byline: Bernie Niemeier

How quickly things change. Last summer, Mitt Romney was Bob McDonnell’s man-crush.  Our governor’s stint as a vice presidential hopeful turned out to be short-lived, undone by a social issues addiction in the General Assembly. Still, Virginia was front and center at both national political conventions.  Despite an occasional lampooning by late-night comedians, the Old Dominion seemed pretty grand indeed.

Then, the presidential race didn’t go exactly as planned.  While the election of Democrat Tim Kaine to the U.S. Senate alongside Mark Warner may have helped Virginia hold on to some of its status in the nation’s capital, the intransigence with regard to virtually all things Obama by our governor’s office, our attorney general and the General Assembly should leave us to expect little from Washington.

Concerns over government spending are well justified. Federal contracts, however,  are the wellspring from which Virginia’s above-average economic status is derived.  It’s a lot easier to tout “Bob’s for Jobs” when an entire nation is footing the bill.

Fast forward to this summer and the 2013 Virginia governor’s race.  Democrat Terry McAuliffe’s campaign has exposed a harsh new political reality.  Elections are more about money now than ever before.  According to the Wall Street Journal, super PAC spending in the 2012 elections exceeded $567 million.  High levels of national party and PAC funding dramatically alter the chances of less well-known, less well-connected candidates.

McAuliffe arguably has an uphill battle to become well known in Virginia, but there is no denying his national connections.  In 1996, he served as national finance chairman and then as co-chair of the Clinton-Gore re-election committee.  He served as chairman of the Democratic National Committee in 2001-05, during which time he raised $578 million and pulled the Democratic Party out of debt for the first time in its history.

Virginia’s Democrats are lacking in bench strength.  Tim Kaine’s election as governor in 2005 marks the last time that a Democrat held one of the commonwealth’s top three elected offices.  During the Kaine administration, Republicans Bill Bolling and Bob McDonnell held the offices of lieutenant governor and attorney general.  Since 2009, Republicans have held all three top spots, leaving little room for a Democratic governor-in-training.

With money being such a factor, it is no wonder that once McAuliffe decided on a second run for governor, the Democratic nomination was his for the taking.  Back in 2009, he came up short in a three-way Democratic primary with Creigh Deeds and Brian Moran, but that was before the Citizens United case opened up the contribution floodgates. Today, no one else can raise enough money to challenge his nomination.

On the Republican front, Ken Cuccinelli is the kind of guy who doesn’t take “No” for an answer. He has fought climate change, health-care reform, abortion, gay-rights — a classic conservative agenda.  At the same time, he’s taken a stand on some less familiar causes, such as human trafficking and restoration of rights to the wrongly convicted.

Cuccinelli announced his candidacy early in the process. Bolling’s subsequent exit, based on the party’s decision to nominate its candidate by convention rather than a primary, probably has done more to accentuate the rift between moderate and conservative Republicans than it has done to mend it.  (This piece goes to press just before the Virginia Republican Convention; at the moment the conservative-controlled leadership seems unlikely to see much change.)

Meanwhile, there’s a sideshow at the Executive Mansion.  Embezzlement charges brought against former chef Todd Schneider have yet to see their day in court, but the legal discovery process has brought forth embarrassing questions for Virginia’s first family, including a $15,000 gift from Star Scientific chief executive Jonnie Williams to pay for Schneider’s catering services at the wedding reception for McDonnell’s daughter.

Questions regarding gifts from Williams to Cuccinelli as well as the attorney general’s ownership of Star Scientific stock also have surfaced, leading him to revise disclosure reports.  Turns out Star Scientific was suing the commonwealth over a tax assessment in 2011 when Cuccinelli owned more than $10,000 in Star Scientific stock. The attorney general said he had not been directly involved in handling the dispute but belatedly recused his office from defending the suit.

