Posts in category: Articles

Article originally published in the Philadelphia Business Journal on March 27, 2017

Effective leaders engender trust by keeping their commitments. President Donald Trump violated the trust of many of his supporters while trying to garner the conservative Republican votes needed to pass the American Healthcare Act (AHCA) in the House of Representatives.

Trump and Speaker of the House Paul Ryan (R-Wis.) suffered a major defeat on March 24 when they withdrew the AHCA from consideration by the House because it lacked the votes to pass. Had the legislation passed, it would have moved on to the Senate for consideration.

Members of the conservative Republican Freedom Caucus opposed the AHCA because it did not go sufficiently far enough in gutting many of the elements of former President Barack Obama’s Affordable Care Act, dubbed Obamacare.

Moderate Republicans opposed the AHCA because millions of elderly voters would have been unable to afford the high insurance premiums after they were placed in age and risk pools, and because of the highly adverse impact on women’s health. The Congressional Budget office projected that the number of uninsured individuals could grow by as many as 24 million over the next decade, which was unacceptable to moderate Republicans.

Republican and Democratic governors opposed the AHCA due to the block grant provision to the states that over time would not keep pace with medical care inflation and place an increasing financial burden on state budgets to fund Medicaid. There was significant opposition to the AHCA within the healthcare community due to people not being able to afford health insurance or when insurance is inadequate, people paying high out-of-pocket costs of health care. These concerns fell on deaf ears.

In an unsuccessful attempt to win over conservative Republicans, Trump supported last minute changes to the AHCA that wouldn’t require states to mandate insurance coverage for essential health care services such as pregnancy, mental health, drug addiction, and emergency room visits, a shocking change that basically gutted the AHCA of any semblance of health care insurance.

This was a violation of the commitment Trump made to the voters in November — a promise that he would provide less expensive and accessible health care to all those who wanted it. In the end, he was more interested in the “win” rather than meeting his commitments to his voters.

Trump said of the House Republicans, “We learned about [their lack of] loyalty.” What about Trump’s lack of loyalty to millions of citizens who voted for him, but would have been adversely impacted by the AHCA had it passed? Trump should have realized that House members are loyal to their constituents, and vote to reflect their strong views.

Republican conservatives are vowing to eventually replace Obamacare. One wonders whether they are pursuing their goal based on doctrinaire conservative principles or dislike of Obama and anything that the former president had accomplished.

A March 26 article in the New York Times is headlined, “Trump becomes ensnared in a fiery GOP civil war.” Given the unprecedented number of protests since Trump’s elections, one wonders if the citizens of the United States are now embroiled in an internal ideological war.

President Trump needs to realize that if he chooses to side with Republican conservatives, he will receive no support from Republican moderates fearful of being voted out of office in the November 2018 Congressional elections.

Trump also needs to be concerned about his own re-election in 2020. He needs to face the brutal reality that had 40,000 citizens in Pennsylvania, Wisconsin and Michigan switched their vote from Trump to Hillary Clinton, she would have won the Presidency by 278 to 260 electoral votes. He can ill afford to alienate voters who would be hurt by a revised version of AHCA.

There are aspects of Obamacare that need to be changed — the rapid escalation of insurance premiums, the exiting of insurance companies from certain markets due to financial reasons and the rising cost to the federal budget, to name a few. So, President Trump, why not fix Obamacare rather that toss it out and replace it with something that could cost you the presidency and cost the Republicans the House and Senate?

So where do we go from here? After the AHCA was withdrawn from a House vote, Trump quipped that Obamacare should remain in place until it collapses. Not the appropriate position of a president who knows that Obamacare needs to be fixed.

Ronald Reagan, the former president known for making deals across the aisle, would have been proactive and met with both Republicans and Democrats and solicited input from all stakeholders, working with them to find a pragmatic way forward. Given the current political environment, I am not hopeful that Trump and Congress will be able to do the same.

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 March 21, 2017

Before selecting a CEO of a for-profit company or nonprofit organization, or an executive director for a government authority, its board must ask four important questions. These questions can determine whether the CEO/executive director will be successful leading the organization.

Will the CEO act in a way that reinforces the trust of the board, employees and various stakeholders? Will the CEO be transparent with the board and solicit advice, bring the right tone at the top and culture to the organization and always act in an ethical way? Does this individual have the common sense and critical judgment needed to lead the organization? Can this person be trusted to do the right thing?

Boards that don’t focus on these characteristics in the CEO or executive director selection process run the risk of a future scandal that reflects badly on the organization, the board and the leader.

Recently I wrote an article in which I described the 2016 sexual harassment and toxic culture scandal at the Philadelphia Parking Authority involving then-executive director Vincent Fenerty. A similar 2010 scandal involved Carl Greene, then director of the Philadelphia Housing Authority. The scandals led to questions about the board governance and oversight of these organizations.

In Oct. 2016, the Parking Authority board replaced Fenerty with Clarena Tolson as interim executive director. Tolson, with more than 30 years of public service experience, was previously deputy managing director for transportation and infrastructure for Philadelphia and is a highly-regarded leader within city government.

