Article originally published in the Philadelphia Business Journal on February 1, 2016

Jan. 28 marked the 30th anniversary of the Challenger space shuttle disaster, which cost the lives of seven crew members. The media let the anniversary pass with only minor mention. The further removed we are from historic events, the more they recede from our consciousness. However, historic events teach us valuable lessons that are timeless, and we shouldn’t forget them as they fade into the past.

The Challenger anniversary reminded me of one of the most important lessons for all leaders – the need to surround themselves with independent thinkers who will point out the brutal facts of reality. Leaders need to create an environment and institutional culture that welcomes and encourages individuals to share their opinions and then consider them, especially if those offering these opinions have more experience or expertise than the leader.

On Aug. 31, 2015, the Philadelphia Business Journal published an article I wrote about the Challenger disaster headlined, “How an independent thinker unearths brutal facts of reality.” In that article, I said a major cause of failure of initiatives, sometimes with catastrophic consequences, is the inability of CEOs, their leadership team or a company’s board to face the brutal facts of their reality, and the lack of a courageous independent thinker who will point out that reality. Portions of that Aug. 31 article appear in this article.

The Challenger was launched on Jan. 28, 1986 in cold weather, which caused the O-ring seal in the right solid rocket booster to fail 73 seconds after launch, resulting in the escape of burning fuel that destroyed the shuttle. The engineers at Morton Thiokol, the contractor responsible for the design of the solid rocket boosters, were concerned about the cold temperature on launch day and recommended that the launch be postponed.

NASA however, objected to Thiokol’s recommendation to delay the launch. The launch had already been delayed a number of times for various reasons. One NASA manager is quoted as saying, “I am appalled by your recommendation.” Another NASA manager is quoted as saying, “My God, Thiokol, when do you want me to launch – next April?”

NASA made unrealistic launch frequency commitments to Congress to secure increased funding for the space program. Thiokol management, facing pressure from NASA, eventually acquiesced and agreed that the launch could proceed. The rest is history. The United States lost the Challenger and its crew due to the catastrophic failure of an O-ring.

On Jan. 29, Howard Berkes wrote an article for the NPR publication “The Two-Way,” headlined, “30 years after explosion, Challenger Engineer still blames himself.” For his article, Berkes interviewed Morton Thiokol engineer Bob Ebeling, who told the story of how he and four other engineers did not want the Challenger to be launched due to cold weather conditions. In spite of their concern, NASA launched the shuttle.

Quoting Berkes’ article, “When Challenger exploded 73 seconds after liftoff, Ebeling [and his colleagues] … knew exactly what had happened. Three weeks later, Ebeling and another engineer separately and anonymously detailed to NPR the first account of that contentious pre-launch meeting. Both were despondent and in tears as they described hours of data review and arguments. The data showed that the rubber seals on the shuttle’s booster rockets wouldn’t seal properly in cold temperatures and this would be the coldest launch ever.

“‘I was one of the few that was really close to the situation,’ Ebeling recalls. ‘Had they listened to me and wait[ed] for a weather change, it might have bene a completely different outcome. … [NASA] had their mind set on going up and proving to the world they were right and they knew what they were doing. But they didn’t.’”

President Ronald Reagan established the Rogers Commission (named for its chairman William P. Rogers) to investigate the reasons for the Challenger disaster. The Commission found that NASA, concerned about their inability to meet an unrealistic launch schedule that might jeopardize their Congressional funding, did not face the brutal facts of their reality – launching in cold weather conditions exposed the Challenger to an unacceptable high level of risk.

One member of the Commission, physicist Richard Feynman, was at odds with Commission chairman Rogers on many issues during the investigation. When Feynman learned that the final Commission report would not focus on the issues he felt were key to the loss of the shuttle – lack of communication, an understanding of risk and a rigid culture that did not encourage sharing of contrary views, he decided to write a minority report. If it wasn’t for Feynman, these issues within NASA might not have been identified.

Leaders need to ensure that the brutal facts of reality are acknowledged. Once reality is acknowledged, many times a decision will come down to assessing the risk of various courses of action. When the risk of a course of action is low but the possible result is catastrophic, one should not take the risk. Unfortunately, the NASA decision makers who moved ahead with the Challenger launch did not think in these terms.

A courageous independent thinker needs to voice their opinion and try to convince everyone of the validity of the organization’s reality. The views of the independent thinker may not be ultimately adopted, but at a minimum, those views provide a different path, a path against which the majority opinion can be tested, and either confirmed or changed. Under this type of process, the best decisions will emerge.

In the words of renowned Brazilian novelist, Paulo Coelho, “If you want to be successful, you must respect one rule: Never lie to yourself.” Leaders, remember this when one of the independent thinkers on your staff reminds you to face the brutal facts of your reality.

