Will Bachman 00:01
Hello and welcome to Unleashed the show that explores how to thrive as an independent professional Unleashed is produced by Umbrex, which connects you with the world’s top independent management consultants. I’m your host Will Bachman. And I’m here today with Matt McDonald, who is a partner at Hamilton plays strategies, a public policy and communications firm. And Matt was just named one of the 38 power players of consulting by Business Insider. Matt, welcome to the show.

Matt McDonald 00:31
Thank you for having me. I’m not the only power player on this podcast, though. Yeah, congratulations. Thank

Will Bachman 00:39
you. Thank you. I was named as one as well, which was, which was really cool. Matt, first of all, I am kind of from a management consulting background, you’re McKinsey alum as well, you have the background as well. But I am really not that familiar with the world of public policy, consulting, and even what that is. So give us an overview of what that term even means.

Matt McDonald 01:02
Yeah, sure. Well, you know, when I think for a lot of companies when they reach a certain size, and certainly we’re seeing this with a lot of companies today is that the you know, I forget, what’s the joking phrase that you may not care about government that government cares about you is that there is an element of you get to a certain size, and you are of interest to kind of the government, the regulators, that sort of thing. And so you know, that at some point, companies have to engage with government entities. And part of what we try to do is work with both the government side of things and the debates that go on in Washington and companies themselves to really shape public policy, legislation, regulation, that would be the best outcomes for everybody involved. That’s, that’s kind of the basic goals of what we do. Okay.

Will Bachman 02:00
And give me an example of what that means in practice, and maybe you could differentiate it for me from what a lobbying firm does, or you know, if Yeah, overlap or if it’s the same, or if it’s very distinct. Yeah, there’s, there’s a well, you know, examples of

Matt McDonald 02:17
the types of work that we do. You know, right now, we’re working on work around the antitrust debate around big tech. So lots of as an example, right now, there’s, in the context of the coronavirus pandemic, there’s lots of discussions in Washington among certain circles about putting a moratorium on m&a transactions, right. And that’s part of a broad kind of antitrust scrutiny that’s been going on for some years in Washington, you know, part of the work that we would do is, you know, illis, in the context of tech competition, illustrate kind of what’s happening in that space, and what what the how dynamic It is, in the context of m&a, you know, we’d be talking to people in DC about the value of that, especially in a volatile time to both preserving businesses and preserving jobs and that sort of thing going forward. The distinction, you know, I would say the distinction on lobbying is an interesting one, where, in Washington firms that do lobbying have to formally register to go in and talk to members of Congress and or regulators and that sort of thing. You know, for us in the work that we do, we’re typically working more we do work with lobbyists and help them help with their research or help craft their arguments, or we’ll work with, you know, trade associations in Washington, we work with lots of reporters who are trying to explain this stuff to the broad public and to DC itself. There’s a little bit of a line drawn of kind of whether you go in and are the person that talks to a member of congress say a lot of those people are former aides to people on Capitol Hill and that sort of thing. So there’s a little bit of relationship that drives that as opposed to kind of, on our side of things, it tends to be more substance driven around a particular argument or debate and the research that goes into that and how you talk about that with the media or with other other players in DC, that sort of thing.

Will Bachman 04:17
Okay, so I’ve read some places that while we thinks or at least from the popular press of lobbyists as being these kind of back slappers, who, you know, just really are giving a lot of, you know, campaign contributions or just kind of going out golfing or inviting Congress, people to some resort, that really a lot of their power actually comes from being able to provide information and arguments that are coherent or even, you know, kind of drafting legislation because staff is so short handed, particularly at the state level, that and I think this was maybe in the book state capture This is argument about a like that it’s not so much about that you’re giving them contributions or being their friend, but it’s your provide helping them kind of do their job by giving them data arguments, graphs, you know, talking. Yeah.

05:16
So this is there’s,

Matt McDonald 05:17
yeah, this is interesting, there’s a lot to there’s a lot to unpack on it. So I would say, you know, it is true that over time, lobbying in particular has moved from what you might call access or relationship driven lobbying, more to expertise driven lobbying, right. You know, part of the work that we think about in in general is how do you how do you? How do you? How do you get the information that is most important to everyone making a good decision for kind of the collective benefit of the country? How do you get that information in front of the people who are making those decisions? Right, that’s that’s one way to think about it. The the other half of what you’re talking about, of kind of that the staff side and the resources that exists there, you know, that that’s developed in interesting ways over the past couple of decades. It’s, you know, there’s there’s aspects, and there’s been some discussion DC over a few years on this of like, some of the reforms that were kind of put forward as good government reforms have actually had the result of gutting some of the expertise that exists in government. So if you ever look at, for example, term limits, which was, you know, I don’t know term limits is probably a hot thing in the 90s. I don’t hear people talking about it as much anymore. But But term limits, I worked for Governor Schwarzenegger in California for a while, right. And term limits are a big thing in California, where, and part of what has resulted in that is that people actually aren’t in office long enough to really learn the ropes or be expert in the types of things that they’re expected to do. And what you point out is that, that the lobbying industry helps fill that void of expertise in government. So it’s kind of it’s an interesting thing, where you have this, you have this good government impetus of Hey, you know, we should really like mix it up a little bit so that there are different people in different perspectives, representing us actually results in kind of like, well, nobody’s representing you after the fact, because they’re not even there long enough to really learn the ropes, which is kind of, you know, it’s backwards. But there’s lots of sometimes I feel like I am generally in the business of unintended consequences, right? I mean, it does have this question of like, I, oftentimes, oftentimes, like the worst policy decisions I see are ones where there’s, there’s a free lunch, or people think there’s a free lunch, and they don’t even know the choice that they’re making, right? Because there’s always a choice. There’s always some sort of trade off. And, and that’s what’s often not clear to people.