On March 15, it was reported that the Parking authority hired Talasia Garner, a roommate of Tolson’s daugher, for the position of administrative assistant to the director of benefits at an annual salary of $48,578, a position that did not previously exist. Due to the connection with Garner’s daughter, The Philadelphia Inquirer, along with other media organizations, raised questions about the hire.

The Inquirer quoted Tolson, saying, “[Garner] … is over-the-top bright and intelligent, so we got a good catch in her.” The Inquirer article continued, “Tolson said she did not consider the connection to her daughter a problem. Rather, she said, hiring people she trusted was part of her job in cleaning up the authority.”

Garner will not report to Tolson – she will report to the director of benefits. Garner was not hired into a policy-making position, so why is it important that she be trusted by Tolson? Does Tolson apply the “trust test” to all Parking Authority hires?

Garner’s hire and Tolson’s statement could undermine the trust that Parking Authority employees have in their executive director, damage employee morale and could adversely impact the ability of Garner to be effective in her job.

The union representing Parking Authority employees criticized Tolson, posing the question of why someone from within the organization was not hired for the position. Perhaps no one internally was qualified, but the union took the opportunity to take issue with the Parking Authority leadership anyway.

Given the history of patronage in Philadelphia – hiring relatives and friends, and due to past scandals, Philadelphia government leaders can expect intense scrutiny regarding everything they do. Why didn’t Tolson realize that she would be criticized for hiring Garner and put on the defensive regarding the hiring decision?

When Tolson was appointed Parking Authority interim director, the Inquirer reported that she said she wanted to “restore morale, integrity and professionalism” within the organization. Hiring Garner was a step in the wrong direction.

Whether an executive director or CEO, one of the things every leader needs to consider is the optics of what they do. When hiring an organization’s leader, one of the most important considerations by boards is a candidate’s common sense and critical judgment.

Boards place their trust in the leader they hire. Leaders, don’t let the board down. It will help keep uncomplimentary articles about you, the board and the organization off the front pages.

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 March 13, 2017

Every so often a company finds that its revenues and earnings have stagnated and it must undertake initiatives to grow again.

The adage “the only constant in life is change” could not be more true about business. Markets, competition, customer expectations and technology are constantly changing, and a company needs to adapt to these changes.

After being promoted from COO to CEO of my company in January 2000, I needed to address many challenges that the company faced. We had been on a revenue plateau of $365 million and an earnings plateau of $23 million for the previous three years. Nearly $9 million was earned by supplying our largest customer, who threatened to bring in a competitor unless we significantly lowered our product’s price.

We couldn’t afford to walk away from that customer due to other considerations, so we lowered the customer’s price, reducing the company’s earnings to $14 million. Not only did we have an objective set by the board to move off the earnings plateau of $23 million, we were starting at a new base of $14 million.

Five years later, the company achieved $600 million in revenue and $43 million in earnings, improving from a fourth-quartile performer to a first-quartile performer versus our peer companies. We didn’t have a down earnings quarter from 2001 through 2004, a period that included the events of 9/11 and the deep recession of 2002.

How did we drive our performance from 2000 through 2004? In addition to making five accretive acquisitions that boosted both revenues and earnings, we restructured the organization, empowered the line operating groups and reinforced our commitment to continuous improvement.

Restructured the organization

One of the most disruptive tasks a company can undertake is restructuring its organization. Although restructuring adversely impacts employee morale, it’s a process that is critical to the company’s ability to continue to fulfill its mission moving forward.

We changed from being a top-heavy, VP-general manager-led organization to a much leaner business manager-led organization. Many VP-general managers departed, saving significant costs. Both our line and staff support groups were streamlined, adding additional savings.

Throughout this cost reduction process, we were careful to keep intact those capabilities that differentiated us from the competition: providing quality products and a great customer experience to our customers. Once you lose these capabilities, it is hard to rebuild your reputation and competitive advantage.

We found that decision-making was faster and less bureaucratic with a smaller organization. We stopped non-value-added activity, such as preparing detailed written reports for the next level up, including reports to me, the CEO. We increased verbal communication of this information, which also brought people closer together.

We were as transparent as possible with our employees as to the restructuring process we were undertaking. Whenever I was in the office, I would have breakfast in the boardroom with as many as 15 employees selected by HR, and explain why it was necessary to restructure the organization and respond to questions.

I knew that some of the employees at the table were to be laid off, and they needed to hear the reasons for the restructuring directly from the CEO.

Empowered the line operating groups

Our division managers and their people were on the front line serving our customers, providing them with quality products and a great customer experience. We reinforced their authority to make decisions that affected their businesses. You can only hold line managers accountable for results when they have the authority to control their revenues and costs.

The corporate staff groups worked in support of the line operating groups. In too many organizations, the staff groups think that the line operating organization works for them.

Empowerment of the line operating groups was a significant contributor to increasing the earnings of the company nearly three-fold during the five-year period from 2000 – 2004.

Reinforced our commitment to continuous improvement

One of our key cultural initiatives was the philosophy that every employee should be empowered to continuously improve the part of the business they were involved in. This was reinforced as we started our journey to grow annual earnings off a base of $14 million. Continuous improvement added significant earnings to our bottom line.

