Posts in category: Articles

Article originally published in the American City Business Journals on June 20, 2017

What is an important trait of effective leaders? It’s the ability to use good critical judgment in the decisions they make.

A June 15 Washington Post article describes how Principal Craig Harris of Southwest Edgecombe High School in Pinetops, North Carolina, told senior class president Marvin Wright on the day of commencement that he couldn’t read the speech that he had written, providing no explanation. Instead, Wright was to read a speech prepared by school administrators.

Wright told the Washington Post, “I felt robbed of a chance to say my own words.” He had a decision to make. He could follow the directions of his principal or read the speech that he had written. Wright decided to do the latter and read his own speech.

Wright felt that he was using his good critical judgment. His speech had been reviewed and approved by his English teacher. There were no negative consequences to the school for reading his own speech. He felt he had to share his own thoughts with his fellow graduates rather than stand at the podium and read words that were not his.

In retaliation for not following directions, Harris withheld Wright’s diploma after the commencement ceremony.

When Wright’s mother asked for an explanation of why her son’s diploma was withheld, Harris said that he missed the deadline for submitting the speech to the school for review. I guess submitting his speech for review and approval by his English teacher didn’t count.

Two days later, Wright was given his diploma. The superintendent of Edgecombe County Schools, John Farrelly, issued the following statement: “I have communicated with the family to apologize on behalf of the school. The diploma never should have been taken from the student.” Farrelly, however, chastised Wright for not following the rules, rules that Wright claims he was not aware of.

Did Principal Harris use good critical judgment when he ordered Wright to read a speech at commencement prepared by the school administrators with no explanation, rather than the speech he had written?

What’s at stake is this: When leaders don’t show flexibility and good critical judgment and make exceptions to rigid rules, they can lose the respect of those they lead.

When Wright read his own speech, did Harris use good critical judgment by withholding his diploma at commencement?

You certainly don’t want leaders in your organization who are vindictive. In this particular case, when Harris withheld Wright’s diploma, it elevated the event to national news. This put Superintendent Farrelly in a position where he had to issue an apology to Wright, a position you never want to place your boss in due to poor judgment on your part.

Did Wright use good critical judgment when he decided to read his own speech rather than the speech handed to him by his principal?

There are those who feel Wright should have followed directions and complied with what he was told to do. Others will feel that Wright made a bold decision and did what he thought was right by reading his own speech.

We all go through our professional lives occasionally facing these types of decisions. If we decide to break the rules or violate policy, even if it is for the benefit of the company, we must be willing to face the consequences if our boss feels differently.

All else being equal, I would hire Wright before I would hire a job candidate who always followed the rules. I want employees who will use their good critical judgment and occasionally break the rules for good reason. These are the employees with initiative that will help move your business forward.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Article originally published in the American City Business Journals on June 13, 2017

I have often written about the importance of getting out of your comfort zone so you can professionally grow and develop. Organizations should assign projects to employees that are outside of their comfort zones to help them in this process.

This was a lesson I learned early in my career at my company as the marketing manager for anhydrous sodium metasilicate used in a variety of metal cleaning and other industrial applications.

We faced imports of ASM into the United States from Rhone Poulenc, a large French chemical and pharmaceutical company at a price significantly below their home market price in France. We felt this was a violation of U.S. dumping regulations, designed to protect U.S. industry from unfair international trade practices.

ASM producers in the United States, including my company, were losing market share. If found guilty of dumping, the remedy would be the assessment of dumping duties on imported ASM from Rhone Poulenc.

As marketing manager of this product line, I received approval from my company to file dumping charges against Rhone Poulenc with the U.S. International Trade Commission. I was 33 years of age at the time, with no experience in these kinds of legal matters. However, my product manager and I knew the market well, which provided the foundation for building the case.

Normally, one would expect a case like this to be presented by outside attorneys with expertise in international trade. Our company’s general counsel hired this type of attorney. However, that attorney insisted that my product manager and I be the public face of our company’s case – testifying at all the fact-finding hearings as well as the hearing in front of the six commissioners of the International Trade Commission.

I recall flying to Washington, D.C. for an evidentiary hearing, asking our attorney at the airport just prior to boarding if he was ready to provide testimony for our company. He said, “No – you are going to testify today.” He said he didn’t tell me ahead of time because at this hearing, he didn’t want me to over prepare, but to just respond to his questioning.

It is hard for anyone to imagine the horror I felt not having written out in detail what I wanted to say. Talking about being outside of one’s comfort zone! Fortunately, I knew the facts, which helped me state my case, despite my trepidations.

The hearing accomplished the optics of what our attorney wanted – to pit a small privately owned, domestic company dedicated to serving the ASM market against a foreign company many times our size, competing illegally through low product pricing that met the criteria of dumping.

The preparation for the hearing in front of the International Trade Commission was very intense. Over a period of months, we responded to questions from the ITC investigative staff in preparation for the hearing in front of the ITC commissioners. The staff asked for significant details to ensure that the commissioners had the information needed to understand the dynamics of the market, determine if dumping was occurring and to render a decision.

We felt that our credibility with the investigative staff would be an important factor in the case. Whenever we realized that we had provided information that was inaccurate, we immediately corrected it, even if it hurt our case.

The hearing in front of the ITC commissioners was held in a chamber very similar to that of the Supreme Court. Somewhat intimidating!