Will Bachman 07:54
So walk me through how an engagement actually works for a public policy firm like yours. can play strategies. I mean, I don’t know if you could you know, what you can share with with with the one you mentioned the antitrust debates. But I’d like to hear kind of, what would the kind of statement of work look like? And then what does your firm actually do? What’s the deliverable? Is it content that the new produces white papers? Or is it then something that, you know, the industry tech industry, so just walk me through it? And engagements are sort of how that world works? Yeah, absolutely. So

Matt McDonald 08:31
typically, you’ve got you’ve got kind of one of two scenarios, right, is that we’re either hired as a on a retainer basis as a firm to help a client with typically research or communication support. And then, and that may be around a particular issue, or it may be for general support, you know, there are there are companies that are large enough, where they have a specific kind of Global Head of public policy role, right. And a lot of our contracts flow through that, or a chief communications officer, or sometimes the marketing functions of different companies, right. And then the way that the work typically unfolds is that, you know, I would say that there’s, there’s a few different pieces to it. But in tip, typically, you’re talking about some portion of research work. So going and doing a deep dive on the issue and really understanding it backwards and forwards. Sometimes that will, a lot of times that will result in kind of the development of a research book that that outlines all the details of the different arguments and the points that people make and the data and that sort of thing. That is sometimes that will get used for creating content that may result in white papers or may inform you know, websites or social media posts or that sort of thing. And then there’s a you know, and then on the back end, there’s an element of like okay, here is the information that was collected here. To understand this situation, how do we get it in front of the people who need this information to make better informed decisions, right. And that can take multiple, multiple forms. And we typically try to be, you know, the way that we think about is that there’s a little bit of, we try to be a little bit platform agnostic on how we approach that. But a lot of times you’re talking about, you know, talking to reporters, placing stories in the media, developing out content on websites, social media, kind of all the different ways that people talk about public policy in Washington, we try to be there with the information that’s relevant for those debates.

Will Bachman 10:37
Okay. I’m curious about the point about kind of placing stories in the media and talking to reporters. Yeah. When when you read the newspaper, what are some signs to you that a story has been kind of placed there by a firm like yours? Are there some sort of telltale signs that that helped help? You know, okay, that was, you know, kind of planted there somehow or introduced to that reporter by by by a firm, just the way it’s written with the references and the data and so forth?

Matt McDonald 11:12
Well, it’s not, you know, if it’s a straight news story, it’s not usually that clean. You know, I would say that, I would say the, it’s funny because reading the news as deeply as I do, and paying attention to it, you kind of get a sense for where stories go and how they evolve over time. You know, and, and, when you’re reading a story, I think that the thing that that after you after you after you work in this industry professionally, the thing that you really pay attention to is the people that are in the story, right? I am, I am frequently more interested in the byline that I am in the title. And I am frequently more interested in the sources that are quoted than I am the facts and the story, right? Because really, what what you’re seeing when you read coverage of different public debates in Washington is that you’re reading the public version, have lots of private conversations that happen every day in Washington. That’s really what you’re seeing. Right? So if you look through and read kind of who is saying, what about what and what the quotes are, and then and then which which quotes aren’t attributed to people, you can get a sense for where the debate or argument is going on different

12:27
things.

12:28
That’s I mean, that’s how I actually read the news.

Will Bachman 12:34
Now, I imagine now that you mentioned sort of the the antitrust for tech, that’s obviously this massive story. But yeah, I’m curious. There’s only so many room for so many stories on the front pages. And I imagine that there’s, like, maybe it’s like the the iceberg in that Titanic, that so many of these policy things would be really obscure, very important to some company or some Industry Association, but just to not never be in the news. Yeah. Do you work on those sorts of issues that are just kind of like, I mean, you never even hear about if you read the New York Times, but you know, maybe it’s important to the milk industry or the car, you know, the corrugated industry or something?

