Jeffrey Zients
Jeffrey D. Zients is an American chief executive officer, management consultant, and entrepreneur. Zients is currently the President of Cranemere. From February 2014 to January 2017, he served as Director of the United States National Economic Council and President Obama's Economic Advisor. Zients previously served as the acting director of the Office of Management and Budget.
Zients's assumption of the role of Director of the National Economic Council was delayed by his acceptance of an assignment from President Barack Obama to fix the problems of HealthCare.gov. According to Time's March 2014 cover story "Obama's Trauma Team", Zients is widely credited with salvaging HealthCare.gov. As a result, he was often referred to as "Mr. Fix-It" within the Obama Administration.
Early years
Zients was raised in a Jewish family, is a native of Kensington, Maryland, and lives in the Washington, D.C. area. He graduated in 1984 from St. Albans School, and earned a Bachelor of Science degree, summa cum laude from Duke University. Zients worked in management consulting for Mercer Management Consulting and Bain & Company. As a consultant Zients reportedly "fell in love with Bain’s culture, teamwork...and analytical rigor." Following this role he was appointed as chief operating officer of DGB Enterprises, a holding company for the Advisory Board Company, Corporate Executive Board, and Atlantic Media Company.Business career
Advisory Board and Corporate Executive Board
Zients was the chairman, chief executive officer, and chief operating officer of the Advisory Board Company and former chairman of the Corporate Executive Board. Both companies were founded by David G. Bradley, and provide research and advice to corporations around the globe on best practices in management, strategy, and operations. Zients and Bradley took each of the companies public through successful initial public offerings that made both men multimillionaires. At age 35, Zients was named to Fortune Magazine's "40 under 40", with an estimated wealth of $149 million.Portfolio Logic
Zients founded and was the managing partner of privately held Portfolio Logic LLC, an investment firm primarily focused on health care services and business services. He was a member of the board of directors of XM Satellite Radio until its 2008 merger, and a board member at Sirius XM Radio until his Senate confirmation. Zients had also served on the boards of Revolution Health Group, Best Practices and Timbuk2 Designs.Baseball
In 2005, he worked to bring Major League Baseball back to Washington with venture capitalist Fred Malek forming the Washington Baseball Club, one of eight or nine groups vying to buy the Washington Nationals. The Malek/Zients team included General Colin Powell, AOL founding CEO Jim Kimsey, attorney Vernon Jordan, Darrell Green formerly of the Washington Redskins, Fannie Mae chairman Franklin Raines and others. Malek was going to be the managing partner for the first three years when Zients would take over. They came close to owning the team but lost to another group led by the Lerner family.Cranemere
Zients is the CEO of Cranemere, a holding company that focuses on partnering with businesses for the long-term. The firm offers a distinct alternative for those business owners considering private equity, going public, or being owned by a large corporation. Cranemere provides long-term capital, business building expertise and global networks to support the growth of its companies and create value for all its stakeholders. With a focus on partnership, innovation, and integrity, Cranemere's approach enables founders entrepreneurs, and leaders to implement the best long-term strategy and build exceptional companies, without the significant costs, distractions, and missed opportunities that shorter-term horizons and heavy debt burdens so often entail.According to The Washington Post, Cranemere is known for, "rejecting the debt-fueled buy-and-sell grind of private equity and doing it old-school like Buffett -- looking for value where others have missed it and investing for the long-long term."
During an interview with The Washington Post about his role at Cranemere, Zients said about his career, "Most of my career has not been as an investor. It has been as an operator. The focus of my career has been execution. I like putting together teams, setting goals, and executing to get stuff done."
Cranemere's current holdings are:
- Acquabella
- Timbuk2 Designs
- Velocity Vehicle Group
- Symmetry Office
- Marmite
- Exemplis
- NorthStar Anesthesia
Public sector career
Office of Management and Budget
In 2009, President Barack Obama appointed him to the new position of United States Chief Performance Officer and Deputy Director for Management of the Office of Management and Budget in the federal government of the United States. According to Obama, his assignment was to help "streamline processes, cut costs, and find best practices throughout" the U.S. government. Zients replaced Nancy Killefer who withdrew from her nomination to this position in February 2009 to avoid controversy about her personal income taxes. His nomination was approved by the full Senate after a hearing on June 10, 2009, by the Senate Homeland Security and Governmental Affairs Committee who voted unanimously to approve him.Early on during his tenure as Chief Performance Officer, he developed a reputation as a person who fixed hard problems. According to NPR, "It was Zients, for instance, whom Obama turned to at an earlier point to unstick the "Cash for Clunkers" initiative. That 2009-2010 federal effort to lift auto sales out of the doldrums by underwriting dealer rebates to car buyers had stalled when the computer systems were overwhelmed with requests. Zients is credited with overseeing that fix.
