He's Spent 35 Years Walking Into Companies On Fire With Howard Brownstein

I'm Claire Hayek, NeuroLeadership expert, TEDx speaker, and founder of Mind Soul Purpose Team Building. Welcome to The NeuroLeadership Edge. I spent more than 20 years leading high-stakes projects and teams under pressure. That experience became the foundation for Pressure Proof Leadership, the system I now build inside executive teams and leadership cultures. In this podcast, we go inside the science and the stories of staying clear, focused, and human when the pressure is real. Now, here is what you are getting today. Why waiting one extra day on a problem can make it impossible to fix. The bias that convinces good leaders everything is fine when it is not. What 35 years inside companies in crisis taught our guest about timing. My guest today is Howard Brownstein. Howard is president of the Brownstein Corporation. For more than 50 years, he has worked as a turnaround and crisis specialist and served as an independent board member for public companies, private companies, and some of the largest nonprofits in North America. He has written more than 140 articles, book reviews, and textbook chapters, and he guest teaches at leading business schools as well as law schools. Howard is also one of the senior leaders whose insights shaped the research behind my upcoming book that is launching on September 9th, The Leadership Skill Nobody Taught You: Calm Under Fire in the Age of Disruption. Howard, welcome to the show.

Thank you. It's very nice to be here with you.

Well, very nice to have you. And I'm very glad you said yes to this episode. Now, let's dive right in because I'm sure a lot of people are probably wondering, what are we talking about here? What happened? So, take me to that moment that still shapes how you lead today, the one that I started and introduced the show with. What happened that day?

So my job is that of somebody who provides turnaround and crisis management, and that means we deal with companies that are in trouble. And the trouble can range from a mild tummy ache to cardiac arrest and everything in between. And what you learn is that often the companies don't understand or know how severe the problems are. until you get involved. And there's an awful lot of normal human bias where the companies don't want to recognize how bad the problems are. And when I, when I do a slide presentation on this, I show a picture of the pyramids of Egypt next to a big river, and under the caption I write, the enemy. It's kind of a joke, The river is the Nile. But if you say denial, that's the enemy because we all have a tendency to be in denial. We don't want to admit how bad things are.

So when you— when that day when you were, you know, you came to the office and there were these federal law enforcement agents, they're ready to shut down the company. What happened and what did you do?

So this was a client that we were introduced to, and, um, I believe the introduction had come from one of their banks. And I had made an appointment to go and meet them, but when I arrived, there were all these official-looking vehicles parked in front of the building. And when I walked in, I was greeted by half a dozen different law enforcement agencies.

Okay.

And they had staged a raid just prior to my arrival. And the company was in the mortgage business. They provided mortgages to homeowners. And, um, I had been introduced to this company by the bank and, and the bank's lawyers. And I showed up and these folks showed me their federal identification badges and they basically said, who the heck are you? And my engagement was as a, what's called a chief restructuring officer, which meant I have hands-on authority to try to help the company. And they said, what's a chief restructuring officer? And why don't we just close this place down and put yellow tape around it? And I looked at these people and, you know, they looked like they were going to eat me for lunch.

Right.

And I said to them, I'm not a federal official. I would never presume to tell you what your duty is. I have just arrived. But what I can tell you is this company has committed to provide thousands of mortgages all over the country to homeowners who've all— or would-be homeowners, planned homeowners who have put a deposit down to buy a home, and now they're waiting for their mortgage. And if this company crashes and burns, they are all going to default and lose their money. And at that point, I think you folks are on the 7 o'clock national news, and not in a good way. Alternatively, stay in this room, nothing will leave the building, let me see if I can bring it down for a soft landing.

Okay.

And thank— thankfully, they let me do that, and it was quite a process. And ultimately, one of the principals of the company pleaded guilty to some major fraud. And I had to have all of that happening in the background while I laboriously moved all the loan commitments to other lenders who, of course, were scared because they didn't know what had happened here. They were suspicious that if the company had done things wrong that got them in trouble with the government, Maybe they had falsified the record keeping on these loans. It was really a difficult process.

Well, let me ask you something. So what were you holding on to in that moment to stay that steady? Because, I mean, you know, we're listening to this. Obviously, we were not there. We are listening to you. I'm just listening to you. And I can just imagine how somebody could feel, right?

So at an early point in my life, when I was getting ready to finish college, um, it was during the Vietnam War.

Okay.