At the ITC hearing, my product manager and I were well-prepared to give testimony as the plaintiffs. Our attorney told us that the ITC commissioners would be much more forgiving of violating courtroom protocols if we, two businessmen who are not attorneys, presented our case, with his guidance. In contrast, the Rhone Poulenc attorneys provided much of the testimony defending their client.

A pivotal moment occurred when the Rhone Poulenc attorneys misrepresented a meeting their clients had with us, accusing us of improper marketplace behavior. As I was listening to their mischaracterizations, I whispered to our attorney that we had notes of that meeting which countered their testimony. He asked me to pull the notes, and as he read them, a smile crossed his face.

Our meeting notes, entered into evidence, undermined much of Rhone Poulenc’s credibility.

When the ITC commissioners announced their decision, they unanimously found in favor of my company and against Rhone Poulenc. They assessed the highest dumping duty on any chemical imported into the U.S. to date. My product manager and I felt as if we had won gold medals at the Olympics.

So, what did we learn from this experience? Whether you are dealing with customers or the investigative staff of a federal agency, you develop credibility with those you deal with by always being honest and factual. This will differentiate you from those that aren’t. Credibility builds trust and confidence, and this will favor you in borderline decisions. We also learned to get out of our comfort zone. It’s a rewarding experience.

Leaders, expose your employees to meaningful experiences. Get them out of their comfort zones. There is no better way for them to develop.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Article originally published in the American City Business Journals on June 6, 2017

This is my 150th article – a milestone. I started writing weekly articles on leadership, entrepreneurship and corporate governance for the Philadelphia Business Journal in July 2014. Ten months ago, I was nationally syndicated by PBJ’s parent company American City Business Journals and I now appear in more than 40 Business Journal publications across the U.S.

The adage “you never know where the future will take you” is certainly true.

As a former CEO and director on numerous public and private company as well as nonprofit boards, I write about career and business principles for success. I would like to share eight of these principles with you.

1. The Holy Grail – become the preferred provider to your markets

This is a universal principle that all businesses need to pursue. What is a “preferred provider?” It’s a provider that a customer or client favors when purchasing 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.

How does a business become the preferred provider to the markets it serves? It differentiates itself from competitors by excelling in the following six areas: it offers high-quality reliable products and services, is on the forefront of technology, provides a great customer experience, is trustworthy, is committed to the process of continuous improvement and is on a journey to be the best in the world at what it does.

2. Act as if your competition is trying to eat your lunch

Why act this way? Because that’s what competitors will try to do. It may not be across the board, but in a business niche where they feel they can exploit your weakness and their competitive advantage.

Andy Grove, former chairman of Intel Corporation was right when he said, “Only the paranoid survive.”

3. Listen to the brutal facts of reality

This is a critical principle taught by the January 1986 Challenger space shuttle disaster. After being warned by Thiokol engineer Robert Ebeling not to launch the shuttle due to an ambient temperature below the design temperature for the O-ring seals on the solid fuel rocket boosters, NASA launched the shuttle anyway. The O-rings failed, resulting in the catastrophic loss of the lives of seven astronauts.

In response to the warning, one NASA manager is quoted as saying, “I am appalled by your recommendation.” Another NASA manager said, “My God, … when do you want me to launch – next April?” It’s obvious that NASA did not want to hear the brutal facts of reality, resulting in tragedy.

Leaders need to be open to hearing unwelcome news. They need to create an environment that welcomes this input.

4. Always differentiate

Creating a great customer experience differentiates you from your competition. The gold standard in customer experience is Apple, which is able to obtain a price premium for the products they sell partly because of the experience they provide their customers.

Whether you are a student about to enter the workforce or are currently employed, always differentiate yourself by creating value for your company. You will stand out and be considered for additional responsibilities. When it comes time to move on to a new company, the hiring manager will ask what you did that was new and different within your previous organization to move that company forward.

5. Treat your employees as you would like to be treated

Create an environment in which your employees have a feeling of personal ownership in what they do. Give them decision-making authority in their areas of responsibility. Share with them your expectations and hold them accountable for results. Don’t micro-manage.

Act in ways that will encourage employees throughout your organization to talk with you. Walking around and asking how things are going will help break down barriers in communication. Acting like an imperial leader will reduce the likelihood that you will learn of issues that need to be addressed.

Quoting entrepreneur Richard Branson, founder, chairman and CEO of Virgin Group, “The way you treat your employees is the way they will treat your customers.” Wise advice.

6. Successful people have a great outlook on life, and are not afraid to take risks

There are two types of people in this world – those who have a positive attitude, see a world of opportunities and abundance and are not afraid to take risks, and those who have a negative attitude, only see a world of limitations and scarcity and never leave their comfort zone.

The first type of individual builds something enduring and changes the world, whether they are entrepreneurs who start something, or drives change and innovation while working within an existing company. The second type only sees obstacles and why things can’t be done. Which type of individual do you think employers want to hire?

7. Networking is one of the most important things that you can do

Networking is how you will get your next job, or be exposed to an idea that might change one of your paradigms. Always take the opportunity and create the opportunity to meet someone of interest.

You never know how that new contact might benefit you, or how you might benefit that individual. In addition to taking from your network, you also must give back to it by helping others.

8. Ensure effective corporate governance to avoid reputational damage

Within the past year, scandals at Volkswagen, Wells Fargo, Uber and Fox News demonstrated that some boards are not holding CEOs accountable for tone at the top, and organizational culture. Why?

