All posts by : Stan Silverman

Article originally published in the American City Business Journals on December 19, 2016

Building a culture of continuous improvement within an organization is usually associated with for-profit businesses. The desire to achieve competitive advantage and become the preferred provider of products or services versus the competition is what drives a company’s continuous improvement imperative.

Nonprofit organizations, including private and religion-based elementary, middle and high schools, also face competition — for financial support from individuals and foundations in support of their mission. Donors have many choices for their charitable dollars.

Schools also compete to attract students. Parents and students have many choices when selecting a school, including high-performing tuition-free public schools that accept only the brightest students within a school district.

All schools should adopt the principles of continuous improvement and be on a journey to become the preferred educator of students. Their goal should be to achieve preeminence in their market. This will attract donors as well as students. It is also the right thing to do to deliver a great education to their students.

Those schools that do not pursue continuous improvement will fall behind those schools that do.

Faith in the Future is an organization that oversees the operation of the 17 Catholic high schools and four schools of special education within the Archdiocese of Philadelphia. It is led by CEO Casey Carter, who has brought a business focus to the operation of these schools.

At a recent board meeting of Faith in the Future, I listened to Chris Mominey, COO and secretary of education of the Archdiocese of Philadelphia, speak of his organization’s focus on continuous improvement and how the Archdiocese differentiates its schools from other schools in the Philadelphia region.

The Philadelphia market for private school education is a competitive one, with many school choices available. At Faith in the Future, data and analytics drive an understanding of the marketplace, as well as an understanding of the factors considered by students and their parents when choosing a high school. This understanding drives strategy and decision-making to achieve enrollment, educational and operational goals.

Parents want their students to receive an academically rigorous education to prepare them for college or gainful employment. Those schools that are not perceived to deliver an academically rigorous education will not attract as many students. They will also lose students to those schools that are recognized for their academics.

Each high school within the Archdiocese of Philadelphia is in the process of establishing boards of directors to help the school’s administration develop objectives and strategies regarding recruitment of students, programing and fundraising, as well as the development of a culture of continuous improvement within the staff and faculty of the school.

The directors at each school are being trained on the roles of a board member, which are governance, oversight and strategic input. In addition, the role of the board is to encourage the process of change, with the goal for each school to proceed on a journey to be the best in the world at what it does.

In schools, as in any other organization, continuous improvement can only take place when employees feel a sense of ownership and empowerment over that part of the enterprise in which they work. They must know what they are being held accountable for, and know the areas over which they have decision-making authority. It is the job of the leadership of that organization to create an ownership environment.

Employees must feel safe and secure when making suggestions to their bosses for improvements in areas above their level of decision-making authority. Bosses must welcome this input from their subordinates.

The Archdiocese is on the right track. A process of continuous improvement will not only help differentiate Archdiocese schools from their competitors, but it will give all employees a sense of pride and accomplishment, and will further differentiate their schools and help them achieve preeminence in their market.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on December 12, 2016

The protest by environmentalists, Native Americans and others against building the 1,172-mile Dakota Access Pipeline connecting the Bakken oil fields in North Dakota with a pipeline terminal in Illinois has been in the news for some time now.

Due to the protest, on Dec. 4, the U.S. Army Corps of Engineers announced that easements will not be approved to build the pipeline under North Dakota’s Lake Oahe.

Lake Oahe is in close proximity to the Standing Rock Sioux Tribe reservation. Members of the tribe fear potential contamination of their water supply and object to encroachment on sacred tribal land.

In a Dec. 4 press release, Jo-Ellen Darcy, assistant secretary of the Army (Civil Works), stated, “… there’s more work to do. … The best way to complete that work responsibly and expeditiously is to explore alternate routes for the pipeline crossing. Consideration of alternative routes would be best accomplished through an environmental impact statement with full public input and analysis.”

If the initial environmental impact statement for the Dakota Access Pipeline was inadequate, the gaps need to be closed before the project moves forward.

However, the pipeline project itself should not be canceled.

Let’s separate the issues surrounding the Dakota Access Pipeline with how environmentalists feel about oil and natural gas in general and the pipelines that transport each.

Many environmentalists oppose pipelines in principle because they are part of our fossil fuel infrastructure, oil and natural gas are sources of carbon dioxide harmful to the environment and because of the risk of damage to the environment in the event of oil spills.

Transport via pipeline, however, is safer and more reliable than by moving oil in tank cars via rail, sometimes through large population centers.

Environmentalists argue that much of our pipeline infrastructure is more than 50 years old and is therefore dangerous. The same can be said about rail lines that also transport oil. Where pipelines and rails are unsafe, they need to be repaired or replaced. Crude oil will be transported to market inland one way or another, if not by pipeline, then by rail.

Many environmentalists fail to realize that fossil fuels and the pipelines that transport them are critical to our economy and standard of living. Pipelines transport the natural gas and oil used to heat our homes, fuel our cars, run our factories, and generate the electricity that powers electric vehicles.

Natural gas and oil transported via pipelines are the building blocks for everyday products upon which our modern society is built, including a multitude of industrial and consumer products as well as pharmaceuticals. Both directly and indirectly, natural gas and oil provide millions of jobs.

