Donald Trump said he’d run the White House like a business, but no big business is run like Donald Trump’s White House

President Donald Trump speaks during an interview with Reuters at the White House in Washington, U.S., January 17, 2018.
Kevin Lamarque | Reuters

On the campaign trail, then-candidate Donald Trump pointed to his business acumen as evidence of his effective leadership and repeatedly promised to run the White House like a business.

Once elected, he filled top Cabinet positions with former business executives in an apparent bid to satisfy this key campaign promise.

Now, more than a year into a presidency that has been plagued with high turnover, public feuds, ongoing leaks and low employee morale, top management experts agree that no large company in America is run quite like Trump's White House.

"If a corporate leader tried to do what Trump does, he would probably get fired," says Jeffrey Pfeffer, a professor of organizational behavior at Stanford Graduate School of Business and author of the book "Dying for a Paycheck."

The White House did not immediately respond to CNBC's request for comment on this story.

Reports from The New York Times and other publications suggest that Trump runs his White House using chaos as a management technique. However, the president tweeted that isn't the case. "The new Fake News narrative is that there is CHAOS in the White House. Wrong!" he wrote on March 6.


Although considered ineffective at well-established companies, embracing chaos as a management strategy isn't totally unheard of, particularly for start-ups, business experts say.

President Donald Trump displays his signature after signing the $1.5 trillion tax overhaul plan in the Oval Office of the White House in Washington, U.S., December 22, 2017.
Jonathan Ernst | Reuters

Willie Pietersen, a management professor at Columbia Business School and author of "Strategic Learning: How to Be Smarter Than Your Competition and Turn Key Insights into Competitive Advantage," points to the late Apple founder Steve Jobs.

"Steve Jobs was one of those who was somewhat chaotic as a kind of innovative genius," Pietersen tells CNBC Make It. "[Jobs] was in many cases very cruel to people and very unkind but people gave him a pass on that because of his absolute brilliance, and the excitement and the exhilaration of working behind a brilliant idea."

During Apple's early years, Jobs was fond of calling employees in the middle of the night. If he suddenly had a new idea, he'd completely change everyone's course of action and scrap previous plans.

"[Jobs] was constantly shaking up the organization, constantly striving for new things, rolling over people who didn't agree with him, and sometimes treating them in a brazen and unfair way," says Pietersen. "He was not known as a diplomat in any sense at all."

This chaotic management style proved to be effective for Apple and ultimately led to the creation of highly innovative products, namely the iPad and iPhone. "[Jobs'] mind was very active and very creative," says Pietersen. "And then he hit upon something that was totally brilliant and off it went."

Jobs isn't alone in using chaos to manage others. Pietersen points to start-up founders like SpaceX and Tesla's Elon Musk, Amazon's Jeff Bezos and Facebook's Mark Zuckerberg as successful leaders who had somewhat chaotic management styles at the start of their companies.

However, Pietersen warns that there's a major difference between the leadership style required to run a start-up, whose aim is to be disruptive and innovative, and that of an established organization like IBM. "Would Elon Musk be a candidate to run IBM or General Electric? My answer would be no," says Pietersen.

Start-ups don't have established systems and are much more experimental. They also tend to be led by the same person or group of people who raised the money for the company, which gives them more leeway to be chaotic in the hopes that they become rich and make their investors rich.

"Typically at the beginning of a start-up," says Pietersen, "it's almost necessary to be chaotic because these are ideas that have never been thought out before and there are no underlying structures or systems to make them happen."

But once a start-up transitions into a larger organization, says Pietersen, the leadership team becomes more disciplined and moves away from this chaotic management style. In fact, many start-up founders ultimately sell their company to people who are better suited to run a large organization effectively.

"That's a very good decision at that stage," says Pietersen, "because [they're] not built to run a steady enterprise or a complex enterprise." Meanwhile, companies like Apple whose founders stay on as CEOs are able to remain successful because their business leaders tailor their management style to be more conducive for a large-scale operation.

As for the White House, Pietersen questions whether Trump intentionally uses a chaos-based management style — namely because the U.S. government is not a start-up. "I don't know that it's an explicit philosophy so much as a sense of disorganization," he says.