As a director if you are not capable of holding the CEO accountable for tone and culture as well as ethics, or if you are not capable of raising uncomfortable issues as the board’s “lone wolf,” you shouldn’t be a director.

These eight principles create significant competitive advantage for a company or for an individual navigating their career. They are important to your personal success as well as the success of your organization.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Article originally published in the American City Business Journals on May 31, 2017

I frequently speak to groups of employees from a wide range of for-profit and nonprofit organizations about how to develop into more effective leaders. At nearly every session, a question is raised about how one can deal with a toxic boss.

When I ask for a show of hands of those in the room who have worked for a toxic manager or know of one in their organization, many hands go up. One wonders why the senior leadership of these organizations tolerate these types of managers, given the damage they cause to their direct reports and to the effectiveness of the organization.

In November 2014, I wrote an article headlined, “Do you work for a tyrant? Do you have one working for you?” I would like to share what I wrote in that article.

Tyrants who disrespect their direct reports cause untold damage to the performance of their organization as well as make life miserable for those who work for them.

These managers tend to micro-manage, blame others for their mistakes and sap the creativity, initiative and vitality from the workplace. They also adversely impact the ability of people to make decisions without “checking with the boss.”

No one can effectively do their job in an atmosphere of fear and intimidation. No employee should have to work in such a toxic environment. The best people don’t put up with it, and they eventually leave the company, resulting in a significant loss of talent that will adversely impact the firm’s performance and potential for growth.

I once worked for this type of manager and learned how to deal with him. One day, he was ranting about an issue, and I politely told him that I was going to leave his office, and when he calmed down and could discuss the issue in a rational way, we would again talk.

I don’t think anyone had ever said something like that to him before. And yes, I was concerned about being fired for insubordination, but it was one of those moments when I had to change the dynamic between us.

Twenty minutes later, he came to my office and in a calm and business-like manner, we discussed and decided on a strategy to resolve the issue at hand. He never treated me like that again.

This incident occurred prior to the introduction of whistleblower hotlines. The human resources department did not have a strong leader, and I did not want to risk going to executive management, so there was no path to lodge a complaint. I was very close to leaving the company until this event occurred and I learned how to deal with him. Had I left, the company would have been deprived of its future CEO.

I was eventually promoted out of that manager’s organization and became his peer, and then promoted again and became his boss. He continued to treat the people in his organization poorly, so I terminated him. The employees within that organization celebrated for days.

I replaced that manager with a very effective leader. It took him months to bring the organization’s employees to the point where they were again operating as they should.

Once more these employees were making decisions on their own. They were exercising initiative and creativity, taking personal ownership of their part of the business and not being fearful of making a mistake, which was career threatening under the former manager.

Many of these poor managers “manage up” very well. It is the responsibility of every leader to see through this and to ensure that their direct reports are treating their people professionally and with respect.

So, what should you do if you work for this type of manager? Do your job, and do it well, which is what you should always do. This will lessen the probability that you will be treated poorly. If you do work for this type of boss, you will learn much – how not to manage and lead people, and the damage this type of manager can do to an organization.

You can use the whistleblower hotline of your company to report this type of manager. Even though this is a human resource issue, whistleblower hotline complaints are reviewed by the audit committee of the board. Having served on the audit committees of many organizations and given my prior experience with this type of boss, I focus on these issues. The audit committee needs to hold the leadership of the organization accountable for addressing this issue. They need to ensure that a proper investigation occurs and what action is taken, up to and including termination, if appropriate.

It is important to ensure that there is no retaliation against any employee who uses the whistleblower hotline to report this type of manager. If the company’s employees do not have confidence in the leadership of the company, they may be fearful of using the hotline. If this is the case, the company has more serious issues beyond the tyrant.

So, as the CEO or other high-level executive of a company that has tyrants working in your chain of command, deal with the issue. In many cases, these individuals can’t change their management style, so you will need to part company with them. They should never be tolerated.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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 May 23, 2017

As the former chairman of the board of Drexel University’s College of Medicine and as the current vice chairman of the board of Drexel, I have the honor each year of addressing the University’s College of Medicine graduates. I always try to share some advice that may help them navigate their careers.

At this year’s commencement, I shared the following message:

Graduates, you have just completed an enormous undertaking. As you seek solutions to work or life’s challenges, I urge you to remember what you learned here about the power of teamwork, and the importance of interpersonal skills in accomplishing your goals.

Many of you will dedicate your lives to the practice of medicine, healing the sick. Others will become researchers, or work in other areas of the health care profession. You will be making a difference in the lives of others, working towards the betterment of the human condition.

The best advice I can share with you as you pursue your careers is to be open to new opportunities that come your way and embrace change — the only constant in life. In addition to taking advantage of opportunities that come your way, I encourage you to be proactive and create your own opportunities. You never know where these might take you.

I am a chemical engineering graduate from your University, who just happens to be the vice chairman of its board. Now, how does that happen? How does an engineer become the vice chairman of the board of his alma mater?

Shortly after becoming CEO of my company, I was honored to be asked to join the Drexel board of trustees. The following year I was named chairman of the board’s finance committee. A number of years later I became chairman of Drexel’s College of Medicine, followed by being named vice chair of the University’s board of trustees.