Pipelines are ubiquitous and have been part of our national energy infrastructure since soon after natural gas and oil were discovered more than 150 years ago.

According to the Pipeline and Hazardous Materials Safety Administration of the U.S. Department of Transportation, there are currently more than 2.3 million miles of pipelines crisscrossing the U.S. that transport crude oil, refined petroleum products, various chemical and petrochemical products, and natural gas.

The only way to transport natural gas is via pipeline, from the wellhead through a national network of transmission lines, through local distribution lines, through gas mains that run under our roads and streets and through lateral lines into our homes.

Many people favor the transition toward non-fossil based methods of generating energy, which I fully support. Solar and wind technologies have advanced significantly and will continue to do so, and they will replace fossil fuels where possible when economic and social factors drive the change.

However, fossil fuels — oil and natural gas — will always play a major role as a source of energy in our country, as well as raw materials for products that are critical to our standard of living.

Environmentalists should be strong advocates for the transition to natural gas and away from coal for electric power generation to reduce carbon dioxide emissions. This is especially important as the number of electric vehicles grow.

Environmentalists should intensify their focus on making pipelines safer, which will become more difficult under a Trump administration, but that should not deter the effort. Environmentalists should continue to advocate for higher gas mileage standards to further reduce the carbon dioxide emissions from vehicles.

Pipeline companies need to understand that any oil spill is one spill too many, and they should always be on a continuous journey to eliminate them.

Oil and natural gas will always play a major role in our lives — both as a fuel and as a feedstock for consumer and industrial products that form the basis of our economy and standard of living. Let’s work towards minimizing their adverse impact on the environment.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on December 5, 2016

Successful entrepreneurs are driven by a passion. Nicole Marquis, a restaurateur who has a burning desire to affect positive change, is one such entrepreneur.

Marquis is the founder and CEO of Marquis and Co., a restaurant holding firm. HipCityVeg is Marquis’s signature fast-casual restaurant concept, which serves 100 percent plant-based food. She opened her first restaurant more than four years ago.

I met Marquis last month at the annual Startup Day event of the Close School of Entrepreneurship at Drexel University. At the event, she delivered an inspiring keynote address to more than 450 students in attendance. I was impressed by the story of her journey as an entrepreneur, so I asked if I could interview her.

Marquis operates three HipCityVeg restaurants — two in Philadelphia and one in Washington, D.C. She is scheduled to open her fourth this month in Philadelphia. Her company also operates Charlie Was a Sinner and Bar Bombón restaurants, also in Philadelphia. Marquis’s Washington, D. C. HipCityVeg is her first geographic expansion — but she is not stopping there. She plans on opening as many as nine restaurants over the next 18 months.

One would think that Marquis would be an unlikely entrepreneur. After studying communications and theater and receiving a BA degree from Temple University, she studied classical drama at the California Institute of the Arts. She told the Close School Startup Day audience about her teenage experiences running a birthday party business and the great feeling of making a $30 profit after paying expenses. She told the audience, “This is for me!”

Entrepreneurs come from all different types of backgrounds. Marquis, as all entrepreneurs, has a passion and the ability to overcome obstacles to successfully fulfill her mission, important traits for anyone starting up a business.

Marquis said, “The mission of HipCityVeg is to make delicious plant food convenient and accessible to people everywhere. The vast majority of our customers are meat eaters, but they love HipCityVeg because the food is delicious and healthy. This is how HipCityVeg differentiates itself from other fast-casual restaurants. I have a burning passion to affect change, which keeps me going. I want to get people to eat plant-based food because of the adverse effect that animal agriculture has on our health, on the planet and on the animals.”

She said that she focuses on “the three Ps — people, planet and profit.”

I asked Marquis that in addition to passion, what are some of the other traits of successful entrepreneurs? She said, “An ability to operate outside of your comfort zone, the ability to take a risk, knowing how to de-risk your decisions, and the willingness to take advice from others. It’s also a mindset. With the proper mindset, you can conquer anything. To stay positive and clear-headed, in the most uncomfortable conditions. If you can do that, you can conquer any mountain.”

Marquis added that she is thankful for the faith her investors have in her and for their support.

When planning their business, what do some entrepreneurs fail to consider? Marquis said the need to reinvest in their business. In restaurants, kitchen equipment wears out over time and needs to be replaced, and periodically restaurant décor needs to be updated. A business needs to generate sufficient cash flow to fund these reinvestments.

Every entrepreneur makes mistakes, and Marquis acknowledges that she has made her share of them.

She said, “I’ve made a lot of mistakes. I have had to swallow my pride, and there was always, there’s still always, someone ready to tell me that I don’t know what I am doing. I am learning every day.”

Choosing the wrong people in a small, early stage startup can have a huge negative impact on the success of the business.

I asked Marquis how she chose her early hires. She said that in addition to reference checking, she relied on her intuition and good critical judgment to assess the attitude and people skills of those she hired, and whether she could trust them. She wanted to hire people whose great attitude would rub off on others, and who had the skills to hire and lead others.

Marquis told the story of sending a team from Philadelphia to train the newly hired staff of her Washington, D.C. HipCityVeg restaurant. The trainers returned to Philadelphia proud of their accomplishment. The training they provided the Washington staff would help that restaurant be successful.

