The surprising success of Donald Trump's campaign for president spurred me to read his 1987 book, Trump: The Art of the Deal. When originally released, the response was mixed, along the lines of the current reaction to Trump the candidate. The book was a best seller, just as Trump is handily leading in all the major polls. The contents are mostly simple axioms told through exaggerated stories involving Trump and other high profile people. The secret sauce of his success is not complex, which makes it, and him, easy to dismiss. (Disclaimer: I'm a Rand Paul type. I don't support Trump, but I'm impressed by his performance and intrigued by how such an unconventional candidate does so well.)
The premise of the book is a simple recap of Trump's biggest deals to date. It begins with a summary of a week in his life, a series of phone calls, meetings, and consultations. This is followed by the elements of the deal, a summary of how Trump negotiates. This is the most significant chapter in the book. The remaining chapters are merely the behind the scenes names and events relating to his major projects.
I think Trump's chapter on the elements of the deal are the most useful part of the book, and they offer a template for his current run for the White House. Trump opens the chapter with this summary:
"My style of deal-making is quite simple and straightforward. I aim very high, and then I just keep pushing and pushing and pushing until I get what I'm after. Sometimes, I settle for less than I sought, but in most cases I still end up with what I want."
Here's a review of each element:
Think Big - Trump doesn't just want to be successful, he wants to do big, bold, outrageous things. He claims most people are scared to think big. They are afraid of success, afraid of making decisions; by thinking big, he has an advantage.
In the campaign, all the candidates are thinking big, in that they want to hold the nation's most powerful position. However, Trump has made the biggest, boldest claims of any candidate. He'll build a real wall on our border, paid for by our neighbors. He'll wipe out ISIS. He'll tame the Chinese business juggernaut. He boycotted a debate and he's threatening to sue another candidate.
Protect the Downside and the Upside Will Take Care of Itself - Trump is viewed as a gambler, but he views himself as conservative in business. He'd rather own slot machines than play them. In every deal, he anticipates the worst case, and only makes a deal where he can accept that outcome. His many examples in the book focus on how he negotiated terms that required very little up front money from him, and no personal liability. In the campaign, he's following the same playbook. He makes claims that he is self-funding his campaign, but he's received a tremendous amount of valuable media exposure, free of charge. Unlike other rich businessmen who have spent considerable sums to seek political office, Trump has limited his downside by not having to spend much of his own money. His personality, media celebrity, and extreme statements have catapulted him to the top of the name recognition list, without spending a dime.
Maximize Your Options - Trump protects himself by never getting too attached to one deal or one approach. In business, Trump knows how to pivot to ensure a successful outcome and gives many examples related to his past development projects. As a candidate, Trump has been flexible on timing, having considered a run for President on at least two other occasions. He's also been flexible on his policy positions over the years, and even spent time supporting both political parties. In the traditional world, consistency is paramount, but Trump is a master at being flexible and deflecting the criticism it attracts. As he often notes, even Reagan switched parties and policies.
Know Your Market - Trump puts a lot of emphasis on instinct, something he thinks is genetic. But he also promotes the idea of getting lots of the right kinds of opinions. He's a great believer in asking everyone for an opinion before making a decision. He likes to do his own research, and gather his own surveys, rather than rely on paid consultants. He rarely listens to critics. He's shown good instincts in his campaign, despite being a novice. He's correctly noted that Republican voters are angry about illegal immigration and terrorism, and he quickly staked out the most extreme positions on both. Regardless of what one thinks of his policies or his rhetoric, Trump is filling arenas and leading the polls by tapping into the discontent of millions of Americans.
Use Your Leverage - The worst thing you can do in a negotiation is appear desperate to make it. The best thing you can do is deal from a position of strength, and leverage is strength. It means having something the other guy wants, or needs, or cannot do without. You have to convince the other party the deal is in their best interest. In a key example, Trump notes that his leverage came from confirming an impression the other party was predisposed to believe. We see the same in his campaign. Most economists agree free trade is good and beneficial to the U.S. However, the average citizen believes America is getting a poor deal from trade with China and other nations. They believe immigrants take jobs from Americans. Trump uses these beliefs as leverage, and stakes out positions that confirm what Bryan Caplan calls the myth of the rational voter.
Enhance Your Location - Trump deals mostly in real estate, where the golden rule is location, location, location. However, he advocates finding good deals over finding the best locations, because you can enhance locations through promotion and psychology. This one is the least applicable to his campaign, but I do think we see him loosely following this advice. Traditional campaigns fight hard and pay big bucks for the premium resources (consultants, get out the vote machines, etc) in each region. Trump has not. He has a capable but not premium organization, and he supplements it with promotion and psychology. Contrast this with Bush, who has the largest organization and the biggest PACs and SPACs, but is languishing in the polls. Trump is a value investor.
