For the past eight years, in my role as Vice Chairman of Drexel University, I have been honored to address in person the graduates of Drexel’s College of Medicine – M.D.s, Ph.D.s and graduates who earned master’s degrees.
5 differentiating principles to take your organization from good to great
If you think that “good” is good enough, you will never become great. In these days of the Covid-19 pandemic, the companies that think they are good enough may not survive.
Boeing 737 Max grounding: When the risk of failure is catastrophic, don’t take shortcuts
If the risk of failure could be catastrophic, you must not take shortcuts, but double-down on risk assessment and safety assurance to prevent a catastrophe and the resulting huge liability.
CEOs need to be open to novel solutions
Article originally published in the Philadelphia Business Journal on July 29, 2019
How many of us have been challenged to accomplish an objective where the path to
success was not clear? How many of us found a way to get it done? This is a challenge
that we face many times during our careers.
In August 2015, I wrote an article headlined, “AT&T’s lesson in leadership: How
to break paradigms.” Given the importance of breaking paradigms, this is an
update of that article.
In the 2001 film “Pearl Harbor,” soon after the U.S. declares war on Japan following the
attack on Pearl Harbor, President Franklin Roosevelt orders the Joint Chiefs of Staff to
strike back by bombing Tokyo. These military leaders offer reasons why it can’t be
done—the U.S. long range bombers don’t have the necessary range from the nearest U.S.
base on Midway Island and Russia won’t let the U.S. launch from Russian territory.
Roosevelt says to them, “Do not tell me it can’t be done.”
What Roosevelt did was challenge the existing paradigms of his military leaders.
Paradigms are an established and accepted set of beliefs. Roosevelt wanted them to be
innovative and think out of the box. It took the assistant chief of staff for anti-submarine
warfare to do so, an individual you would not necessarily expect to come up with a
solution to this challenge. He proposed that B-25 bombers carrying extra fuel be launched
off an aircraft carrier that would sail within aircraft striking range of Tokyo. After the
planes launched, the carrier would turn back, and after the bombing run, the planes would
fly to China and land there.
This bombing mission over Tokyo is enshrined in history as the Doolittle Raid, named
for Army Air Corps Lieutenant Colonel James Doolittle. Even though the mission did
little damage to Japan’s military capability, it provided a needed boost to American
morale, and at the same time showed the Japanese that they were within the reach of
American bombers.
When “something can’t be done,” there is usually a creative path forward that can
achieve the result desired, or a similar result that might serve the purpose originally
intended.
Your corporate culture must encourage out-of-the-box thinking and risk-taking for this
process to take place. Collaboration among people from different technical disciplines
and operating units are sometimes needed to find the path forward, as when the assistant
chief of staff for anti-submarine warfare came up with the idea of how to bomb Tokyo.
Rebuilding the phone system
As manager of operations planning early in my career at PQ Corporation, one of the most
impactful lessons I learned was the imperative of breaking paradigms.
Our CEO, Paul Staley, asked Russell Ackoff, then professor of management at the
Wharton School of the University of Pennsylvania, to talk with the senior leadership team
at PQ about applying his idealized design approach to our manufacturing technologies to
break our paradigms. As a mid-level manager, I was very fortunate to be included in
these sessions.
Ackoff described a meeting that he attended in 1951, consisting of engineers and
scientists at Bell Labs, a division of the phone company AT&T, in which the facilitator
abruptly announced to the meeting participants that the phone system in the U.S. was just
destroyed. How would they not only rebuild the system, but reimagine and improve it?
The only criteria that they needed to meet were that the new phone system design had to
be technically feasible and operationally viable. The facilitator was asking the meeting
participants to break their paradigms and think out of the box.
In the process of establishing the specifications of the new phone system, the participants
realized that given the expected growth of phone usage, continued use of the rotary dial
phone system in use at the time was not practical. Touch-tone dialing cut 12 seconds off
the time it took to dial a phone number and required much less investment than the
capital-intensive mechanical rotary dial system.
At that moment in history, the touch-tone dial system became the technology of choice
for the future phone system. Little did the participants know the significant impact that a
reimagined phone system based on touch-tone dialing would have on our lives in the
future.