And, and our country had just changed from using what were called local draft boards that decided who would get drafted in what order. But those local draft boards were very susceptible to favoritism and even corruption. So the country had changed that year, the year that I was about to graduate and became eligible to be drafted.

Okay.

Had changed to a national lottery system where once a year they pulled all the birthdays out of a hat, and the order in which your birthday was drawn determined your priority to be drafted. And, you know, it's people who weren't alive then, it's hard to know how divisive and controversial the Vietnam War was. It gave rise to terrible antagonism around the country and demonstrations and polarization. And I went to— I was in college and I went to a hockey game one night, came back to the house I was living in, and everybody was sitting around drinking beer, watching the game on TV, and they cheered and handed me a hat full of $1 bills. I had the lowest draft number in the house. That's not a good thing, right? That means I would be drafted 10 seconds after I graduated. Now, this was a time when a lot of people were running away to avoid the draft, breaking the law. I had never thought of doing that, but If you got drafted, you were only drafted into the Army, not the Navy, not the Air Force, not the Marines. And it meant you were almost certainly going to Vietnam. Or I could figure out another way out of this, and that was to enlist. So I made the rounds of all the enlistment offices, and this was a point in my life when I really learned to read the small print. Do your homework. Find out what is going on in the background. And I found a recruiting sergeant who opened up his book. He was an Air Force sergeant, and he showed me all the trainings that he had available. I won't use on this broadcast the language he used to describe them because they weren't nice words.

Right.

But the choices were you could be a mechanic, You could be a clerk typist, or you could be a medical corpsman. And there had been a point in my life when I was actually going to be a doctor. I had been accepted to medical school.

Okay.

And I had not even gone to college yet. There was a program at Penn State where you went to high school, went to high school, you graduated, you went to college for 15 months, and then you went right into medical school. And in 5 years total, you were a doctor. And I was accepted and I was going to go and I changed my mind. So this sergeant's offering me to become a medical corpsman. I thought, okay, well, that's pretty cool. Okay, well, you have to leave at the end of March. Now I was going to the University of Pennsylvania, different than Penn State. The University of Pennsylvania is a Quaker tradition school. The Quakers believed that rules were important, But if you have a different way you want to do something as an individual and you're not trying to hurt anyone, they will always listen. So I had figured out how to graduate in under 3 years with 2 degrees and 3 majors just by counting this for that and that.

Right, right.

Yeah. Using all the rules. Now I was going to have to leave at the end of March. Would I blow all that up? Now I could stay another year in college. You were allowed 4 years before you went to get drafted. But I had done all this work to graduate early. So I went to the recruiting sergeant and I said, what do I do? And he goes, well, you can either show up for this or wait another year. I went to the dean and he said, it's not up to me. If your professors say you finished the course, we don't ask. Quaker tradition, University of Pennsylvania. So I figured out a way to finish all the courses. And I left at the end of March and went to basic training and learned how to be a medical corpsman. And you learn that the most important thing is the heartbeat and the breathing. And so when I later became a turnaround consultant, when I was, you know, finishing and all that— Right. I had gotten a very low draft number. I enlisted in the Air Force, became a medical corpsman, was able to graduate early in 3 years, 2 degrees, 3 majors, and went off to learn how to be a medical corpsman. And later, when I described the situation I was in about Being a director, they let me do my basic training and still get to law school and business school on time.

This is amazing. This is really interesting. And thank you for giving us a bit of the background to how you got to that point of steadiness, if I could say. Right now, you have talked about triage when we spoke together before this.

Yes.

As a model for leadership. And I think this is the right moment to bring this up. Tell us a little bit more about this. And I know it's related to your medicine, right? And what doctors actually do. Go ahead. Tell us a bit more about that.

And just to be clear, I'm not a doctor. I'm not a physician. But in the service, people that are trained as medical corpsmen are allowed to do way more than a not doctor, not nurse would ever be allowed to do in a hospital.

But that training allowed you to understand a thing or two about how you can apply what you've Right. Trained for and bring it into the business world, which brings us a whole different dimension.

Yes.

Leadership. And that's what I'm interested in. No problem. I think it's important for you to clarify that. Thanks for doing it.

Yes.

Tell us about this triage as a model for leadership. I'm sure our listeners now going, okay, I need to know more. What does that mean?

So if you're confronted with a patient who has a tummy ache and he's got personality issues, And oh yes, he's bleeding from the neck. You'd better treat the bleeding or else the other things aren't gonna matter. So what emergency medicine teaches you to do is triage, is deal with the most important things first, because the other things need to be dealt with, but they're not as urgent. And as human beings, we have a tendency not to do that, to do what we can do, not what we should do.