I can look back to the first day after my commencement and recall the steps along my career pathway. I took advantage of opportunities and accepted assignments outside of my comfort zone to learn and broaden my knowledge and experience. I took risks. Sometimes I failed, but I never let that stop me from moving forward.

Tomorrow is the first day after your commencement. Take risks, and step out of your comfort zone. To quote Stephen S. Tang, President and CEO of the University City Science Center, “Failure is a valuable experience. It is a natural consequence of [taking] risks.”

Always take advantage of opportunities to do something new and different. And some day, you may have the honor of addressing graduates at their commencement ceremony, as I am doing today.

The story of Icarus, a character in Greek mythology, is a great metaphor for how one should manage their career. According to legend, Icarus flew too high, too close to the sun. The wax holding the wings to his back melted and he crashed into the sea.

Should Icarus have played it safe, and flown lower?

Seth Godin, the author of “The Icarus Deception,” 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.

The following achievements and personal attributes will help you advance in your career:

• your commitment to yourself and others to always strive for excellence
• how you differentiate yourself by doing new things, and proactively implement positive change in everything you do
• your interpersonal skills and how you lead others
• your good critical judgment and common sense
• your contacts and personal network, and
• your ethics, integrity and your professional and personal reputation among your colleagues, your patients and the public.

During your career, be sure to protect your integrity and reputation. Once damaged, you never earn them back.

There is a passage in the West Point Cadet Prayer that reads, “Make us to choose the harder right instead of the easier wrong.” Remember this, especially when you run into situations that require difficult ethical decisions.

Good luck, and may the wind always be at your back.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Article originally published in the American City Business Journals on May 16, 2017

One of the missions of college fraternities and sororities is to develop leaders. Beta Theta Pi fraternity at Penn State University failed in that mission. The fraternity and the University permitted violations of the law as well as their own internal policies, which resulted in the tragic death of 19-year-old pledge Timothy Piazza.

Beta Theta Pi and 18 of its members have been charged with multiple criminal counts including involuntary manslaughter, aggravated assault, tampering with evidence and furnishing alcohol to minors. In addition, the University, the fraternity and its members face wrongful death lawsuits.

Reading the 65-page grand jury indictment that describes the events surrounding Piazza’s death is a chilling experience. Pledges of the fraternity underwent hazing that included consumption of copious amounts of alcohol during a series of drinking games conducted for the entertainment of the fraternity members. The games ended when the intoxicated Piazza fell 15 feet down a flight of steps and suffered serious external and internal injuries.

The fraternity’s leaders, not wanting their actions or events that night to go on the record, ignored pleas by pledges and other fraternity members to call for help. Freshman brother Kordel Davis told his fellow fraternity brothers that Piazza needed help immediately. Quoting the grand jury report, “[Davis] screamed at them to get help. [In response, upper classman and brother] Jonah Neuman, … shoved Davis into … [a] wall. Neuman instructed Davis to leave and that they had it under control.”

Finally, some 12 hours after Piazza’s fall, 911 was called, and he was taken to the hospital. Surgery revealed a shattered spleen and severe internal bleeding. Piazza also suffered skull injuries and underwent a craniotomy to relieve brain swelling. He died two days later.

Piazza’s death leads one to question why the members of the fraternity did not exercise common sense and good critical judgment. Why didn’t they call 9-1-1 as soon as it became apparent that Piazza was seriously injured?

Where was the judgment of fraternity leaders when they compelled those pledging to drink so much alcohol that in Piazza’s case, his blood alcohol content was between .28 and .35, approximately four times over the legal limit for operating a motor vehicle?

Why did the members of Beta Theta Pi feel it was acceptable to ignore the policies of their national fraternity, which, quoting from the grand jury indictment, states, “[Abuse] or the consumption of alcoholic beverages by any fraternity member or guest while on chapter premises, during an official fraternity event … shall be prohibited”?

The policies of the national fraternity also state, “No member shall permit, tolerate, encourage or participate in ‘drinking games’ or other activities that encourage excessive consumption of alcohol. … [No] chapter … shall engage in hazing activities. Permission or approval by a person being hazed is not a defense.”

Penn State, Beta Theta Pi, and the members of the fraternity have a fiduciary responsibility for the safety of their pledges. Penn State knows this. Did the members of Beta Theta Pi know it? They should have been educated about how to act as leaders so they could effectively carry out this responsibility.

Speaking about the inaction of Penn State to previous fraternity policy violations, Tom Kline, attorney for Piazza’s parents, stated “There was a taskforce that was impaneled a few years earlier that did nothing to stop this. The problem was widespread. The problem was endemic at Penn State. They looked away.”

What happened at Penn State should provide a warning to all colleges and universities that they need to proactively educate their students about the dangers of violating the rules, as well as institute continuing oversight to ensure that the rules are not violated. Piazza died due to the actions and inactions of 18 young men charged in his death and were responsible for his safety. These young men did not act as responsible, ethical leaders that night.

A life has been lost and the lives of 18 individuals have been changed forever. Will hazing practices change as a result of the tragic death of Tim Piazza? Time will tell.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Based on earlier versions of the AHCA, the CBO estimated that 24 million people could lose their health insurance coverage by 2026. That number may be higher after the CBO scores the AHCA that was passed by the House. The drive for a “win” by the Republicans was so strong that getting the legislation passed was more important than getting it right.

Article originally published in the Philadelphia Business Journal on April 28, 2017

Saturday marks the 100th day since Donald Trump became president. This is a traditional day on which news media and political pundits reflect on what the new president has accomplished since taking office.

