[PPT] - Lessons for IROs from the 2016 Election and What to Expect in 2017 PowerPoint Presentation

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Lessons for IROs from the 2016 Election and What to Expect in 2017

David Castagnetti March 10, 2017

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Election 2016

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3 114th 115th

GOP 248 241 DEM 187 194

GOVERNORS: R+2 HOUSE: D+7

114th 115th

GOP 54 52 DEM / IND 46 48

SENATE: D+2

2016 2017

GOP 31 33 DEM 18 16 IND 1 1

306 306

Candidate Popular Vote Percent

TRUMP

62,979,636

46.1% CLINTON

65,844,610

48.2% JOHNSON

4,488,912

3.3% STEIN

1,457,038

1.1%

http://uselectionatlas.org/RESULTS/index.html

Results: Big Night for the GOP

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Americans Wanted Change

Change Mattered Most

39% 21% 20% 15% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Bring Change Right Experience Good Judgment Cares Which Candidate Quality Mattered Most?

Can Bring Needed Change Right Experience Good Judgment Cares About People Like Me

T+69 C+82 C+40 C+23

TRUMP Dominated Change Voters

Source: CNN Exit Polls; Net difference shown on bottom.

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Message Trumped Organization

More Paid Staff More Field Offices More Voters Contacted More Money Raised More TV Ads Run Better Analytics More Debate Prep More Popular Surrogates

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Will It Be the Same Old Battlefield?...

Trump Coalition Breached “Big Blue Wall”

IA WI MI OH PA

Source: Exit Polls (CNN); Pew (Cathoilic)

+39

White No College Voters

(Romney +25)

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Union Households

(Romney -18)

+23

White Catholic voters

(Romney +19)

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Ran Against the Media Establishment

Great Deal/Fair Amount of Trust in Mass Media by Party

41 52 46 47 39 49 44 31 31 33 27 36 32 38 26 33 27 32 14

53 53 55 53 52 52 53 44 49 41 41 39 39 38 31 37 38 33 30 64 59 61 53 65 59 66 59 70 66 60 58 59 56 58 60 54 55 51

10 20 30 40 50 60 70

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Republicans Independents Democrats

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The Trump Administration

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...Will Be an Unconventional President The Unconventional Candidate...

PLATFORMS POLICIES PEOPLE PARTNERS

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The Disruptions Will Continue By Design: Historically Outside-the-Beltway Cabinet

Source: NPR analysis of Initial Cabinet officials, updated Feb. 16, 2017

CABINET MEMBERS’ RESUME EXPERIENCE Government Experience

81% 81% 81% 81% 91% 91% 91% 91% 57% 57%

Military Experience

48% 48% 48% 48% 32% 32% 9% 9% 29% 29%

CEO

5% 5% 14% 14% 18% 18% 0% 0% 24% 24%

PhD

19% 19% 24% 24% 9% 9% 23% 23% 0% 0%

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White House Still Establishing Its Rhythm Competing Power Centers, Similar to 1993 Clinton WH

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Bowling Green Massacre Nordstrom’s Alternative Facts Fake News Inaugural Crowd Size OBAMACARE ABORTION TRADE ENERGY IMMIGRATION SCOTUS So-Called Judge Holocaust Remembrance #lastnightinSweden Worst Deal Ever NATO

There is a Game Plan: Doing What He Said He’d Do

Mar-a-Lago Wiretapping Trump Tower

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The New Congress

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Congress Is Very New 72% Rs & 52% Ds Never Served Under a GOP President

10 20 30 40 50 60 70 Democrats Republicans House Members by Year of Arrival

Source: Public dataset, Author’s calculations

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The Road Ahead:

Majority Were Not Here for Key Legislation Now in Play Percentage of Members of the 115th Congress Who Were Serving When Congress Passed…

House Senate

44% 44% 63% 63%

(49 as Senators, 14 in the House)

22% 22% 39% 39% 11% 11% 14% 14% 2.5% 2.5% 6% 6%

NAFT FTA

‘86 TAX REFORM

Source: Author’s calculations

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97.9% 93.9% 90.2% 86.5% 80.7% 62.3% 52.8% 42% 97.0% 96.0% 97.8% 94.8% 93.9% 90.5% 86.0% 88% 40.0% 50.0% 60.0% 70.0% 80.0% 90.0% 100.0%

1950 1950 1960 1960 1970 1970 1980 1980 1990 1990 2000 2000 2010 2010 2017 2017

Both Parties Face Challenges

76 77 76 47 52 51

Dems… Leaders Too Old?