Stanley W. Silverman is the founder and CEO of Silverman Leadership. He is a writer and speaker, advising C-suite executives about issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on January 26, 2016

The Flint, Michigan, water quality crises accurately fits the description of a man-made disaster, defined by Black’s Law Dictionary as “deliberate or negligent human actions directly and principally caused [by] one or more identifiable disastrous events.”

There was a complete lack of leadership by Michigan government and regulatory leaders whose actions and inactions caused this disaster. The accountability lies with Governor Rick Snyder and his executive branch staff as well as the leadership and staff of the Michigan Department of Environmental Quality. These leaders continually told the citizens of Flint that the water used in their homes was safe, even after reported problems with the water’s color, odor and taste. The water in fact, was not safe. The result was that many Flint residents suffered lead poisoning due to high lead levels in their water including children, who are most susceptible to lead exposure.

To reduce costs, in March 2013, Flint’s mayor and its City Council made the decision to switch the long-term source of Flint water from the Detroit water system to the Karegnondi Water Authority, which would build a pipeline to transport water from Lake Huron to Flint. In April 2014, to save $5 million during the remaining two-year period until the completion of the pipeline, Flint switched from Detroit to the Flint River as an interim source of city water.

The water from the Flint River has a high salt content and therefore is very corrosive, causing lead and other heavy metals to leach out of aging pipes delivering water to homes. The addition of an anti-corrosion agent to high salt content water is a well-established and common practice to reduce heavy metal leaching from water system pipes.

The cost of the anti-corrosion agent, had it been added to the Flint River water, would have only been $100 per day. The failure of government and regulatory authorities not to require the addition of the anti-corrosion agent was a gross failure in stewardship and responsibility, which could lead to criminal charges and civil liability.

More than half of the population of Flint is African-American, and nearly half of the city’s population lives below the poverty line. Were the demographics of Flint a factor in the decision to switch to untreated Flint River water, as some individuals are suggesting? If these government and environmental officials experienced the same type of water coming from the faucets in their homes, corrective action would have been demanded and immediately implemented.

It wasn’t until pediatrician Mona Hanna-Attish found elevated levels of lead in the blood of Flint children that the Flint water problem was taken seriously. Engineering Professor Marc Edwards and his team from Virginia Tech conducted independent water quality tests and found high lead levels in tap water in homes. Edwards found lead levels in Flint water within some homes to be several orders of magnitude higher than what was considered acceptable. There is no threshold level of lead considered to be completely safe. It is estimated that as many as 12,000 residents of Flint have elevated levels of lead in their bodies. Many of these are children, who will suffer developmental issues and a range of other health problems.

In a Washington Post article dated Jan. 7 headlined, “The poisoning of Flint,” columnist Katrina vanden Heuvel writes, “When complaints persisted, officials assured citizens that the water was safe to drink, repeatedly disregarding clear evidence that it wasn’t. But when elevated levels of lead showed up in children’s blood this past fall, the government was forced to admit there was a problem. Snyder’s then chief of staff, Dennis Muchmore, acknowledged the administration’s deplorable response in a July 2015 email, writing, ‘These folks are scared and worried about the health impacts and they are basically getting blown off by us (as a state, we’re just not sympathizing with their plight).’”

Flint water is again being sourced from Detroit until the pipeline from Lake Huron is completed. However, lead still may leach from the damaged water system pipes. The National Guard is distributing bottled water to Flint residents, and will do so for some time. The magnitude of the repairs needed for the Flint water system is as yet unknown.

Snyder declared a state of emergency in Flint on Jan. 5. He has also acknowledged his role in this crisis. “Accountability” and “austerity” has been Snyder’s political narrative. Was austerity partly to blame for the Flint water crisis? Due to the weak financial condition of the city, Snyder had appointed a series of emergency managers to oversee the finances of Flint, and it was one of these emergency financial managers that signed off on the switch to Flint River water. Governor Snyder is a Republican and his inattention and lack of action to protect the residents of Flint will be raised as an issue by the Democrats in the upcoming presidential campaign.

The Flint Advisory Task Force appointed by Snyder to investigate the crisis has stated, “Throughout 2015, as the public raised concerns and as independent studies and testing were conducted and brought to the attention of … [Michigan Department of Environmental Quality], the agency’s response was often one of aggressive dismissal, belittlement, and attempts to discredit these efforts and the individuals involved. …We find both the tone and substance of many MDEQ public statements to be completely unacceptable.”

As can be expected, there is much finger pointing as to who is to blame. After the investigation is complete, many individuals need to be held accountable for their role. Michigan Department of Environmental Quality Director Dan Wyant has announced his resignation, as has MDEQ spokesman Brad Wurfel. Susan Hedman, U.S. EPA Region 5 administrator, also announced her resignation. There are many who are calling for the resignation of Governor Snyder.