The ideal plant concept
A number of years later as president of PQ’s Industrial Chemicals Group at a meeting
with our plant managers, I posed a similar question to the one that was posed at Bell
Labs. I told the group that our Augusta, Georgia manufacturing plant, built many years
ago, was just destroyed. How would they reimagine, redesign and build the plant to fulfill
the product needs of the plant’s customers? The only criteria were that the redesign
needed to be technically feasible and operationally viable.
We identified new manufacturing approaches we wanted to include in the new plant
design. We subsequently estimated the cost to build and operate the plant and found it
would be significantly less using these new technologies.
Our approach to reimagine this plant was called our ideal plant concept, similar to what
Ackoff called his idealized design. Whenever capital additions were made to our plants,
we considered the risks involved in adopting new technology, and whether we needed to
de-risk the decision by applying and testing out the new technology before putting it into
commercial practice.
Of course, what is the latest state of the art today will be surpassed by new innovations
tomorrow. In addition, this approach fit with our commitment to the continuous
improvement of our manufacturing plants, as well as other aspects of our business
operations.
Leaders, create a culture focused on breaking paradigms. This is a way to differentiate
and create a sustainable advantage over your competitors. And remember, when you hear
from employees that something can’t be done, respond with, “Don’t tell me it can’t be
done. Find a way to do it.”
Stan Silverman is founder and CEO of Silverman Leadership. He is a speaker,
advisor and nationally syndicated columnist 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. Follow Silverman on
LinkedIn here and on Twitter, @StanSilverman.
6 ways for a CEO to think like an activist investor
Article originally published in the Philadelphia Business Journal on July 22, 2019
CEOs of many public companies raise their guard when they receive a phone call
from an activist investor wanting to discuss how their company can improve its
performance and shareholder return. This is not necessarily the right reaction. In
April 2015, I wrote an article on this subject. This is an update of that article.
Activists invest in underperforming companies and push for improved shareholder
return through cost reduction, a change in business strategy or leadership, or the
pursuit of strategic options. If shareholder return cannot be improved through other
means, the activist might push for outright sale of the company or one or more of its
operating units.
If unsuccessful in convincing the CEO and board to implement their proposals to
increase shareholder return, an activist may threaten a proxy fight to seat their own
director slate.
All outside directors have a fiduciary duty to be independent, even if nominated by
an activist and seated through a proxy fight. These directors need to make their own
independent decisions based on what is best for the shareholders after board
deliberation, not what is best for the activist who nominated them.
Some activists are interested only in making a quick return, with no concern for the
potential of a company to generate much higher returns for its shareholders over the
long term. This adds to the pressure of companies to sacrifice the long term in favor
of quarterly results. The interests of short-term oriented activists may not be in the
best interests of most of the company’s shareholders. Other activists are in it for the
long term, as are many shareholders, and their proposals need to be heard and, if
valid, seriously considered.
Dealing with activists who are adversarial is a distraction to the CEO and the board
and takes time and focus away from the business. A proxy fight puts the CEO and
the board in the public spotlight. How do you lessen the likelihood that your
company becomes an activist target?
Think like an activist when formulating and executing strategy
Companies that outperform their peer group are usually not targets of activists,
because the potential for improvement is less when compared to companies that
underperform. Outperforming your peer group should be your objective regardless.
The board needs to hold the CEO (and themselves) to high-performance standards
Activists like to target under-performing companies that have a weak CEO and are
governed by a weak board. I have served as a director of three public companies.
When a new director joins our board, the last thing my fellow incumbent directors
and I want is to be viewed as not having held the CEO to high-performance
standards.
Ensure decisions are made based on what is best for the shareholders, not the CEO or board
What is in the best long-term interests for the shareholders should be the focus of
the CEO and the directors, not what is in their personal best interests. After an
evaluation of the alternate strategies to improve financial performance and
shareholder return, if selling the company is in the best interests of the shareholders,
this is the strategy that should be pursued by the board, recognizing that the CEO
might be replaced and the directors will step down after the sale.