In the eyes of Americans, how has Trump done? It depends on who you ask. In a Washington Post/ABC News poll published April 23, only 42 percent of Americans approve of Trump’s performance, while 53 percent disapprove, the worst rating since modern polling started with Dwight Eisenhower.

Intense protests are often held whenever a Republican Congressman or Senator attempts to hold a town meeting with their constituents. A number of Republican lawmakers have chosen not to meet with their constituents due to the sharpness of their dissatisfaction.

Trump has a loyal bloc of supporters, however. The poll also indicates that among Trump voters, 94% approve while 2 percent disapprove. The country is certainly split along cultural and ideological lines. If any of those Trump supporters will come to believe they will be hurt if Trump’s agenda is passed into law, it hasn’t happened yet.

Performance assessment, advice and feedback for improvement

So, let’s assess President Trump’s 100-day performance and share some feedback for improvement. After all, he sold himself to voters as a businessman. He’d understand that regular evaluation and feedback for new hires is a key part of the onboarding process.

First, the advice and feedback. All effective leaders share a number of important traits: They have the right tone at the top and establish the right culture within their organizations. They understand the possible unintended consequences of their actions, they get things done through influence without acting like a bull in a china shop.

Effective leaders are consistent in their positions, so they are readable. This builds strong alliances. Most importantly, they are truthful. Their personal reputation and the effectiveness of their organization depends on these traits. These traits engender confidence, trust and credibility.

President Trump has yet to demonstrate many of these leadership traits. If he was a CEO reporting to a board of independent directors representing the organization’s stockholders, he wouldn’t last long as chief executive.

Trump’s “Contract with the American Voter”

During the campaign, Trump issued his “Donald J. Trump Contract with the American Voter,”(PDF) in which he promised to immediately pursue an ambitious “100-day action plan to Make America Great Again.” This document contains 18 action items and 10 broad legislative initiatives.

Let’s look at what Trump accomplished from this list.

• Confidence in the economy is up, reflected by the run up in the stock market since Trump’s election. Trump has convinced a few CEOs to keep jobs or bring back jobs to the U.S., but over the long-term, those decisions will be driven by economics and other factors.
• Trump has promised to restore jobs in the energy industry, naming shale, oil, natural gas and coal. Power companies will build new electric generation plants fired by cleaner natural gas. Most available analyses indicate those coal jobs are never coming back.
• Neil Gorsuch was confirmed by Congress as the next Supreme Court justice.
• The Keystone XL pipeline was approved by executive order. It is anticipated that Trump will sign 32 executive orders by his 100th day in office that will roll back many regulations put in place by the Obama administration. For what it’s worth, little, if any, time was spent vetting the impact of rolling back these regulations, many of which are environmental and Dodd-Frank financial system-related. Some of these rollbacks could have serious unintended consequences.
• On April 26, Trump announced a major tax cut initiative on businesses and individuals– so, in a sense, he fulfilled that promise from the “Contract.” We’ve still yet to see significant debate on whether the economic activity generated will pay for the tax cuts ahead of us, and if it doesn’t, what are the long-term implications of continuing to increase the deficit?

So, what did Trump attempt but not accomplish from his “Contract” with the voters? We couldn’t have expected him to accomplish all of them, but there were still plenty of major initiatives that were either turned back, stalled, or otherwise remain in limbo.

• Trump’s order to bar citizens from seven Muslim-majority countries from entering the U.S. for 90 days until an “extreme vetting” system could be adopted was successfully challenged in federal court. It was ill-conceived by a White House staff that appeared to not be in complete control of what they were doing.
• He did not label China a “currency manipulator” as he promised he would, and recently Trump told the Associated Press that he can’t do that and expect China to help address issues with North Korea.
• Trump has repeatedly stated that Mexico will pay for the southern border wall he wants to build. That country’s government has consistently replied they won’t. Trump is now threatening to impose a 20 percent tax on Mexican imports to pay for the wall. In response, Mexico is considering legislation to shift the purchase of U.S. corn to Argentina and Brazil, which will hurt American farmers.
• And then there’s the big one: Trump said he would shepherd through a repeal of and replacement for the Affordable Care Act. Trump had such a strong, ideological desire to get Obamacare repealed and replaced that at the last minute, he agreed to gut essential health care services from the Republicans’ American Health Care Act. That effort ended with no repeal, let alone replacement, and with Republicans in disarray.

Trump’s promise to be “president for all Americans,” and steps for improvement

In his victory speech after he won the election, Trump stated, “… 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…”

In virtually every instance, Trump has not acted to bind the wounds of division. Perhaps because of a desire to chalk up “wins,” Trump hasn’t acted as the “president for all Americans.” One of the essential traits of any leader is that he or she can be trusted. Trump has not demonstrated that this trait is important to him. He has failed on this pledge.

Here’s what the president can do right now to accomplish this. Reach across the aisle to get support to fix and improve Obamacare. And before rescinding regulations or adopt new ones, understand the unintended consequences of those actions. Don’t be as doctrinaire and ideological as you have appeared to be — take a more pragmatic approach in policy management.

President Trump, be the president for all Americans. Your legacy depends on it.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Article originally published in the Philadelphia Business Journal on April 25, 2017

On April 10, the directors of the Wells Fargo board independent oversight committee issued their 111-page report on the scandal that has engulfed the bank. The report was prepared by the law firm Shearman & Sterling LLP.

