Learning from CEOs: What It Takes to Get to the Top and
Succeed PART I
Author
Elena Lytkina Botelho and Andrew Silvernail, CEO of IDEX, discuss how leaders
can deliver results.
Most first-time CEOs tend
to play it safe. That, however, could be a mistake. CEOs who succeed focus on
their company’s performance, its culture and employee engagement in a way where
everybody is driven to cater to the customer at the frontlines. Those were
among the insights that helped Andrew Silvernail, CEO of IDEX, a Lake Forest,
Ill.-based maker of specialized fluidics systems and components, and fire and
safety products.
Silvernail shared these
lessons in a conversation with Elena Lytkina Botelho, co-author of The
CEO Next Door, and Knowledge@Wharton. Silvernail is
one of the leaders featured in the book. Edited excerpts from the conversation
follow. (You can listen to a complete podcast of the discussion using the
player at the top of this page.)
Knowledge@Wharton: Elena, when we spoke about a year ago about
your research on the
CEO Genome Project, you told us about four behaviors that
define great leaders. Your book, The CEO Next Door, is about those
behaviors and much else. Could you tell us about the book and also the reasons
why you believe Andy is a leader who illustrates its principles?
Elena Lytkina Botelho: With the book, we sought to apply 21st century
analytics to this holy grail of leadership, which is who gets to the top and
why and how, and what does it take to be successful at the top. We took our
database of 17,000 leaders that we’ve assessed up close and personal, took a
sample of 2,600 leaders, and then did follow up interviews with about 100 CEOs
to look at the patterns of what it takes to get to the top and succeed there.
One surprise is that 70% of the CEOs didn’t
intend to become CEOs when they set out on their career paths, or even
mid-tenure in their career. It was only when that role became within striking
zone for them that it became a relevant career aspiration.
These CEOs master the balance of getting
extraordinary results and getting noticed for those results. There are few
people who have mastered both sides of it as well as Andy has. If you look at
the stock
chart of IDEX … he has had the privilege and pride, I
hope, of being a CEO who delivered the hockey stick. [IDEX was] trading [just
below] the 40s in [August] 2011 when he took the reins, and now it’s $140 (as
of February 26, 2018).
Knowledge@Wharton: Andy, clearly we want to talk about the results at
IDEX and how you got noticed for them. Could you also take us through the arc
of your own leadership journey and some of the inflection points that helped
you get to the position that Elena was talking about? You grew up in a small
town in Maine. Did you even intend to go into business?
Andrew Silvernail: I grew up in a small town in Maine, and my dad was
a social worker. I’m the youngest of four boys, and my mother passed away when
I was very young, so my father was in charge of raising four boys as a social
worker. It was a rough and tumble environment as you might imagine. When we
moved to a mill town when I was seven or eight years old, what I knew about
business was a mill – a paper mill. And what I knew [is that] people who worked
in the mill were folks who worked on machines.
But my perspective wasn’t about going into
business at all. I went to college with the idea of being a doctor; my
grandfather was a physician and I admired him immensely. In my second term of
chemistry I realized I was not cut out for being a physician. I did some soul
searching around what I wanted to do with my life. It took quite a while.
By happenstance, I ended up doing an
internship through a friend [whose parents ran] MacClean-Fogg in Chicago, which
is a family-owned business. Here we are 30 years later and I sit on the board
of that company. I realized I liked business because it was about people. What
I realize now is that I am just a really highly-paid social worker, and in some
ways very much in the line of the work that my father did.
I had my first real job out of college [as]
an equity analyst for Fidelity Investments. But I realized early on that I was
not cut out for being an investor. I didn’t want to be a reporter, so to speak;
I wanted to be in the game. I had a series of experiences [and] went back to
business school, and ended up with an internship at Danaher (a Washington,
D.C.-based maker of industrial, health care and consumer products.) What I saw
at Danaher was this interesting combination of process and people – a fabulous
combination. I spent several years at Danaher and then, frankly, I made some
mistakes along the way. I went to work for a business that I won’t name. It was
a mistake – the people were a real challenge, the culture was a challenge, and
it didn’t fit.
Then I was recruited by the former CEO of
Danaher. He had retired, and I was recruited to a private equity-backed
business and I went in as a president of a business. We had a lot of success;
we ended up selling the business to another private equity company, but myself
and my boss – not the chairman – had a very difficult time from day one. We did
not connect in any way. Ultimately, we had a tough parting of ways. It was
tough, and frankly, they fired me, and that was not fun. That was a very tough
time in my life. That is when I came to IDEX.