This effort was not top-down driven, which is rarely sustainable without lots of effort from senior management. Employees felt a sense of ownership in what they did and were given authority to improve their part of the business. If the improvements they wanted to undertake exceeded their authority, our culture permitted them to seek the authority from their boss.

All companies periodically reinvent themselves and it is never an easy task. Those that don’t will eventually find themselves at a competitive disadvantage. How you do it will determine how your employees feel about the leadership of the company, and whether you maintain the capability to serve your customers with quality products and an excellent customer experience.

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 March 6, 2017

The success of any company depends on the recognition by the CEO – as well as all the company’s employees – of the company’s core businesses, those areas that are critical to its success.

Many CEOs describe their company as being in one core business – most often delivering a product or service to their customers or clients. Other CEOs and their employees recognize that their company is also in other core businesses, all of which are critical to building preeminence and competitive advantage.

Why is this recognition important? It focuses time and resources on those areas of the business that support all core businesses, which helps the company to become the preferred provider to its market.

I have written that Comcast (NASDAQ: CMCSA) is in two core businesses. Its primary core business is providing internet and telephone service, as well as subscription TV service and content to its customers. Because this primary core business is so customer-service intensive, Comcast is also in the core business of providing a great customer experience.

In fact, Comcast’s reputation is very dependent on how well the company provides a great experience when a customer calls, whether it’s to resolve a technical or billing issue with their service, or for help operating their remote.

Comcast has recently recognized the importance of delivering a great customer experience, and as they focus on and invest resources in this core business, their historically low annual American Customer Satisfaction Index survey results will certainly improve.

J2 Solutions is a firm that, among other services, provides clients with contract individuals who have the needed technical skills to meet intermediate manpower staffing requirements.

A typical J2 client might be a company implementing a new HR system, but lacks the internal personnel to manage the project. The company would turn to J2 to provide a project manager for the project. Another J2 client might want to automate a back-office process, but lacks the internal expertise to do so. J2 will provide that expertise and get the project done.

From 2012 through 2014, J2’s revenues have grown by more than 550 percent. The firm was named one of the fastest-growing companies on the 2014, 2015 and 2016 Inc. 5000 lists. J2 was ranked ninth on the 2014 Philadelphia 100 list and appeared on this list in 2015 and 2016. The firm was also awarded the Philly 50 On Fire and the Smart CEO Corporate Culture Awards.

I recently had a conversation with Vijay Khatnani, founder and managing partner of J2, to learn why J2 has been so successful. It soon became apparent that Khatnani recognizes that his firm is in three core businesses.

The primary business of J2 is providing a great experience to clients in need of people with the talent and expertise to successfully meet their short- and long-term project staffing needs.

This primary core business is supported by two other core businesses: identifying and building a database of individuals with the talent and expertise to undertake future client assignments, and having a system and processes in place to match these individuals to clients with specific needs.

The speed at which J2 can fulfill a client’s needs with an individual with the right experience and skill set increases its competitive advantage.

In my conversation with Khatnani, it was very apparent that he wants J2 to continue the journey to be the best-in-class in the region in all three core businesses of the firm.

This is how any firm builds preeminence and becomes the go-to firm for clients in need of services – the preferred provider in the marketplace. This is the universal principle that determines the success of all businesses.

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 February 27, 2017

An important responsibility of all CEOs is to deal with toxic managers and toxic cultures within their organizations. I wrote about this recently, and find myself doing so again with the recent high-profile sexual harassment complaint against Uber.

First, a little context. Uber, known for its very aggressive, only-the-strong-survive competitive culture, has not as yet developed a culture or mechanisms to prevent or properly deal with sexual harassment. These are not mutually exclusive.

The company will need to adopt the proper culture to be an attractive employer of talented female employees. This is critical to the company in a technology-driven competitive environment.

In a blog published Feb. 19 by former Uber engineer Susan Fowler, she outlined how her sexual harassment complaint to the Uber human resources department against her team manager was ignored. Fowler also wrote about other events, indicating women face a hostile working environment at Uber.

Fowler wrote, “When I reported the situation, I was told by both HR and upper management that even though this was clearly sexual harassment and he was propositioning me, it was this man’s first offense, and that they wouldn’t feel comfortable giving him anything other than a warning and a stern talking-to.

“Upper management told me that he ‘was a high performer’ (i.e. had stellar performance reviews from his superiors) and they wouldn’t feel comfortable punishing him for what was probably just an innocent mistake on his part.”

Fowler said she was given a choice: move to another team and avoid her former manager, or remain on the team and probably receive a poor performance review.

Fowler explained, “One HR rep even explicitly told me that it wouldn’t be retaliation if I received a negative review later because I had been ‘given an option.’ I tried to escalate the situation but got nowhere with either HR or with my own management chain (who continued to insist that they had given him a stern-talking to and didn’t want to ruin his career over his ‘first offense’).”

Fowler later learned that this was not his first offense, making it obvious that HR and management had lied to her. The most concerning aspect of this situation is that HR and management had let a man continue to harass women in the workplace – an inexcusable lack of action.

