Business Insight Zone

I’ve grown up as a journalist with Donald Trump in my life. I remember when I was on a group study tour the summer I was 16: my roommate was reading Trump and taking notes, because he wanted to be a mogul someday. Well, in the sense that “mogul” means “big shot” or “rich guy” or “prominent rich guy,” then, yeah, Mr. Trump’s a pretty good model. But in the sense that “mogul” might mean “a famous guy who’s made a lot of people rich,” then, uh, no.

Don’t get me wrong — I’m fascinated by The Donald and totally admire his chutzpah and his go-get-it outlook on life. He’s done well for himself and reaped the rewards. But in many facets of his business empire, for example Trump Entertainment, his record is far less impressive than his (usually self-generated) hype. Latest example:

Loss Widens at Trump Entertainment

Conveniently enough for my purposes, another item in the same batch of New York Times headlines is this AP story:

Harrah’s Entertainment Profit Rises

While Trump has given admirable energy to his television career and so on, Harrah’s has gone about the hard business of getting casino-goers to part with more of their money and have a great time doing it. And it’s not like Harrah’s success has snuck up on it. Here’s a short Fast Company interview with Harrah’s CEO Gary Loveman from 2003.

“I have spent scarcely any time with other CEOs in this industry. It’s not a group that tends to be very collegial. There are some very big egos in this business, with names like Trump, for example.”

Here’s a longer Forbes feature on Loveman from 2002.

In 1997, when Harrah’s bowed out of the trend toward faux Eiffel Towers, Cirque du Soleils, and erupting volcanoes, analysts questioned whether the company could continue as a long-term industry player. But Harrah’s had a plan [...] to grow the company without expanding into saturated markets or concocting replicas of the Statue of Liberty.

So far, that plan seems to have worked. Through branding, cross-casino marketing, loyalty cards, and technology, Loveman and company have made Harrah’s Entertainment, the most diversified of the big four gaming companies, a model of effective customer feedback.

Here’s an eWeek column from 2005 describing Harrah’s ongoing investment in sophisticated IT systems.

when business values are supported by technology underpinnings, a company can achieve success beyond that of its competitors. At Harrah’s, customer loyalty is a core value, and it’s a sure bet that technology investment is being made to support it.

This echoes something similar from Teradata magazine way back in 2001.

To differentiate itself from other casinos, Harrah’s developed a customer-relationship management strategy that has set the standard in the industry and positioned the company on Forbes’ platinum list of the top 400 best performing companies.

At the core of this strategy is the Harrah’s award-winning Total Rewards program, which helps the company maintain an edge in a highly competitive industry. And the highlight of the program is the Total Gold customer loyalty card [...]

Meanwhile, Trump has had problems with his casinos for years. Donald Trump is very smart and he’s made lots of money, but he’s hardly a mogul when it comes to creating value for investors. The best rule of thumb for judging business leaders will never be what sort of a public figure they cut; it will always be how well their enterprises do.