Get the Word Out - Promotion is something that defines Trump. He's very good at it, and he's widely criticized for it's negative connotations. Let me quote Trump extensively.
"One thing I've learned about the press is that they're always hungry for a good story and the more sensational the better. It's the nature of the job, and I understand that. The point is that if you are a little different, or a little outrageous, or if you do things that are bold or controversial, the press is going to write about you."
Trump admits to purposely acting this way, but has no delusions that the press like him personally. He also thinks negative publicity can still be valuable, because it makes the story bigger. His key is to be straight with reporters, and when they ask tough questions, he manipulates them.
"I try not to deceive them or to be defensive, because those are precisely the ways most people get themselves into trouble with the press. Instead, when a reporter asks me a tough question, I try to frame a positive answer, even if that means shifting ground."
Trump also combines his promotion with his mantra to think big. He's going to Make America Great Again. His big plans are hyperbole, not lies. He may not build an actual wall on the border, but the imagery is all he's after to promote himself.
"The final key to the way I promote is bravado. I play to people's fantasies. People may not always think big themselves, but they can still get very excited by those who do. That's why a little hyperbole never hurts. People want to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole. It's an innocent form of exaggeration - and a very effective form of promotion."
Fight Back - This is simple to Trump. Try to get along, but if you believe in what you are doing, you have to be willing to fight for it. Trump says there will always be those who lose at life and get a sense of satisfaction from trying to stop others from succeeding. I think this explains his willingness to fight Fox News, and certain TV anchors. He sued Univision, a former partner, but has settled it and will soon give them an exclusive interview (look for him to win lots of Hispanic votes). In the most recent debate, he frequently called the other candidates "liars" and is now threatening to sue Ted Cruz. Trump may not win, but he will not go down without a huge fight.
Deliver the Goods - Here Trump warns that promotion is not enough. If you cannot deliver on your grand plans, people will eventually abandon you. You can't con people for very long. This is the biggest unanswered question about Trump's campaign. Traditional pundits say he's all talk, and unfit to be President. They say he will eventually fail to deliver, and voters will turn on him. Quite possible, and it should be fun to monitor.
Contain the Costs - Trump warns that you'll never be successful with your great dreams if you don't learn how to contain costs. It's critical in large real estate projects. I think he adheres to this in his campaign as well. Again Bush is the bad example, and Trump seems to be running a very lean organization. Consider how other multi-millionaire businessmen have funded past campaigns. Even Romney put lots of his personal money into the effort. So far, Trump has not, or has not been forced to do so.
Have Fun - Trump claims money is not a motivator to him, other than as a way to keep score. To him, the deal itself is the reward. He enjoys competing and winning. Critics claim Trump isn't really serious, and that when things don't go his way, he'll take his ball and go home. That's possible. But if he truly enjoys the competition, he may be in this longer than the pundits think. When I watch Trump, he does seem to be enjoying himself. He revels in having the lead, and speaking to large crowds. He also seems to enjoy needling other candidates, and his critics.
That's it. A long look at Trump's magic. Very simple stuff, but it does seem to explain his approach to campaigning. I think it is easy to dismiss Trump as a bully or buffoon, but that misses the fact that lots of bullies and buffoons run for office, yet none of them dominate the way Trump has. There is some skill here that critics are ignoring. I'll close with my favorite story from Trump: The Art of the Deal, which showcases many of these elements.
Mrs. Annabel Hill from Georgia became a national news story when her sixty-seven year old husband committed suicide, hoping the insurance proceeds would cover the debt on their family farm, which had been in the family for generations. It was not enough, and now the bank was going to foreclose on the widow. Trump makes a few calls, and gets in touch with a VP at the bank. The banker claims the foreclosure process has begun and "nothing or no one is going to stop it." Here's classic Trump:
"I said to the guy: 'You listen to me. If you do foreclose, I'll personally bring a lawsuit for murder against you and your bank, on the grounds that you harassed Mrs. Hill's husband to his death.' ... Sometimes it pays to be a little wild."
Trump succeeded in halting the foreclosure. He and Don Imus raised funds to repay the mortgage, and held a mortgage burning ceremony on Mrs. Hill's farm that Christmas.
Hyperbole, toughness, winning, and celebrating. That's Trump: The Art of the Deal.