Even after these women escalated this issue as far as they could, proper action was still not taken. Every corporation should have a hotline in place to the audit committee of the board so employees can report issues that are not properly addressed by management.

The allegations described by Fowler might have in fact violated the law, which could cause the Equal Employment Opportunity Commission (EEOC) to launch an investigation.

Uber has seen a decrease in female workers, from 25 percent to 6 percent in Fowler’s organization, according to her post. Fowler stated most women are either transferring to a different part of the company or simply quitting due to organizational chaos and rampant sexism.

Within days of publication of Fowler’s blog, Uber CEO Travis Kalanick tweeted, “What’s described here is abhorrent and against everything we believe in. Anyone who behaves this way or thinks this is OK will be fired.” Hopefully, this scandal will be a wake-up call for him and the rest of his staff.

Uber is sensitive to how this scandal is affecting the company’s reputation. After the publication of Fowler’s blog, Uber sent a message to those customers wanting to delete their accounts which said, ”Sorry to hear that you wish to delete your account. … Everyone at Uber is deeply hurting after reading Susan Fowler’s blog post.” Similar to Kalanick’s public statement, the message also said, “What she describes is abhorrent and against everything Uber stands for and believes in. …”

The extent of Uber’s reputational damage will depend on how Uber responds to Fowler’s allegations.

Former attorney general Eric Holder has been hired by the board to do an independent investigation of the culture at Uber. Holder has done work for Uber in the past, raising questions on whether he can be truly unbiased. However, he has said that he is betting his reputation on it.

If Fowler and other women at Uber experiencing sexual harassment had the ability to report these issues directly to the audit committee of the board through an employee hotline, the situation could have been investigated properly and changes could have been implemented, avoiding the loss of talented women engineers and damage to Uber’s reputation.

Public companies are mandated to have hotlines. Private companies should adopt this best practice and have hotlines in place for employees to report issues that they would feel uncomfortable reporting up the chain of command.

Kalanick, like all CEOs, has the responsibility to set the tone at the top and organizational culture at Uber. Had he established the proper tone and culture, Fowler’s experience and those of other women employees might not have occurred or would have been addressed appropriately, and damage to the company’s reputation avoided.

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 February 21, 2017

Many of us have worked for toxic bosses. We wonder how they could continue to be promoted within the organization.

Toxic bosses can 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 micromanage, take undo credit, blame others for their mistakes, are inconsistent in their words and actions, 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.” Their employees don’t trust them. They can harm their employee’s health. They are terrible role models.

I once worked for a tyrant who sapped the vitality from his organization. I still blame the then-CEO who knew what was going on. The human resource department didn’t have a strong leader, and I didn’t want to risk going to executive management for fear of retribution, so there was no path to lodge a complaint. This was prior to the introduction of whistleblower hotlines. There was no effective way to report my boss up the chain of command.

I was very close to leaving the company until 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 the tyrant’s organization, and then three years later, 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 toxic manager with a very effective leader. It took him months to bring his employees to the point where they were operating as they should. Once more they 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 their former manager.

Many of these toxic managers “manage up” very well. It is the responsibility of every leader to see through this and to evaluate the effectiveness of their direct reports’ leadership style and ensure that all people within their organization are treated professionally and with respect.

So, what should you do if you work for this type of boss? Do your job and do it well, which is what you should always do. Learn how to manage your toxic boss. Ultimately, you may decide to work elsewhere.

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.

All public corporations, many private companies and many nonprofit organizations have hotlines which employees can use to report toxic managers and environments. Whistleblower hotline complaints are reviewed by the audit committee of the board. It is the job of the audit committee to ensure the hotline reports are investigated and if appropriate, actions are taken.

It is important to ensure that there is no retaliation against employees who use the whistleblower hotline. If the company’s employees don’t have confidence that they will not face retaliation, they may be fearful of using the hotline.

Every organization should have an anonymous 360-performance evaluation process in place, where employees can comment on the effectiveness of their boss and peers can comment as well. Organizations also need to conduct periodic climate surveys. Done correctly, both are useful tools for performance assessment and improvement.

The board needs to hold the CEO accountable for dealing with both toxic environments and toxic bosses within their organization. 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.

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 February 13, 2017

Scandals at the Philadelphia Parking Authority and at the Philadelphia Housing Authority are teachable moments in what happens when boards don’t adopt best governance practices. Government authorities across the U.S. should take note.

In a decision on Sept. 27, 2016, the board of the Philadelphia Parking Authority allowed its then executive director, Vincent Fenerty, to keep his job after an investigation showed that he had sexually harassed an employee. The board reduced his personnel decision-making power, imposed other restrictions and made him pay the $30,000 charged by an outside investigator working on the case.

Felicia Harris, president of Philadelphia Commission on Women, said, “[Fenerty’s] continued employment sends the message that sexual harassment is OK, and that the harm caused can be erased by monetary payment. Sexual harassment can’t be written off like a parking fine.”