Zients performed a similar managerial feat to break a bottleneck on GI Bill benefits for post-9/11 vets."
As the Chief Performance Officer, Zients led the Obama Administration's "Accountable Government Initiative". Zients outlined the Initiative in a memo to the government's Senior Executive Service in the fall of 2010. One primary area of focus was to reform how the government buys and manages information technology. To bring outside expertise into government, Zients organized a Forum on Modernizing Government at the White House in January 2010 that brought 50 private sector CEOs together with senior government managers and CIOs to discuss best practices in large-scale IT project management. This session informed subsequent actions, including ordering a halt on all major government financial system projects until a review was completed to eliminate long-standing problems, reduce costs and accelerate the delivery of functionality to end users. In November 2010, Zients announced an execution plan for overcoming the long-standing structural challenges that plague government IT.
In his role as DDM, Zients established and chaired the President's Management Council and oversaw the "Management" side of the Office of Management and Budget.
Zients served as the Acting Director of OMB from July 2010 to November 2010, and again from January 2012 to April 2013. In 2011 President Obama tasked Zients with reorganizing the Commerce Department to make it a hub for export-import policy. In 2013, Zients's major concerns for the budget became economic recovery and putting the country on a "fiscally sustainable path". He also led the Administration's preparations for dealing with the "fiscal cliff" in 2012, and "oversaw the administration's budget content and message, which are central to the president's argument that he has a balanced plan for the economy, while Republicans would rip the country's social fabric and undermine the education and infrastructure needed to succeed economically... was Obama's ambassador liaison with the CEOs on the . Obama later attributed Zients' effectiveness to his business credentials, "The truth is that Jeff's policy perspectives were not significantly different than my own on most economic issues," Obama said. "It's just that Jeff was a rich, successful businessman, so when he said it, it sounded better to them than when I said it."
Healthcare.gov
Following the error-plagued launch of healthcare.gov on October 1, 2013, Zients was recruited by President Obama and his Chief of Staff Denis McDonough to lead a "tech surge" to fix the website. McDonough referred to Zients as a "force multiplier" who what he promises. He said the president had given Mr. Zients the same instructions he had given White House staff: "Get this fixed." While leading the "tech surge" to fix healthcare.gov, Zients had an ownership position in PA Healthcare. The position of the White House was that Mr. Zients's stake in PSA Healthcare, a pediatric home health business, was not a conflict of interest.On October 25, Zients promised, in a conference call to the media, that the site would be working well "for the vast majority of users" by the end of November.
Zients worked with Silicon Valley experts, and Obama Chief Technology Officer Todd Park to create an ad hoc technology "dream team" of trouble-shooters and coders. Zients overhauled the project's management structure by insisting that one contractor be appointed the "general contractor" or systems integrator with clear accountability for managing the needed fixes. HHS appointed Quality Software Services, Inc to that role. Zients accelerated the pace of the website fixes, established clear metrics for tracking website performance, prioritized a "punch list" of bugs and enhancements, and instituted morning and evening "stand up meetings" to work through emerging issues in real-time.
On December 1, 2013, HHS released a report on the site's performance improvements, and held a press call to announce that the team had met Zients's goal, with Zients reporting: "The bottom line is that HealthCare.gov is night and day from where it was on Oct. 1."
During the press call, Zients listed some of the root causes of the site's earlier failure, such as the "unacceptable user experience, very slow response time, inexplicable user error messages and frequent website crashes and system outages". Root causes of the problems, he said, included hundreds of software bugs, inadequate hardware infrastructure and a general lack of system monitoring. Zients identified weaknesses in how the site was being managed, and he also cited slow decision-making among the root causes of the site's troubles. "HealthCare.gov was fixable", Zients said, "We needed to get the team working with the speed and urgency of a high-performing private sector tech company."
