First Anniversary

This week's New Yorker celebrates President Obama's first anniversary in office with a Barry Britt cover that captures the situation nicely. 

Whether measured by the recent senate election or by the president's declining favorability ratings, it seems clear that Obama can no longer walk on water.

But "favorability" ratings can be dangerous when read in isolation, like the "net promoter" score that so many marketers use.

What really matters are the reasons behind the score.  For example, I tracked employee attitudes toward AT&T during the tumultuous period of 1995 to 2000. You may recall that this period included the three-way breakup of the company, reports of massive layoffs, resignation of a CEO-apparent, hiring and firing of a CEO unapparent, $100 billion acquisitions,and ultimate breakup of the company.  

 But through it all, when we asked employees whether or not they thought the company was going in the right direction (yellow line), the strongest correlation we could find was with the company's stock price (red line), as portrayed in the chart to the right. 

When we dug deeper, we discovered that was due to two things: 1. the actual stock price; we had given employees stock options and many had substantial shareholdings, and 2. what the media was saying about the company's stock; as its price went down, the media grew increasingly negative, putting additional pressure on the stock and raising even more questions in employees' minds.  What we should have done, of course, was to define progress on our strategy in terms other than the stock price from the very beginning.  

If we had started by acknowledging the scale of the transformation necessary for the company to succeed, made clear that it would take at least five years and billions in investment, and cut the dividend immediately rather than four years down the road, the stock price would have taken a hit.  But it probably wouldn't have gone down as much as it ultimately did.  And we could have given employees and share owners a set of realistic milestones to follow.

I was reminded of all this when I read John Judis in the New Republic.  He prepared the chart to the left that shows how closely the decline in Obama's approval rating (red line) tracks with the national unemployment rate (blue line).  

But he also notes that, "when Washington began debating the health care plan in earnest last fall, the president's level of disapproval began to exceed the rise in the unemployment rate."

Judis doesn't think that was a coincidence. "Obama invited a voter backlash," he writes, "by letting the burden of reducing health care costs appear to fall on senior citizens and middle class workers." I think he's right.

By setting broad policy goals but leaving the drafting of legislation to Congress, Obama allowed others to frame the argument for healthcare reform.  As a result, it became a debate over "death panels," "abortion rights," "Cadillac health insurance plans," and "a government takeover of healthcare."  All while the middle class was worrying about something else entirely -- jobs.

Obama needs to regain control of the discussion, focus it on the economy in a way that resonates with the middle class, and reflects real bipartisanship.