Shortly after the decision by the Parking Authority to permit Fenerty to remain in his position, the board learned that he sexually harassed another employee in 2006. Fenerty resigned on Sept. 28, 2016, knowing that this time the board would fire him.

The 2006 sexual harassment accusation was not reported to the board by the Parking Authority’s general counsel, a gross violation of good governance practices, nor did the board have the opportunity to vote on the $150,000 settlement offered to the victim, which she ultimately turned down.

It’s clear that the Parking Authority board did not learn from a similar 2010 scandal at the Philadelphia Housing Authority.

In that scandal, executive director Carl Greene settled four sexual harassment claims over five years by paying off the victims and not telling his board he was doing so. Greene faced similar acusations in the past, but he was hired anyway. Greene also faced a host of corruption accusations while at the Philadelphia Housing Authority, which resulted in a federal investigation. He was subsequently fired.

Describing the culture within the Philadelphia Housing Authority under Greene’s leadership as “toxic” is an understatement. Where was the board while all this was going on?

Do all government authorities have hotlines directly to the audit committees of their boards for employees to report wrongdoing by the leader or by the organization? Will the audit committee of the board take appropriate action against wrongdoers? Even if hotlines are in place, do employees believe that they won’t face retaliation if they use the hotline?

These are all standard best governance practices in public companies and in many private companies and nonprofit organizations.

The most important responsibility of any board is to hire and fire the CEO, establish levels of authority beyond which he or she needs to go to the board for approval and assess his or her performance against established goals. The board must also hold the CEO accountable for tone at the top and organizational culture.

Tone at the top encompasses the ethics, honesty and integrity with which an organization operates. Culture encompasses how members of an organization treat each other, as well as the organizational environment which hopefully allows employees to speak their mind and report wrongdoing without fear of retribution.

The CEO or executive director of the organization sets the tone and culture, and should be held accountable by the board for both.

Scandals occur in organizations in which tone at the top and culture are poor. These scandals are often reported on the front pages of the local or national press, damaging the reputations of the organization, its leader and its board members.

This raises the issue of the qualifications of board members of government authorities. Do they know how to be effective board members? Are they selected purely on their political connections or by patronage considerations, or are they chosen for their specific functional experience and expertise?

No employee should have to work in an organization in which ethical lapses or illegal activities occur, nor where employees lack confidence in using the hotline to report these activities. When government authorities are not operated using best governance practices, not only do the employees suffer, but the public is shortchanged as well. Both deserve better.

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 February 6, 2017

In a previous post, I wrote effective leaders have three traits in common: They operationalize their decisions, base decisions on facts, and understand the possible consequences of their actions. Effective leaders also need to surround themselves with independent thinkers who will point out the brutal facts of reality.

These traits engender confidence, trust and credibility. President Donald Trump has yet to demonstrate these leadership traits.

Trump campaigned on the slogan, “Make America great again.” To date, his actions are accomplishing the opposite.

You don’t make America “great again” by:

1 — Trying to accomplish everything on the agenda within a few weeks. Quoting Rep. Charlie Dent (R – PA), “The White House appears intent on ‘trying to check boxes’ and speed through campaign promises as quickly as possible, even when ideas aren’t fully formed. They’re accelerating that when perhaps they ought to move more deliberately.”

2 — Pursuing “America First” international trade policies, which will drive our allies and geographic regions of the world into the arms of our economic, political and military rivals – notably China and Russia – that are waiting to increase their influence in the world at the expense of the U.S. They must be delighted at the opportunity Trump has given them.

3 — Arrogantly announcing the construction of a wall on the U.S. and Mexico border and stating Mexico will pay for it. They won’t. American consumers will pay for it with Trump’s recently proposed import tax on Mexican imports to the U.S. American workers will pay for it when some of them lose their jobs due to retaliatory duties on American products exported to Mexico.

4 — Angering European allies by questioning the U.S.’s long-standing military commitments to NATO. This undermines trust, one of the worst things a leader can do, and makes the U.S. less safe.

5 — Being inconsistent in your own policy positions, as is Trump with his contradictory statements on Israel regarding the building of new settlements on the West Bank. Trump often changes positions, which makes him hard to read.

6 — Reversing long-standing policies and positions of former Republican and Democratic presidents by campaigning on the relocation of the American Embassy from Tel Aviv to Jerusalem, without thoughtful consideration and discussion of the possible reactions by the Arab World. Trump has recently backed off this campaign promise and said the relocation was only under consideration.

7 — Banning for 90 days the entry to the U.S. of immigrants who have been vetted for up to 18 months from Muslim-majority countries on former President Barack Obama’s terror watch list, even though there is no history of people from these countries causing death to an American.

Countries that were the source of terrorists who killed Americans were left off the ban list, such as Saudi Arabia. Was Saudi Arabia left off the list because Trump does business with them? Trump’s conflict of interest issues undermines his credibility.

8 — Banning individuals who hold green cards and who live in the U.S., separating family members. College students enrolled in our universities were also denied re-entry, preventing them from continuing their studies. Previously-vetted individuals attending business and professional meetings were denied entry.

