Stan Silverman is vice chairman, Drexel University, the author of Be Different! The Key to Business and Career Success, the founder and CEO of Silverman Leadership, and former chair of PQ Corporation. He spoke to Scott Chase about risk and leadership in the time of crisis.
Beyond COVID-19 and the associated market freefall, what’s lurking that cuts across businesses and industries such as the coronavirus?
The trillion-dollar annual deficit Trump is running is unsustainable, and [it] provides less capacity for the federal government to respond to a COVID-19-type crisis. This is a huge issue that we are passing along to future generations.
What risks were you focused on before COVID-19?
The ever-rising amount of college student debt and the growing difficulty of paying it off, especially by students majoring in non-STEM areas.
Given what the pandemic already has shown us about preparedness and response, what steps are you taking/procedures are you adapting to absorb the next damaging global event?
Currently, our only focus is helping protect our employees while still meeting the needs of our customers, who are the backbone of the critical infrastructure of our country. Our critical infrastructure (transit, trucking, energy, business information technology and communications) must continue to operate.
Do any of your companies or boards maintain a rainy-day fund? Can a company justify keeping cash reserves against an unknowable event of immense dimension?
Cash reserves are not kept as a rainy-day fund. Lines of credit and a strong balance sheet are always the best defense against “an event of immense dimension.”
How will (or won’t) shareholder perceptions change regarding the hoarding of cash?
Cash and deep lines of credit are very comforting to shareholders right now. They know that these help a company weather the storm.
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Should the way business leaders/boards of directors respond to unforeseen events be a measure of leadership ability and continuity?
Did a leader listen to his/her experts and recognize the brutal facts of reality, or were the experts ignored, and did the leader listen to people with no expertise in implementing a response? How a leader reacts to an unforeseen event is the real measure of the talent and capability of a leader and should be part of every performance review.
On the other side of the coin, so to speak, what positive unintended consequences arise from this global catastrophe?
As with every event of huge magnitude, society will change. More meetings will take place via Zoom, Skype and other apps, resulting in less travel and time saved. More companies will move to a virtual work-at-home model, saving money on housing employees in buildings. The technology is there to do it effectively. People will periodically meet in person so they get to know each other. This also is a great recruiting tool, especially when the recruit’s spouse does not want to disrupt his/her career by moving. More emphasis will be placed on public health with the realization pandemics can be more disruptive to our way of life compared with wars. Universal health care will receive attention, with the realization that our personal health can be dependent on the health of the stranger standing next to us.