With Tesla stock spiking to over $300 and Elon Musk being tapped for a role driving government efficiency in the Trump administration, it seems that Musk made a good bet going all-in on Donald Trump. Most CEOs, however, did not make that same bet, and are now wondering what they can do to deal with the incoming Trump administration.
Fortunately for them, there is already a playbook showing what works — and what doesn't — in dealing with Trump. That playbook is the previous Trump administration.
The first rule for CEOs is to take personal responsibility for the relationship with Trump. Trump is remarkably accessible for a president. He takes calls on his cellphone from a variety of people and likes prominent CEOs to come calling. Apple's Tim Cook was no fan of Trump's political agenda, but he recognized that it was important to work with Trump in order to protect his company's interests. Cook would call Trump directly on the phone and not through an intermediary, something that impressed Trump. As Trump said of Cook, "That's why he's a great executive, because he calls me."
A second rule is being willing to negotiate. People say Trump is transactional, and there is some truth to that, but he also has red lines and goals that he is trying to attain. You can negotiate with him to get things that you want, if they will help him attain those goals. Trump and Meta's Mark Zuckerberg were often at odds, but they had a private dinner in October 2019 where they came to an agreement:
Zuckerberg would not impose fact-checking requirements on Facebook, requirements that are typically biased against Republicans, and in exchange Trump would limit his regulatory targeting of Facebook. Both parties benefited from the exchange.
A third rule is to join his policy councils if such an opportunity arises. In the last administration, Trump's Strategic and Policy Forum included Musk, JP Morgan Chase's Jamie Dimon, and Disney's Bob Iger.
The council became a problem for some of the CEOs during various Trump controversies, such as when Trump left the Paris Accords climate-change agreement and after the Charlottesville "very fine people" incident.
CEOs were pressured by some employees to withdraw from the council.
Faced with CEO departures, Trump decided to disband the council unilaterally. Dimon held off resigning until this happened, and so he got off the council but at the same time did not alienate Trump. By staying in Trump's good graces, Dimon remained an informal adviser and was later invited to a small private CEO dinner to discuss the state of the economy. In this next term, business leaders should choose to join Trump's councils if they can, but they should be aware of the cost of dropping off should Trump do something controversial.
The business-council experience raises another recommendation, which is to resist being driven by one's employees. Many Silicon Valley, entertainment, and media companies have liberal employee bases that want the CEO to back their political views. In the first Trump White House, Zuckerberg told Trump and his team that he was under pressure from his staff to ban Trump from Facebook over Trump's "when looting starts, the shooting starts" comments during the George Floyd protests. This led Trump aides to snicker, "Mark doesn't think there's anything wrong" with Trump's post, "but his staff is going to kill him."
CEOs need to explain to employees the vision of the business, and the need to serve people and shareholders regardless of political affiliation. CEOs may get criticism from their teams for working with Trump, but they have to weigh that against getting their business models damaged by refusing to engage with the White House. As Dimon said in justifying his work with Trump, "We have a responsibility to engage our elected officials to work, constructively and advocate for policies that improve people's lives and protect our environment."
Employees need to hear that directly from their leaders.
Finally, CEOs need to be careful of their public statements when dealing with Trump. They can't be friendly when they engage him personally and then denounce him to employees or in public fora. Trump reads the press and is sensitive to that kind of double-dealing. In the first term, Elon Musk called Trump "great at Twitter," and Dimon praised Trump's appointees. But Dimon also made a mistake when he said that if he were to run for president against Trump, he would beat him.
Trump pounced on the statements on Twitter, and Dimon beat a hasty retreat, admitting his comments were not wise.
None of this means that CEOs need to be toadies to Trump, or change their political views. As Cook learned, Trump can get along with CEOs who disagree with him but are willing to negotiate. Often, CEOs and their teams are flummoxed by new presidents, not knowing how best to interact to the advantage of their companies. But in this case, if CEOs make a mistake, it is their own fault for not studying the playbook that is already out there.