The scandal went public when Wells Fargo (NYSE: WFC) was sued in May 2015 by the district attorney of Los Angeles for fraudulent sales practices within the Community Banking Division over a five-year period.

In a Sept. 8, 2016 press release, the Consumer Financial Protection Bureau stated, “Spurred by sales targets and compensation incentives, employees boosted sales figures by covertly opening accounts and funding them by transferring funds from consumers’ authorized accounts without their knowledge or consent, often racking up fees or other charges.

“According to the bank … employees opened more than two million deposit and credit card accounts that may not have been authorized by consumers.”

Wells Fargo was fined $185 million and ordered to reimburse customers $5 million in fees they were charged due to these unethical practices.

Reading the Shearman & Sterling report, the following lessons stand out:

Don’t lose sight of your company’s mission

The mission of every business should be to exceed its customers’ expectations and provide them a great customer experience. It was apparent that this was not the mission of the Consumer Banking Division of Wells Fargo.

The Community Banking Division only cared about increasing sales, which drove incentive compensation. This was a significant failure of the culture of the bank.

The report stated, “The Community Bank identified itself as a sales organization, like department or retail stores, rather than a service-oriented financial institution. This provided justification for a relentless focus on sales, abbreviated training and high employee turnover.”

Wells Fargo’s branches are not stores. They are banks providing clients with banking services. Why did Wells Fargo cheapen its brand?

An incentive system not properly designed can produce adverse results

Quoting from the report: “The root cause of sales practice failures was the distortion of the Community Bank’s sales culture and performance management system, which, when combined with aggressive sales management, created pressure on employees to sell unwanted or unneeded products to customers and, in some cases, to open unauthorized accounts.”

This sales pressure was intense. A Wall Street Journal article by Emily Glazer on Sept. 16, 2016 was headlined, “How Wells Fargo’s high-pressure sales culture spiraled out of control.” The article was sub-headlined, “Hourly targets, fear of being fired and bonuses kept employees selling even when the bank began cracking down on abuses.”

Glazer’s article describes a deeply embedded culture in which lower level managers told their employees to ignore orders from senior Wells Fargo managers to stop abusive sales practices. Many Wells Fargo employees at retail bank branches chose to quit rather than do their jobs in an unethical manner.

While business operations can be decentralized, internal controls must be centralized

John Stumpf, the former chairman and CEO of Wells Fargo, who was forced to resign in the wake of the scandal, believed that not only should operations be decentralized, but the internal control and compliance functions should also be decentralized. He continued to have this belief year after year as serious issues persisted within Consumer Banking.

Quoting the report, “Wells Fargo’s decentralized corporate structure gave too much autonomy to the Community Bank’s senior leadership, who were unwilling to change the sales model or even recognize it as the root cause of the problem. Community Bank leadership resisted and impeded outside scrutiny or oversight and, when forced to report, minimized the scale and nature of the problem.”

One wonders why the Wells Fargo board did not identify decentralized internal control and compliance functions as a significant enterprise risk, especially as they became aware of the issues within Community banking.

A business unit leader that is not transparent should raise red flags

Carrie Tolstedt, the former vice president of Community Bank who was forced to retire in July 2016, “was notoriously resistant to outside intervention and oversight,” according the report.

“Tolstedt and certain of her inner circle were insular and defensive and did not like to be challenged or hear negative information. Even senior leaders within the Community Bank were frequently afraid of or discouraged from airing contrary views.

“Tolstedt effectively challenged and resisted scrutiny both from within and outside the Community Bank. She and her group risk officer not only failed to escalate issues outside the Community Bank, but also worked to impede such escalation, including by keeping from the Board information regarding the number of employees terminated for sales practice violations.”

Tolstedt’s toxic tone at the top of her organization was a red flag that was ignored. This type of leader cannot be trusted.

Employees who use the employee hotline to report wrongdoing must be protected

In a Sept. 21, 2016 CNN Money article headlined, “I called the Wells Fargo ethics line and was fired,” reporter Matt Egan writes 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.

Quoting the Shearman & Sterling report, “Based on a limited review completed to date, Shearman & Sterling has not identified a pattern of retaliation against Community Bank employees who complained about sales pressure or practices. The review … is ongoing…”

It is very important that this investigation be done carefully and its conclusions be accurate. Its credibility with the Wells Fargo employees depends on it, as well as trust in the Wells Fargo hotline.

Wells Fargo faces many lawsuits and investigations, the bank has lost business and its reputation has been damaged. The proxy advisory firm Institutional Shareholder Services is recommending that the 12 directors in place while the scandal unfolded not be reelected to the Wells Fargo board at its annual meeting. Proxy advisor Glass Lewis is recommending that six directors not be replaced.

Hopefully, what went wrong at Wells Fargo will be a lesson for other companies.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Article originally published in the Chicago Business Journal on April 13, 2017

During the past week, United Airlines faced a firestorm of criticism in the news and on social media for the incident that occurred the evening of April 9. A passenger was dragged off a flight from Chicago to Louisville by security officers when he refused to leave his seat and exit the aircraft to accommodate a United employee.

Seats were needed for four airline employees who arrived at the gate just prior to departure. United offered a cash payment to passengers willing to give up their seats in addition to a booking on the next available flight to their destination.