Mm-hmm. Hmm.

And it's often the harder thing. But if you don't do the harder thing, it's not going to matter. If you're on a 2-mile track and you want to go 60 miles an hour on the 2-mile track, but you only go 30 miles an hour the first mile, how fast do you have to go the second mile to average 60? And when I ask this question to business school students, All the hands go up and they say 90. And I say, you're a little low. The answer is infinity. It cannot be done. 60 miles an hour is a mile a minute. 30 miles an hour is a mile every 2 minutes. You've already used up the whole 2 minutes in the first mile. You'd have to go the second mile infinitely fast to average 60. So what that foolish little story is designed to teach Is it's very important to work on the most important things first. And that was true when I was a medical corpsman. You've got to deal with the bleeding from the neck before you deal with the personality issues. Just like in business problems, you got to deal with the cash. If the cash runs out, it's like oxygen. There'll be no more patient.

I guess, you know, when we're talking about in business, you know, we We have that built-in bias against recognizing how bad things might really be. It's that bias that pushes us toward doing what feels comfortable, right? As you were saying, instead of doing what the situation actually requires. Why do you think this bias is so hard to catch in ourselves?

Well, it's uncomfortable. We don't want to admit how bad things are. Frequently admitting that then requires you to do some hard things, some uncomfortable things. So we have an implicit bias against recognizing those because we don't like it.

It's uncomfortable, right?

But the problem is that— and I'm not suggesting you be an alarmist, assume that every situation is a house on fire. Just don't rule it out until you're sure it doesn't exist. If you don't keep your mind open, you won't see it.

Yeah. And I couldn't agree more. I mean, the leaders who catch this bias early have usually built a habit of asking one honest question to themselves before they act. Am I avoiding this because it is actually fine or because looking at it closely is uncomfortable? And that single habit practiced consistently is foundational to pressure-proofing your leadership. Because otherwise, how do you deal with pressure in a day-to-day scenario? Now—

And so, by the way, I think it's not a coincidence that here I did this training as a medical corpsman and you use the word triage. Well, that's pure triage. You have to treat the bleeding first, or it's not going to matter what else you treat. Similarly, in business problems, you have to treat the most serious problems first, or else whatever you do isn't going to matter.

And one thing that you mentioned when we first spoke to each other, you mentioned a phrase you go back to often. I think you know what I'm talking about. Tell our listeners about it.

You better— okay, maybe. Is it about don't get caught in the thick of thin things?

That's the one. That's the one. Tell us what that means. Tell us a little bit about the story behind this.

And so we have a normal human bias to want to do what we can do, not what we should do, to do what is easiest to do. And frequently what is important to do is not what's easiest to do. It's harder. And it may require you, in order to address it, you have to admit to yourself and possibly others about mistakes that were made and the severity of the situation. And that's uncomfortable. And so we sometimes try to avoid that if we can, but avoidance can have tremendous consequences because unless the underlying company is making good red Zinfandel wine. Time is not your friend. If they're making wine, take your time, it's going to get better. I haven't had that one yet.

I think we can all relate to that one.

So you've got to get on with it, right? And just like in dealing with emergency room medicine, you have to deal with the most important issues first to preserve your ability to deal with the lesser important issues.

And if we dive deeper into this, so a lot of people might be listening and saying or asking themselves and say, okay, it all sounds great. But how do you develop that ability to be able to focus on what matters to be able to do that triage? How do you— where do I start? What would you tell them?

Well, so you've got to constantly ask yourself, okay, What am I missing here? Am I, am I giving in to my own desire for comfort and relaxation and somehow avoiding seeing what I need to see? And you can even ask yourself a hypothetical question. If I were to assume I'm missing something here, what would that be? What might I be missing? How do I rule out missing anything? How can I test what it is I'm thinking I'm seeing to make sure it's verifiable? Is anybody giving me a different opinion and I just don't want to hear it, so I'm not listening? Am I avoiding seeing evidence that's in plain view because I don't like it?

Right.

This is all normal human, human behavior that can unfortunately lead to less favorable outcomes.