National Economic Council
From 2014 to 2017, Zients served as Assistant to the President for Economic Policy and Director of the National Economic Council. As President Obama's principal economic policy advisor, Zients was responsible for coordinating the development and execution of policy regarding all domestic and international economic issues.Tax and Budget
In December 2015, Zients played a key role representing the White House in negotiations with Congress on a tax and budget agreement, which permanently extended the American Recovery and Reinvestment Act tax credits, including the Earned Income Tax Credit and Child Tax Credit for working families, and American Opportunity Tax Credit for college tuition expenses, as well as a number of tax "extenders" that had traditionally been extended together for a year or two at a time. Permanently extending the EITC and CTC resulted in providing about 16 million working families a year with an average tax cut of about $900, together lifting about 16 million people – including about 8 million children – out of poverty or closer to the poverty line. The agreement also made the Research and Experimentation Tax Credit permanent for the first time since its enactment in 1981, providing certainty to companies investing in innovation. It also made permanent tax cuts for small businesses, including enhanced expensing for small businesses making new investments and a zero percent capital gains rate for investments in small businesses. The agreement extended the Production Tax Credit and the Investment Tax Credit – two important incentives for clean energy – for five years. As NEC Director Zients also spearheaded efforts to lower corporate taxes. According to a Vox article at the time title: "Obama has a plan to cut corporate tax rates that corporations are going to hate" the plan, "would increase long-term tax revenue while lowering statutory rates, and also create a one-time surge in tax revenue that would finance infrastructure investments."During the Senate testimony, Zients described Obama's proposal as one that would close loopholes, lower the overall rate, encourage investment here at home, simplify taxes for America's small businesses, and not add a dime to the deficit.
Job Training
Zients led the Obama Administration's work to strengthen job training – working with employers, community colleges and training providers to help Americans develop the skills necessary to compete in the 21st century economy. As part of this effort, the Administration launched the TechHire Initiative, a campaign to work with communities to get more Americans rapidly trained for well-paying technology jobs. On a conference call announcing the initiative, Zients said: "There are IT jobs in every corner of America, from big cities to small towns, from big businesses to small businesses, in every sector of the economy... Getting Americans trained to fill these well-paying jobs is not only the right thing to do, it's also an economic imperative for the U.S." He also led the effort "to reform the Federal job training system to better prepare workers for the jobs employers are hiring for" by ensuring accountability for employment results, improving transparency for job seekers to help them make better choices, strengthening employer engagement and service to businesses and enhancing coordination and collaboration across programs.Conflict of Interest Rule
Zients worked with the Department of Labor to finalize the Fiduciary Rule, also known as the Conflict of Interest Rule, to protect American's hard-earned savings by ensuring retirement advisers provide advice in their clients' best interest. In remarks at the Bipartisan Policy Center in May 2015, Zients said: "Just as we all expect our doctors to give us the advice that's best for our health and lawyers are duty-bound to represent their clients faithfully, families saving for retirement should be able to rest assured their financial advisers are always putting their best interest first...The conflict of interest rule is an important step forward in ensuring we have an economy that works for everyone. And that everyone who works hard and plays by the rules can get ahead. That's central to middle-class economics, and it's central to who we are as a Country."The rule has been strongly criticized by Wall Street leaders and business groups. It also garnered strong support from progressive leaders in Congress including Senator Elizabeth Warren, and she has led the fight against the Trump Administration's efforts to weaken the Obama era rule.
Overtime Rule
Along with the Labor Secretary, Tom Perez, Zients was a leading proponent in the Obama Administration of the overtime rule, which extended overtime pay to nearly 5 million workers by updating out-of-date rules. The 2016 rule, which was held up in court following a challenge by business trade associations and Republican-led states, would have increased the overtime salary threshold to $913 per week, or $47,476 for a full-year worker, from its current level of $455 per week, or $23,660 for a full-year worker. It would also have indexed the threshold to wage growth on a triennial basis; under the 2016 rule, the threshold would have increased to roughly $51,000 on January 1, 2020.Payday Lending Rule
A rule cracking down on payday loans was first proposed in 2016. President Obama touted the rule as the end of predatory lending. He warned payday lenders in a speech: "If you're making that profit by trapping hardworking Americans into a vicious cycle of debt, you've got to find a new business model." The rule would have required lenders to determine whether customers could pay off their loans. It would also limit payday lenders to only two attempts to withdraw money from borrowers' accounts, a move designed to target the fees that payday lenders charge. Zients was a leading advocate for the rule and made the moral case for putting an end to predatory payday lending. In 2016, he wrote in a blog post with Valerie Jarrett and Cecelia Munoz, "Providing stronger protections in areas such as payday lending are precisely why the President worked with Congress to create a new, independent agency focused solely on consumer protection as a part of financial reform and to ensure it had the authority to address abuses in this space."Paid Sick Leave
In 2015, President Obama signed an executive order requiring businesses doing work on Federal contracts to offer seven days of paid sick leave to workers. According to a White House fact sheet, the rule gave approximately 300,000 people working on federal contracts the new ability to earn up to seven days of paid sick leave each year. In addition, it allowed workers to use paid leave to care for themselves, a family member, such as a child, parent, spouse, or domestic partner, or another loved one, as well as for absences resulting from domestic violence, sexual assault, or stalking. Zients was a leading proponent of the rule which was finalized in the fall of 2016.International Economic Policy and Trade
In June 2015, President Obama signed the Bipartisan Congressional Trade Priorities and Accountability Act, also known as Trade Promotion Authority. The legislation gave the Administration the authority to expedite negotiations for the Trans-Pacific Partnership. While the authors of the TPP described the legislation as a trade deal that included enforceable standard to advance workers' rights, protect the environment, promote a free and open Internet, and address unfair currency practices others saw it as a controversial giveaway to multinational corporations. As director of the National Economic Council, Zients led one of the main bodies responsible for advising the president on this economic policy. In this role he led negotiations for the Trade Promotion Authority, which streamlined the process for signing the TPP and centralized that power in the White House.In conjunction with TPA, President Obama signed the Trade Preferences Extension Act of 2015, securing a six-year extension and expansion of Trade Adjustment Assistance, which provided over 750,000 American workers displaced by globalization with job training, income support, and other benefits. "Here's the bottom line", Zients said, "... 95 percent of the world's consumers live outside of our borders. We can't afford to close ourselves off from those opportunities. A 21st century TPA is America's chance to modernize our trade policy by locking in our progressive value and putting American workers first."