You always want to hire, appoint or elect people with good critical judgment, who will do the right thing. The leadership of the MDEQ did not meet this standard, and neither did the governor of Michigan and his executive branch staff. In the future, why should the citizens of Flint believe anything they are told by their governmental leaders? They have lost their credibility.

Tone at the top and institutional culture play a critical role in the success of any organization. Michigan government and regulatory leaders were horribly lacking in both. They did not fulfill their responsibility – protecting the people of their state.

Whether a government or regulatory leader, the CEO of a company or head of a nonprofit organization, these leader’s constituents – the public, employees or stockholders, are counting on them to do the right thing. The Flint, Michigan water crisis is a lesson in how not to act as a leader.

Stanley W. Silverman is the founder and CEO of Silverman Leadership. He is a writer and speaker, advising C-suite executives about issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on January 19, 2016

What has Chip Kelly learned from his experience with the Eagles, his first job as head coach in the National Football League, as he assumes his position with the San Francisco 49ers?

Kelly’s 6-9 win/loss record certainly was a major reason for Kelly’s termination by Eagles owner Jeffery Lurie. Were there other, softer reasons? Kelly had Lurie’s trust when Kelly was given the responsibility for player personnel decisions in January 2014. What caused that trust to be lost during this past season?

A number of player personnel missteps by Kelly involved the replacement of talented players with those who were less talented. The Eagles’ defense ranked near the bottom of the NFL this past season, having given up 45 points in two games and 40 points in another.

Kelly wanted players who “fit the culture.” Kelly has stated that “culture beats scheme.” It appears that cultural fit took precedence over talent and learning how to work with players who could win games.

The headline of a Jan. 11 story by ABC News said, “Eagles CEO says coach following Kelly needs people skills.” Lurie is quoted in the story as stating he wants “someone who interacts and communicates very clearly with everyone he works with. We are looking for the best leader. It comes down to the leadership ability with today’s athlete and today’s world. It’s different than it was a long time ago.”

Based on Lurie’s statement, Kelly was not a person with the best people skills. Perhaps Kelly also did not effectively “manage up” in his relationship with Lurie. Lurie had sufficient trust in Kelly’s leadership style and abilities to give him the responsibility for player personnel decisions a year ago. Was there something else that occurred other than a 6-9 performance that made Lurie decide not to give Kelly another season to turn things around?

On Dec. 30, CBS News stated that “two Eagles players … told the Associated Press … that several players had met in groups in recent weeks to discuss their frustration with Kelly. They said they expressed relief … after the team announced that it had fired Kelly.” Apparently Kelly lost the locker room. His coaching style during his time at University of Oregon does not necessarily work in the pros. Did Kelly think about making adjustments to his leadership style?

One wonders if Kelly’s coaching staff offered their opinions on the player decisions Kelly made. Did the culture established by Kelly permit his coaches to share their views? All successful leaders welcome the opinions of those who report to them. They don’t flaunt their power, they are collaborative. Is this less common in the world of sports than it is in the business world? The leader makes the final decision, but that decision has a higher probability of success if the leader has the benefit of other opinions. As I have written in the past, this is how key decisions are de-risked – through discussion and debate. Other alternatives may emerge, better than those originally considered.

Kelly did not build collaborative relationships or political capital with those in the Eagles front office or with Lurie. Every effective leader knows that much can be accomplished through the informal organization, and political capital is a valuable currency. It creates supportive allies within organizations. It gives a leader more time to be successful, and their organization is more forgiving of mistakes.

All this being said, if the Eagles had made the playoffs, Kelly would still be the Eagles head coach. Winning overshadows all other issues.

As Kelly assumes his next head coaching position with the 49ers, he needs to ask himself what he learned as head coach of the Eagles. What will he do differently to ensure a more successful result? In the Jan. 16 edition of the Philadelphia Inquirer, columnist Jeff McLane wrote an article about Andy Reid, the Eagles head coach prior to Kelly and now head coach of the Kansas City Chiefs. McLane’s article is subtitled, “Big Red (Reid) is a changed coach, and he’s thriving.” Will the same thing happen to Chip Kelly? Time will tell. I wish him well.

On Jan. 17, Doug Pederson, the Kansas City Chiefs’ offensive coordinator and former Eagles quarterback and assistant coach, was hired as the next head coach of the Eagles. Hopefully, Pederson has the leadership qualities Lurie is looking for and that Kelly was lacking.

Kelly’s tenure with the Eagles was very costly, financially and in terms of time and players lost. All of us want to make the right leadership selection decisions. Prior to hiring a direct report, understand the individual’s leadership style, determine their level of interpersonal and collaborative skills, and how they will go about building a great team below them. People are key to any organization’s ability to achieve results.