Guard against complacency
The directors of a company need to guard against complacency, which may set in
due to the growing relationship directors have with the CEO over time. Independent
directors are just that – independent. The most important responsibility of directors
is to hire the CEO and determine the CEO’s compensation based on results. The
board of directors must also be capable of terminating the CEO if warranted.
Engage with large shareholders
In his February 2015 letter to independent directors, F. William McNabb III, former
chairman and CEO of Vanguard, the world’s largest mutual fund company, wrote,
“We’ve observed that the best boards work hard to develop ‘self-awareness,’ and
seek feedback and perspectives independent of management. They ask the right
questions to understand how their company may be different than [their] peers, and
whether those differences are strengths or vulnerabilities.”
McNabb continues, “We believe boards that provide such context to investors are
less likely to be surprised by activists or proxy votes, and more likely to have strong
support of large long-term shareholders.” Wise advice.
If you do receive a phone call from an activist, listen
Activists spend a significant amount of time studying industries and the companies
that comprise those industries. Many times they know more about the industry and a
company’s competitors than the company itself. They are a source of valuable
information, and can provide a prospective different than that of the CEO or
directors of the company. The strategies they suggest to increase shareholder
performance may have validity, and change the paradigms of management and the
board.
In addition to public company CEOs, much of the advice above is also valid for the
CEOs of private companies. CEOs, think like an activist. Boards, hold the CEO to
high-performance standards.
Recognize that the company is there for the benefit of the shareholders and guard
against complacency. Engage with large shareholders, but be careful not to violate
SEC Fair Disclosure rules against providing inside information to selected
shareholders. When an activist calls, listen to their ideas to increase shareholder
value. These are the best defenses against activists, who will go after lower-hanging
fruit.
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.
Graduates, get out of your comfort zone and never compromise your integrity
Article originally published in the Philadelphia Business Journal on May 20, 2019
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 the challenges you will face, 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 healthcare profession. You will be making a difference in the lives of others, working toward 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 chairman of the University’s board.
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 to broaden my knowledge and experience. I took risks. Sometimes I failed, but I never let that stop me from moving forward.
Failure happens. It is not the end of the world. Learn to mitigate risks. Winston Churchill once said, “Success is not final, failure is not fatal. It is the courage to continue that counts.” Get outside of your comfort zone. You never know where the future may take you.
Many of you will choose to advance the state of the art of your profession in areas that make a positive difference in people’s lives. Many of you will work to change the world and make it a better place. There is no higher calling.
Always take advantage of opportunities to do something new and different. And someday, 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, avoiding the risk presented by the sun?
Seth Godin, the author of “The Icarus Deception: How high will you fly?” writes, “It is far more dangerous to fly too low than too high, because it feels safe to fly low. We settle for low expectations and small dreams, and guarantee ourselves less than what we are capable of. By flying too low, we shortchange not only ourselves, but also those who depend on us, or might benefit from our 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, your integrity and your professional and personal reputation among your colleagues, your patients and the public.
During your career, be sure to protect your good name, 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.
People quit bosses, not companies
Article originally published in the Philadelphia Business Journal on April 29, 2019
Performance goes beyond the achievement of financial or other goals to which leaders are held accountable. I frequently hear complaints by employees, including those employees who report to CEOs, that their bosses lack fundamental leadership skills. Ensure you don’t lose your good employees because of the lack of leadership skills of the individual they report to.
I offer the following advice to all leaders to improve their leadership style:
Don’t micro-manage
A frequent complaint is that bosses micro-manage and tell direct reports how to accomplish a task, rather than state expectations, ensure the resources are available to get the job done, and cut the direct report lose to achieve results.
Steve Jobs, the former chairman and CEO of Apple once said, “It doesn’t make sense to hire smart people and tell them what to do. We hire smart people so they can tell us what to do.” Lee Iacocca, former automobile industry executive once said, “I hire people brighter than me and then I get out of their way.” Why don’t all leaders have the same philosophy as Jobs and Iacocca?
Acknowledge the work of a direct report
A number of individuals have shared with me that their work is not acknowledged when passed up through the organization. I personally experienced this when I was told that all work leaving our department had to have the name of the department’s manager on it, rather than a cover letter transmitting the work of a direct report. I knew that this was not the kind of manager I wanted to work for.