Matt McDonald 13:13
Yeah, there’s definitely, there’s definitely a lot of stuff that that crops up like that, I would say that, you know, for us, what you’ll see typically in Washington around those types of issues that are that are fairly niche is that a lot of those industries rely on their trade association, as their voice in Washington on a specific set of issues, right? We typically come in on issues that are much more consequential, where they really need serious help. And it’s, it’s under scrutiny, right. I mean, we, you know, the shorthand for something that I think about with our work in our firm is that, you know, we basically work on very complex issues that have pretty high public exposure. And that’s, and so that’s kind of the zone that we get, and so if it’s, you know, if it’s kind of debates around like, you know, the northeastern milk compact, and how that what what the trade relations with Canada, how that implies, mean, that theoretically, that’s work that we could do, but, but typically, you know, people are relying on their trade associations for that sets of stuff. Like I’ll give you an example of an issue that we’ve been working on recently, that’s that’s cropped up in the context of the coronavirus pandemic, is that there’s a big debate brewing around business interruption insurance for small businesses and the fact that it doesn’t cover pandemics. That’s a place where we’re working on that debate with insurers to kind of explain what the policies do and do not cover and how government can help small businesses, even though the they know typically bought policies that cover pandemics, you know, so that’s a you look at something like And that is a hundreds of billions of dollars at stake and in need for small businesses across the country. So that’s typically kind of a level of work that we end up getting involved in.

Will Bachman 15:13
Okay, that helpful. So how does this work actually get done? And maybe let me rephrase that? What are certain a different place? Does your firm or is this something that other firms would do? Just sort of monitor policy discussions at the local state and federal level? for a company? You know, you mentioned earlier, some firms might have a Global Head of policy, but in order to see you even know what’s going on, they I’m curious if there’s firms that sort of do that monitoring of, okay, there’s bills under discussion in Nebraska and California, New York City? Yeah. Is it number one, just to monitor and number two, even to figure out, Okay, what what should our position be, you know, for our company, how does that impact some things might be super obvious. But other things? It might be unclear, like, you know, if you’re representing Google, like, what side of this should google be on? You know? Yeah, so Yeah, so? Yeah, absolutely.

Matt McDonald 16:15
There’s, there’s a lot of, there’s a lot of dimensions that so there’s, there’s definitely a whole industry around monitoring legislation and regulation. It’s, it’s interesting, most, a lot of the government functions on that are online. But it does kind of remind me of a little bit of like Bloomberg, and Bloomberg operates in the company that the guy operates in this space where of tracking legislation, so so you have both lobbyists tracking legislation proper, you have a bunch of technical tools that are keeping track of how some of these things are moving through, you have kind of media monitoring a host of tools, and people who do that. And then the other the other actually really fascinating piece is, is social media. You know, Twitter in particular is just a, a very heavy, heavily trafficked site for both kind of political policymakers and reporters, that’s, that’s a heavy place where a lot of these conversations go. And that’s a some of that’s a super easy thing to monitor and target, because you can do, you know, you can create API’s that alert you to different positions that people are taking, or what’s going on. So, you know, and one of the things that we’ve developed over the past several years is kind of, you know, media monitoring and analytics tools to get a sense for the Share of Voice on any particular topic, and how that’s moving over time and how people should and what how people should be thinking about it, you know, you raise the question of, Okay, do we weigh on on this? Or do we weigh in on that? It’s my sense that, you know, corporate America has come under, I would say increased, I don’t know, scrutiny, pressure for leadership broadly on public policy debates, you know, with, I would say, with, with kind of both, you know, mixed with a mixed reaction of what they want to win wade into every last political dynamic, but it does have this quality of we’re living in an era where everything has become political, and leaders across the, across the spectrum, find themselves being called on to weigh in on issues that a generation ago would have been left to others. So it’s it’s a very interesting, dynamic in terms of how you know, how politics in Washington are intersecting with the corporate world, he says, All right,

Will Bachman 18:43
so so let’s get back to my earlier question that I jumped around in terms of how one of these engagements actually works. Could you bring me into the guts of it a little bit? And, yeah, but the different phases? What, how does it work?

18:56
Yeah, well, let me talk.

Matt McDonald 18:58
It’s interesting. I mean, let me talk a little bit about how kind of our firm is set up and how we how we approach this type of work. Because it’s interesting, we, you know, I don’t know what I found in recent years. You know, I remember when I, and I suppose this is dating me that it’s not that long ago, when I first started at McKinsey. Excel had 32,000 lines, right? And I can remember being on client projects where we had to go get access installed that, you know, the database program installed on our machine to do particular analysis on a project, right. You know, and it wasn’t a few years later is it is now that there’s a million you can put a million lines into Excel, right? And that, to me, that is like an interesting dimension that has happened across technology that consulting uses, right? So so like the technical tools that are team uses do our job to do the research to, to do that sort of stuff, that’s, that’s gone that act, the accessibility of that has gone way, way, way down. So we fundamentally run a generalist practice. And what that means is that, from a process perspective, the same person on our teams, is doing the research into the issue is then, you know, compiling the research is using that research to maybe like write an op ed for a CEO is place pitching and placing that op ed themselves is then crafting social media on behalf of the CEO on the back end, and then, you know, going in and placing a digital advertising campaign that drives eyeballs to that piece, right. So like, that’s an example of both the way that you know, the way that our work kind of unfolds, but then also how we approach it itself, you know, we don’t really have silos within our organization, which has implications in terms of recruiting and how we think about that, but it really does free us up to have the best to think broadly about what the best strategy or tool is to solve a particular client problem.