Knowledge@Wharton: I want to turn to Elena to talk about what you said
about growing up in a family with your father being a social worker in Maine.
Elena, one of the things that struck me [is that] Andy does not have a typical
background that you might imagine for a CEO. How common is that for CEOs in
your book? Does a privileged background necessarily lead to leadership?
Botelho: The story that [Andy] just told is not the story
that most of us imagine. And that in big part is what drove us to dig into the
data. The story in many ways is more common than we would expect. Many parts of
what you just said resonate with some of [our] research. One common advice
everybody hears is, you’ve got to find powerful mentors. Reading a little bit
about you, I think you’ve had some of those mentors.
When we look at the data, those who get ahead
and those who are more likely to get picked are those who stand out not
necessarily because of powerful mentors, but early on in their career, their
lives and sometimes even in school, they become mentors to others.
One reason you were featured in the book is
how candid and forthcoming and thoughtful you were about your failures. When
you look at somebody who has been successful, it is easy to assume that it was
an unfettered path to the top, and that it was one success after another, one
carefully planned career move after another. What differentiates successful
CEOs and those who get a shot at the top job isn’t that they don’t make
mistakes, and it isn’t even that they make fewer mistakes than others. It’s
[about] how they go through those mistakes, how they process them, and how they
learn from them. We call them blow-ups in the book.
Then we dug in and thought – surely their
careers took a dive. We were shocked to find out that what separated success
from failure long-term wasn’t lack of failure; it was all about how you process
it and how you deal with it. We found that CEOs who use the word ‘failure’ to
describe their experiences were half as successful as those that were very
matter-of-fact and very forthcoming and just used it as a learning opportunity.
Silvernail: When I look at leaders whom I want to groom and I
want to put in positions [of responsibility], it’s so critical that people have
had serious moments of challenge in their life. That comes in many forms – it
may be athletically, it may be in a family, it may be at some point in their
work. When you’re at this level, every day something comes up that 20 years ago
you would have thought of as impossible to deal with, and yet you have to deal
with it today. So that sense of perseverance, of grit, is a very important
trait — and it’s a learned trait. It’s learned through experience. We look for
people who have had to persevere through things, because it’s a really
important part of success.
Transparency and Candor
Botelho: One of the board members I work with said the most
dangerous thing you can have is a CEO who has never failed.
Silvernail: Absolutely. When I interview people … I look for
people to have transparency and candor about things that didn’t go well. That’s
an important part of someone’s character development and the likelihood that they
are going to succeed.
Botelho: What struck me in how you described [one]
experience is … that your first concern seemed to not be about, ‘How do I save
my face?’, but that you wanted to do the right thing. You went to the board
that wanted to pay your team and said, ‘No, we shouldn’t get paid full bonus,’
and you went to the team that thought they should get paid full bonus and told
them, ‘Well, actually it shouldn’t be quite that good.’ Maybe what helped you
power through that failure is that your first concern wasn’t to save your hide,
if you will, but how to do the right thing by others.
Silvernail: That’s a great point. Just to be clear, it wasn’t
quite as black-and-white about people being paid. It was more a big question
mark about should you or shouldn’t you. We didn’t deliver for our shareholders
what we said we would deliver; we didn’t deliver for ourselves….
That was not a popular choice. But when you
get into these situations where you have real difficulty, especially as a
leader, if your first reaction is to CYA, it is going to move through your
organization like crazy. If your first reaction is to look at the facts and do
root-cause analysis and say, ‘What have we learned? What do we do with this
information so we get better as an organization?’ it is pivotal.
The Right Corporate Culture
Knowledge@Wharton: You mentioned in your opening remarks [that] you
made a couple of career choices that didn’t quite work out. What did you learn
from those experiences? What did you learn about being in a toxic corporate
culture?
Silvernail: When I say the environment that I was in was toxic
for me, that’s very individual. For somebody else it might not have been
[toxic] at all. What matters there in the learning is understanding yourself
really well, and knowing who you’re going to surround yourself with. All around
– 360 degrees – are the people and the culture aligned with who you are
authentically? It’s when you’re in those inauthentic situations that you have
that friction and it becomes an impossible situation to live in. So one answer
is to surround yourself with the type of people that you align with.
As a leader it means thinking about what kind
of culture you want to create, and then being very explicit [about it]. That
way people can buy in and opt out of the culture, and they know it.
CONTINUES IN PART II
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