In another instance, I was told by the creator of an advertising campaign of an experience she had after she presented her work during a meeting with a client. The client loved the campaign. After the presentation, she was not invited to join her boss and the client at a lunch celebrating the campaign’s creation. Why was her boss tone-deaf and insensitive to how that made her feel? This is not the way to inspire and motivate direct reports.
Respect female colleagues as you would respect male colleagues
I have heard from many women that they are not as respected as men within the workplace. Many feel that this is not purposeful, but part of an ingrained cultural norm.
A company with an organizational culture that tolerates a hostile work environment or doesn’t respect both men and women sends signals to some current and potential employees that they are not welcome and valued. The recent #MeToo movement has shined a light on the issue of sexual harassment in the workplace and it hopefully signals the start of a cultural change.
All organizations should create a respectful environment and provide advancement opportunities regardless of gender to all employees based upon their skills and track record of accomplishments.
Don’t tolerate a direct report who is a tyrant to his or her direct reports
I used to work for a tyrant who did significant damage to morale. I nearly left the company but was promoted around him and became his peer within the company. I was promoted again and became his boss. I fired him. Had I left, the company would have been deprived of a future CEO.
I still wonder why the CEO of the company tolerated the tyrant. Don’t make this mistake if you have a tyrant working in your organization.
Perform 360-degree reviews of your direct reports
What is the best way to obtain a full picture of the effectiveness of a direct report? Obtain 360-degree feedback on their performance. Done properly in organizations where this process has become a cultural norm, this performance tool provides feedback to direct reports to help them be more effective.
Obtain input about your direct reports from people reporting to them, from peers and from senior individuals within the organization. This information can be used in the direct report’s performance review. In many cases, it is the best way to identify and communicate to the direct report their strengths and areas for improvement.
At my company, I introduced a 360-degree feedback system while president of our world-wide chemicals business. Not only did I receive and communicate 360-degree feedback to my direct reports, but I subjected myself to the same process, conducted by our company’s CEO.
When I became the CEO of the company, I continued this process, with the chairman of our board who obtained 360-degree input on me from my direct reports. I found it to be one of the most valuable feedback mechanisms to help me improve my performance as a CEO. To undergo 360-degree reviews was my decision. It should not be mandated by the board but be a decision for the CEO.
It is said that people quit bosses, not companies. Boards, ensure your CEO is an effective leader. CEOs and other leaders within the organization, ensure the leaders below you are effective. If they are not effective, you are apt to lose your high performing employees, perhaps to a competitor. In today’s tough business environment, you can ill afford to lose them.
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.
To develop your company’s future leaders, push them outside their comfort zone
Article originally published in the American City Business Journals on April 9, 2019
An important responsibility of every leader is to develop future leaders for their organization.
One of the most effective ways to do this is to push your direct reports outside of their comfort zone. Give them challenging assignments in areas that they have never faced to broaden their experience and see how they perform.
In June 2017, I wrote an article describing my experience taking a large French multinational chemical company to the U.S. International Trade Commission, accusing them of dumping product in the U.S. at below their home market price. I share an update of this article because it’s illustrative of how you can develop employees by getting them outside their comfort zone.
The benefits of stepping out of your comfort zone was a lesson I learned early in my career as my company’s business manager for anhydrous sodium metasilicate (ASM), which is used in a variety of metal cleaning and other industrial applications. It was also a lesson for the senior leadership of my company in the further development of a mid-level manager who eventually became CEO of the company
We faced import competition for ASM 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 U.S., 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 the business manager of this product line, I received approval from my company’s CEO to file dumping charges against Rhone Poulenc with the U.S. International Trade Commission. I was 33 years old 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, and we both relished the challenge.
The attorney retained by our company’s general counsel insisted that my product manager and I be the public face of our company’s case. I soon learned what that meant.
I recall flying to Washington, D.C., for an evidentiary hearing in front of the ITC staff, 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 the one who is 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 just to respond to questioning.
It is hard for anyone to imagine the horror I felt not having written out in detail what I wanted to say. Talk about being outside of one’s comfort zone.