Will Bachman 21:16
Wow. But that also means that folks have to be good at a pretty broad range of skills, you know, being able to read it is right cop EDS, do social media,

21:25
it is super, it is super, super difficult. The you know, the,

Matt McDonald 21:32
the type of work that our team does is very kind of left brain right brain, right, you have to have someone who can read and understand research and data, and then also explain it to other people. And and there’s plenty of people who can do one and the other to be able to do both is definitely a challenge. And, you know, when we started the firm, that was kind of the premise of like, combining kind of the depth and analytical ability with the ability to explain it to the different audiences that you care about. You know, and we saw white space in the consulting world, you don’t, when you You never know whether a white space is white because nobody’s thought of it, or because they have thought of it. And it was just so unappealing that they ended it right. And the challenge that we found, you know, I think we’re probably the only consulting firm in Washington that does on campus recruiting, but the solution, the solution to us for to be able to kind of crack the code on that. And that hurdle has really been to just upgrade the talent and approach the talent, and recruiting side from a pretty rigorous perspective, which allows us to get kind of those hybrid people come in, we’re typically looking for, you know, when we’re doing our undergraduate recruiting, you know, our prototype might be an econ major, who also, like, wrote for the school paper or something like that, you know.

Will Bachman 22:58
So you do on campus, both? undergrad, you also do like MBAs or or grad grads, we, we don’t? It’s interesting, you know, we don’t do MBA recruiting. It’s it’s,

Matt McDonald 23:14
I don’t know that we never will, I would say that, in general, the, the price point of the consulting work that we do in DC, I mean, fundamentally, a lot of our work in government broadly is a cost center, right? So it’s hard to come into a client and say, Hey, you know, I can you can pay me a million dollars to do X, and you’ll make $5 million on the back end, right? My, our console, our our conversations are more like, Hey, you know, this is our price, and then the, the, there’s a 1% chance this is going to cost you a billion dollars and maybe a 90% chance it’s going to cost you a you know, half billion dollars, and you can move it this much. I mean, it’s just all very nebulous, right? It’s not, it’s not as clean cut as on the revenue side. So we haven’t done MBA recruiting in general. We’ve tried to, you know, we’ve tried to compete by getting very qualified undergrads. I mean, the The interesting thing about DC, I would say is that it’s not hard to compete on that dimension, because they’re just there aren’t many MBAs in Washington at all. I mean, this is this is a lawyers town. And so like, so you’re generally, you’re generally dealing with professional professional degrees, you’re generally dealing with lawyers, there’s lots of memos. You know, we’re one of the only shops in town that really does DAX in any meaningful way. So it’s just DC is a very culturally different place than kind of the traditional consulting world that I spent time in.

Will Bachman 24:43
So you’re producing DAX and then we’re so it sounds like you’re doing research it does that mostly secondary research or you’re out doing, you know, interviews of experts, surveys, focus groups, like what

Matt McDonald 25:00
Yeah, yeah, it’s, yeah, it’s a little bit of it’s definitely a little bit of all that, I would say that, you know, literature review and secondary research and compiling information is definitely core to it. You know, a lot of but yes, we will do focus groups, we’ll do you know, survey work, we’ll do original analysis of our own, you know, we an example of the type of analysis that we would do, right, we did, back when we were working, we were the firm of record that worked on the too big to fail debate, right? And back in, say, 20, like, 2013 or so. And 2014, there was, there’s a thread in the debate in Washington that said, hey, it’s been five years since the financial crisis, and the big banks are bigger than they were before. Right, as kind of a political shot at the banking industry. You know, our response to that, and the work that we did was to say, okay, you know, that’s fine, but like, let’s take, take a step back and look at that, right. So, one, during the financial crisis, the government literally directed the banks to, to acquire each other. So, you know, you can, you can say they’re bigger, but you can’t, you can’t kind of count against them, actions that you were encouraging them to take one, too is that, you know, the economy just gets bigger. So a banks, you know, a bank is going to grow as the economy grows, and then and then three is that, and so So really, the way to think about that is market share, not big banks, not necessarily like the size. And then three is that there was actually a legislative response in the Dodd Frank act to to change the banking sector. So he said, okay, given all that, what we what we’re going to do is we’re going to look at the banks and look at their market share by size. So you’ve got the big banks, you’ve got the kind of middle market bulge bracket, and then you’ve got small banks. Look at the banks by size from pre Dodd Frank, two after Dodd Frank. And what is the difference? And when we looked in ran that analysis, and that’s analysis that, you know, that we we did, when we ran that analysis, what you found is that the big banks lost market share, the small banks lost market share, and the middle banks grew market share. And that’s what you would expect, based on the legislation you have, you have small banks that struggle to deal with the increase in the regulation, the regulation included penalties for the very largest banks. And so the middle banks were the ones that kind of gained market share as a result of that. So and what we did with that analysis, then is to take Okay, go talk to you know, reporters or policy professionals in Washington and say, Hey, I know you’re hearing this political talking point. But here’s the substance of what’s actually happening and how to understand it. Right? And when you go when you have the actual facts, and you can have those conversations, that’s when you really can change minds and have people understand what is going on.

