Ask an Expert: Business lessons from the candidates' campaigns

— -- Q: Obama's campaign seemed better organized. Does that always translate into organizational strength? Does it in business? — Amy

A: Although I certainly have as strong political opinions as anyone, I always strive to maintain the separation of the church of small business and the state of elections. That said, from a business perspective, there is plenty to be said and learned, both good and bad, from both presidential candidates, to wit:

Understanding the market: In a different life I was a political junkie. I got a masters in public policy, was a Coro Fellow in Public Affairs, and worked on too many campaigns. One thing I learned back then was that, in presidential elections especially, new eras are a reaction to old eras and it is the candidate who best gets that who usually wins.

The strength of Ronald Reagan was a reaction to the perceived weakness of Jimmy Carter. We wanted a president like Bill Clinton, someone who could feel our pain, because many people felt that George H.W. Bush could not. George W. Bush banked on the fact that he promised to have more integrity than Bill Clinton.

Understanding the market is as important in business as it is in politics. You must correctly assess the market if you are going to win, and it is not enough just to have a hunch what potential and actual customers want, you have to be sure. So do what the pols do – poll your customers, talk to uncommitted customers, conduct focus groups, look at results, and change as necessary.

Branding out: In a recent New York Times piece, Maureen Dowd correctly pointed out that John McCain entered the campaign with one of the strongest brands in American politics: The steady, strong, straight talk expressing maverick.

But brands, both business and political, are not set in stone. You have to back up your brand with consistent actions if you want to maintain it. The mistake John McCain made is that he undercut that valuable brand by acting and speaking in ways that did not bolster his maverick image. Alternatively, Barack Obama was a cool customer from the get-go, and when the financial markets melted down, that coolness brand was reinforced by his actions, which in turn reinforced his brand.

Actions create or destroy brands.

Back in the early 80s, Tylenol received a slew of bad publicity when someone laced some of its product with cyanide, causing several deaths. But instead of panicking or retreating, Tylenol became immediately proactive, voluntarily recalled its product, and invented tamper-resistant packaging in the process. The brand became more trusted than ever.

Your brand is your reputation. What you do can either reinforce it or undercut it. One of the reasons the Reverend Wright and Bill Ayers connections almost derailed the Obama candidacy is that part of Obama's appeal, his brand, was that he was going to "change the way they do business in Washington." But having prolonged contacts with folks who seemed to lack the integrity he espoused proved to be almost fatal.

The point is this: Protect your brand; it's gold, and it's hard to get back once damaged. Make sure that everything you do, from how the phone is answered to your advertising to how your place looks reinforces the brand you are trying to create.

Undercut it at your own peril.

Protect your cash flow: It is almost unthinkable that Hillary Clinton had to lend her own campaign money in its waning days. It is similarly shocking that Mitt Romney spent, according to some estimates, more than $1 million per delegate won. Neither became the nominee, by the way.

George Bush had more money in 2000 and 2004. He won. This year, Obama had far more money. Money makes the world of politics, and business, go 'round. Cash flow enables you to do things your competitors may not be able to do, so use yours wisely, be smart with it, spend it when necessary, and horde it when not. Someday, you will need it.

You never know when you may need to respond to a nasty ad from your competitor.

Today's Tip:Some presidents were great entrepreneurs:

• George Washington built a whiskey distillery at Mount Vernon after he left office. "It became one of the largest in the country, producing 11,000 gallons of whiskey annually." (Entrepreneur Magazine.)

• After graduating from Stanford, Herbert Hoover started a mining consulting business which eventually had offices in New York, San Francisco, London, Paris and Petrograd.

• Jimmy Carter started as fertilizer business, owned a peanut farm, acquired a cotton gin, ran a farm-supply operation, and owned several warehouses.

Ask an Expert appears Mondays. You can e-mail Steve Strauss at: you can click here to see previous columns. Steven D. Strauss is a lawyer, author and speaker who specializes in small business and entrepreneurship. His latest book is The Small Business Bible. You can sign up for his free newsletter, "Small Business Success Secrets!" at his website —