Fortunately, I knew the facts, which helped me state my company’s case despite my trepidations.
The hearing accomplished the substance and 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 product pricing that met the criteria of dumping.
The preparation for the hearing in front of the ITC 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 in order to determine if dumping was occurring and render a decision.
Our credibility and the trust we built with the investigative staff was an important factor in the case. Whenever we realized that we had provided information to the staff 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. 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 operate under pressure and to get out of our comfort zone. It was a rewarding experience.
Leaders, expose your employees to new, 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.
Learn How to Be an Inspiring Leader
Article originally published in the Philadelphia Business Journal on February 26, 2019
What makes a truly great leader? In part, it’s the ability to inspire followers toward an aspirational goal. I miss the inspirational leadership of three former leaders, whose words and their delivery of those words inspired many of us.
Former President John F. Kennedy, in his Sept. 12, 1962 speech, announced the national goal of sending men to the moon and returning them safely to Earth before the decade was out. As a high school student at the time with the goal of going to college and earning a degree in chemical engineering, I was inspired by not only Kennedy’s audacious challenge to overcome the immensely difficult technical and engineering barriers, but also by his confidence that the goal could be achieved.
Former President Ronald Reagan, in his Jan. 20, 1981 inaugural address, spoke of the exceptionalism of Americans in a very positive, uplifting message, describing the “will and moral courage of free men and women,” and how committed we are to defending freedom. Reagan’s eloquent speech was a call to action for all Americans to be the best they could be, and serve as an example for the rest of the world to emulate. He is the president I most admire.
Former British prime minister Winston Churchill on June 4, 1940 delivered his “we shall fight on the beaches” speech to Parliament to rally his citizens during World War II. Churchill’s speech, reenacted by Gary Oldman, in the film, “The Darkest Hour,” is an inspiring example of how a national leader can mobilize a nation’s citizens toward the most challenging goal it has ever faced – national survival. In the film, one can overhear the comment, “He mobilized the English language, and sent it into battle.” Unfortunately, not very many leaders can do the same today.
So, what did Kennedy, Reagan and Churchill have in common? They had wonderful command of vocabulary and knew how to inspirationally communicate their goals and beliefs with emotion in an up-lifting way that won the hearts and minds of their citizens. They united the nations they were leading at the time.
How does a business leader win the hearts and minds of those they lead? How do you become an inspiring leader? Certainly, it takes more than great communication skills. Inspirational leaders have other skills as well.
Lolly Daskal is a leading executive leadership coach and founder of Lead From Within. In her article, “Six powerful traits of the most inspiring business leaders,” Daskal identifies these traits as people skills, credibility, authenticity, emotional intelligence, motivation, and positivity.
Murray Newlands, an entrepreneur, business advisor and speaker, in his article, “Seven characteristics of inspirational leaders,” says that inspirational leaders have a clear vision of the future, express unerring positivity, listen to their people, are grateful to their team, communicate impeccably, are trustworthy, and are passionate about what they do.
Based on my own experience as a CEO and director on the boards of numerous companies, I would like to add to the list of characteristics and traits of inspirational leaders identified by Daskal and Newlands, as follows:
Is genuine in words and actions, and is a person of high ethics and integrity
A leader who is not genuine and lacks ethics and integrity will not earn the respect and trust of the people within their organization. They will certainly not inspire followers to achieve great results. Board members, be sure you hire a CEO with these traits.
Communicates the importance of the company’s goals
The senior leadership team of the company needs to communicate the importance of the company’s goals in both group meetings and in one-on-one conversations with key opinion leaders within the company.
Employees need to feel that the goals are meaningful and achievable and will have a positive benefit for them and the organization. The goals should be aspirational, and stretch beyond the normal reach of individuals.
Identifies the role that employees play in attaining the goal
After completing a new strategic plan, as the recently appointed CEO of PQ Corporation, I communicated the goals of the company to our business units, and just as importantly, the role each business unit had in achieving those goals. The role of our low-growth commodity chemical business was to generate cash flow, through very heavy emphasis on continuous improvement. This cash flow would be invested in our high-growth specialty chemical and catalyst businesses.