Stan Silverman is the founder and CEO of Silverman Leadership. He is a writer and speaker, advising C-suite executives about leadership issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

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

On occasion, one crosses paths with an extraordinary individual, who despite the hardships endured through childhood, overcomes life’s obstacles and becomes an inspirational role model for others. Her narrative demands that it be told.

I first met Yasmine Mustafa in November 2015 when she was a guest speaker at Start-up Day of the Close School of Entrepreneurship of Drexel University. She describes her history as “cheating the birth lottery.” She is certainly achieving success in spite of very difficult odds.

Mustafa’s parents are Palestinian. She was born in Kuwait. Her father, a mechanical engineer, came to Philadelphia in 1990 on a business trip and her mother tagged along, six months pregnant. Her brother was born while they were here, making him a U.S. citizen. Shortly after they returned to Kuwait, Iraq invaded their country, marking the start of the Iraq-Kuwait war.

While Mustafa’s family was sitting in a bomb shelter, two men from the U.S. Embassy entered to locate her little brother, stating they were there to extract all American citizens from Kuwait. Mustafa’s parents thought they were only there for her brother, but they said they were there to take her entire family to the United States. Mustafa’s family arrived in Philadelphia on Sept. 21, 1990.

Mustafa, who was 8 years of age at the time, started a new life, and needed to acclimate to a new country, culture and language. Her first priority was to learn English. Her father’s engineering degree was not recognized, so to support his family, he borrowed money from relatives in the Middle East and bought a 7-11 convenience store franchise. Mustafa’s first exposure to entrepreneurship was working in that store. After 10 years, Mustafa’s father decided his family was becoming too Americanized, and took her two youngest siblings back to Kuwait, leaving Mustafa, her mother and three other siblings in the U.S. He also took the family’s savings with him, placing those family members who remained in serious economic difficulty.

In 1999, Mustafa learned she was an illegal alien. When they were whisked out of Kuwait in 1990, the family was not told they only had a year to apply for asylum, but given the circumstances, they were then permitted to apply. When 9/11 occurred, the processing of applications of those individuals of Middle Eastern descent was halted. In 2006, she was finally granted asylum and permanent residency status.

Prior to gaining permanent residency status, Mustafa, her mother and siblings were always under the threat of being deported. For more than six years they flew under the radar. Because of her status, Mustafa couldn’t apply for a college scholarship; so she put herself through Temple University, working two waitressing jobs. It took her seven and a half years to earn her degree, graduating with a 3.8 GPA.

Mustafa decided to eventually become an entrepreneur and start her own company. She said, “Living on the margins with the fear of being deported at any time formed this desire to be my own boss and have more control over my life.”

After graduating from Temple, Mustafa joined a consulting firm that worked with technology entrepreneurs. Over time, she worked her way up to the level of partner. She eventually decided to leave to start her first company, “123LinkIt.” She grew the company and two years later, sold it to Netline in 2011. She stayed on as product manager for the company’s advertising services. It became one of the top plug-ins on Word Press.

On April 19, 2012, Mustafa became a naturalized citizen of the United States. She said, “It was a day I will never forget. I finally had the security of citizenship, was financially comfortable, had health insurance, and time off on nights and weekends. I no longer had to fly under the radar.”
Mustafa stated, “When I started my first company, I found that I had no technical experience and I had a lot of trouble communicating with developers. I learned about Girl Develop It, a nonprofit in NYC, where they teach you how to code. I was making a four-hour commute from Philadelphia to NYC for a two-hour class, so I went to the founders of the organization and asked if I could start a branch in Philadelphia. GDI Philadelphia grew to be the most active in the U.S., and now has nearly 3,400 members.”

Mustafa, like many millennials, is driven by a purpose, beyond just making money. She said, “I want to make this world a better place.” Mustafa was inspired to found her latest company “ROAR for Good” by stories of women who had been attacked on the streets of our cities, and wanted to develop a device that could call for help. The company developed and is marketing a product that can be worn as a piece of jewelry – a pendent worn around the neck, or the product can be attached to your clothing. If you are in trouble, you can press a button to emit a loud siren. At the same time a message and your location is sent to friends or family through your iPhone or Android. ROAR is working on adding functionality for calling 911 so you can get help from the police.

Dreamit Ventures, a startup accelerator that provides expertise and resources to early-stage companies, boosts ROAR as an alumnus and as a portfolio company. Karen Griffith Gryga, chief investment officer of Dreamit Ventures, said this about Mustafa, “Yasmine is just the type of entrepreneur that we seek for Dreamit. She has intense passion, a big vision, core executional skills and the fortitude and persistence to keep pushing forward through obstacles and adversity. She has that fine balance that is key to success of being driven in equal parts by the market data and feedback, and her vision and passion. We at Dreamit are so proud of what the ROAR team has achieved to-date and are looking forward to great success in the years ahead.”