9 — Delaying the entry to the U.S. of those Iraqis who risked their lives as translators assisting U.S. soldiers on the battlefield. How many will risk their lives in the future to help the U.S. military?

10 — Handing ISIS and al-Qaeda a significant recruiting tool through rhetoric and actions, something that former Presidents George W. Bush and Obama were very careful not to do. Trump is making America less safe.

On Feb. 3, U. S. District Court Judge James Robart in Seattle issued a temporary restraining order against Trump’s immigration ban. In response, Trump tweeted, “The opinion of this so-called judge, which essentially takes law-enforcement away from our country, is ridiculous and will be overturned!” So-called judge? You don’t make America great again by showing arrogance and disdain for the judiciary.

On Feb. 5, a federal appeals court denied Trump’s request to lift Judge Robart’s temporary restraining order. The court has asked both sides to file briefs for a hearing this week.

In June 2016, Trump also showed disdain for American-born U.S. federal judge Gonzalo Curiel, who was overseeing the Trump University case, demanding that the judge recuse himself because his parents were born in Mexico. Trump was concerned that his demand that Mexico pay for the border wall would prejudice the judge against Trump University.

Many Trump supporters give him a pass by saying, “He is only doing what he said he would do during the presidential campaign.” There is the right way of keeping campaign promises and the wrong way. Trump is doing it the wrong way, like a bull in a china shop.

Trump is heading down the wrong path, not listening to the professionals and experts, but instead relying on Steve Bannon and other ideological political operatives with no experience or expertise in national or international affairs.

There is no indication that Trump has learned from his first two-plus weeks as president or that he will change his leadership style.

Given that Trump had the lowest popularity rating just prior to his inauguration of any president in modern times and the likelihood that his ratings will get worse, the Republican Party needs to realize that his base of support going into the next Congressional election in less than two years will be a lot smaller, and they risk a significant loss of seats in the House and Senate.

Is this what the Republicans want? I don’t think so. They need to push back and show the electorate that they will resist Trump’s actions that make America less great and less safe.

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 January 30, 2017

All effective leaders have three important traits in common which engender confidence, trust and credibility.

President Donald Trump has yet to demonstrate these leadership traits to many Americans.

Effective leaders:

Operationalize their decisions

On Jan. 27, Trump issued an executive order suspending the entry of individuals to the U.S. if they are from seven Muslim majority nations. Trump and his administration did not think through how the details of his order would be operationalized. He could have done this with much more finesse.

Green card holders and students from the Muslim-majority countries identified in the executive order who currently reside in the U.S. and who were traveling outside the country on business or holiday fell under Trump’s executive order.

Many of these individuals were not able to re-enter the U.S. Immigrant families who were in transit and have already undergone an extensive vetting process over many months, in some cases more than a year, were sent back upon arrival in the U.S. Not a very humane or empathic thing to do.

Trump’s executive order was not properly vetted or operationalized to address these and other issues: Did Homeland Security have input before the executive order was drafted? What steps were taken to ensure that the order was legal and would be consistently applied at destination airports?

Several federal judges across the country have temporarily halted implementation of portions of this executive order. At some airports, custom and border patrol agents reportedly ignored the federal judges’ orders, which would be unprecedented. People are being harmed, as is the reputation and standing of the U.S. within the global community.

What Trump should have done was beef-up the vetting process that already was in place. That, however, would not match his rhetoric during the presidential campaign that won Trump votes.

Hopefully, the large number of massive demonstrations that are taking place across the U.S. since the executive order took effect will soften how the order will be implemented.

Base their decisions on facts

The coining of the term “alternate facts” by Special Assistant to the President Kellyanne Conway, as well as Press Secretary Sean Spicer’s comparing various inauguration day crowd size estimates to conflicting weather reports, did nothing to engender trust and confidence in Trump or in these two members of his administration.

There is no evidence for Trump’s continuing assertion that he lost the popular vote to Hillary Clinton because three to five million illegal immigrants voted for Clinton. This is probably the first time the winner of an election has ever complained about the vote count.

His focus on inauguration day crowd size and the popular vote count shows that to Trump, everything is about him and his image, regardless of the facts. There are more important things for a president to focus on.

Understand the possible consequences of their actions

Trump ran on a platform of creating jobs for the American worker. He wants to raise tariffs on imported goods to force more of these products to be produced in the U.S. However, Trump has yet to publicly recognize the consequences of doing so.

Countries whose products are subject to U.S. import tariffs most likely would retaliate by placing import tariffs on American goods entering their countries. This would be a huge blow to American workers producing these products. The trade war in the early 1930s was one of the causes of the Great Depression. The world does not need another trade war.

Rex Tillerson and James Mattis, the newly confirmed secretaries of State and Defense, two non-politicians, did not advance through ExxonMobil (NYSE: XOM) or the Marine Corps without operationalizing their strategies, basing their decisions on facts and understanding the possible consequences of their actions. They must be wondering about the values and cultural norms of the team they are now part of as members of Trump’s cabinet.

Trump needs to remember the traits of effective leaders that engender confidence, trust and credibility. He will have a more successful presidency if he does.