Not to be outdone by these Republican hijinks, McAuliffe quietly resigned from the chairmanship of his electric car company Greentech Automotive before a delinquent property tax bill (since paid) was revealed for a Greentech plant site in Tunica, Miss.

Both campaigns have used these events to tar and feather their opponents.  With the amount of money likely to be spent on this year’s governor’s race, one can only assume things will get worse.  At a time when the commonwealth should be looking for leadership that can rise above the partisan fray, we seem destined instead to witness a race to the bottom. 

Despite the saying that time waits for no man, there is a great deal of waiting in today’s business world.  Before the Great Recession came to its technical end in late 2009, companies were keeping their proverbial powder dry in case things got worse.  Next came angst over the speed of recovery, the possibility of a double-dip recession and the general foreboding gloom of “What if things don’t get better?”

Doomsayers have been quick to point out uncertainties around things like health- care reform.  During the run-up to last year’s presidential election, concerns were raised about tax rates.  The question over who would be elected president loomed large.  After the election came the fiscal cliff, then sequestration, the federal debt-limit ceiling, and now the federal budget. All told, there were lots of supposed reasons to do — well, nothing.

The certainty of uncertainty has become too familiar.  In fact, there never has been a time when all was certain.  Have we totally forgotten that business investment is predicated on the idea that with risk comes reward?

When it comes to politics, it is often said that government should be more like business.  Whether that is true or not, most would probably agree that we ought to avoid making business more like government, especially if that means moving at the speed of politics, which of late has been maddeningly slow.

Let’s take a moment to rescript this paradigm:  The Great Recession came and went.  In the process, jobs that had been wrung out of the economy by more efficient technologies were eliminated, never to return.  Working from a lower cost basis, business earnings now are exceeding expectations.  Elections have taken place with little change to political norms.  Housing prices are on the rise.  The S&P 500 recently hit an all-time high.  Companies have cash-heavy balance sheets.

For those willing to go forward in business, the difference between these two worldviews is an OPPORTUNITY writ large.  Those waiting for perfect conditions with certain returns will see little or no reward, while those willing to move forward with plans to build their businesses can realize significant future gains.  As a banking friend once told me, only a compliance officer can stay safely on the payroll for saying, “No.”

In fact, the art of business is getting to “Yes.”  We want to be able to say yes to hiring people, yes to investing capital, yes to marketing programs and to all the other things that lead to business growth.

Let’s try to advance the positive paradigm a little farther forward.  What will business results be like for leaders versus followers in this economic recovery?  When others are still sitting on the sidelines, isn’t this absolutely the best time to invest?

Years ago, a publisher friend of mine informed me that he had let go a mutual acquaintance.  I asked what the problem had been, and he said “Well, the fella thought he was an intersection, and what I needed was a highway.”  Closely examined, this comment isn’t as cryptic as it seems.  It summarizes a lot of what we know about leadership.

The real job of leaders isn’t to play traffic cop, blowing whistles and pointing out stop signs.  That’s what happens at intersections, and it is a lot more akin to the role of a manager than the role of a leader.  After all, if we are making good hiring decisions, our people already have enough talent to drive the car and know the difference between red lights and green ones.

The role of the leader is to be more like a highway, encouraging as many people as possible to travel safely in the same direction, to look out for one another and to arrive at their destinations with efficiency.  There is a certain grace to the flow of traffic, and the bigger the highway the greater the results. Fundamentals like collaboration, cooperation, encouragement and establishing a shared sense of purpose are the hallmarks of leadership.

Take a little time to assess what you are to your organization.  Are there stop signs where you’d actually like to see traffic merging?  Are feet hovering over the brakes, instead of applying a bit more pressure on the accelerator?  Leaders encourage people to take some risks; without them there won’t be much reward. 

This magazine is nonpartisan, and so is its publisher.  Virginia Business delivers reports on business news and trends each month without spin and hits straight down the middle.  In politics that middle has become a bit hard to find, especially in the business community.