Marquis said that when you trust employees and share your expectations of them, they develop a sense of ownership in what they do, feel valued as employees and are motivated to continue to improve the operation of the business.

On Dec. 1, I had lunch at the HipCityVeg adjacent to Rittenhouse Square in Philadelphia to get a first-hand look at the restaurant’s operation. The staff gave this patron a great customer experience. The food was delicious.

By 12:20 p.m., the restaurant was packed with customers wanting to purchase their 100 percent plant-based lunch. Marquis has differentiated HipCityVeg from its competitors and has become a preferred provider of fast-casual food.

Differentiate and become the preferred provider — a lesson for all entrepreneurs.

Playwright George Bernard Shaw once wrote, “Life isn’t about finding yourself. Life is about creating yourself.” This describes entrepreneurs who make a difference in this world. This is Nicole Marquis.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on November 28, 2016

There are those who successfully pursue improbable dreams. One such individual is Vince Papale, who was a 30-year-old walk-on at a 1976 tryout for the Philadelphia Eagles football team. Against the odds, he made the team.

This year is the 10th anniversary of the film “Invincible,” which chronicles Papale’s journey as an Eagles player, and how hard work and a positive attitude can help you achieve your goals. I recently met Papale and asked if I could interview him.

Papale was a track star at St. Joseph’s University in Philadelphia, where he excelled in the jumping and sprinting events. He never played college football, but played two years for the Philadelphia Bell, a team of the short-lived World Football League.

In the forward to the 2011 book titled “Be Invincible” by Papale and his wife, Janet Cantwell, Dick Vermeil writes that when he arrived in Philadelphia as the team’s new head coach in early 1976, he and his staff decided to host a tryout to “pick up a few players who could come in and help during the 10-week training camp” during the summer. Papale jumped at the chance. The tryout gained the team much publicity and, as I recall, some derision.

Before Vermeil’s arrival, the Eagles record was 16-25 during the previous three seasons. The team did not have a first-, second- or third-round draft pick until 1978. The only way to improve in the short-term was through hard work and a change in the team’s attitude and mindset. Vermeil had to seed the team with players who could act as catalysts to turn things around.

Papale’s speed and his overall athletic ability quickly became apparent to the coaches during the tryout. In the forward to “Be Invincible,” Vermeil wrote, “The combination of [Papale’s] athletic skills, passion and work ethic made the evaluation process easy. I was convinced that we had someone who could help us build a foundation we would eventually win with.”

Papale served as the catalyst Vermeil needed in the early years of his tenure as the Eagles coach. Papale said in his interview, “Coach Vermeil needed a change agent. Change is the only constant in life, and you had to be comfortable with change to be successful as an Eagle.”

Papale won a position on the Eagles special teams, responsible for punts and kickoffs, and was eventually voted by his teammates as special teams captain. He earned that leadership position.

The Eagles went 4-10 during the 1976 season, and by 1978 had improved to 9 – 7, Papale’s last year as a player, sidelined by a shoulder injury. In 1980, the Eagles under Vermeil were 12-4, went to the Super Bowl, but lost to the Oakland Raiders. During his career as an Eagle, Papale played a key role in the team’s climb in the standings.

Papale is now a motivational speaker, sharing his inspiring story with others. There are many parallels between being successful in sports and successful in business, and Papale talks about these to corporate audiences.

1. Work hard, and don’t have a sense of entitlement

Papale writes that some players at that Eagles training camp during the summer of 1976 had a sense of entitlement. They were NFL veterans and had seen head coaches come and go, and did not want to work as hard as Vermeil wanted them to. Many of them didn’t make the team.

Papale worked hard to gain acceptance, not only from the coaching staff, but also from the veteran players, many of who supported him and his work ethic. This is also how acceptance and recognition is gained in a corporate environment.

2. Get out of your comfort zone

Papale writes in “Be Invincible,” “I think people are at their best when they are battling some obstacles. We weren’t meant to be comfortable. When we become complacent, we start to die.”

If you are comfortable for much of your professional life, you never grow. Occasionally you may fail, but you learn from those failures, and this helps you successfully face the next challenge.

3. Travel a journey to be the best in the world at what you do

During my interview of Papale, his outlook on life was very apparent. Papale is always on a journey to be the best in the world at what he does. He serves as a role model and a catalyst for others to do the same.

4. Be a positive thinker with a can-do attitude

We all know people who have a negative attitude about nearly everything. Papale is always positive. He sees challenges as opportunities. He undertakes every task with a winning attitude that he will succeed. This is what Vermeil saw in Papale when he made him a member of the Eagles.

5. “Good is the enemy of great”

These are the first six words in “Good to Great,” the iconic book by management guru Jim Collins. If you think you are good enough, you never will become great. Papale writes, “Many people think that life is all about competition with others, and sometimes that’s true. But in reality, your biggest competition is yourself.”

Papale’s compelling journey is an inspiration and serves as an example for those who are pursuing success in any endeavor. Be open to all opportunities and pursue those for which you have a passion. Differentiate yourself through hard work, results and a commitment to excellence, as did Papale. With these traits, you will have a rewarding future.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on November 21, 2016

Most of us have run into policies at work that don’t seem to make any sense. They impede the ability of the company to implement change and to achieve its goals.

