New York—Perth Leadership Institute, an alternative research provider focused on evaluating company management, recently published a white paper applying its evaluation framework to the presidential candidates. The study finds that none of leading presidential candidates are likely to improve U.S. competitiveness. According to Perth, Senator Hillary Clinton would be the least damaging to U.S. competitiveness while Senator John McCain is likely to be erratic—switching between fiscal prudence and resource-intensive defense policies. Senator Barrack Obama is viewed as potentially the most destructive to U.S. competitiveness if he continues to be highly consensus driven.
Perth is one of a handful of research providers which explicitly evaluate management quality of publicly traded firms. Other firms include Management CV and 3D Advisors. Perth also provides leadership training and evaluation services to corporations.
The 44-page study, "The Financial Psychology Of The Presidential Front-Runners And Its Impact On US Competitiveness", seeks to identify the leadership styles of the leading presidential candidates based on their prior experience, stated policies and other evidence. Clinton is viewed as introverted, analytically-oriented 'Clinician' with a command style of management. McCain is extroverted, intuitive and viewed erratic in his fiscal style, vacillating from a frugal profile to a high-spending one. Obama is viewed as having the best innate skills, a closet introvert/learned extrovert with a high degree of leadership agility but his 'Communalist' style of management in seeking consensus is expected to be highly resource intensive (paying dues) and detrimental to policy innovation.
The executive summary is reproduced below. For the full report go to http://www.perthleadership.org/Documents/Presidential-WP-5-1-08-Perth-Leadership.pdf.
The Financial Psychology Of The Presidential Front-Runners And Its Impact On US Competitiveness
Executive Summary
This White Paper examines the financial psychology of the three Presidential frontrunners
with the aim of assessing what impact they will have on the US economy and
US competitiveness.
The approach used in the paper is based on a new set of behavioral finance tools
developed by the Perth Leadership Institute. These measure the propensity of a leader to
create value and to utilize resources. Where a leader creates more value than the
resources used to achieve this, they create capital and they have a positive impact on US
competitiveness.
The White Paper assesses all three front-runners on these criteria to make an assessment
of their impact on US competitiveness. It looks at their behavioral balance between
value-creation and resource utilization as measured by their resource distributive
impact, essentially the same criterion.
All three front-runners exhibit much greater behavioral focus on redistribution
than on value creation. So the impact of all three is that they will have an adverse
impact on US competitiveness over the longer-term.
Of the three Clinton will have the least adverse impact, and there is even a (small) chance
this could turn positive later in her term of office. McCain's impact will be negative as he
has intensive policies and behaviors which are directed to redistribution, in this case to
the military and exacerbated by his tax policies. Obama will have the most adverse
impact on US competitiveness in the short-term but there is a slight chance that this could
turn slightly positive later in his term under certain circumstances.
Clinton: Clinton will have a somewhat negative impact on US competitiveness but
she has repressed tendencies towards policy innovation which could appear later in
her term if she was comfortable enough politically to let this hang out. In that case her
impact could turn slightly positive.
McCain: McCain's impact is negative and is likely to be the most erratic of the three.
The sharp conflict between his two main behavioral financial tendencies, one to reduce
spending without adding any policy value, and the other to pursue high resource
utilization initiatives in the area of defense and foreign policy, will probably lead to sharp
oscillations in his financial policies and impact and could possibly lead to very adverse
impacts on the US competitive position.
Obama: Behaviorally, Obama should have the least adverse impact but his
determined strategy over his career to seek agreement at the expense of
performance will overwhelm this behavioral tendency and lead to the most adverse
impact. He may well have some behavioral tendencies to increase policy innovation but
if so he has hidden them well and in any case he has less of them than Clinton (but not
McCain). To the extent he does possess some of them, these could possibly reveal
themselves later in his term when he feels confident enough that they will not weaken
him politically, but in that case any positive impact would be minimal.
The White Paper recognizes that it raises complex behavioral issues that are unlikely to
be resolved in a single paper. Its aim is to focus attention on an issue which has received
little attention – the outcome of the election in terms of the future global leadership and
competitive position of the US – and to relate the behavioral tendencies of the frontrunners
to show their possible impacts in this area. The Paper recognizes that, in practice,
many scenarios are possible some of which could be responses to the issues raised in the
Paper and some of which could be totally unrelated.
investment research, equity research, research providers, alternative research, alternative research providers, independent research, independent research providers, independent equity research, management quality