Will Bachman 28:13
To what degree do you find that facts actually matter in changing the minds of legislators? This Yeah, we just sort of as a outside citizen observer, yeah, the whole world It seems like effects hardly matter anymore that we don’t one party or the other will take a position and then they’ll defend it kind of regardless of you no evidence Yeah. Maybe there’s some issues that are just not that partisan, where you can but do it, you know, affect people with with facts, but I’d love to hear your thoughts on that.

Matt McDonald 28:48
Well, part of how I would think about it, I mean, you know, the you know, the the the analogy of like the duck swimming along the pond where the feet are going like wild and above it’s smooth. Sure. We have an upside down duck structure and in Washington at the top things are going crazy and in arms are flailing but there’s still real substance and real debates going on on real issues underneath the fact and under and underneath kind of the the circus. And it’s weird because you have this element of even though even though on the outside these debates seem crazier than ever. The reality is that underneath the underneath that because it’s such a distraction, there’s actually a lot of policy getting made and changed in ways that that are kind of crazy to understand if you actually look at them, you know. So I don’t know it’s it’s that’s how I think about it is that and in what in what you see is that beneath the radar is that the facts do actually matter in those debates that that people are having And both with both with kind of the observers of the political process with the politicians themselves, and then with reporters, all these kind of different players who are interacting, I would say generally that, you know, they, they generally don’t want to be thought an idiot, right. So so there is an aspect and there’s certainly there’s certainly plenty of politicians in particular who derive, you know, power and influence from kind of the the circus atmosphere that they generate around themselves, and they kind of welcome that scrutiny. But for most of them, they want to, they want to at least understand the things that they’re talking about. And if if they have the sense that they are out of their depth, they’ll they’ll do their homework, it doesn’t necessarily mean that they’re going to change their position, or they’re going to always kind of flip sides of like, oh, I’ve seen the light. This is the right answer. You know, but but they will modify their previous position based on a deeper understanding of whatever the complexities of the issue are at hand.

Will Bachman 31:05
Yes. I mean, there’s some issues that just sort of the big name issues that, you know, pro choice, you know, pro line, things that are, you know, just Yes, so very, very partisan. But then, do you find in this policy world, that there’s some issues that are not really that partisan, like, he couldn’t be looking at it, you wouldn’t necessarily predict republican democrat, where they’re going to be on it maybe matters more? What part of the country they’re from, or what kind of constituents they have, that there’s not it’s not so much of a party line thing, but it’s more just like,

Matt McDonald 31:37
Yeah, I think that’s definitely true. I mean, and, and we actually don’t, you know, we don’t work on, we don’t work on political campaigns, we don’t work on social policy issues. We, for us, as a firm, you know, we because we do analytical work, we center on, you know, knowable issues where you can go do the research, and, you know, you’ll have a perspective, but you can kind of come to us based set of facts around why you have that perspective, as opposed to kind of a values driven argument where, you know, it’s not it’s, it’s, it’s not quite as informed by a fact pattern. It’s just kind of your your orientation or how you think about the world. But I would say that there are issues like that,

32:19
they just,

Matt McDonald 32:20
you know, they kind of don’t get a lot of attention, right? That’s not people agreeing isn’t news. So, so while some of these things can can move ahead, like you’re seeing it right now with the Coronavirus response to things like the PPP, I think that there’s like a general agreement in Congress that that needs to be changed. And they need to increase flexibility that was kind of designed thinking that this that the pandemic was going to be a two month shutdown exercise. And now that it’s not, everybody’s kind of like, okay, we get it, this needs to this needs to add flexibility for small businesses around the country. You know, I just got off watching a committee hearing on the business interruption insurance that we just talked about, and like, there was broad agreement, both on the Republican side on the Democratic side that we can’t retroactively change insurance contracts, right, everybody kind of agreed, and I understood that that would be completely destabilizing to our system of law and the insurance industry broadly. So there are spaces like that, that people kind of come together and agree, it’s just, that’s never what is going to leave the news, what’s going to leave the news is the conflict, you know,

Will Bachman 33:36
yeah, that’s really insightful. So it’s almost the design of the system is things where there’s, you know, real debate or actually kind of agreement on the facts. Those are the things that you don’t hear about.

Matt McDonald 33:46
Yes. Yeah, definitely. I mean, I think that there’s I think that there are kind of I I would say that especially in the current moment with with so much craziness around politics generally is that there there’s a real opportunity to build agreement and substantive progress on different issues, you know, quietly and behind the scenes because nobody really no one politically profits from blowing up things that you know, that are that will be quiet victories. It’s, there’s no there’s not that that’s an interesting dynamic of the moment that we’re in as a result.

Will Bachman 34:24
Tell me is that you’re right in the thick of it. Tell me a little bit of perspective of what what you see going on right now with with with some of the you know, Coronavirus impact. And you know, what you mentioned that you’re working on the insurance issue. Is your firm working on any other issues, you can talk about love to get your perspective on just how the pandemic is what’s going on in Washington.