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 American City Business Journals on January 23, 2017

When it comes to serving customers and operational effectiveness, government agencies generally rank below that of for-profit companies in the private sector. When a government agency makes significant improvements, its journey needs to be shared as a story of success and a lesson for others.

This is the case with the United States Department of Veterans Affairs, which provides medical services to some 9 million of our country’s military veterans.

On Jan. 20, Bob McDonald stepped down as secretary of VA. He was appointed by President Obama and confirmed by the Senate on July 29, 2014 after serious ethical scandals and illegal practices rocked the VA.

In the two and a half years that McDonald served as secretary of the VA, transformational changes have occurred at the agency.

In an article published Aug. 4, 2014, “Bob McDonald – the right person to lead Veterans Affairs,” I wrote that wait times at VA hospitals were unacceptably long and records were falsified to hide delays in treatment. Some veterans died due to these delays.”

In that article, I wrote that a whistleblower reported that at one VA hospital, veterans who died were reported as still living in order to hide the number of deaths at the facility. The examples could go on and on. One can imagine the low morale of VA’s doctors, nurses and other staff members who came to work each day to properly serve their patients.

McDonald was the former chairman and CEO of Procter and Gamble, a highly regarded company in the consumer products business that places great importance on serving its customers. The VA is in the healthcare service business, which should place great importance on serving its patients. The VA did not have this mindset prior to McDonald’s arrival.

As I have written many times, tone at the top and organizational culture are major determinants of the long-term success of any organization. McDonald brought the right tone and culture to the VA.

Tone encompasses the ethics, honesty, integrity and values with which an organization operates. Culture encompasses a commitment to continuous improvement, empowering employees, and creating a leadership environment in which employees can develop a sense of ownership in what they do.

Government agencies have traditionally operated within a rules-based culture that was described as stifling within the VA. McDonald introduced a principles-based culture.

Quoting McDonald, “A principles-based culture is grounded in values, sound judgment and [from West Point’s Cadet’s Prayer], the courage to choose the ‘harder right instead of the easier wrong.’”

Successful private-sector companies want employees who will use their common sense and good critical judgment and not automatically follow the rules when the rules make no sense. This is a cultural norm that McDonald has brought to the VA.

Change in any organization is driven by the right people, and the VA is no exception. Under McDonald’s leadership, 14 new leaders have assumed responsibility within a senior leadership team of 17.

The VA can’t provide a great veteran experience unless its employees are properly trained and they feel that the VA values the work they do. Best practices are now being shared across hundreds of VA facilities throughout the U.S. The VA has some 340,000 employees, so the changes initiated under McDonald have been a massive effort and take time.

How do you measure the success of McDonald’s initiatives? A November 2016 report published by the VA states that a RAND study during the summer of 2016 “showed that the VA [had] performed better than the private sector in 96 percent (45 of 47) of outpatient measures, and … performed the same as the private sector in the other 4 percent of outpatient measures.”

According the VA’s internal measures, “82 percent of VA Medical Centers (120 out of 146) have made improvements in overall quality between the fourth quarter of fiscal year 2015 and the third quarter of fiscal year 2016.”

Another measure of McDonald’s success is that two dozen veterans groups asked President Trump to nominate him to continue as secretary of the VA in the Trump administration.

Quoting McDonald, “A leader’s job is to develop an inspiring vision, to constantly breathe life into it, build off the organization’s values, and with the help of employees, turn it into reality. For the VA – it’s to travel on a journey to become the top customer service organization in the Federal government.”

President Trump has chosen Dr. David Shulkin to be the next secretary of VA. Shulkin served as undersecretary for health at the VA working with McDonald. Pending Senate confirmation of Shulkin, hopefully the agency will continue to improve in its mission to provide a great customer experience to our veterans.

What are the lessons that can be learned from the VA’s journey? Even government agencies can improve the service they provide to the public.

What it takes is the type of leadership that McDonald brought to the VA, as well as the right tone at the top, culture, values and the right people in leadership positions to make it happen. These are universal lessons applicable to all government, for-profit and nonprofit organizations.

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

Article originally published in the American City Business Journals on January 17, 2017

Throughout life we run into different types of people. There are those who see the glass as half empty, have a negative attitude about most things and are complacent with the status quo. There are also those who see the glass as half full, have a can-do attitude, embrace challenges and serve as a role model for others.

On Jan. 10, I had the privilege of attending a panel discussion in Philadelphia titled “Women Changing the City,” hosted by Center City Proprietors Association, at which five highly accomplished women spoke about their professional journeys and how they are making a difference in the lives of others.

The panel was moderated by Susan Buehler, a former Emmy award-winning reporter and producer for Philadelphia’s Fox News for eight years, who served as a role model and helped advance the status of women in broadcasting. She is currently chief communications officer at PJM Interconnection.

Patrice Banks, a materials engineer and automotive mechanic/technician, spoke about why she created Girls Auto Clinic – to take the stress and anxiety out of the experience of buying a car and the subsequent experience of purchasing auto repair services.

Banks stated, “It’s no secret that women generally do not understand vehicles – how they operate or how to maintain them. Most women hate the automotive buying and repair process because we feel misunderstood, taken advantage of, and/or mistreated.” Banks is out to change this.

