For Terry. You saw more in me than was readily apparent. You are everything.
PROLOGUE:
THE HOSTILE TAKEOVER
I MAGINE A ONCE SUCCESSFUL ENTERPRISE, LONG AGO BUILT ON THE principles of hard work, growth, and innovation, that has grown arrogant, fat, and happy from earlier successes. Achievement, once sought out, strived for, rewarded, is now assumed as given. But there are telltale signs of trouble: Expenditures are skyrocketing even in the face of declining revenues. Debt servicing now dominates the companys balance sheet. Leadership has been replaced with a stultifying bureaucracy, and hard work has given way to cynicism and complacency among the rank and file. Customers no longer want to buy what senior management is selling.
There was a time when things were good. The customer is always right, was the mantra that drove the corporate culture, and the CEO and senior managers vigilantly guarded against unnecessary spending, any hint of waste, or any deviation from the core mission of the enterprise. But now continued success is treated as a birthright, and innovation has been replaced with an aggressive sales pitch for tired ideas and bad products that customers dont want.
It is a story that plays out time and again in the life cycle of a business. Over time, innovators are replaced by bureaucrats, and future managers lose sight of the values and principles that made the venture strong in the first place. As Apple founder Steve Jobs describes it in one of his last interviews, companies often lose their purpose and fail because producers who had a keen sense for innovation, and the drive to constantly create value for customers, are eventually replaced by salesmen simply intent on moving product and collecting new revenue. I have my own theory about why decline happens at companies like IBM or Microsoft, Jobs tells Walter Isaacson. The company does a great job, innovates and becomes a monopoly or close to it in some field, and then the quality of the product becomes less important. The company starts valuing the great salesmen, because theyre the ones who can move the needle on revenues, not the product engineers and designers. So, says Jobs, the salespeople end up running the company.
John Akers at IBM was a smart, eloquent, fantastic salesperson, but he didnt know anything about product. The same thing happened at Xerox. When the sales guys run the company, the product guys dont matter so much, and a lot of them just turn off. It happened at Apple when [John] Sculley came in, which was my fault, and it happened when [Steve] Ballmer took over at Microsoft.
Sounds familiar, doesnt it? In America, our political management has failed us, attempting to replace founding principles with a slick sales pitch for tired, bad ideas. The American enterprise grew exceptional based on the bedrock foundations of individual freedom, decentralized knowledge, and accountable, constitutionally limited government. But our leaders in Washington, D.C. have systematically replaced the dispersed genius of America with top down dictates and expensive schemes designed to expand the power of insiders and protect the privileged positions of politicians and bureaucrats.
Senior management has failed us, and its time to clean house.
The American people know that its time to shake up senior management, and as shareholders we are acting swiftly to protect our interests and those of our children. But entrenched managementeverywhere inside the Beltway, but particularly in the U.S. Senate and the West Wing of the White Houseis circling the wagons. They dont want change. Solutions are being ignored, and outsiders rebuffed.
We know where our problems begin, and they begin in Washington, with a political elite that has neither the will nor the inclination to do what must be done. But we do. And so America needs to take over Washington. Blithely ignoring our entreaties, the powers that be in Washington say: no thanks, we got this. Our shareholder proposal has been roundly rejected by the CEO and the Board of Directors, the microphone has been shut off, name placards removed, conference tables broken down, and naysayers herded out the front doors. In effect, America has been thrown out of its own shareholders meeting.
Things are getting, in the parlance of corporate governance, hostile.
On August 17, 2010, just a few months before the November 2, 2010, mid-term elections, Dick Armey and I called for a hostile takeover of the Republican Party in the Wall Street Journal . The logic was simple: we had to beat the Republicans before we could beat the Democrats. We needed standing within the operations of government, a minority position in the company that would at least allow us entry into the room, a seat at the table. We got more than a few angry calls from the leaders of the Grand Old Party, but we meant it precisely, in the exact use of the phrase. Takeovers replace failed business practices and failed managers. Hostile takeovers do the same, but are decidedly unwelcomed by the existing management regime.
If you think of Congress as Americas Board of Directors and the federal budget as the annual operating budget for our country, it is immediately clear that something is fundamentally wrong with our companys management team. In the private sector, showing no cash-on-hand and an operating debt equal to or exceeding total output, the heads of the entire finance team would roll. Shareholders would act swiftly to protect their interests. When a failing company burdened with entrenched, visionless executives is challenged by insurgent entrepreneurial leadership from outside the corporation, expect those in privileged positions to do whatever it takes to cling to power regardless of what is best for the company and its customers. Often CEOs pad their boards of directors with friends and other CEOs that manage related firms in a similar fashion. In this case, change is difficult, and any friendly takeover is rebuffed immediately.
Its only hostile because the interests in Washingtonthe political class, the rent-seekers, the power-hoarders, the government-employees-for-life, the moochers and looterslike things just the way they are. The mere presence of citizens with better ideas and the will to implement them is viewed as a hostile act.
The only way we will ever reduce the debt, balance the budget, and restore constitutionally limited government is if America first beats Washington.
In the private sector, a hostile takeover seeks a controlling interest in a publicly traded company against the wishes of the current management. When you think about it this way, it seems like a perfect description of what needs to be done to take back control of our government. In our democratic republic, the people need to get involved again. As stakeholders in the American dream, as Sons and Daughters of Liberty inspired by our Founding Entrepreneurs, we need to take it over. We need to take it back from the Washington establishment, and from the crony capitalists that lobby through their man in Washington in lieu of producing better goods and services at lower prices. We need to pry it from the hands of well-heeled progressives that would block the unwashed nouveau from getting riche , through higher tax rates and government-imposed barriers to success. From the professional tax consumersthe public employees unionswho feed off the fruits your hard labor. And from a growing class of well-paid bottom-feeders who expectno, are self-entitled toa handout, a subsidy, a loan or a payment they did not earn and do not deserve, from each according to his ability and to each according to the loudest demands.