Without the influence or authority to change them, employees are frustrated, wondering why these policies remain in place.

Every company needs policies and procedures to effectively serve its customers or clients, ensure equitable treatment of employees, protect against litigation, and to meet legal and regulatory requirements. Without them, there would be chaos.

What I am referring to are those policies that don’t make sense, but are rarely challenged.

At the first anniversary of my job as a process engineer at PQ Corp., I received a performance review and was told that I was being awarded a salary increase of 5 percent, compared with a marketplace salary structure increase of 4 percent. During our conversation, my boss made the mistake of telling me that the other engineer in our small group would be awarded an increase of 3 percent.

I thought my co-worker was a solid performer and questioned why his salary increase was less than the marketplace increase in the salary structure. My boss said that was the way the system worked — the overall percentage salary increase for our small department could not exceed the increase in the salary structure — 4 percent.

I told him that made no sense. My boss responded, “Well, that’s just the way it is.”

I then told my boss that when I rose to a level within the company where I could influence or change the system, I would. That compensation system didn’t fulfill what I thought should be its intended objective — pay employees commensurate with their performance, and no one ever did anything to fix it.

Years later, I was appointed to the position of president of PQ’s Industrial Chemicals Group. I now had the influence to change the compensation system, which over the years had undergone minor changes, but was still not effective.

I convinced the other two operating group presidents, the new, proactive leader of the human resources department, and PQ’s CEO of the need to change how we compensated our employees.

The new performance and compensation systems that were developed had input from employee focus groups, which created buy-in. The employees liked it because it provided a more rational approach to compensation administration. Employees also had ownership in the system, since a group of them helped develop it.

So, how was the new system different than the previous one?

In the previous system, salary increases were targeted to meet an annual operational budget objective: To ensure that the average salary percent increase for all employees was no more than the marketplace percent increase in the salary structure.

The new system met a longer-term strategic human resource objective: To ensure that on average, employees were paid at the 50th percentile of the salary range for their specific job, based on marketplace data that was updated annually.

Where in the salary range an employee was paid depended on their performance, including how well they worked with others to continuously improve the operation of the company, which was rigorously assessed.

Paying employees on average at the 50th percentile was a strategic policy decision. We could have decided to pay employees on average at the 75th percentile as some companies do, or some other percentile of the salary range.

Some proponents of paying above the 50th percentile argue that to achieve superior performance, the company needs to pay on average at the 65th, 70th or 75th percentile. We preferred using variable pay — the annual bonus and long-term stock option programs to reward employees when the company achieved a performance above its short and long-term goals.

Once launched, the new compensation system remained in place and was successfully used until the company was acquired 15 years later.

CEOs, listen to those employees who challenge policies that don’t make sense to them. Never respond with, “Well, that’s just the way it is.”

These employees are your talented change agents. If frustration leads to them to leave your company, they may go to work for a competitor.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the Minneapolis/St. Paul Business Journal on November 14, 2016

It has now been seven days since Donald Trump won the election and became president-elect of the United States after one of the most divisive political campaigns our country has ever experienced.

Trump tapped into the fears of disaffected Americans wanting to take their country back. He played on the resentment of those who have lost jobs due to what he described as unfair trade agreements and illegal immigration, among other issues. He vilified “the elites” for not caring about ordinary Americans.

Trump ran for president as a Republican, but he is a populist. He hijacked the Republican Party and used it as a vehicle to win the presidency.

In a Bloomberg Businessweek article published on May 26, Trump describes the future of the GOP. He stated, “Five, 10 years from now, [the GOP] will be a different party. You’re going to have a worker’s party. A party of people that haven’t had a real wage increase in 18 years, that are angry.”

In Trump’s victory speech, he sounded presidential for the first time since he started his quest for the presidency. He said, “Now it is time for America to bind the wounds of division. … To all Republicans and Democrats and independents across this nation, I say it is time for us to come together as one united people. I pledge to every citizen of our land, that I will be president for all Americans…”

Being the president for all Americans will define Trump’s legacy. He needs to make life better for all. How should he go about doing that?

On Nov. 11, Trump stated at a press conference that he has three priorities: immigration, healthcare and jobs. All three have a major impact on people and on the economy.

Immigration

Trump and his political surrogates have been inconsistent on whether he will build a wall between the U.S. and Mexico, and whether an estimated 10 million illegal immigrants will be deported. Yesterday he said he would first deport only the three million illegal immigrants with criminal backgrounds and address the remaining illegal immigrants later, leaving these families in limbo. These families will now worry indefinitely about their future.

Has Trump thought about the negative impact to the economy of deporting illegal immigrants, not to mention the hardship that these families would endure?

Immigrants are an important economic engine to our inner cities. They start businesses, pay taxes and hire workers. They build our homes, care for our children and are positive contributors to our society. He needs to put forward a way for those here illegally to stay.

Healthcare

The rising cost of healthcare insurance and the thin coverage provided by Obamacare is a real issue. Even Hillary Clinton has acknowledged that Obamacare needs to be fixed.

Trump has stated that he would repeal Obamacare and replace it with a private insurance company system that would control costs through the competitive marketplace.

The word “repeal” sends shockwaves to those who were prevented from buying health insurance due to pre-existing conditions. Trump announced that this important aspect of Obamacare would be maintained. His statement will receive a very favorable reaction.

