There's an age-old axiom in Washington that goes, "Personnel is policy." It's also reflected in business: How many times have you heard investors say they really put their money behind people, not plans?

Recently President Obama unveiled his new list of ambassadorial nominees. Like other presidents, his representatives in friendly countries and garden spots will mostly consist of his friends and fundraisers. His top diplomats in countries with more complicated U.S. relationships will be career foreign service veterans.

There's nothing new about that arrangement, but it got me thinking about the three categories of confidants in Obama's second-term administration and what they say about his priorities. To my mind, he values three things: loyaltycaution, and filling in a missing element from his personal background, namely business experience.

Chances are a survey of who you've partnered with and hired says a lot about your values as well. 


Look at a list of Obama's appointments -- especially his second-term appointments -- and you'll see one familiar name after another. This president clearly values loyalty, perhaps above all other attributes.

Obama's new chief of staff, Denis McDonough, is a veteran of his Senate office and worked on his 2008 campaign. His new U.S. trade representative, Michael Froman, was a law school classmate. Meanwhile, his new treasury secretary is Jack Lew, who was previously chief of staff. And his (relatively) new secretary of state is John Kerry, who was one of Obama's most prominent endorsers in January 2008, when Obama was running for the Democratic party presidential nomination.

Many successful entrepreneurs recommend partnering primarily with people you've already developed relationships with -- those who've shown integrity, loyalty, and an ability to work with you. But is that always the best policy? 

Business Experience

The first-term Obama cabinet was striking in that its members had comparatively little private sector experience. (We went from a George W. Bush administration that was heavy on big business backgrounds -- Vice President Cheney, Donald Rumsfeld, Bush himself -- to one whose members had backgrounds in the public sector -- Vice President Biden, Hillary Clinton, Obama, etc.).

The second Obama cabinet has more people with business experience. Interior Secretary Sally Jewel was formerly the chief executive at REI. And Obama's nominee for Secretary of Commerce is Penny Pritzker, "the daughter of the co-founder of the Hyatt hotel chain and a successful investor in her own right," as The Washington Post has described her. Her estimated net worth is $1.85 billion.

Obama's second-term additions in this category reflect a positive, if belated, effort to shore up one of the deficiencies in his first-term cabinet's background. Are there holes in your skills and experience? How do you recruit people to your team to fill them? 


There are two holdovers from the first cabinet who were expected to leave, which would have been shocking because of the confirmation battles he'd need to endure to replace them. That may have been an incentive to keep them around. 

The first is Attorney General Eric Holder, a lightning rod for Republicans. The Health and Human Services Secretary, Kathleen Sebelius, also plans to stay for a second term. Replacing her would have meant yet another opportunity for Obamacare opponents to open up that issue again.

Personnel decisions are among the most difficult. Have you retained any second-choice performers on your team, simply because replacing them would be too much of a hassle?