After I made my presentation to the employees of our commodity chemical business, one of the employees commented, “This is the first time I was told what our role is in the achievement of the company’s strategic goals.” In my former position as COO of the company, I was too close to the strategic planning process to realize that the different roles of business unit employees to achieve the company’s goals had not been explained to them. All individuals who take part in achieving the goals of the company should have a personal ownership of the role that they themselves play in the achievement of those goals.
Frequently provide updates on progress
By frequently sharing updates on the progress towards achieving the company’s goals, an inspirational leader has the opportunity to keep the focus on what the company is trying to accomplish. It keeps the company’s employees in the game.
Great inspirational leaders have great communication skills. To those that have a fear of public speaking, you can conquer that fear by facing it head on, by receiving coaching and taking every opportunity to publicly speak. You will never regret that you developed this skill. Someday, you, like Churchill, Kennedy and Reagan, may be able to mobilize the English language and send it into battle.
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. Follow Silverman on LinkedIn here and on Twitter, @StanSilverman.
What to Focus on as a Newly-Appointed CEO
Article originally published in the American City Business Journals on February 12, 2019
In August 2016, I wrote an article about what new CEO’s should focus on in their first 100 days on the job. Based on my subsequent conversations with new CEOs, this is an update of that article.
You were just appointed CEO at a new company. The press announcements have been singing your praises, outlining your previous positions, expertise and track record of results.
The employees at your new company are wondering about your leadership style, your tone at the top and what changes you might make to the company’s culture and strategy, as well as possible changes to the senior leadership team reporting to you. Your board of directors will be wondering the same thing. What you say and do will be watched intently by everyone within the organization. Expectations that you will move the company forward will be very high.
As the new CEO, what should you focus on during your first 100 days? The knowledge gained during this learning process will help you formulate changes to the culture, the senior leadership team, as well as both the operational and strategic initiatives of the company.
Listen, ask questions and form impressions
Get to know the company, your board members and your direct reports. Talk with your board members and the individuals reporting to you, as well as those individuals reporting to them.
Learn about the norms and practices established by the former CEO
Understand the tone at the top and organizational culture under the previous CEO. Did the culture permit employees to practice common sense and good critical judgment, and when necessary violate the rules when doing so was in the best interest of the company? Were employees who did so terminated or celebrated? How much leeway were employees given to do what’s right versus follow existing policies and procedures?
What is the state of the company’s strategic plan?
Talk to your staff to understand the company’s current market situation. Is the strategic plan current, and are the various areas within the company pursuing strategies to achieve this plan?
Has a SWOT analysis (strengths, weaknesses, opportunities and threats) been performed, and do the strategic and operational plans build on the company’s strengths, minimize the impact of its weaknesses, exploit its opportunities and defend against its threats?
When you are sufficiently knowledgeable about the business, you will need to discuss the changes you want to make to the company’s strategic plan with the board. It is critical that as CEO, you and your team “own” the strategic plan, because you and they will be held responsible for executing it.
What is the competitive position of the company?
Vis-a-vis the competition, what is the competitive position of the company’s various businesses? How active is the competition in attacking the company’s markets with new product offerings or aggressive product pricing?
Determine if members of the senior leadership team know why their customers buy from the company, and why other customers buy from the competition. This knowledge should be known throughout the organization, so every employee, even those who do not directly touch the customer, can perform their jobs in a way to strengthen the company’s competitive advantage and deliver a great customer experience.
What is the cost position of the company versus its competitors? How competitive is the company’s business processes and information technology?
Ensure all employees are committed to the process of continuous improvement. The company should be on a journey to be the best in the world at what it does. Learn if all employees and board members buy into and share ownership of this ethos.
What is the company’s financial position?
How strong is the profitability and cash flow of the company and how much debt is on the company’s balance sheet? How capital intensive is the company and what major capital projects are on the horizon? Is the cash flow and balance sheet sufficiently strong to fund these projects and market growth?
Are you comfortable with your signature authority for capital projects beyond which you will need to take a project to the board for approval? Ensure you are comfortable with the signature authority of your direct reports, beyond which they need to get your approval.