Matt McDonald 34:50
Yeah, it’s interesting, you know, I would say that we had, I think back to March, you know, our firm started working remotely a little bit early. Really, which was helpful I marching, marching. And candidly, a lot of April to me, for our, for our clients were actually a lot less than, like on the policy side, but more on the employee and personnel and that side of things of how do we, how do we adapt to this new environment? How do we communicate to our employees? How do we keep them safe? How, what is the what is the liability look like on the back end of some of the stuff? You know, the the cares Act, which is the vehicle for both small business lending, and then some of like airplane bailouts. And that that sort of thing. That happened remarkably quickly. I mean, that is that is perhaps the fastest I’ve ever seen Congress move. Now, we’re kind of entering in and there was, it’s when you roll back at the time, people were thinking, Okay, this is an exercise of, you know, weeks, maybe months, but not beyond that. Right. And, and now, I think that there’s and then there was, you know, there’s a second round that kind of re up some of the funding for those programs. I think that now that people are processing that, okay, the economy is slowly opening back up, but the impact of this is going to last longer. I think people are thinking through the policy implications for that now. And I think it’s going to, I think it’s going to take a while right to both figure out, it is definitely hitting a moving target because the the economic side of it is changing as we go. And candidly, the healthcare side of it is changing as we go to, you know, I look at I look at kind of the different guidance that has happened over the past several months. And it kind of reminds me of the financial crisis for wall street, right. financial crisis was this moment where it’s like, oh, the guys that we thought knew everything in and what was going on, actually didn’t know what was going on. It didn’t really know anything, right? And it has that quality for public health, the public health apparatus at the current moment, too, you know, you don’t need maths. Now. You do need maths. You know, we we had, we had tons of conversations about ventilators. Now, we don’t talk about ventilators anymore. There’s tons of ventilators to be had. It’s just this kind of careening response. And and I think that that’s caused from a policy response of how do we support people? How do we support the economy? How do we support businesses is that that’s also been careening because it’s all predicated on on reopening the economy and what you can do. So the way that I see it right now in Washington is that I’m starting to see as, as the, as the response has settled, and we’re in kind of this moment, where, okay, we’re, we’re starting to open up, we don’t know exactly what the impact is going to be on the economy or on jobs or any of those sorts of things. But we’re gonna we, we know that this is going to be a more CES, we’re gonna have to look at this recovery over a period of time, and we need programs that are going to be that are going to sustain people, I think there’s starting to be more creative thinking around what those could look like, going forward. So it’s it. I mean, it is a fascinating time to see all of all this hit once. And it’s, it’s amazing, the degree to which, you know, some of the tools that exists in public policy are not well suited to the moment, you know, the the, the GDP numbers appear for the initial forecast for the quarter appears like three months after the quarter ends. And, you know, and then jobs, jobs data is like, you know, we had, we had, you know, what was it the report at the beginning of May, for April, you know, days before that report the the jobs data to survey that to get the unemployment rate that that survey goes into the field the week of the 12th of the month, right. So, like, even by the time that data came out, it was three weeks old, and you know, 15 million people had claimed unemployment benefits just between when that survey was in the field and when the number was released. So you have this kind of double effect of not really knowing what the, what the health situation looks like. And then you add to that, that all the economic indicators are not built for the moment and it’s just a very difficult and complex time to make policy in Washington.

Will Bachman 39:45
What other kind of issues are being discussed that are a little bit under the radar you so things like this, you know, business continuity, insurance that are really important to some industries that you know, are getting Kind of front page attention, perhaps but our big issues that are Congress’s is working on.

Matt McDonald 40:05
Yeah. I mean, you know, another issue that we’re working on that that is getting front page attention is, is travel. You know, we work with airports and think through some of those dimensions. I think that, you know, you, it’s, it’ll be interesting to see how some of our transportation infrastructure becomes, in part health care infrastructure, you know, what does that look like? You know, I ride the I read the the Amtrak to New York a lot. And like, you know, it’s it’s kind of fascinating that there’s not certainly there’s not a that’s a place where there’s not heavy security screening, there’s but across all these things, there’s definitely not health screening, either. So what does that mean for the mobility of our country? What does that mean for business? related to that? I think a lot of people are thinking about, you know, remote work and real estate and that sort of thing. You know, there was a, there’s a period of time at the front end of this crisis, where, again, the people who kind of don’t think about choices and policy, were saying, Well, people, people just shouldn’t have to pay rent for three months. And then or other people are like, well, what are the How are the landlord’s going to pay their people? And how are they going to pay their mortgage? Well, they shouldn’t have to pay their mortgage. Okay, well, what about, what about the retirees who are invested in mortgage backed securities? Like what, you know, the economy is a circle. And a lot of people, a lot of people in Washington Don’t, don’t view the world that way, or don’t really understand that fact. So you had this kind of buck passing exercise at the front end. And I think that I think that like, there was an again, there’s enough kind of knowledge under the surface, even while you’re seeing some crazy opinions at the top to say like, okay, that’s not going to work. But real estate is going to be fascinating going forward, too, right? You know, you’re seeing the banks in New York, thinking about how they can have suburban offices, right? restaurants, restaurants that are now they now can have half the table set, seedings. Like how do you make that that business is all predicated on table turnover and volume? How do you even make that business viable or work? Right? And then from a you know, and then you have kind of commercial real estate to where, okay, you know, what does this look like? Do people have a? Do you have half the people in your office? How do you deal with that? Do you do you need more office space?