Jobs

Trump is a protectionist. He needs to understand that protectionists don’t create jobs; they destroy jobs, especially in today’s economically and technically integrated world. During his campaign, Trump ignored the millions of new jobs that have been created due to trade between countries.

Trump stated that he wants to renegotiate NAFTA, the North American Free Trade Agreement with Canada and Mexico. As a dealmaker, Trump knows that the parties to an agreement will renegotiate if they can secure changes that benefit them. If Trump can’t renegotiate NAFTA and the U.S. decides to exit the agreement, the results would be a disaster for the U.S. economy.

Unfortunately, Trump’s candidacy and his election has brought out the worst in some people who are showing their disdain and in some cases hatred of others who are not like them. To be the president of all Americans, Trump needs to strongly state his opposition to their views and hateful actions. He did so during a CBS 60 Minutes interview with Leslie Stahl that was aired last night.

Trump needs to surround himself with smart, experienced pragmatic advisors, and he needs to listen to them. He needs to also over-rule them when they propose extreme views.

He shouldn’t appoint conservative extremists to advise him, as he did yesterday with the appointment of Steve Bannon to the position of chief strategist and senior counselor to the President. Bannon is a right-wing ideologue. Trump’s appointment of Bannon sends the wrong message to the more than half of the people who didn’t vote for him and will prove to be a terrible mistake.

Trump has an opportunity to fulfill his victory speech pledge to bind the wounds of division and to be president for all Americans. Will he? His legacy as president depends on it.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on November 7, 2016

The residents of the Philadelphia region awoke this morning to good news. A new labor agreement was reached by Transit Workers Union Local 234 and SEPTA, the Southeastern Pennsylvania Transportation Authority

At the press conference early this morning, there were only smiles as a new five-year labor agreement was jointly announced by SEPTA and the TWU. Both parties also acknowledged the hardships that commuters faced last week.

That raises the question, is there a better way to reach transit agreements between labor and management?

Driving to work during the past week at a crawl in nearly gridlocked traffic, I had ample time to think about the Philly transit strike.

All buses, trolleys and the two subway/elevated lines that run through the city were shut down by the strike, forcing tens of thousands of commuters to find alternate means to get to work or to school.

The 13 SEPTA regional rail lines that connect the Philadelphia suburbs and some outlying Philly neighborhoods with Center City were not affected by the strike, since the regional rail line employees belong to a different union. However, these trains were packed with people and were significantly delayed.

In economically disadvantaged neighborhoods, parents rely on public transportation to take their children to medical appointments, and even to the hospital for surgery. During the strike, there were few alternatives for people without access to a car.

Childcare workers couldn’t get to their jobs, forcing a parent to lose a day’s work, which negatively impacted the childcare worker, the parent, and the parent’s place of employment.

The TWU called the strike one week before tomorrow’s presidential election. Since Philadelphia is heavily Democratic, if voters couldn’t get to the polls on election day, those lost votes would mainly impact candidates of the Democratic Party.

On Nov. 5, SEPTA sought an injunction to force TWU workers back to work, calling the transit strike a “clear and present danger to the health, safety and welfare of our riders and the citizens of Philadelphia and the region.”

Philadelphia Common Pleas Court Judge Linda Carpenter ruled, “There is not enough evidence that [an] injunction right now is necessary,” and scheduled another hearing for today. This provided more time for the parties to reach agreement over the weekend.

SEPTA, as well as many other transit systems, has experienced strikes in the past. Is there a better way?

On Nov. 2, former Pennsylvania Gov. Ed Rendell, a Democrat, suggested that transit workers be classified as essential employees not permitted to strike. Transit labor contracts would be submitted to binding arbitration after negotiations failed to result in an agreement.

An arbitrator would be selected by each party, and a third would then be chosen by those two arbitrators. On any given issue, the arbitrators would be limited to either choosing the labor proposal or the management proposal, which would prevent each side from making unreasonable demands, for fear that the arbitrators would choose the other side’s proposal.

Classifying SEPTA transport workers as essential employees subject to binding arbitration would require legislative approval. Legislators would need to weigh the opposition of the union and possibly SEPTA to such a proposal, versus the benefit to the public of such legislation.

If legislators did what was right, they would seriously consider the imbalance of power that transit unions hold and their ability to cause huge economic and personal hardship to the people of Philadelphia. They would classify transit workers as essential, subject to binding arbitration.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on October 31, 2016

A story first reported in the Los Angeles Times on Oct. 22 that has since appeared nearly every day in the news media leads one to question the common sense and good critical judgment of Pentagon leadership.

As many as 6,500 national guardsmen who received enlistment bonuses of up to $25,000 a decade ago during the Iraq and Afghanistan wars were told that the payment of these bonuses was a mistake and to return the money plus interest. A 2010 audit revealed that not all the national guardsmen met the criteria for receiving the bonus.

Why didn’t the Pentagon think that clawing back the bonuses due to a mistake that they had made years ago would be unjust? Why didn’t the Pentagon leadership grant repayment waivers at that time rather than just follow policy?

These soldiers kept their part of the bargain, risking their lives fighting in Iraq and Afghanistan. Now they face a financial nightmare through no fault of their own.