Learn about the senior leaders who report to you
Understand the leadership styles, tone and culture of the senior managers reporting to you. Do they listen to their direct reports and do they surround themselves with people who will point out the brutal facts of reality? Can they execute and deliver results? Do they inspire their employees?
Do they micro-manage their direct reports, or do they empower them to make decisions, so they have a feeling of ownership in what they do? Are employees allowed to take risks, and do they know how to de-risk their decisions? Do some of your direct reports need to be changed?
Develop a good relationship with your board and stakeholders
Understand how the board operates, and their expectations of you. What level of information detail do they require to oversee the company? How much experience does each have as a board member? Do they tend to drift beyond oversight and governance and get into operational issues, which is the responsibility of the CEO?
You should also spend time focused externally, speaking with major stockholders and customers, and understand their expectations. What would they like to see that’s different from the previous CEO?
In my conversations with current and former CEOs, they all commented that trust among the leadership team is paramount to the success of their organizations. The foundation of trust is honesty, ethics and integrity. What is the level of trust among members of your senior leadership team?
Focusing on the areas above will ensure that you have an effective start as CEO at your new company.
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.
Lesson from Michigan State University: Empathy Is a Key Leadership Trait
Article originally published in the Philadelphia Business Journal on January 22, 2019
One of the most important skills of any leader is to know when and how to communicate empathy. The third senior leader at Michigan State University during the past 12 months, Interim President John Engler, has just demonstrated that he lacks this skill in remarks he made about the sexual abuse victims of Dr. Lawrence G. Nassar.
On Jan. 24, 2018, Nassar, physician to athletes at MSU and national team doctor for USA Gymnastics, was sentenced to 40 to 175 years in prison (concurrent state and federal sentences) for sexually abusing young women. Around 150 women gave impact statements in court prior to his sentencing. It has been reported that there are at least 265 Nassar victims.
A Jan. 11 Detroit News article quotes Engler, speaking about those sexual abuse victims who were not personally in the news, as saying, “In some ways they have been able to deal with this better than the ones who’ve been in the spotlight who are still enjoying that moment at times, you know, the awards and recognition…”
“Enjoying that moment … the awards and recognition?” Did Engler not understand how inappropriate and insensitive that sounds?
On Jan. 12, the chair of the MSU Board of Trustees, Dianne Byrum, commented in a Twitter message, “[Engler’s] remarks were ill advised and not helpful to the healing process, survivors, or the university.”
On Jan. 16, Engler resigned his position as interim president of MSU effective Jan. 23, after learning he lost the support of five of the eight MSU trustees and would be terminated if he didn’t resign. In his resignation statement, however, Engler did not acknowledge the comments that led his loss of MSU trustee support. He did not express regret that his comments were hurtful to the athletes who were abused by Nassar. He blamed politics as the reason for his loss of trustee support.
Understanding when and how to express empathy was an issue with the previous president of MSU, Dr. Lou Anna Simon, who Engler replaced, and the vice chairman of the MSU board, Joel Ferguson. I wrote an article about Simon and Ferguson in February 2018 headlined, “Viewpoint: Michigan State tone deaf to abuse by Nassar.”
In that article, I wrote that in the face of growing criticism from many of the students, faculty and staff at Michigan State on how Simon handled the accusations against Nassar, and after losing the confidence of a number of MSU board members, Simon resigned her position as long-time president of the university on Jan. 24, 2018.
In her resignation letter, Simon wrote, “To the survivors, I can never say enough that I am so sorry that a trusted, renowned physician was really such an evil, evil person who inflicted such harm under the guise of medical treatment.”
Simon added later, “As tragedies are politicized, blame is inevitable. As president, it is only natural that I am the focus of this anger.”
“Politicized,” Dr. Simon? I am not sure how the abuse of so many young women can be politicized.
Similarly, MSU Vice Chairman Joel Ferguson was also insensitive and tone deaf to Nassar’s victims. During an interview on a Detroit radio show before Simon’s resignation, Ferguson commented, “There are so many more things going on at the university than just this Nassar thing.”
“Just this Nassar thing,” Mr. Ferguson? As someone who holds the same position as Ferguson at another university, I believe his remarks and attitude were completely inappropriate.