Donna De Carolis, founding dean of Drexel University’s Close School of Entrepreneurship, the first free-standing, degree granting school of entrepreneurship in the U.S., spoke about her journey and her intense interest in educating students from across the University in entrepreneurship skills.

These skills are very valuable not only for those who become entrepreneurs, but also those who work in established businesses and in managing one’s professional life.

De Carolis stated, “The myth is that entrepreneurs are risk takers and that’s not entirely true. Entrepreneurs assess situations – they mitigate risk. They have a level of confidence that if X does not work out, I can go to Y.” This is a characteristic of all those who are successful over the long-term – if something isn’t working out, they have the confidence to pivot and try something new, and they know how to manage risk and develop options.

Janet Haas spoke of her journey as a physician, which was influenced by a severe illness in her family. She wanted to make a difference in the lives of people who faced adversity. This guided her medical journey toward brain injury rehabilitation and, later, to palliative medicine.

Haas’s desire to make a difference in the lives of others is evident in her role as chair of the William Penn Foundation. As written on its website, “[The Foundation] is committed to increasing high-quality, educational opportunities for economically disadvantaged students; supporting arts, culture and the development of accessible and vibrant public spaces; and protecting the Delaware River watershed.” There is no higher civic calling.

Siobhan Reardon, president and director of the Free Library of Philadelphia, told of her challenge at the Library – continuing to provide library services to the children and adults of Philadelphia in the face of reduced financial support from the city.

Reardon proposed shutting down 11 library branches to keep others open, but found that was a very unpopular decision with the citizens of the city. She and her staff found a solution, as all effective leaders do when faced with a challenge. They developed a creative plan to rotate closures and on those days, referred library patrons to “sister” libraries. A few years later, Philadelphia City Council restored partial funding, permitting the library to cease rotating closures.

There are those people who go to work every day for 45 years, are satisfied with the status quo and enjoy what they do. That’s fine for them. There are others who don’t enjoy what they do but never make a change. They complain about the way things are, but never do anything about it.

And then there are those like these five women who embrace change and are out to make a difference in this world.

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

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

Over the past two and a half years, I have written articles about the universal principles of effective leadership. These principles come from my own experience as a leader rising through the ranks of PQ Corporation to the position of CEO, and by observing the leaders 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 when their actions provide teachable moments.

As we start 2017, I would like to share five key leadership principles for the success of any organization, drawn from previous articles and insights developed over the past year.

1. Become the preferred provider to your markets

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

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

How does a company become the preferred provider? In addition to offering high-quality, reliable products and services, it must provide a great customer experience. These companies create a competitive advantage by servicing their customers better than their competition.

2. Establish the right tone at the top and institutional 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.

Most of us are now familiar with the toxic sales culture at Wells Fargo in which bank branch employees were pressured to open more than 2 million bogus customer accounts, driven by a financial incentive system run amok.

In a Sept. 21, 2016 CNN Money article headlined, “I called the Wells Fargo ethics line and was fired,” reporter Matt Egan wrote that a number of Wells Fargo employees were fired for reporting unethical practices to the ethics hotline and the bank’s human resources department.

After five years of these unethical practices and adverse media exposure, on Oct. 12, 2016 John Stumpf finally stepped down as CEO of Wells Fargo. Stumpf failed to ensure that the Wells Fargo Consumer Banking division operated with an ethical tone and culture. The legal and civil liability as well as reputational fallout is still unfolding. Wells Fargo has lost significant business due to these issues. What occurred is a teachable moment for all CEOs and boards.

3. Embrace a culture of continuous improvement

Share with your employees that your expectation is for them to continuously improve their part of the business. 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.

Instinctively, most employees realize that continuous improvement is needed to grow the company and build competitive advantage. If your company doesn’t continually improve, it will fall behind its competition.

Even though continuous improvement is led by the CEO and other senior leaders, it is driven by employees at every level within the company. This organizational culture puts power and responsibility into the hands of employees to initiate improvement projects on their own, without getting upper management’s approval. If an improvement project is beyond their authority level, they feel empowered to present the idea to the individual who has the authority to approve it.

4. Hire people with good critical judgment

Early in my career, while serving as the division marketing manager for my company, I ordered a recall of a contaminated product without the authority to do so. My boss, the VP and general manager of the division, and his boss, the CEO, were traveling in Europe and were unreachable.

Every day that went by, the cost of the recall went up significantly, so I made the decision on my own to order the recall knowing I would be either celebrated or terminated. I was celebrated, which taught me the value of employees who possess good critical judgment and are willing to violate policy when it is in the best interest of the company to do so. Had I been terminated, the company would have been deprived of its future CEO.

5. Face the brutal facts of reality

One of the most important imperatives for all leaders is 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. It’s equally important for leaders to consider them, especially if those offering these opinions have more experience or expertise than the leader.

The Challenger space shuttle 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. 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. 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?”

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.

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.

The leaders who follow these five leadership principles will enjoy business success and be effective role models for emerging leaders within their organizations.

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