I asked Mustafa, “What matters to you?” She responded, “I know it sounds like a cliché, but I want to make a difference. I want to have an impact. I want to know that what I am working on is going to change something for the better. Girl Develop It has done that. I save all the emails from participants who say that it has changed their lives. For ROAR, my goal is that it will have the same type of effect. One day, women will not have to worry about their safety, won’t worry about their dress or where they go, that the world will be a safer place because of what we are building.”

Entrepreneurs, Mustafa is your role model. She possesses the characteristics of successful people – the confidence to deal with adversity, a laser-like focus on her objectives, the ability to take risks and continue to move forward when faced with difficult obstacles, the willingness to do something new and different. She possesses an inner self-confidence to achieve success.

As I have written so many times in the past, there are those who see the world of possibilities and abundance, and those who see the world of limitations and scarcity. Mustafa is the former. She is driven to make a difference in this world, and is an inspiring example of what is possible.

Stan Silverman is the founder and CEO of Silverman Leadership. He is a writer and speaker, advising C-suite executives about leadership issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on January 4, 2016

Over the past 18 months, I have written 77 articles on leadership as a guest columnist for the Philadelphia Business Journal. The subjects of these articles have come from my own experience as a leader rising through the ranks to the position of CEO of my company, and by observing CEOs of other organizations while serving as a board member on public, private, private equity and nonprofit boards. I have also written about leaders and organizations that have appeared in the news due to their favorable or adverse actions.

Thinking about these experiences, I believe there are six key leadership imperatives that CEOs should focus on in 2016.

Establish the right tone at the top and corporate culture.

Tone at the top encompasses the ethics, honesty and integrity with which the company operates. One might ask, aren’t these a given? In most companies they are, in others they are not.

Corporate culture encompasses how co-workers treat each other. Leaders need to create an environment where employees are mutually supportive and meet their commitments to their fellow co-workers. Organizations in which employees don’t trust each other will never reach their full performance potential.

Motivate and inspire your employees, and nurture an environment in which they feel a sense of ownership in what they do.

Employees are motivated and inspired when you share the vision and mission of the organization and the role employees play in achieving them. This is especially important for millennial employees (broadly defined as those born between 1980 and 1995). Surveys indicate that millennials want to feel that their work benefits society and that they are having an impact on the success of their customers or clients.

Share with your employees what your expectations are, ensure they have the needed resources to do their jobs and don’t micromanage them. Nurture an environment in which they develop a sense of ownership in what they do. Great things happen when they feel you are relying on them to move their part of the business forward.

Differentiate your company versus the competition by improving the customer or client experience.

As purchasers of consumer products and services, we have all experienced poor customer service. Given that the customer or client experience can be a significant competitive differentiator, one wonders why we are forced to deal with rude customer service representatives or wait an inordinate amount of time for a technical support person to answer our phone call, only to learn that they are of no help as they pass us to someone else for the process to start anew.

Companies that differentiate themselves versus their competition will achieve higher growth and profitability. Whenever I was doing due diligence of an acquisition candidate, I would always ask the CEO, “Why do customers buy from you versus a competitor?” The CEOs of those companies who had a ready answer usually had higher growth and profitability than the companies whose CEOs had to think about their response.

You can learn much from your employees, regardless of their organizational level.

Listening to employees helps change paradigms and to think outside of the box. Nurture a culture in which all employees continuously improve their part of the operation. When employees feel ownership in what they do and are empowered, the company’s hierarchy doesn’t need to drive improvement. These initiatives start from the bottom up.

You also need to be open to discussing alternatives with your direct reports. Be an active listener. Through discussion, a new alternative never considered may emerge, better than those alternatives under consideration, and only found because you as the leader encouraged the discussion to take place. When this process to find the best alternative occurred in my company, we rarely made a mistake.

Manage reputational risk by hiring people with good critical judgment.

We are all familiar with stories appearing in the media on a daily basis about employees of companies exercising poor judgment with a customer and having the incident appear in social media a few hours later. Given the risks, it is important for companies to hire people with good critical judgment.

Hiring employees with good critical judgment is even more important when an employee, who does not have the authority, needs to break a company policy for the good of the reputation of the company or to avoid significant costs. I faced this situation when I made the decision to recall a contaminated product and my boss and his boss, the CEO of the company, were not reachable. I knew I would be either celebrated or terminated. Fortunately, the former occurred, and I was taught this valuable lesson.

Hold yourself and those around you to high performance standards.