Chicago-based United (NYSE: UAL) started with a cash offer that rose in increments to $800. Rather than continue to raise the cash offer until four passengers accepted, which was the proper thing to do, the airline randomly selected four seated passengers and ordered them off the flight.

Three of the passengers left the flight, but Dr. David Dao did not. He argued that he needed to be in Louisville the next day to see patients. Airline personnel then called security and he was dragged off the flight, suffering injuries, including a bloody face, that put him in the hospital. Dr. Dao lost his front teeth and suffered a broken nose and a concussion.

As he was being removed, passengers were videoing the event on their smartphones. These videos then found their way to social media.

An insensitive response

In a “tone deaf,” insensitive email to the airline’s employees on April 10, blind to the firestorm and the growing damage to United’s reputation, United CEO Oscar Munoz called the passenger “belligerent and disruptive.”

Munoz also stated, “Our employees followed established procedures for dealing with situations like this.” This poured more fuel on the firestorm criticizing the airline. What about establishing procedures that focus on providing a great customer experience to United’s passengers?

Did anyone at United ever operationalize this situation and realize that perhaps the “established procedures” are wrong, and that following them harms United’s reputation and brand?

Do the United employees on the front line at airports who deal with passengers each day feel empowered to exercise common sense and critical judgment to keep raising the cash payment offer beyond $800 until four passengers accept and voluntarily leave the aircraft?

Are United employees afraid of being terminated for doing something that violates a policy or procedure but is in the best interest of the airline?

Using common sense

Supervisors who fire employees who exercise common sense and critical judgment to protect United’s reputation — even though they are violating a policy or procedure — should in fact be the ones fired.

In an ABC Good Morning America interview by Rebecca Jarvis on April 12, Munoz, after experiencing the terribly negative reaction to his first comments in his email on April 10, and most likely after being advised by United’s PR team, said he felt shame when he saw the video.

He said, “This will never happen again.” But why did he let it happen in the first place?

Munoz also said, “[This] was a system failure. We have not provided our front-line supervisors, managers and individuals with the proper tools, policies and procedures that allow them to use their common sense. …This issue could have been solved by that. That’s on me, I have to fix that.”

So, why didn’t Munoz fix the system before the event happened?

Fixing the culture

Jarvis asked, “Were those … employees of United not able to offer people more money to voluntary leave that flight?”

Munoz responded, “I think there are many [things] we need to look at. We do empower our front-line folks to a degree, but … we need to expand and adjust those policies to … allow a little bit more common sense.”

Munoz also said. “We are not going to put a law enforcement official onto a plane … to remove a booked, paid, seated passenger. We can’t do that.”

Jarvis also asked, “Do you think [Dr. Dao] is at fault in any way?” Munoz responded, “No, he can’t be. He was a paying passenger seated on our aircraft, and no one should be treated that way. Period.”

United Airlines needs to make major changes to its culture. There is only one reason an airline exists, and that’s to serve its customers. Every company on the cutting edge of building competitive advantage and striving to become the preferred provider of products and services to its markets are focused on providing a great customer experience.

Will Munoz fix the United culture to put the customer first? Time will tell. United’s reputation and long-term competitive position depends on it.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Article originally published in the American City Business Journals on April 9, 2017

It seems that nearly a day doesn’t go by without new allegations of a hostile working environment and sexual harassment at Fox News.

The number of lawsuits and financial settlements continues to increase, as does the damage to the reputation of the organization.

Former Fox News Chairman and CEO Roger Ailes and Bill O’Reilly, host of “The O’Reilly Factor,” have been accused by a growing number of women of sexual harassment as well as retaliation for resisting their advances.

Ailes resigned in July 2016. O’Reilly, who has a history of being accused of sexual harassment, still holds his job. His show garners high ratings and generates significant viewership and earnings for Fox News.

Andrea Tantaros, a former Fox commentator and host, sued Fox News after she faced retaliation for complaining about Ailes’ advances. She described the culture within Fox News as a “sex-fueled, Playboy Mansion-like cult.”

A written statement from Fox

Do powerful men think they can get away with disrespectful behavior toward women by virtue of their positions or perceived importance to their company? Do they believe they are untouchable?

On April 1, The New York Times reported that it had received a written statement from the parent company of Fox News stating, “21st Century Fox takes matters of workplace behavior very seriously.

“Notwithstanding the fact that no current or former Fox News employee ever took advantage of the 21st Century Fox hotline to raise a concern about Bill O’Reilly, even anonymously, we have looked into these matters over the last few months and discussed them with Mr. O’Reilly.

“While he denies the merits of these claims, Mr. O’Reilly has resolved those he regarded as his personal responsibility. Mr. O’Reilly is fully committed to supporting our efforts to improve the environment for all our employees at Fox News.”

The fact that no one used the hotline to report the actions of Ailes or O’Reilly indicates that network management was not trusted to take action or protect those who suffered sexual harassment or retaliation, even if the caller using the hotline was anonymous. Instead, they decided to go the legal route. This is a very serious indictment of the Fox News culture.

Costs to Fox News

There is a financial cost to Fox News for tolerating this toxic culture, in addition to the cost to its reputation. In a settlement of alleged sexual harassment claims against Ailes, Fox News commentator Gretchen Carlson was paid $20 million. Ailes was paid $40 million by Fox News to leave the network. A total of $13 million was paid to five women who allegedly suffered sexual harassment by O’Reilly.

