Before I cherry pick the quotes that best summarize my own explanation, I find it somewhat interesting that there is no mention of the May 2007 memo by Deputy Campaign Director Mike Henry, in which he said that the campaign shouldn't compete in Iowa, instead focusing on New Hampshire and the following states. Henry presciently wrote that
In past presidential campaigns smaller states, like Iowa and New Hampshire, played a more prominent role in securing the nomination. That process was based on the momentum that was created from winning Iowa or New Hampshire. Thirteen of the last 14 major-party nominees have won Iowa, New Hampshire, or both. Senator Clinton's husband is the only exception. But I think this old system is about to collapse and it will happen this year because of the impact of primary elections that are being held on February 5th.He lists six reasons for his suggestion, three of which proved to be particularly accurate:
After assessing this proposal against core elements of our plan, my recommendation is to pull completely out of Iowa and spend the money and Senator Clinton's time on other states. I believe that the changes to and the volatile nature of setting the Democratic nomination calendar has changed the way the nomination will be won in 2008. I believe the "small state first" approach that we are familiar with, that bases winning nomination on momentum is about to be turned on its' head this year. It used to be protected by party rules and the lack of a national primary day. We no longer have either. The party has no leverage to maintain scheduling discipline and we now have a national primary on February 5th with 20 states choosing their nominee on the same day.
2. Dedicating significant funding to Iowa will draw money away from other important states. Spending Senator Clinton's time and money in other states will be more efficient and increase our chances of winning the nomination. And it will improve our fundraising. After the first four states (not including Florida) our campaign will only have $5 - 10M to compete in the 25 February 5th states.As a result, he nailed the state of the campaign heading into Super Tuesday on February 5th:
3. Iowans will not be the first to vote. Over 15 states have no excuse early vote or vote by mail programs that allow voters to cast their ballots well before caucus day in Iowa. These states are: Florida, Arkansas, Arizona, California, New Jersey, New Mexico, Oklahoma, Tennessee, Utah, Colorado, Georgia, North Carolina, and Texas.
5. Proportional representation is a ticking time bomb that the campaign needs to deal with by campaigning hard in February 5th states now. The campaign should focus on winning a majority of congressional districts in each state. This will limit our exposure to a movement candidate beating us after the early states.
Remember all of the states have a rule that you eat what you kill. So if we have a split decision in Iowa. Senator Clinton wins New Hampshire, and Obama or Edwards wins South Carolina. We now enter into the February 5th mega states with no money, little time to raise it, and have to rely on earned media to get our message out. Coverage will be about equal among all the candidates who have survived (for argument sake let's say Obama and Edwards). If we invest the money and time we save by leaving Iowa on a strategy to win majorities in each of the February 5th states we limit our exposure.The Clinton campaign rejected Henry's advice, however. One week after having his advice vindicated on Super Tuesday, Mike Henry resigned as Deputy Campaign Manager. Clinton, low on funds, went on to be routed in state after state throughout February, too low on funds to compete and not having put sufficient effort and troops in place to organize those states after essentially fighting to a draw on Super Tuesday. Obama ran up large margins of victory in small states and caucuses where the Clinton's didn't compete, banking on coming back in Texas and Ohio. By ceding several contests entirely, however, Clinton let Obama build up a pledged-delegate lead that she was unable to overcome.
To be clear, Henry's strategy was not the same as Giuliani's disastrous gamble of skipping the early states and betting it all on Super Tuesday, largely for two reasons:
1) Giuliani's position in the Republican field was not as dominant as Clinton's in the Democratic field. Despite the media's infatuation with his campaign, Giuliani never managed to put any real distance between himself and the other candidates in terms of either support or fundraising. Clinton started off with much larger initial advantages here, yet Obama was able to catch up. Giuliani was never out in front of the pack to the same degree, and he could not, therefore, afford to let someone else (or multiple candidates, as it turned out) build momentum.