Leaders, for the most part, achieve results through the efforts of others. This is why it is so important to hire the right people reporting to you, and for your direct reports to hire the right people reporting to them. Don’t accept mediocrity. Never tolerate a tyrant. It hurts the organization below that individual, and has an adverse impact on the organization achieving results.

I have a performance standard to which I hold myself accountable as a director. When the next director joins the board, what will he or she think about the performance of the incumbent directors? I would not want a new director to think that the incumbents didn’t properly do their jobs. The most important thing each of us has is our reputation. We need to make sure we protect it.

I believe each of the six leadership imperatives listed above represent best practice. Someday each will be common practice. These are key not only for effective leadership, but also for creating a competitive advantage in the marketplace.

Stan Silverman is the founder and CEO of Silverman Leadership. He is a writer and speaker, advising C-suite executives about leadership issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on December 28, 2015

Why do people experience various degrees of success over the course of their careers? During my career, I have observed many successful people and those wanting to achieve success. Among the many personal characteristics that can help increase one’s chances of career success, I believe that two stand out above the rest.

The proverb, “Whether you think you can or think you can’t, you are usually right,” is ascribed to Henry Ford. Your attitude and your ability to push through self-perceived limitations play key roles in how successful you will be.

A friend at my gym drove this home for me about 18 months ago. I had been doing assisted chin-ups on an exercise machine that uses counterweights because I believed I did not have sufficient upper-body strength to do a chin-up without them. My friend came up to me and said, “I know you can do chin-ups unassisted.” I told her that I hadn’t done unassisted chin-ups since high school, and I couldn’t do them now. She egged me on, challenging me to do just one. By now a crowd was gathering, and I felt huge peer pressure to try to do one chin-up. I walked over to the machine without counterweights and with my friends watching, nervously jumped up six inches and grabbed the chin-up bar. To my surprise, I was able to do two!

I never used a counterweight machine again. Over the subsequent three months, I pushed hard and worked my way up to three sets of 10 unassisted chin-ups. I learned a valuable lesson from my friend – you are only limited by your own self-perceived limitations. Thank you, Patti Morris!

Sometimes it takes a friend, colleague, coach or mentor to inspire you to the next level. When you move to that next level, you never look back – you only move forward. As leaders, our job is to inspire others around us – to help them move to that next level.
Seth Godin, the author of “The Icarus Deception,” writes about the character in Greek mythology who flies too high and too close to the sun. His wings melt off and he crashes into the sea.

Godin writes: “It is far more dangerous to fly too low than too high, even though it might feel safer to fly low. You settle for low expectations and small dreams, and guarantee yourself less than what you are capable of. By flying too low, you also shortchange not only yourself, but also those who depend on you, or might benefit from your work.”

During your career, be sure you don’t fly too low. Take risks and fly high, and if you crash, you will pick yourself up and fly again.

Your attitude, which is apparent to everyone you interface with, plays a significant role in your success. Be a person who sees a world of abundance and possibilities, not one who sees a world of limitations and scarcity. Push through self-perceived limitations. You never know what the future holds or where it will take you.

Stan Silverman is the founder and CEO of Silverman Leadership. He is a writer and speaker, advising C-suite executives about leadership issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on December 21, 2015

In the 2001 film “Pearl Harbor,” soon after the U.S. declares war on Japan, President Franklin Roosevelt orders the Joint Chiefs of Staff to strike back by bombing Tokyo. These military leaders offer reason after reason why it can’t be done – the U.S. long range bombers don’t have the necessary range from the nearest U.S. base on Midway Island, Russia won’t let the U.S. launch from Russian territory, short range navy planes only can carry light bomb loads and need to be launched close to Japan, which puts our aircraft carriers at risk, etc. Roosevelt says to them, “Don’t tell me it can’t be done.”

What Roosevelt did was challenge the existing paradigms of his military leaders. He wanted them to be innovative and think out of the box. It took the assistant chief of staff for anti-submarine warfare to do so, an individual you would not necessarily expect to come up with a solution to this challenge. He proposed that B-25 bombers carrying extra fuel be launched off of an aircraft carrier that would sail within a distant range of Tokyo, reducing risk to the carrier. After launch, the carrier would turn back, and after the bombing run, the planes would fly to China and land there.

The bombers had only 467 feet of deck to launch off the carrier USS Hornet, something that had never been done before. The planes had to be stripped of everything that was not absolutely critical to the mission in order to reduce their weight, including defensive guns.

This bombing mission over Tokyo is enshrined in history as the Doolittle Raid, named for Army Air Corps Lieutenant Colonel Jimmy Doolittle, who trained the pilots and led the bombing mission. Even though the bombing mission did little damage to Japan’s military capability, it provided a needed boost to American morale, and at the same time showed the Japanese that they were in reach of American bombers.