Lately, however, I’ve occasionally begun to hear something akin to inquisitive foot-tapping coming from the stall next door.  It seems that business folks who’ve leaned Democratic in their private lives may be getting more open about their differences with what has largely been a Republican-dominated business class.  Perhaps, the foot-tappers are realizing they have never entirely been alone.

Consider that a majority of Virginians voted to elect Democrat Barack Obama president, not just once but twice.  Surely, there must be some overlap between the general population and the business world.  The Republican elements of business have been, well, just a lot louder, almost scarily so.

The U.S. Chamber of Commerce’s television ads during last November’s elections were a prime example. Though the U.S. Chamber claims the millions it spends on advertising are focused on issues and not candidates, 2012’s featured themes were exclusively drawn from the Republican presidential and Senate race platforms. Divisive partisanship coupled with negative positioning and scary background music didn’t do much to make the business community seem majority friendly (or minority friendly, for that matter).  It’s no wonder that some Democrats in business might be reluctant to identify themselves.  The resulting conversations are high in emotion and notably lacking in middle ground.

Take health-care reform. There are those in the business community who are happy to see health-care reform.  Health benefits expenses have risen unchecked for decades, becoming the fastest-growing expense for business budgets.  Employee health premiums have heavily subsidized care for indigent, unemployed and otherwise uninsured segments of the population.  Should it really be the role of Main Street to pay these social costs?  Maybe government should play that role.  Reform is much needed.

Then, of course, and especially in Virginia, there are infrastructure costs.  Businesses rely on a good transportation network, not just to move products to market, but also to move people to and from work.  The chronic underfunding of Virginia’s infrastructure is something that cannot be alleviated by the business community; this, too, is the role of government. Even public-private partnerships need public funding.  Otherwise, the only roads we’d have would be toll roads, with even higher tolls.

In the case of either health care or infrastructure, the argument most always comes down to cost.  In fact, the idea that a tax-starved government will find money to pay for necessary services by cutting other areas has proven unworkable.  No Congress, no legislature, no governor and no president — regardless of party — has been able to fund the long-term cost of essential services exclusively from existing revenues.

Even if the political will existed, there simply isn’t enough cash to be found.  While the idea of “no-new taxes” has populist appeal, especially for the well-heeled, it doesn’t add up to a workable long-term solution.  Much like at least half the voting public, there are some in the business community who must wonder, “Just who is Grover Norquist, and why is he so important?”  No-tax pledges have made underfunded, dysfunctional governance the norm.  Whatever happened to the time when we rightly expected our public figures to be exceptional?

Moving from fiscal to social issues, business leaders might also rightfully pause to search for middle ground.  After all, customers and employees alike are drawn from an increasingly diverse community.  Diversity is no longer limited to just race or gender.  Staking out political positions that affect any group negatively is risky business.

The failure of the Republican Party in last year’s elections has largely been linked to the perception that it is the party of big money, big business, guns and religion.  Moving toward a platform that will be inclusive of a larger percentage of the voting public without alienating existing constituents poses a significant challenge.

Looking forward, the key phrase may well be “percentage of the voting public.”  Despite legislation designed to either restrict voter turnout or reduce voter fraud, Virginia’s voter turnout was largely unchanged in 2012 from the presidential election of 2008.  Much has been made of lower turnout for gubernatorial elections, with many pundits opining that an entirely different electorate chooses the commonwealth’s governors.

Virginia’s voter turnout in last year’s presidential election was 76 percent, compared with just over 40 percent in the 2009 gubernatorial election.  Turnout in the 2009 race was much lower than normal.  Looking back over eight governor’s elections before 2009, the average turnout was 56 percent, with 61 percent being experienced only 20 years ago.  An entirely different electorate might not elect our next governor than those who voted for our current president.  In fact, only three of Virginia’s last eight governors have come from the Republican Party.

Of late, it may well be true that Democratic sentiments have been soft spoken in the business community.  However, it may not always be thus so.