2) Henry's strategy wasn't to skip all of the early states, as Giuliani did, but rather to skip Iowa and move straight to New Hampshire, where Clinton went on to win. He advocated campaigning in all of the early states except Iowa, whereas Giuliani skipped head to Florida and Super Tuesday. Prior to Super Tuesday, Henry still had Clinton competing in Nevada, South Carolina, and New Hampshire, two of which she managed to win despite spending inordinate amounts of time and money in Iowa. Had she used those resources elsewhere, the results may well have been better for her than they were, and Obama's Iowa victory wouldn't have seemed as astounding. No more so than her victory over him in West Virginia, where he didn't compete at all.
As for the Clinton people themselves, here are some of their more persuasive explanations, courtesy of TNR:
"Clearly [Obama] was a phenomenon. He was tapping something really different than anyone had ever seen before. ... Months and months before Iowa, he was getting record crowds. I just think they should have really gone after him back in the summer and in the fall. I know it would have been a difficult decision to make back then. She's the leader of the party, the standard bearer, the big dog. Everyone thinks she's gonna win and walk away with it. Why go picking on Barack Obama? But that's just something the campaign should have done sooner."
"We didn't lay a serious glove on him until the fall. We tried to a little bit, but we weren't successful. We did silly stuff, like talk about David Geffen. It wasn't the substantive contrast we needed to make."
"There was not any plan in place from beginning to end on how to win the nomination. It was, 'Win Iowa.' There was not the experience level, and, frankly, the management ability, to create a whole plan to get to the magical delegate number. That to me is the number one thing. It's starting from that point that every subsequent decision resulted. The decision to spend x amount in Iowa versus be prepared for February 5 and beyond. Or how much money to spend in South Carolina--where it was highly unlikely we were going to win--versus the decision not to fund certain other states. ... It was not as simple as, 'Oh, that's a caucus state, we're not going to play there.' That suggests a more serious thought process. It suggests a meeting where we went through all that."
"Harold Ickes's encyclopedic understanding of the proportional delegate system was never operationalized into a field plan. The campaign inexplicably wrote off many states entirely, allowing Obama to create the lead of 100+ delegates that he has today. Most notably, we claimed the race would be over by February 5, but didn't devote any resources to the smaller states that day and in the weeks that followed, allowing Obama to easily run up margins and delegate counts on the cheap--the delegate margin he will win by."
"Probably our second biggest mistake was much more operational: Making our chief strategist our one and only pollster. It is impossible to disagree and have a counter view on message when the person creating the message is also the person testing the message."
"We would just cringe. Ugh. Such an out-of-touch corporate run kind of campaign--exactly what you'd expect from Mark Penn. He did fine during his time in the Clinton White House. But running a campaign to capture the nomination in a change environment is something he had never done. Just look at what he did for Joe Lieberman!""Keeping the same team in place [after New Hampshire] meant that pre-Iowa planning and strategic errors continued nearly unabated, were not corrected. ... Too much damage had been done by the time Maggie Williams took the helm."
"There was financial mismanagement bordering on fraud. A candidate who raised more than a quarter of a billion dollars over the years had to pump in millions more of her own money to stave off bankruptcy."
"We placed a huge financial bet on Iowa and raised its importance by sending senior staff there. And because we didn't plan for a national campaign, we couldn't point to an operation that could withstand an Iowa blow the way Obama could after New Hampshire.""Penn was preoccupied with the national polls. We were up in the national polls, but Iowa was always a challenging thing for us. Early, early on, our internals showed us a significant number of points behind. ... In Iowa, Penn consistently would show polls that were of the eight-way. That was basically meaningless because it wasn't going to be an eight-way race. The candidates that were the second-tier candidates were not going to reach the threshold [of 15%]. The real race was the three-way. But he always focused on the eight-way when we'd start going over the numbers in Iowa. It was frustrating to the state staff and other people as well. It just showed a lack of understanding and a disconnect."