42:38
do

Matt McDonald 42:39
you have? Do you have mandatory remote work? What does mandatory remote work look like? What does that look like for for transportation infrastructure? You know, the the metro here in DC or the subway in New York, those are those are all budgeted with with high capital investment costs. And then, you know, you cut if we’re going to have a sustained period where ridership is going to be half. Well, that’s a that’s a huge impact on you know, on revenues. Likewise, you get to the you get to things like the state response to this. I mean, a big debate going on right now is do should states get bailed out of based on response in need around Coronavirus? And what does that what does that implicit? What does that imply about? You know, the the problems of budget management at the state level, and whether states that haven’t done a great job of that should get should get bailed out at this time. And kind of the the, the incentives around that, which is like, which is a debate, you know, for fans of Hamilton, there’ll be familiar that that is a debate literally dating back back to the beginning of the Republic of whether states should get bailed out on this stuff. So there’s, I mean, the cascade of policy decisions and implications are gonna last for years on this entire exercise.

Will Bachman 44:03
How does the work that a firm like yours does? How is it different from these think tanks like the Cato or Brookings or other sort of think tanks?

Matt McDonald 44:12
Yeah. Well, you know, a lot of those a lot of those think tanks have have particular missions, particular perspectives. They’re not in some level, they’re not. A lot of them have corporate sponsors in one frame or another, but they’re really more like, they’re almost like Shadow universities. Have you ever heard of, what is it? Princeton has? Their I think it’s their school for Advanced Studies. Are you familiar with that? I’ve heard of it. It’s, it’s like this. It’s the school within the university that has no students. Right. So I had a when I was at, when I was at MIT for my MBA, I had a professor who did time who had spent time at the school for Advanced Studies and he was like, it was amazing. It was like a picnic without the ants, right? You know, for people that go into that professional, all they want to do is research and and on some level is that if you think about if you think about like the the timeline of knowledge creation, right, is that, you know, in consulting, I think one of the things that that a lot of people who maybe who have statistical backgrounds have to get over when they get into consulting is that like, Look, yes, the perfect answer is out there. But we need the answer that’s available in a month, right? So. So part of how I think about us related to think tanks is that they have a much longer time horizon, on the types of research that they do, and the way that they inform debates in DC, you know, they’re, they’re, they’re thinking about things in a much bigger picture. We’re typically working on decisions that need to be made in the next month, and how do we how do we shape kind of a debate around these things? And how do we inform those as best we can, with the information that’s available? Right? When you think about a think tank, or especially a university, they’re thinking about, you know, extending the frontier of human knowledge type of time horizon, right. And that’s just a, that’s a very different exercise. I’ve, you know, I have friends, too. We’ve had colleagues who’ve gone and done, done more of that type of work from after leaving our firm, and, you know, they’ll spend a year cleaning a data set to be able to, to do the analysis to possibly be able to publish. And that’s just that’s a time horizon. That’s kind of beyond the the zone of debate that we work in.

Will Bachman 46:40
I see. Now, you have a background in Republican administrations, you were in the George W. Bush, White House, and we worked for Governor Schwarzenegger. Does Hamilton play strategies? Do you work to get folks from kind of both sides of the aisles? You know, tell me a little bit about kind of your sort of pardot partisan positioning at your firm?

Matt McDonald 47:03
Yeah, it’s, it’s split pretty evenly, I would say, we probably, we probably lean a little right at the among the partners, or maybe the Managing Directors, and we lean a little left at the associate or analyst level, it’s been part of that, to be honest part of that as a function. It’s, it’s probably the, the causation, there’s probably age, it’s probably not, it’s probably not any particular partisan leanings type of stuff, but but we try to have it be balanced in terms of how we do recruiting and the experience that people bring, you know, I mean, we’re in the business of getting things done, and then forming decisions. And if you only talk to one set of people, that just becomes much, much harder to do, right. And I think that it helps our work, also, I mean, and in the way that we scope, our work in terms of not not working on political campaigns, not working on social policy issues. You know, most of the people who come in to our shop have some understanding of economics and some anchoring in business and how the world works and that sort of stuff. And so it’s, it’s comparatively easier, I would say, within our walls to for everybody to sync up. And at the same time, have a good little bit of a good difference of perspective on how to approach things to spice things up a little bit, you know,

Will Bachman 48:30
yeah. And do a lot of folks, maybe compared to an entering class at a consulting firm, do a lot of folks tend to have more, either experience, you know, in government as like an intern in the Senate or experience, you know, doing more writing, like you mentioned before working on the college newspaper, what sort of other experience are looking for beyond say, an economics degree?

Matt McDonald 48:56
Yeah, no, that’s correct. You know, you will do I don’t know if you were involved in recruiting at McKinsey. Yeah. I so I did some of that. And we, you know, we have it’s obviously different, but we have a pretty structured approach to that, you know, we do resume scoring, and I think that unbalanced, what we try to do is we try to have we try to have the we like to see an educational background that is fairly quantified, like has quantify has kind of a quantitative approach to things. A lot of times that’s econ though, you know, engineering, math, statistics type of stuff mixes in there. And then we like to see people with backgrounds in Aside from that, that demonstrate an interest in the types of issues that we worked on. So you’ll see people who have interned at think tanks or interned on political campaigns or Capitol Hill, people who’ve worked in the media, that type of stuff.