Senators like Elizabeth Warren critiqued another key provision of the TPP, the Investor State Dispute Settlement, as "tilt the playing field in favor of multinational corporations versus citizens in the US and globally". This provision allows multinational corporations to sue governments for unlimited amounts of money while nations and citizens have no such right to sue multinational corporations.
Under Zients' leadership, the Obama Administration also took action to strengthen trade enforcement, signing the Trade Facilitation and Trade Enforcement Act and the American Trade Enforcement Effectiveness Act into law. The legislation strengthened tools to ensure that the United States' trading partners and foreign industries were complying with trade laws.
Competition, long-termism, and other
Under Zients' leadership, President Obama launched a new initiative in April 2016 to stoke competition across the economy. "Stronger competition matters because it can deliver lower prices, higher quality, and better customer service for consumers", Zients said. "It gives workers more of a voice, and can help strengthen wage growth. And it's what entrepreneurs need to get a fair shot at growing their businesses and creating jobs."Zients also worked to further the Administration's efforts on long-term investing, including working with the Labor Department to issue new guidance clarifying that pension plan fiduciaries can consider environmental, social, and governance or "ESG" factors – in assessing the economic merits of competing investment choices.
Across his roles in the Administration, Zients served as a key liaison to the business community, including by managing execution of recommendations from the President's Council on Jobs and Competitiveness, and by establishing the President's Management Advisory Board to bring Fortune 500 executive expertise to bear against the federal government's biggest management challenges. The Wall Street Journal dubbed Zients "a kind of ambassador to the business community."
Post-NEC business career
In 2017, Zients became the CEO of Cranemere, a Berkshire Hathaway-style holding company focused on the acquisition and long-term ownership of mid-sized companies in the United States and Europe. Cranemere was founded in 2014 by former AEA Chairman and CEO Vincent Mai. It is a holding company that focuses on partnering with businesses for the long-term. The firm offers a distinct alternative for those business owners considering private equity, going public, or being owned by a large corporation.In 2018, he joined the board of Facebook. According to The Wall Street Journal, he declined to seek another term earlier this year over differences with company leadership over governance and its policies around political discourse.
Children's National Hospital Center
Zients has a long history with Children's National Hospital having grown up in the Washington, DC area. He served on the Board from 2003-2008 and rejoined the Children's National Board of Directors as Board Chairman in 2019. For 150 years, Children's National has been the children's hospital for the region, serving the critical role of providing care for children with rare, complex or life-threatening conditions. The hospital is consistently ranked as one of the top ten children's hospitals in the country by U.S. News & World Report—this year as No. 7 nationally.Last year, Children's National Hospital Center announced a partnership with Virginia Tech "that will include a launch of a 12,000-square-foot Virginia Tech biomedical research facility within the new Children's National Research & Innovation Campus." According to the announcement, "the two institutions will now expand their collaborations to develop new drugs, medical devices, software applications and other novel treatments for cancer, rare diseases and other disorders." Zients was also quoted in the release stating, "Children's National Research & Innovation Campus pairs an inspirational mission to find new treatments for childhood illness and disease with the ideal environment for early stage companies. I am confident the campus will be a magnet for big ideas and will be an economic boost for Washington DC and the region. When you bring together business, academia, health care and government in the right setting, you create a hotbed for innovation."