AGE

as of 1/9/17

Pelosi Hoyer Clyburn McCarthy Scalise Ryan

GOP… Sufficient Diversity?

White Males as a Percentage of Party’s House Caucus, 1950-present

Source: D. Wasserman, Cook Report

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Issues Shaping Congress

Dem

Civil War Begun Over…

GOP

Civil War Averted But…

Deficit Spend or Revenue Neutral? Business: Ally or Enemy? US Role in the World? Repeal and/or Replace Obamacare Fight Trump or Make Deals? Globalists vs Populists? Focus on Poor & Minorities or White Working Class?

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Lessons for IROs from the 2016 Election

1. Offer a Clear Brand

7. Prepare

2. To Get Coverage, Make News

8. Remember Everything Is On The Record

3. Don’t Fight the Last War

9. It’s Time to Rebuild Trust

4. Secure Core Customers First

10. Build Bipartisan Alliances

5. Broaden Stakeholder Engagement 6. Reassess Political Risk & Strategy

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The Road Ahead:

#1. OFFER A CLEAR BRAND Great Brands Relentlessly Communicate Values

Everything Trump Did Reinforced His Clear Brand: Strong + Change What Was Clinton’s Brand?

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The Road Ahead:

#2. TO GET COVERAGE, MAKE NEWS Also Look to Alternative Channels, Direct-to-Consumers

Trump Earned Half of all TV Mentions

(Sept 1, 2015-Jan 1, 2016)

"It may not be good for America, but it's damn good for CBS… The money's rolling in and this is fun.”

Sources: Hollywood Reporter (Moonves); USA Today (Sunday Shows)

- Les Moonves, President of CBS

Sources:: Echelon Insights (TV mentions); Twitter, Facebook & Instagram 1/9/17.

Twitter 19.2M Facebook 17.3M Instagram 4.6M Trump’s Virtual Army

APPEARANCES ON SUNDAY TALK SHOWS

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The Road Ahead:

#3. DON’T FIGHT THE LAST WAR Past Performance is No Guarantee of Future Returns

Clinton Re-Ran Obama ‘12 Campaign Trump Innovated to Win

1. Policy: Reject orthodoxy on

trade to win new voters.

2. Brand: Run against DC elites

including GOP leaders.

3. Medium: Take message

direct-to-voters via huge rallies & social media.

1. Identity politics: Micro-target

specific groups via analytics.

2. Attack Ads: Define opponent as

“unfit” via TV barrage.

3. Safe States: Assume Big Blue

Wall will hold & try to win red states (e.g. AZ, GA, NC).

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The Road Ahead:

#4. SECURE “CORE CUSTOMERS” FIRST Don’t Assume Elites Speak for Their “Followers”

86% 14%

Union Election Spending

(controlled by Leaders in Washington)

51% 42% 7%

Union Household Voting

(workers voting with their feet)

Sources: Center for Responsive Politics (Spending); Exit Poll (Voting)

Support for Dem Support for GOP Other / Did Not Say

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The Road Ahead: #5. BROADEN STAKEHOLDER ENGAGEMENT

You Need a Whole Foods Strategy AND a Cracker Barrel Strategy

20% 30% 40% 50% 60% 70% 80%

1992 1996 2000 2004 2008 2012 2016 Counties with Whole Foods Counties with Cracker Barrel

Dem share of vote in counties with Whole Foods Dem share of vote in counties with Cracker Barrels

20 25 44 48 54 41 32

Source: D. Wasserman, Cook Report

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The Road Ahead: #6. REASSESS POLITICAL RISK & STRATEGY

Challenges Are Accelerated, Viral & Reputational

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The Road Ahead:

#7. PREPARE: THE NEW BULLY PULPIT

Accelerate scenario planning, risk assessment & crisis preparation to deal with new political risk. Challenges are accelerated, viral & reputational.

BEST PRACTICES

1. Weigh new political risk in business plans & external communications. 2. Practice Q&A re: Trump, tweets & jobs. 3. Take stock of media & Hill relationships – who will defend us? Have list ready. 4. Monitor Twitter & news real-time. 5. Know & streamline approval path for replies in advance. 6. Let executives immediately know you’re aware of situation & are responding. 7. Have good facts pre-prepared for response. 8. Respond in the same news cycle… don’t need to correct mistakes & don’t attack POTUS. 9. Share response with executives, employees, customers & the Hill.

