Skip to Content

Power Sheet – March 3, 2016

What’s the difference between Donald Trump and Bernie Sanders? That’s a real question, not the set-up for a punch line, and here’s what I mean. The two are in many ways remarkably similar. Each is trying to become his party’s presidential nominee, and each is tapping into the anger and resentment of voters who feel they’re being cheated by a class of people who are denying them the secure jobs and rising living standard they’ve earned. Voters who think the source of their pain is in Washington vote for Trump, and those who think it’s on Wall Street vote for Sanders. Further, both candidates are performing the same, drawing around 35% to 40% support on average, with a few higher or lower exceptions.

And yet – one is the political phenomenon of the age, front page news every day, and looking ever more like his party’s nominee. The other looks like one of those curiosities who occur in every cycle, whose flame flares brightly but briefly, and who will be remembered in a year as a footnote, if at all.

So what’s the difference? The answer is obvious: Trump faces four opponents who split their support, so his 35% makes him the winner, while Sanders faces only one opponent, so the same share of the vote (his average vote share actually beat Trump’s on Super Tuesday) makes him a no-hope loser. They’re two politicians who by most measures are doing the same thing and getting the same results, but as the game theorists would say, the structure of the game led to opposite outcomes.

Many lessons will be drawn from this presidential race, and one of the most important for party leaders, donors, and prospective future candidates will be why so few candidates pursued the Democratic nomination. An anecdote suggests one reason. In April 2008 I was sitting backstage at a conference with two former government officials, both famous, a Republican and a Democrat, old friends; I can’t use their names. The Republican said, “You’re supporting Hillary, right?” “Yes,” said the Democrat. His friend asked, “Why?” The Democrat replied, “Because I don’t want my car to blow up.” We’ll presume he was speaking metaphorically. The presumption that the Clintons, in addition to being formidable fund raisers, are tough, take-no-prisoners operators had intimidated a guy who was known as a pretty tough customer himself. More broadly, Hillary Clinton prevented any credible challenger from entering the race by creating an air of invincibility that took many years to build. When Sanders unexpectedly surged, the dearth of other challengers made all the difference.

The lessons are not self-evident. Advising future candidates to recreate Hillary Clinton’s situation is not especially useful unless they can start working on it in college, as she did. Party leaders and donors used to influence powerfully which candidates got a foothold, but in the age of social media and online fund raising, that power is waning. It’s safe to guess that all players will conclude they must start years in advance to influence who brings the most resources into the contest, how delegates are awarded, and when – that is, shaping the structure of the game. And they’ll need to do it long before the next contest is visibly underway.

You can share Power Sheet with friends and followers here.

What We’re Reading Today

White House vetting appellate judge for Supreme Court 

Jane Kelly is a judge on the 8th U.S. Circuit Court of Appeals in St. Louis and was confirmed unanimously by the Senate in 2013. An Iowan, she had been considered a potential nominee in part because of her connection to Iowa Senator Chuck Grassley, chairman of the Judiciary Committee. Grassley has said she’s “well regarded” in his home state. Republicans have vowed to ignore any nominee selected by President Barack Obama. Fortune

Former Chesapeake Energy CEO dies in car crash 

A day after Aubrey McClendon was charged with conspiring to rig prices of oil and gas leases, he died in a one-car crash in Oklahoma City. McClendon was a pioneer of fracking, which drove Chesapeake’s rise and made him a billionaire. He had denied the charges against him. NPR

VW acknowledges CEO received emissions memo…

…a year before authorities discovered that the company was using software to defeat emissions tests. But the company can’t confirm that then-CEO Martin Winterkorn read the memo. Volkswagen also said that regardless of whether he read the memo, senior management didn’t understand the severity of the problem until months later. The company argues that it therefore was not required to inform shareholders of the issue at that time, countering allegations in shareholder lawsuits. NYT

DOJ gives immunity to ex-Clinton staffer

Bryan Pagliano, who worked for Hillary Clinton while she was Secretary of State, set up her private email server. Now that the FBI has finished its review of Clinton’s emails, it’s trying to judge whether a crime was committed. A Clinton campaign spokesperson said she supports Pagliano’s working with the authorities. Pagliano originally invoked his Fifth Amendment privilege to avoid self-incrimination when contacted by investigators. CNN

Building a Better Leader

Average CMO tenure drops for the first time in a decade

Spencer Stuart’s annual survey shows average CMO tenure fell from 48 months to 44 months. WSJ

LinkedIn CEO donates his stock bonus to employees

Jeff Weiner‘s $14-million bonus goes back into the stock pool for employees. His decision follows a 40% decline in the stock earlier this month. Fortune

Hormel must pay $195,000 in back pay to employees…. 

…for time spent putting on clothing and equipment at a Wisconsin canning plant. The Wisconsin Supreme Court ruled that the employer must pay for all the time it controls the physical and mental exertion of an employee.  La Crosse Tribune

Worth Considering

Koch brothers won’t block Trump

Charles and David Koch, major conservative donors, have decided they won’t use their $400-million campaign fund to block Donald Trump‘s rise in the Republican party. Part of the reason is that they reportedly haven’t found a persuasive attack against Trump that sticks. Republican leaders had been counting on Koch support to stop Trump, if needed. Reuters

New Adidas CEO’s aggressive style

CEO Kasper Rorsted says he uses a competitive, aggressive leadership approach embraced more by Americans than Europeans. That approach helped him turn around European consumer products company Henkel. When he started at the firm in 2008, he set aggressive profit margin targets. When the recession hit, Rorsted didn’t abandon his plans and reached the goals by pledging to double managers’ bonuses if they succeeded. He also shed nearly 80% of the more than 1,000 brands that Henkel had when he started. With Adidas falling to third place among sports apparel brands in North America, after Nike and Under Armour, it’s in dire need of a similar turnaround.  WSJ

Google helps combat the Zika virus 

The company has donated $1 million to the United Nations Children’s Emergency Fund, and CEO Sundar Pichai has provided engineers who have volunteered to help the organization map the spread of the virus. It’s building a system that can “process data from different sources” and predict potential outbreaks, according to Google’s blog post announcing the donation. Fortune

Up or Out

Republican presidential candidate Ben Carson says he doesn’t see a “path forward” to the nomination and will skip today’s GOP debate. But he didn’t formally suspend his campaign. Fortune

TPG Capital has hired former Goldman executive Jack Daly to oversee its industrial acquisitions. NYT

Fortune Reads and Videos

‘FanDuel for stocks’ 

Forcerank allows you to compete with others by ranking 10 stocks for the week. Fortune

Big Auto lines up against Brexit 

Toyota, BMW, and other carmakers say jobs and investment could leave the U.K. if it separates from the European Union. Fortune

Increasing promotions from within…

…has turned Hilton Hotels into one of the Best Places to Work. The tactic has improved employees’ professional satisfaction on the job. Fortune

Women can achieve gender parity by 2040…

…if the world doubles the rate of digital fluency among women, says Accenture. That’s 25 years earlier than the World Economic Forum’s estimate. Fortune

Quote of the Day

“[T]he diesel matter, as it was treated as one of many product issues facing the Company, did not initially receive particular attention at the management levels of Volkswagen.…For global automobile manufacturers, service measures and recall campaigns are nothing out of the ordinary. Volkswagen expressly regrets that, looking back, the situation is different.” — Volkswagen statement accompanying the release of documents concerning the emissions cheating scandal that Martin Winterkorn received when he was CEO.  Volkswagen

Share Today’s Power Sheet: 
http://fortune.com/newsletter/powersheet/

Produced by Ryan Derousseau
@ryanderous
powersheet@newsletters.fortune.com