As leaders of our organizations, how many times do we hear from employees that something can’t be done? When I am told this, I respond, “Don’t tell me it can’t be done. Find a way to do it.” I was taught this lesson by my former CEO, who challenged the plant design and operational staffing of a new plant to supply one of our products into a geographic market that was small. There were insufficient revenues and cash flow to achieve a rate of return on the investment needed to justify the plant’s construction.

Due to the CEO’s challenge, we changed the accepted paradigm and through innovative changes in technology, we redesigned the plant to reduce its capital cost and the number of people needed to staff it. The rate of return increased to above the threshold to fund the investment, and we were given approval by the board to build the plant. This new plant design became the model for future plants of its type, and gave us a very significant competitive advantage in the marketplace.

When “something can’t be done,” there is usually a creative path forward that once uncovered, can achieve the result desired, or a similar result that might serve the purpose originally intended. The corporate culture must encourage out-of-the-box thinking and risk-taking for this process to take place. Collaboration among people from different operating units, technical disciplines and business units are sometimes needed to find the path forward, as occurred when the assistant chief of staff for anti-submarine warfare came up with the idea on how to bomb Tokyo.
Leaders, whenever you are told something can’t be done, challenge your staff to find a way to do it. To those who are tasked to find that path, think outside the box and challenge existing paradigms. You will be surprised at what you can accomplish.

Stan Silverman is the founder and CEO of Silverman Leadership. He is a writer and speaker, advising c-suite executives about leadership issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Ben Franklin Technology Partners, Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on December 14, 2015

On Dec. 7, I spoke about the path to becoming an independent director of a private or public company at a National Association of Corporate Directors conference. An independent director is one who meets the definition of independence, which means that the individual is not an employee of the company and has no familial ties to management, among other criteria.

I have been a trustee or director on the boards of nonprofit organizations, private companies, private equity companies and public companies. I have also held the position of CEO of a private company, and the chairman of the board of a nonprofit. I would like to share my perspectives on serving on these types of boards.

For those who desire to become an independent corporate director of a private or public company, a common first step is to join the board of a nonprofit organization. This is an opportunity to learn about the board governance process, the fiduciary responsibilities of a director, the areas under the purview of the board, and that the job of a director is governance and not operations, which is the responsibility of the CEO.

Serving on a nonprofit board also provides an opportunity to learn about how to be an effective director or trustee, how to have your opinions effectively heard and how to make influential arguments on issues. It is also an opportunity to network with individuals who could support your candidacy as a director for a private or public company board.

There are a number of differences between public, private and private equity company boards:

Public company boards

Public companies are owned by institutional as well as private investors. Public company boards have a formal board process, with significant time spent on satisfying the complex regulatory requirements of a public company. These requirements include the review and approval of quarterly (10Q) and annual (10K) financial reports, as well as annual proxy statements that disclose to investors the details of operations, financial results and executive compensation.

Analysts who follow a public company opine on its prospects as an investment and make buy/sell recommendations to investors. They also issue estimates on quarterly earnings. If a company does not achieve these quarterly earnings estimates, it can have an adverse impact on the company’s stock price. This places an emphasis on quarterly earnings versus earnings growth over the long-term.

Public companies are under the scrutiny of the SEC as well as investor advisory services, which advise institutional investors on the quality of the board governance process (for example, investor advisory services prefer that the role of chairman and CEO not be held by the same individual), and issue a report card regarding the governance practices of the company. The reports of investor advisory services and their recommendations can impact how shareholders vote for a company’s directors.

Private company boards

These companies are owned by private individuals, often family members who have an interest in building long-term shareholder value for eventual sale of the company or to pass to the next generation of family members.

Private company stock is not traded on public markets and therefore private companies do not face the scrutiny that public companies face by the SEC, investment analysts and investor advisory services. The time that public company directors spend in dealing with this scrutiny can be spent by private company directors on discussion, approval and oversight of the company’s objectives and strategies that are developed and implemented by management.

Private equity company boards

On private equity company boards, the directors usually are also significant investors. My experience on these boards is that the directors and the CEO are financial partners mainly focused on strategies to increase shareholder value. Their time horizon is much shorter than that of a private company or public company. As in the case of private companies, the time not spent on compliance required by public companies can be spent on the company’s objectives and strategies.

Private equity companies acquire firms with the goal of using their resources and specific expertise to increase the firm’s value. Unlike public company firms whose operating metric is earnings, the primary operating metric of a private equity acquired firm is cash flow which is measured by EBITDA (earnings before interest taxes depreciation and amortization). Their focus is to increase the EBITDA and increase the company’s growth potential from what it was before they acquired the firm, so that it can be sold for an EBITDA multiple higher than the multiple they paid for it.