Some guardsmen are paying back a portion of the bonus each month, while others are re-mortgaging their homes. A few are refusing to pay back the bonuses and have asked members of Congress to intercede.

This is not a case in which the error had been quickly discovered after the bonuses were paid and the guardsmen were then asked to repay the funds before they were spent. Many years have passed! Homes were purchased, businesses were started, college tuition paid, and many important family decisions were made based on those bonuses.

The Pentagon made the mistake, not the soldiers. Didn’t someone at the Pentagon — regardless of organizational level — stop and think of the hardship that would be encountered by the soldiers and the unfairness of asking for repayment many years later, and propose that waivers be granted?

This scandal is now front-page news, casting the Pentagon in an unfavorable light. It didn’t need to be this way. The cloud of financial uncertainty that hung over these soldiers should have been removed soon after the 2010 audit.

On Oct. 26, Secretary of Defense Ash Carter stated, “There is no more important responsibility for the Department of Defense than keeping faith with our people. That means treating them fairly and equitably, honoring their service and sacrifice, and keeping our word.” Carter further stated, “… [I have suspended the clawbacks] until I am satisfied that our [review] process is working effectively.”

This is the type of statement that should have been made soon after the 2010 audit by then Secretary of Defense Leon Panetta or by Chuck Hagel, who was Defense Secretary from 2013 to 2015.

Secretary Carter, as “CEO” of the Pentagon, needs to address the following issue: What is it about the culture within his organization that prevented staffers from recognizing an injustice and reporting it up through the organization, so that the individual who has the authority to grant a waiver is made aware of the situation, even if that ultimate authority might lie with Congress?

Within business and nonprofit organizations, how often do employees feel current policies and practices are not in the best interests of the organization or its customers?

How often will an employee raise the issue to his boss? How often will she in turn pass that concern on to her boss, and on up to the individual, possibly the CEO, with the authority to change the policy?

All leaders need to think about their organizational culture and whether it encourages employees at any level to identify policies and practices to their management that are not in the best interests of the company’s employees, customers or other stakeholders.

Employees need to feel that their concerns will be heard and considered. This is how any organization can lessen the chance that a small issue will eventually become a much larger one.

Had this occurred at the Pentagon, what is now a very public scandal surrounding the clawback of bonuses could have been avoided.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the Silicon Valley Business Journal on October 24, 2016

There is one universal principle that determines the success of all businesses: Be the preferred provider to your markets.

What is a “preferred provider?” It’s a provider that a customer or client favors in the purchase of a product or service versus its competition. A preferred provider has a significant competitive advantage over all other providers, because it is the “go-to” provider in the marketplace.

Whether a business sells autos, groceries, clothing, computers or raw materials to a manufacturer of industrial products, it wants to be the preferred provider of its products.

Whether a business is an Internet service provider, a hospital or a physician in a group or individual practice, an attorney or a roofing company, it wants to be the preferred provider of its services.

So, how does a business build competitive advantage by becoming the preferred provider to the markets it serves? It differentiates itself from competitors by excelling in the following six areas to achieve preferred provider status.

1. Offers high-quality, reliable products and services

When customers buy a product, they expect that it meets a high standard of quality and it will work as intended. They don’t want to waste time and effort returning a shoddy product to have it replaced.

When clients buy a service, they expect that service to be performed in a professional and competent manner.

2. Provides a great customer experience

People will return to buy products and services from those companies that always meet their commitments. Companies earn repeat business when the price charged is fair for the value received, and when they make it easy for a consumer to interact with them.

Customer service representatives that only go through the motions without taking a genuine interest in helping a customer drives repeat business away and hurts the company’s reputation.

3. Delights the customer

On Aug. 22, I wrote an article headlined, “Here’s how to create a sustainable competitive advantage,” in which I described how Cooper Roofing Co. provided rapid service to a friend whose kitchen skylight broke just hours before it was forecasted to rain. Within an hour, a Cooper crew arrived at her home and covered the skylight opening with plywood.

My friend was delighted by how quickly and professionally Cooper Roofing responded to her problem. Now, don’t you think that she will be singing the praises of Cooper Roofing to all her friends?

4. Is trustworthy

Customers want to do business with a company that will act in the customer’s best interest. When a company acts in this manner, it earns their customers’ trust. When a company acts in its own best interest and against the interests of its customers, it earns the wrath of its customers.

The ongoing scandal at Wells Fargo Bank has damaged the trust that current and potential future customers have in the bank.

California has announced that it will suspend Wells Fargo from participating in the state’s investment activities, followed by similar announcement by Illinois and Ohio, as well as Chicago and Seattle. More states as well as cities will follow, not to mention the loss of business from individuals and commercial accounts. Wells Fargo will pay a significant price for losing the trust of its customers.

5. Isn’t arrogant

A provider may feel that since it has a monopoly, it can arrogantly charge whatever it wants to for its product. The CEO of Mylan Pharmaceuticals and the former CEO of Turing Pharmaceuticals found themselves skewered in front of Congressional committees for showing arrogance and disregard for their customers in the pricing of their medications.

If an industrial or commercial customer feels that the price being charged is unreasonable, they often will go to the ends of the earth to find a replacement, even encouraging other providers to enter the market.