After being widely criticized for his insensitive comments, a spokesperson for Ferguson released a statement that in part said, “Mr. Ferguson deeply regrets his comment and apologizes to those he offended.” Amid calls for his resignation from the MSU board, he chose not to do so, and remains on the MSU board.
An important responsibility of an effective leader is to set the right tone at the top and nurture the right culture at their organization. What a leader says or doesn’t say in part sets the tone and culture. Your employees and other stakeholders listen to you. Be sensitive to what you communicate to them.
Your employees may make statements or act in a way consistent with your attitude or what you say. Show compassion to those that have been wronged or hurt. That’s what effective leaders do.
Stan Silverman is founder and CEO of Silverman Leadership, and is the former CEO of PQ Corporation. 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. Follow Silverman on LinkedIn here and on Twitter, @StanSilverman.
Get out of Your Comfort Zone & Push Through Your Self-Perceived Limitations
Article originally published in the Philadelphia Business Journal on January 15, 2019
People often share with me the real and perceived limitations they face in pursuing their goals. As we enter 2019, I would like to share with you this look back at an article I wrote in December 2015 headlined “Advice for the New Year: Push through your self-perceived limitations.”
Why do people experience various degrees of success over the course of their careers? During my career, I have observed many successful people and those wanting to achieve success. There are those who succumb to their self-perceived limitations, and those who find a way to push through them.
The proverb, “Whether you think you can or can’t, you’re right,” is ascribed to Henry Ford. Your attitude and your ability to push through self-perceived limitations play key roles in how successful you will be.
A friend at my gym drove this home for me a number of years ago. I had been doing assisted pull-ups on an exercise machine that uses counterweights because I believed I did not have sufficient upper-body strength to do a pull-up without them. My friend came up to me and said, “I know you can do pull-ups unassisted.”
I told her that I hadn’t done unassisted pull-ups since high school and I couldn’t do them now. She egged me on, challenging me to do just one. By now, a crowd was gathering, and I felt huge peer pressure to try to do one pull-up. I walked over to the machine without counterweights and, with my friends watching, nervously jumped up six inches and grabbed the pull-up bar. To my surprise, I was able to do two!
I never used the counterweight machine again. Over the subsequent three months, I pushed hard and worked my way up to three sets of 10 unassisted pull-ups. I learned a valuable lesson from my friend: You are only limited by your own self-perceived limitations. Thank you, Patti Morris!
Sometimes it takes a friend, colleague, coach or mentor to inspire you to the next level. When you move to that next level, you never look back – you only look forward. As leaders, our job is to inspire others around us – to help them move to that next level.
To me, one such individual is Seth Godin, the author of “The Icarus Deception,” who writes about Icarus, the character in Greek mythology who flies too high and too close to the sun. His wings melt off and he crashes into the sea.
Godin writes: “It is far more dangerous to fly too low than too high, even though it might feel safer to fly low. You settle for low expectations and small dreams, and guarantee yourself less than what you are capable of. By flying too low, you also shortchange not only yourself, but also those who depend on you, or might benefit from your work.”
People fly too low due to fear and self-perceived limitations. If you fly too low, you are not preparing yourself for a time that may come when your job or profession becomes obsolete and you must re-launch your career. So, 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.
Get out of your comfort zone and take on new challenges. Albert Einstein once said, “Anyone who has never made a mistake has never tried anything new.” You differentiate yourself among your peers by trying new things, sometimes failing, but moving forward. This trait will help you land your next job. Employers, hire those who embrace change, rather than those who don’t.
The type of company at which you want to work should value employees who are not afraid to innovate, embrace change and, yes, occasionally make mistakes and learn from them.
Your attitude, which is apparent to everyone you interface with, plays a significant role in your success. Be a person who sees a world of abundance and possibilities, not one who sees a world of limitations and scarcity. Push through self-perceived limitations. You never know what the future holds or where it will take you.
Stan Silverman is founder and CEO of Silverman Leadership, and is the former CEO of PQ Corporation. 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. Follow Silverman on LinkedIn here and on Twitter, @StanSilverman.