Money Matters: Escaping Poverty, Achieving Excellence

April 2014

Dave Sather

Al Silva is an unforgettable man. At 6 feet, 5 inches tall, he casts a shadow while his broad smile exudes a warm confidence.

If you don't know the man, odds are he has fed you or someone you know. The San Antonio native has been the general manager, chief operating officer and part owner of Labatt Food Service since 1981. The food distributor serves 85 percent of the schools in Texas.

When a 25-year-old Silva joined the third generation of the Labatt family in running the company, annual revenues were $8 million. Revenues now exceed $1 billion - an increase of more than 17 percent per year. The privately owned San Antonio company is now the ninth largest food distributor, even though it only serves three states.

Despite the impressive performance, the business leader's story did not start from success or privilege. As Silva shared with my students at Texas Lutheran University, he grew up in inner-city San Antonio.

He and four sisters were raised by a single parent, a disabled mother. Growing up, he attended seven different schools - living a transient life mired in poverty. To help out, his first job was throwing newspapers at age 6.

As a coping mechanism, Silva became a voracious reader. In discussing this, he said, "I became a big reader in the fourth grade, as it allowed my mind to escape the poverty we lived in."

To this day, Silva inhales books five at a time. More interestingly, the books he reads are not just on business. He loves the classics and conveyed how so much of modern history relates back to the classics.

Silva continued to share that he rereads certain ones, recognizing that he will glean different meanings depending upon where he is in life. Currently, he is reading his favorite book, "War and Peace," for the third time.

In addition to his reading addiction, Silva was quite talented on the basketball court. This led to a scholarship to attend Texas Lutheran. College was the first time Silva lived with air conditioning.

Much of what brought him success on the basketball court is now used in business. Sports taught Silva about leadership, teamwork and competitiveness. Additionally, athletics taught Silva that losing did not matter. However, "having the character to lose gracefully did matter."

Being smart in sports forced Silva to assess the strengths and weaknesses of opponents. This allowed him to formulate successful strategies, whether on the court or in the board room.

From humble beginnings, Silva shared hard-fought wisdom with my students. He encouraged them to learn as much as possible while in college but advised the real education begins once they graduate. Their formal education would merely be the first floor of a massive skyscraper.

As such, he encouraged the audience to be lifelong learners. In the process, it is important to "know what you don't know."

Silva counseled that an individual's most productive years are between ages 25 and 50, and you must "get yourself into trouble every five years." In explaining this philosophy, Silva said our brains become lazy and need a reason to grow. Getting into trouble forces one to solve problems and expand.

As is often the case with successful businesses, Silva helped Labatt to differentiate. At a time when players in the food distribution industry developed "private label" brands, Labatt recognized this would save money but cut quality.

Sticking to its principles, the Labatt team never developed a private label. This caused it to lose out on quick profits, but in the long run, it has been a crucial differentiator that guaranteed consistent quality to loyal customers.

The other key innovation allowing Labatt to thrive has been its ability to write and customize its own internal software. This has delivered limitless variations of logistical efficiency in assessing what-if scenarios.

After more than 30 years, Silva and his team continue to implement the fundamentals of success. Read, as it unlocks the opportunity to learn and innovate. Once you stop learning, it is game over.

Differentiate. You cannot hope for stellar results if you do the same thing everyone else does. Embrace technology as it allows you to run faster and farther. Don't fear obstacles. They forge character and make you stronger.

While it's not necessary to endure circumstances like Silva's, his principles can be applied by anyone wanting a successful and productive life.

Dave Sather is a Victoria certified financial planner and owner of Sather Financial Group. His column, Money Matters, publishes every other week.