Providers that don’t exploit their monopoly position have a higher chance of remaining the sole provider to the market and enjoy higher sales revenues and profitability over the long term.

6. Is on a journey to be the best in the world at what it does

Why should you be on this journey? Because it builds competitive advantage and makes it more difficult for other companies to compete with you. This also focuses employees on what builds great, enduring companies.

You want to be so good at being the preferred provider, you want your competitors to think it’s very difficult to compete against you. That’s how good you want to be.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on October 17, 2016

On Oct. 12, five weeks after it was announced that Wells Fargo was fined $185 million for unethical business practices, John Stumpf stepped down as chairman and CEO of Wells Fargo.

On Oct. 13, The Wall Street Journal published an editorial headlined, “Wells Fargo’s political sacrifice: CEO John Stumpf is offered up to the Beltway Gods.”

The Wall Street Journal praised Stumpf for navigating Wells Fargo (NYSE: WFC) through the banking crisis of 2008-2009 and called him “… one of the most successful American CEOs of recent times, because [Stumpf] produced some $149 billion in profits and [the bank] saw an increase in market cap of $124 billion.”

Quoting the Journal, “Mr. Stumpf has already forfeited $41 million in unvested equity grants … Now he is paying with his job, as the bank tries to appease the political lords who under Dodd-Frank have become more or less co-owners of our largest banks.”

With all due respect to The Wall Street Journal editorial board, their editorial made no comment about the toxic culture within the bank that encouraged fraudulent and unethical consumer banking practices, nor Stumpf’s inability to change that culture and stop those practices, which occurred over at least a five-year period.

The editorial made no mention of allegations made in a Sept. 21 CNN Money report headlined, “I called the Wells Fargo ethics line and was fired.” Reporter Matt Egan wrote that the news organization spoke with a number of Wells Fargo employees who were fired for reporting unethical practices on the ethics hotline and to the bank’s human resources department.

Egan spoke with a former Wells Fargo human resource manager who said, “The bank had a method in place to retaliate against tipsters … It could be as simple as monitoring the employee to find a fault, like showing up a few minutes late on several occasions.”

No employee should ever fear retaliation for reporting unethical practices or any other issue to a company’s hotline.

Reports to the hotline are customarily received by a third-party firm and reported to the audit committee of the board. What action did the Wells Fargo audit committee take when they learned about unethical practices at bank branches?

Stumpf’s inability to change a culture that rewarded the creation of 2 million bogus bank accounts and the sale of products that customers don’t need undermined his ability to lead Wells Fargo. He would not have been an effective CEO of the bank moving forward.

The Wells Fargo board has now separated the positions of chairman and CEO, appointing lead director Stephen Sanger as chairman of the board and Wells Fargo President and Chief Operating Officer Timothy Sloan as the new CEO.

This was the right board governance decision for the bank, a structure that has been adopted by many companies. Sanger can focus on the avalanche of lawsuits and Congressional investigations that are being launched. Sloan can focus on the changes that are necessary to regain the trust of the bank’s customers.

Sloan had held the position of COO since Nov. 2015. One can question why he didn’t put a stop to the unethical business practices within Consumer Banking during the year he was COO. Will Sloan have the trust and respect of Wells Fargo employees?

All CEOs need to be held accountable by their boards for tone and culture — in addition to financial results. Had the Wells Fargo board held Stumpf accountable for ending the toxic sales culture within the bank branches five years ago, the bank could have avoided damage to its reputation and the ire of its stakeholders.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the Philadelphia Business Journal on October 11, 2016

This presidential election campaign is none like any other. Never has one candidate continued to make comments and take positions that are the antithesis of the values that most all Americans hold dear.

Donald Trump raised the issue of Hillary Clinton’s erased emails during last night’s debate, which she acknowledged was a mistake. If elected, Trump threatened to appoint a special prosecutor to investigate Clinton’s actions and put her in jail. Only in dictatorships are political opponents thrown in prison. This doesn’t happen in democracies.

The bombshell release on Oct. 7 of taped comments by Trump in 2005, in which he makes lewd, offensive and derogatory references about women only adds to the dozens of objectionable comments made by Trump during this presidential campaign.

Recently revealed banter between Trump and Howard Stern on Stern’s radio show about Trump’s sexual exploits reveal his total lack of respect for women, including his own daughter. His comments go way beyond “locker room talk” that he claims it was and that some Trump apologists use to excuse him.

During the debate, Trump raised the issue of Bill Clinton’s affairs to deflect attention away from his own actions. However, Donald is not running against Bill.

Presidents set the tone at the top for the country, just as CEOs set the tone at the top for their companies. Trump is CEO of his company. Effective CEOs don’t say things that Trump has, and neither do presidents.

On June 13, I wrote an article headlined, “Values matter and Trump has crossed the line. What should Republicans do?”

My article was based on Trump’s verbal attacks on women, his making fun of a disabled reporter, broad-brushing Mexican illegal immigrants as criminals, and his attack on Muslim immigration.

Trump has stated that federal judge Gonzalo Curiel should recuse himself from overseeing the Trump University case due to bias, because Curiel’s parents were born in Mexico. He has stated that he knows more about how to defeat ISIS than our generals. Oh really? I could go on and on.

