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Commentary: Business Past Helping and Hurting Corzine

Saturday, December 17, 2005

Jon Corzine hasn’t even been sworn in as Governor yet, and he’s already under fire for the way he’s made two decisions since Election Day – appointing Robert Menendez to the US Senate and appearing to go back on a campaign promise not to consider a hike in the gasoline tax. WNYC’s Brian Lehrer says Corzine’s experience in business may be both helping and hurting him.

LEHRER: What do the State of New Jersey and the investment firm Goldman Sachs have in common? Jon Corzine took over both when they were in financial disarray. On my weekday call-in show, Harvard Business School Professor Boris Groysberg remembered the first case.

GROYSBERG: He ran Goldman Sachs and started in 1994 when the firm was basically in crisis. About 1/3 of partners left the firm, it was losing a lot of money and through 1999 he transformed the company. He gave the firm a vision. By the way, one of his greatest strengths is actually articulating a good vision.

LEHRER: But if Corzine was good at articulating his vision in the private sector, he’s off to a rocky start communicating it to the public. Take the gasoline tax. With the state roads and bridges fund out of money, a few cents more on the gallon might be a reasonable thing to consider. But Corzine appeared to rule it out in the campaign. Now he says he only ruled it out during the gasoline price spike that followed Hurricane Katrina. With prices back down, it might be okay because it would inflict less pain. But that’s not the message the public thought it heard in the gubernatorial debates.

Then there’s Corzine’s decision-making style. Professor Groysberg says decision-making was a big reason for Corzine’s success at Goldman Sachs.

GROYSBERG: He was very very good at making decisions. He made a lot of decisions after hearing all the parties. So he would collect a lot of information from different units from within Goldman Sachs and at the end of the day be the decision maker.

But that brings us to the appointment of Congressman Robert Menendez to fill out Corzine’s term in the US Senate. The CEO Jon Corzine described by the Harvard Business School Professor was not the politician Jon Corzine observed by Bergen Record columnist Mike Kelly, speaking on the same program.

KELLY: This decision was apparently made among a very small group of Corzine people. It was kept very close to the vest. I spoke yesterday to other Congressman besides Menendez who were hoping to run for the Senate and they hadn’t even heard a courtesy call from Corzine. So this was hardly the consensus-building leader that Corzine was described in the business world.

LEHRER: Given that contrast, the easy thing would be to wonder which Jon Corzine will run New Jersey for the next for years – the open consensus-builder or the guarded insider. But I also wonder this: is an effective leader in business necessarily an effective leader in government? Do the two jobs even require the same skills? Professor Groysberg says not only are they different, government is harder.

GROYSBERG: If you think about leadership as aligning the organization, choosing the right people, creating culture in the form of an organization, it’s much much easier to implement something like this when you have a very clear goal, in which it’s basically you have to deliver on the bottom line versus when you have a number of different goals or constituencies you have to satisfy along that process.

LEHRER: That’s the challenge for any Governor: satisfying different constituencies while managing the budget and not losing sight of your vision for progress. Corzine was a visionary at Goldman Sachs, and he should have a lot to offer New Jersey. Let’s see if he can put it all together.

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