Intentional or not, Trump's use of chaos has been effective at distracting people from critiquing his policies, says Pfeffer. He likens Trump to a magic act: "One of the things that a magician does is move lots of hands," he tells CNBC Make It. "The intention, of course, is to divert your eyes so you don't see what he or she is really doing. And I think that's pretty much what Trump has been able to accomplish."

The Stanford professor notes that Jobs used a somewhat similar strategy (although in a different context and in a less extreme manner). When a new iPhone release was impending, Jobs would create a frenzied fanfare over the unveiling, leading to speculation about the iPhone's release date, the possible new features and where the launch would take place. This "chaos" kept the public's focus on the newness of the product instead of whether or not the latest iPhone was actually better than the previous one, says Pfeffer.

Apple CEO Steve Jobs delivers a keynote address at the 2005 Macworld Expo.
Justin Sullivan | Getty Images

Still, Trump's chaotic management style is far from how most successful businesses are run. First, the White House has had nonstop employee turnover, with Secretary of State Rex Tillerson being the latest high-ranking official to leave. However, within the private sector, an organization's management is evaluated based on their ability to hire and retain top talent. In Trump's White House, there is "no stability and there's too much turnover for him to get much of a good score on that," says Pfeffer.

Trump also has a penchant for making decisions on his own. He most recently announced sweeping tariffs on steel and aluminum against the advice of senior economic advisor Gary Cohn and Republican members of Congress. Cohn resigned after Trump announced the tariffs.

When coming to a decision, effective leaders understand that others may have opposing viewpoints, says Pietersen. Yet they still open up the discussion for input, thoroughly explore all options and make a "legitimate" conclusion based on the information at hand. The president, however, approaches decisions with an "I know best" mentality, says Pietersen. "If you're doing it as an expression of power, if you're doing it to serve yourself, that's not a good decision."

Again Pietersen points to Jobs, whom he regards as an excellent decision-maker. Once Apple became an established company, Jobs would create various teams to work on projections that had breakthrough potential. When they reported back with their findings, he listened to all of their ideas before picking the strongest ones and shelving the others.

Pietersen also notes that although Jobs initially had a chaotic management style, his leadership strategy was based on creating innovative products. This allowed him to galvanize his employees to buy into his ideas. The president's style, on the other hand, is purely ego-driven and does not reflect a shared interest with his constituents, Pietersen says. He points to Trump's statements where he boasts his wealth, his ability to build "great" walls and his intellectual prowess as evidence of this self-serving attitude.

TRUMP TWEET: "I call my own shots"

"The companies that I worked with, this would have been regarded as a totally unsuitable leadership style," says Pietersen, who served as the CEO of multibillion dollar companies for over 20 years and now advises global companies like Boeing, Deloitte and Exxon Mobil.

But if the White House were in fact run as a business, then Americans would see quite a few changes, according to management experts. The turnover rate would decrease, Trump would have a clear-cut plan describing what he wants to achieve, and everyone on his team would be aware of that plan and on the same page. Currently, Trump's aides are often left to play catch up to the president. "You never know from one minute to the next what you're supposed to be doing," says Pfeffer. "It's extremely difficult to execute policy when the policy changes too frequently."

The same goes for business. "Successful businesses set a strategic direction and they hold to that direction at least for awhile," he says. Although circumstances do change in business, they don't occur daily because that leaves people "confused about what they're supposed to be trying to accomplish," says the Stanford professor.

And while Trump's business ventures have had varying degrees of success, Pietersen says he wouldn't recommend his particular management style because too much of the president's behavior is "driven by a need for ego enlargement."

"We wouldn't hire somebody with that profile at the companies that I ran, and if we made a mistake hiring somebody like that, they wouldn't last more than five minutes," he says. "It's just not a leadership style that is productive and it's far too self-referential."

Like this story? Like CNBC Make It on Facebook.

Don't miss: 5 things to know about Robert Johnson, America's first black billionaire

Kellyanne Conway: Those on Medicaid who will lose health insurance can always get jobs
Kellyanne Conway: Those on Medicaid who will lose health insurance can always get jobs