Ethical CEOs don’t stiff their smaller contractors who performed work on their hotels and casinos as Trump has because they don’t have the financial staying power to sue, a stunt he wouldn’t pull on larger contractors with deeper pockets. Would Trump be an ethical president?

One can only wonder about the tone and culture within the Trump organization and what Trump’s employees must think about his ethics and his disrespectful and lewd comments about women as well as his personal exploits. I would hope no one within his company considers him to be a role model.

After Trump’s latest comments denigrating women were made public, many Republican politicians announced they could no longer support Trump. There is a growing chorus asking him to step down as the Republican presidential candidate.

The number of conservative newspapers endorsing Clinton continues to grow. Their non-support of the Republican candidate for president is unprecedented. Trump is doing significant damage to the Republican Party, which is not in our country’s best interest.

In that June 13 article, I wrote, “The value system of our leaders matter and Trump does not represent the values nor has the temperament of the individual to lead the United States.”

Four months later, I feel even more strongly about what I wrote.

It’s one thing to not support candidates because one disagrees with their policies. It’s quite another to do so because they are not fit to hold the position.

Day by day, Trump further demonstrates that he lacks the emotional intelligence, temperament and values needed to lead the United States.

I would not trust Trump as our president.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.

Article originally published in the American City Business Journals on October 3, 2016

Chairman and CEO John Stumpf of Wells Fargo, CEO Heather Bresch of Mylan Pharmaceuticals, and former CEO Martin Shkreli of Turing Pharmaceuticals were recently in the unenviable position of being asked to testify before congressional committees on issues involving unconscionable actions by their companies.

It is no fun being in the hot seat in an unfriendly environment covered by national and international news organizations, as well as by social media.

Stumpf testified in front of the Senate Banking committee on Sept. 22 and in front of the House Financial Services Committee on Sept. 29. He was grilled on why, over a five-year period, Wells Fargo (NYSE: WFC) could not fix a toxic incentive-driven and unethical sales culture in which bank branch employees signed up customers for credit and debit cards they didn’t need and opened new bank accounts in customers’ names without their knowledge.

Some Wells Fargo employees who reported these abuses to the company’s Ethics Line were fired. Whistleblowers are protected from termination by the Sarbanes-Oxley and Dodd-Frank Acts, a violation that can carry up to a 10-year prison term.

Congressman Patrick McHenry (R-NC) asked Stumpf, “How can you rebuild trust? What standards are you holding yourself to, that sends a message to the rest of the folks in your organization that look to you for leadership and guidance? What are you doing to restore that [trust]?”

Stumpf did not have a satisfactory response.

Bresch of Mylan Pharmaceuticals (NASDAQ: MYL) appeared before the House Oversight and Government Reform Committee on Sept. 21 to explain the latest of 17 EpiPen price hikes to $609 for a package of two injectors, a 550 percent price increase over the past decade.

In August, as criticism of Mylan’s latest price hike of EpiPen mounted, Bresch stated, “I am running a business. I am a for-profit business. I am not hiding from that.”

This was an insensitive and arrogant comment to individuals who someday will need to use EpiPen to immediately counter a life-threatening allergic reaction but can’t afford it.

During the House Committee hearing, Rep. Gerald Connolly (D-Va.), commented to Bresch, “You virtually have a monopoly and use it to your advantage, but unfortunately, it is at the expense of people who need [your product].”

Shkreli testified before the House Oversight and Government Reform Committee on Feb. 4 and faced tough questioning about why Turing Pharmaceuticals raised the price of Daraprim from $13.50 to $750 per pill soon after the drug was acquired. This pushed the drug out of the financial reach of many patients. Daraprim is used to treat toxoplasmosis, a disease that weakens the immune system of people who have cancer or are HIV positive.

At a Forbes Healthcare Summit, Shkreli stated, “I probably would have raised the price [of Daraprim] higher … and made more profits … this is a capitalist society, capitalist rules, and my investors expect me to maximize profits, not to minimize them … [like we] are all taught in MBA class.”

Oh really? This is taught in MBA class? Let’s hope not.

The public, through their elected officials and government regulators, give businesses a license to operate. That license can be changed to stop abusive actions. Was this taught in Mr. Shkreli’s MBA class?

In my Feb. 17 article headlined, “Former pharma CEO Martin Shkreli tarnishes the image of his profession,” I wrote, “on rare occasions, corporate leaders lose sight of a major principle in business and in life. When they take an action that … is unreasonable or egregious, or act in a way that is disrespectful or with disdain, their behavior will come back to haunt them and [hurt the reputation] of their company.”

Stumpf, Bresch and Shkreli give CEOs a bad name. They are supposed to set the right tone and culture, as well as the moral and ethical compass for their companies.

Boards need to hold their CEOs accountable for tone and culture in addition to financial results.

No board wants its CEO to be called in front of a Congressional Committee to answer for their company’s egregious behavior.

Stan Silverman is the former president and CEO of PQ Corp. He also is founder and CEO of Silverman Leadership and is vice chairman of the board of trustees of Drexel University. Silverman earned a Bachelor of Science degree in chemical engineering and an MBA degree from Drexel University. He is also an alumnus of the Advanced Management Program at the Harvard Business School.