Will Bachman 49:54
Yeah. What would you say is, you know, a great background or experience if someone has wants to get into public policy and communications, consulting, either in their in school, or even maybe just employed right now, but want to shift into the into your, into your area? What sort of experience should people strive to get? Well,

Matt McDonald 50:18
you know that the trick with the trick with our industry in some level is that it tends to be very volunteer driven. Right, so the first thing and I, you know, I’ve had conversations over time with MBAs who are thinking about career switching, or I really want to kind of do, you know, something in public policy, more mission oriented, whatever it may be, I think the challenge is that it’s, it can be difficult to break into what is fundamentally a pretty networked discipline, right? So got to figure out some way to get into, get into that type of work where you’ve got, you maybe have one foot on each base, right. So, you know, if you have a background in finance, then then you want to target things like Senate Banking Committee to be able to work on or something like that, right. So you got to find a way, if you’re trying to do a career, a career shift in that zone, something like that is helpful for people who are a little younger, you know, there’s usually opportunities to think about graduate school for something like that, either in law or grand Master’s in Public Administration, that type of thing. You know, for undergrads, it’s, it’s not actually that hard. It’s kind of an exercise of, okay, you know, go get involved volunteer, figure out where you can kind of dive in, it’s a, it’s an industry, the thing to understand about it is that it’s not a very, it’s not structured, so it’s pretty easy to get in the door. It’s very, on some level, it’s very meritocratic, or outcomes oriented when you’re in the door, right? So it’s very networked. So who you work with and who you work for matters. And that will kind of allow you to progress. It’s also not very structured in terms of training. So you really do want to pay attention to mentors who know what they’re doing and can show you the ropes because you’re not going to get in onto a political campaign as an example, and go through a week of training before doing your job. It’s like, okay, here’s your desk, go do this. See you later. Right. Which is, you know, people can thrive in that environment, but you have to kind of seek out the opportunities to learn from others. As

Will Bachman 52:31
you said, it’s a very network discipline, just say it’s a little bit more about that in terms of,

Matt McDonald 52:36
well, as an example, like, have you I don’t know if you’ve heard of the, like the coaching trees in the NFL, the football guy. No, I’m ignorant of that. So there’s so there’s a theory there’s a theory in football of, of what someone’s coaching tree looks like. Right? So if you go through like I’m a pats fan, so Bill Belichick was defensive coordinator under Bill Parcells back in the day right so he would be part of quote unquote Bill Parcells coaching tree. And one of the metrics for like, not metrics, but one of the way that people compare greatness of football coaches is like, okay, who is in your coaching troop? Basically, who were the people who were your head coordinators offensive or defensive coordinator, and then went on to be head coaches in their own right. So you could imagine a scenario where you say, Okay, this person in their coaching tree, they have so many championships or something like that, right? It’s actually very similar in politics is that you? People work for PR in campaigns, especially so people will work for different people, and then they’ll kind of move on and take people with them. Right. So like, I, when I first came to Washington, I worked for Steve Schmidt, who, you know, as people tend to know, from television these days, but, Steve, I worked for Steve at the nrcc, which is the hill Campaign Committee for the republicans. Steve went over to the bush relax, and I went and worked for Steve on the bush reelected, and Steve managed Schwarzenegger campaign, and I worked for Governor Schwarzenegger and then Steve worked for john mccain. And I worked for him on that. Right. You know, Matt Rhodes worked for Steve Schmidt on the Bush campaign. And then Matt brand, the was the campaign manager for the Romney campaign. So it’s a very networked environment where who you work for, the training you get is vary on the job. So people assume things that you know, based on who you worked for, at a particular point in time, so that’s kind of it and in the jobs, and the job fillings on, on. And on campaigns and that sort of stuff. It tends to be referral based stuff. It’s very heavily networked. So it’s like, okay, you know, I need someone for this role. Do you know anyone good, great. Tell them to be in the office on Monday. I mean, that’s that’s kind of building level of speed that these things worked on. So. So it’s an interesting discipline and like part of what we’ve tried to do in our firm is really combine the some of the tactical and speed elements of that world with kind of the discipline, the knowledge and the depth of consulting, and how the how can you combine those two to to be able to move very quickly and impact debates as they roll along? Wow. Well, Matt, this

Will Bachman 55:29
has been an extraordinary, fascinating tour of the public policy and communications consulting world for me. So folks who want to find out more about Hamilton play strategies, we’ll definitely include your website in the show notes, any other links or Twitter handles that you’d like to share?

Matt McDonald 55:49
Yeah, my son, my Twitter handle is Matt MC de HPS. And, and we’re, we HPS is also on. We also do a podcast, the HPS macro casts and HPS insights. So I’ll have to return the favor here shortly.

Will Bachman 56:07
Alright, so we’ll include those links in the show notes. Matt, this has been really really informative to me really enjoyed speaking with you. Thanks so much for coming on the show. Well, thanks a lot.