Whether you serve on a nonprofit, public, private or private equity company board, all directors need to be concerned about liability exposure. Directors must practice the duty of care and duty of loyalty, which are basic obligations. Don’t join a board unless adequate D&O (directors and officers) insurance is in place.

Directors serving on public company boards face relatively larger liability exposure due to the nature of scrutiny and risks associated with public companies. For example, directors of a public company who decide to sell it invariably will be sued, regardless of the merits of the case for allegedly not following a proper and thoughtful decision-making process, or for not negotiating a sufficiently high premium over the market price of the shares before the sale was announced. These suits are usually settled, but do require the time and attention of the directors of the company.

Board service is a rewarding experience and provides an opportunity to develop valuable skills. It expands your network. It provides an opportunity to be an effective leader on certain issues, and be a follower on others. It also provides an opportunity to be exposed to businesses and business issues you normally would not be exposed to, which is an enriching experience. For those of you who are serving in a senior leadership position at your company, serving on a board will help you be more effective in your job.

Stan Silverman is the founder and CEO of Silverman Leadership. He is a writer and speaker, advising c-suite executives about leadership issues and on cultivating a leadership culture within their organizations. Stan is Vice Chairman of the Board of Drexel University and a director of Ben Franklin Technology Partners, Friends Select School and Faith in the Future. He is the former President and CEO of PQ Corporation. Follow: @StanSilverman. Connect: Stan@SilvermanLeadership.com. Website: www.SilvermanLeadership.com

Article originally published in the Philadelphia Business Journal on December 7, 2015

Leaders within all companies face the issue of how to motivate and inspire their millennial employees. Millennials are broadly defined as those born between 1980 and 1995. On Dec. 2, I wrote an article that appeared in the Philadelphia Business Journal headlined, “Millennials want to be inspired by a company’s mission. Is yours inspiring?” In that article, I state that millennials want to feel that they are making a difference in this world – a difference to the company’s customers, clients or society. That is what motivates them.

I often reach out to CEOs of companies who employ millennials, and ask about the most effective way to lead them. Ronald Rock, CEO of Point.io, a developer of mobile web applications, said, “I have found that if you genuinely listen to millennials, they get very motivated. I think most of my contemporaries talk ‘at’ or ‘about’ millennials, and don’t actually engage with them, which only widens the gap. Once they know you really hear them, they funnel all of that energy and enthusiasm towards getting amazing things done.”

Tim Panagos, CTO of Point.io, said, “Millennials are very comfortable with information technology and online social sharing because they have grown up with these tools. It is a natural part of their lives. Let them bring … [these tools] to your business. They are looking for ways to make their marks on the business world. By giving them this opportunity to do so, you will make them feel included and it may very well help your business grow.”

Continue reading on The Business Journals.

Article originally published in the Philadelphia Business Journal on November 30, 2015

How many of you work for a company with a mission statement and operating principles that are “boilerplate,” don’t inspire your employees and don’t differentiate your company from its competitors? Does your company live by its mission statement, or operate by a different set of cultural norms and values? This issue will become increasingly important as more millennials join your company and rise through the leadership ranks.

There has been much written about how to motivate and inspire millennial employees, broadly defined as those born between 1980 and 1995. In the Nov. 25 issue of The Wall Street Journal, Punit Renjen, CEO of Deloite Touche Tohmatsu Ltd. wrote an article headlined, “What millennials expect from employers.”

In his article, Renjen talks about the results of a 2015 Deloite survey of 7,800 millennials across 29 countries. The results of the survey indicate that “the majority [of millennials] believe that business needs to reset its purpose. While they believe the pursuit of profit is important to sustaining a business, millennials also say that pursuit must be accompanied by a sense of purpose, through efforts to create innovative products or services, and, above all, by viewing employees as members of society. In fact, 75 percent say businesses are too focused on their own agendas and not focused enough on improving society.”

Continue reading on The Business Journals.

Article originally published in the Philadelphia Business Journal on November 23, 2015

On Nov. 19 at the Keystone Business Policy conference held at the University of Pennsylvania, I was a panelist at the session exploring ways to increase manufacturing job growth in Philadelphia. I shared some of the following thoughts with the conference attendees.

Philadelphia used to be a world leader in manufacturing. Since World War II, that dominance has diminished to the point where today, manufacturing makes up only a small portion of the region’s economy.

A CBS Philly Nov. 17 article quoted Eva Gladstein, head of the city’s Office of Community Empowerment, who said, “Philadelphia is the poorest of the nation’s 10 biggest cities.” An Oct. 22 CBS Philly article stated that “26 percent of Philadelphians live below the poverty line, which means less than $24,000 a year for a family of four. ‘In Philadelphia, it takes about $60,000 to make ends meet,’ says Kate Scully, policy director at the Center for Hunger Free Communities.”

Continue reading on The Business Journals.