There is another cost to Fox News: being labeled as a company with a hostile work environment toward women. No business can afford to not welcome 50 percent of the population and not treat them as valued employees.

Within the last week, it’s been reported that “The O’Reilly Factor” has lost many sponsors including Mercedes-Benz, Hyundai, BMW, Lexus, T. Rowe Price, Allstate and GlaxoSmithKline, who did not want to be associated with O’Reilly.

Mercedes-Benz released a statement saying, “The allegations are disturbing and, given the importance of women in every aspect of our business, we don’t feel this is a good environment in which to advertise our products right now.”

A better response

What would have been a more powerful response to this sexual harassment scandal than the April 1 statement released to The New York Times by 21st Century Fox (NASDAQ: FOX)? It would be a statement by Fox CEO James Murdoch to the company’s employees and to the public in which he says a company culture that disrespects women is no longer tolerated, and those who continue to do so will face sanctions up to and including termination. Murdoch can still make such a statement. Will he?

O’Reilly has a very loyal following of viewers with conservative views who are unlikely to abandon watching his show. How will Murdoch weigh viewership, the loss of sponsors and doing what is right? What will he tell the Fox board?

On Sunday, 21st Century Fox announced that it will investigate the sexual harassment claims against O’Reilly, an action that should have been taken much earlier.

Every CEO is responsible for the tone at the top and for the cultural norms within his or her company. It’s up to the board of directors of all companies to hold the CEO accountable for tone and culture. Those that don’t are not doing their jobs.

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.

Article originally published in the American City Business Journals on April 4, 2017

Entrepreneurs are driven by many things. Sometimes it’s an experience that has had a huge impact on one’s life. Such is the case of Joseph Lubowitz, a 28-year-old entrepreneur whose personal struggle with drug addiction drove him on an extraordinary journey to help others going through a similar struggle.

Lubowitz is the founder and CEO of Humble Beginnings Recovery Centers, an agency that provides drug and alcohol abuse treatment, as well as mental health counseling to those suffering from substance abuse disorder. Humble Beginnings now operates treatment centers in southeastern Pennsylvania and southern New Jersey.

In the eighth grade, Lubowitz and his friends started to consume alcohol and smoke marijuana, which unfortunately, were easily available. After graduating from high school in an affluent suburb north of Philadelphia, Lubowitz attended Penn State University, where he continued his substance abuse.

During the summer after his junior year at Penn State, he became addicted to opioids. According to Lubowitz, “Eventually things started to spiral out of control,” causing him to drop out of school during his senior year.

Lubowitz said, “After leaving Penn State, I became addicted to heroin. I was in and out of treatment and reached the point at which I was ready to do whatever it took to become drug-free. I didn’t want to die. I made a commitment to myself and my family to succeed. It was the hardest journey I have ever been on.” Lubowitz said that he has not consumed alcohol or taken drugs in more than five years.

“I saw others struggling with the same addiction issues and I wanted to help them navigate their recovery,” said Lubowitz. After seeking guidance and advice from many people and relying on his entrepreneurial instincts, he made a bold decision and started Humble Beginnings in 2014. Every entrepreneur is driven by a passion, and Lubowitz’s passion is very apparent just from speaking with him.

Lubowitz said many of his competitors are larger companies that treat hundreds of clients at time. “It’s hard to compete with the big guys when it comes to marketing, but not on individual client care.” Most of the clients come to Humble Beginnings by word-of-mouth.

Lubowitz hires people who don’t look at their position as just a job, but genuinely care about their clients. He feels that the quality of care of each client is a differentiator and is paramount to Humble Beginnings’ success.

This principle guides his company’s growth strategy. Once a location reaches a size such that further growth could adversely impact the quality of a client’s experience and quality of care, Lubowitz opens another center at a new location to accommodate new clients.

His staff, who are certified providers in their areas of expertise, are key to putting each client on the path to recovery. Lubowitz said, “Our clinical director is dual master level licensed in mental health and substance abuse and our medical director is board certified in addiction psychiatry. They have the drive and motivation to put their knowledge to use to provide the best services to our clients.”

I asked Lubowitz what are some of the things that keep him up at night as CEO. He responded, “Beyond being on a journey to provide our clients better care, I also think about how we can provide our staff a better employee experience. I value my employees as much as our clients.

“I also think about future changes in healthcare reimbursement rates and insurance coverage. We fight and advocate every day for our clients with the insurance companies.” He added, “I want to go to sleep each night knowing that I gave 100 percent that day.”

Lubowitz said he has spoken in front of a number of groups. “I spoke at my alma mater, Upper Dublin High School, and a few weeks later an envelope arrived at my home with over 30 notes of thanks from students. Those notes had an impact on me.”

I asked Lubowitz what message he would like to convey to school administrators to better deal with students’ potential substance abuse. He said, “Schools need people on staff who can better relate to the kids, and educate them to the dangers of drugs.” He also said that they should invite more of their graduates who recovered from addiction to speak to their students about how drugs can ruin their lives.

To all students, Lubowitz said, “When chasing your dream, don’t give up if you run into hard times. Push through it, and don’t be afraid to ask for and listen to advice. You can obtain anything you want as long as you are willing to put in the work. Never give up.”

Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker, advisor and nationally syndicated writer on leadership, entrepreneurship and corporate governance. 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. He can be reached at Stan@SilvermanLeadership.com.