10. Retweet / share positive stories widely.

Majority of targeted companies failed to respond to negative tweet within the same news cycle

Company Trump Tweet Response type Response time 11/17/16 Press release; Tweet 1 day 11/29/16 Press release; Tweet 1 day 12/2/16 Statement in WSJ article 2 weeks 12/6/16 Press release; Tweet <3 hours 12/22/16 Met with Trump; Tweet 1 day 1/3/17 Statement to media; Tweet < 2 hours 1/5/17 Press release; Tweet <1.5 hours

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The Road Ahead:

#8. REMEMBER EVERYTHING IS ON THE RECORD Privacy Is Dead & Cyber Is a CEO (not CIO) Problem

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Look to Alternative Partners, “Good Works” & Community Solutions

10 20 30 40 50 60 70 80

Congress Big Business Newspapers TV News Criminal Justice System Organized Labor Banks Public Schools US Supreme Ct Presidency Medical System Church / Org. Religion Police Small Business Military Confidence in Institutions

(Percentage of Voters with a “Great Deal “or “A Lot” of Confidence in:)

Source: Gallup, June 2016

Hardly a coincidence Trump picks generals & entrepreneurs

#9. IT’S TIME TO REBUILD TRUST

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The Road Ahead:

#10. BUILD BIPARTISAN ALLIANCES Unilateral Accomplishments Rarely Endure

Walking Dead Built to Last

42 Republicans + 12 Democrats Senate: 60 Democrats + 0 Republicans FCC: 3 Democrats + 0 Republicans 0 lawmakers voted to ratify House: 236 Republicans + 178 Democrats

1996 Telecom Act Medicare Pt. D

Passed Senate by Unanimous Consent

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#11. PLAY THE LONG GAME

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PLAY THE LONG GAME

✓ Passed longest highway bill since 1998. ✓ Enacted permanent “Doc Fix” after 17 temporary bills. ✓ Passed first Trade Promotion Authority since 2002. ✓ Passed first update to chemical and toxic substance oversight authority in 40 years. ✓ Made R&D tax credit (and many others) permanent after 20 years of annual, temporarily extensions. ✓ Provided debt relief to Puerto Rico. ✓ Enacted landmark medical innovation / Cures Bill. ✓ Passed first major education reform since No Child Left Behind (2002). ✓ Reformed NSA’s bulk surveillance program. ✓ Repealed 1975 Oil Export ban. ✓ Incentivized cyber security information sharing via landmark law. ✓ Passed 1st Customs Bill (MTB) in 6 years. ✓ Enacted landmark bill to encourage commercial space launch & exploration. ✓ Updated Water Resources Development Act. ✓ Provided funding for Opioid epidemic.

114th Congress Was Far More Impactful Than You Thought…

Those Who Engaged Shaped Major Outcomes

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PARTING THOUGHTS

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The Road Ahead:

IT’S A TOUGH JOB

But If Trump’s Truly Changing All the Rules…

Before After Before Before After After?

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First Two Years Are Critical

Crime Bill; Brady Bill; Assault Weapons Ban; 100,000 cops NAFTA; GATT Reinventing Gov’t Initiative Deficit Reduction Bill (tax hike) AmeriCorps Family & Medical Leave Act $787B Stimulus package Affordable Care Act Dodd-Frank 2010 Tax Deal Lily Ledbetter Fair Pay Act No Child Left Behind 2001 Tax Cuts (10-year cuts) Patriot Act; DHS Bill US-Russia Nuclear Arms deal FTAs launched/concluded: Singapore, Chile, Australia, Morocco, CAFTA

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A Winning Strategy for Changing Times

Winning in 2017

ALIGN EDUCATE PLAY THE LONG GAME SURROUND INNOVATE PREPARE

ALIGN: Identify 1-3 Administration priorities where we can go “all in,” engaging at the CEO

Level. We’ll have more success building a new

relationship based on their priorities before asking them to consider ours. INNOVATE: Rethink our arguments, initiatives and

ideas. Do our policy goals & messaging match

today’s economic, political & global realities (e.g. new populism)? What data / allies will we wish we had 6 months from now? Where can we be thought leaders and with whom should we partner on new ideas? SURROUND: Expand the number and intensity of channels through which we communicate. Which stakeholders have the most currency with the new Administration, and how might we partner with them on our goals & theirs? What outside- the-beltway assets can we activate?

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is one of the nation’s most innovative government relations firms, offering strategic solutions to companies, trade associations, non-profits, and entrepreneurs that help them succeed in Washington.

http://www.mehlmancastagnetti.com/

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