Absolutely. And what we've seen and I've seen in my work and research is that when people are under pressure, they will default to a pattern that they probably, you know, been defaulting to most of their lives that kept them alive. So, the brain is registering a certain behavior that is not necessarily serving them in different situations. So, being able to— I mean, having that self-awareness enough to be able to ask those questions or at least having a framework which I call pressure-proof leadership. In a way, what you've described, it matches that because you have a system that you've installed and practiced where you ask yourself certain questions that are related to your environment, to your situation, to your day-to-day that you know will bring you clarity when you need it the most. And a lot of times, we don't do that. We're not prepared to stop and ask ourselves the questions because it all sounds great on paper. But How do you snap out of the panic or the survival brain that maybe wants to speed up and make a decision, or freeze and completely avoid making a decision, or control every single little detail about the decision or the situation? So, that reset is important to be able to stop and ask yourself these questions. And this needs to be installed in your day-to-day and practiced. Otherwise, you're not going to default to it naturally. Because you've already wired it in. It's a habit. And the more you practice it, the better it gets.

That's right. And, you know, there may be going on in your world or your environment a tendency to view such thinking as pessimism and fatalism. And you may be surrounded by people who poo-poo it and who feed that tendency to overlook things. And I'm not suggesting you'd be an alarmist or a pessimist. I'm just saying, recognize your own implicit bias that may lead you to miss things. Ask yourself the tough questions.

Yeah, which I think is brilliant because you don't want to be caught in a blind spot, right? Clarity. Leadership is clarity. Leadership is alignment. Leadership is looking at the things sometimes you don't want to look at. And leadership is doing the things sometimes you don't want to do and having that calm authority to show up and do it. Even if it's that you're stepping outside your comfortable zone, right? So, it's definitely not pessimism and very clear. Thank you very much, Howard, for clarifying that because it's important. This is not what we're talking about, just in case.

Right.

Now, we're already at the point where we're going to dive into some rapid fires. Just quick answers. I'll be asking you very short questions as well. Now, the first one, one word that would describe pressure.

I would say concern, frustration, worry. Pressure creates anxiety.

Okay, that definitely— I couldn't agree more. A lot of people spiral down because of pressure. But we don't have to if we have that framework and we've practiced, right, what we're talking about. So there's hope. And we're not being pessimists here. Okay, here's the next one. Best advice you ever received?

I would say You know, to keep your eye on what really matters, not what is most available or easy or attractive. You have to keep your eye on what really matters. And we all have a tendency to not do that, to be distracted by what might be more interesting or more fun or less worrisome, more enjoyable. But But all of those may lead you away from what you should be doing.

Okay, so focus on what matters. Here's another one, a habit you are glad you broke.

You know, I would say along those lines that, you know, I had earlier in my career a tendency to just do everything quote unquote by the book. That doesn't mean I don't follow rules, but just to recognize that the rules may have been written for a normal situation. And frequently situations are not normal. So you have to ask yourself, are the rules going to work here? Are they going to apply? That doesn't mean you should break the rules, but there may be a method for deviating from the rules with proper authorization. But you have to ask. But if you don't ask, you never get to do it.

Well, that, that is a perfect place to land. Howard, thank you. Thank you so much. Now, if you're leading a team or sitting on a board right now and you want to know exactly where pressure is already costing you, I suggest that you take the Pressure and Performance Scorecard. It's a free 4-minute, very short diagnostic at clairehayek.com/pp-scorecard. It maps where pressure is limiting your leadership and your team's performance and tells you where it's costing you right now. Also, as already mentioned, I have an upcoming book. It's called The Leadership Skill Nobody Taught You: Calm Under Fire in the Age of Disruption. And it's coming out September 9th. If you're interested in joining pretty much the early readers club with exclusive access to the book before it launches and maybe some webinars and some little surprises along the way, you can join at clairehayek.com/book to sign up. Finally, do subscribe, follow, share this episode if it resonated with you. When you hit the subscribe button, it does more than you think it does. Every subscriber helps the show grow, reach further, and bring you the caliber of guests and conversations that really matter to you, just like the one we had today with Howard. Now, Howard, any last words before we wrap up?

I would say maybe use this program as an opportunity to take a fresh look at whatever you're doing and how you're doing it and do it with an open mind, not assuming you're wrong, but also not assuming you're right. And maybe try to look at it with a fresh set of eyes from the outside in. Are we not just doing things right, but are we doing the right things?

I love that. I love that. This couldn't have been a better way to end this episode. Again, Howard, thank you so much for joining us and for your insights. Everyone else listening or watching this, do check the description for all the links. Otherwise, lead boldly, stay human, and turn every challenge into a gift. And we will see you all