After being a customer of Radian Group, a Philadelphia-based credit risk management firm, S.A. Ibrahim joined it as CEO in 2005. Soon, the subprime crisis gripped the nation. Through innovative thinking and some seemingly risky decisions, he turned the company around and, when he left in 2016, it was the best year in its history. Ibrahim calls it a journey to the gates of hell and back.

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In a conversation with [email protected], Ibrahim says: “I had to convince everybody in my company that we could make it because no company with 6,000 basis points of credit risk ever came back. Everybody else had written our obituary.” One of the most important lessons he learned, says Ibrahim, is to not waste time complaining about how unfair the world is and instead, focus on things that one can change. He calls his magic mantra “C to D: From the current state to the desired state.”

Below is an edited version of the conversation:

[email protected]: Before we talk about leadership, I wonder if you could start with your early years growing up in Hyderabad in India. Who were your role models at that stage of your life? What did you learn from them?

S.A. Ibrahim: I had a very interesting childhood in the sense that I came from a business community, part of the communities that originated in Kachchh district of Gujarat in Western India and then spread all the way across India and the world. In fact, the joke about us was, “Your true religion is business.” But interestingly, my mother, while she came from the same community, had a very academic orientation. So I was stretched between business role models and highly intellectual role models.

That included wandering around with people like Albert Einstein and George Gamow [the author of One Two Three… Infinity] in my head. I’m not sure whether I understood any of them, but it was a very impressive thing to walk around with. On the business side, [there were] the business leaders in India, like the Birlas, with whom my family did business, and the Tatas. I think most people didn’t realize at that time the strong entrepreneurial culture in India. It wasn’t just at the upper levels. Today, even the slums in India are humming with entrepreneurial activity.

[email protected]: Based on the fact that you already had such a strong entrepreneurial background, what brought you to America? When did you come here?

“I took advantage of the fact that the stock was so low. You look at every challenge as also providing an opportunity in disguise.”

Ibrahim: I came to the U.S. in the bicentennial year. Interestingly, I had been here on vacation once to visit some relatives while I was in college, engineering college. But I came here to go to school at Wharton; that was my first stop. What brought me, more than anything else, was the draw of America. I was from a small business family in India. In those days, business families in India were much maligned by the media. I wanted to come to a country where free enterprise had an opportunity. I was first in direct lineage to go to college. My uncles had been educated, but my mom and dad had never gone to college. I went to undergrad engineering school in India and business school here and I betrayed my family tradition of being an entrepreneur and worked for large companies most of my life.

[email protected]: What were your early professional experiences like? And, most importantly, what qualities did you develop that helped you ultimately become a CEO?

Ibrahim: I’m trying to remember who the dean [of Wharton] at that time was…Dean Palmer [Russell Palmer, who was Wharton’s dean from 1983 to 1990]. [I remember] asking him of the choice I had when I graduated. Who should I go work for? Unlike many other students who had focused on finance and consulting out of school, I was attracted — given my Indian background and having heard of those companies in the manufacturing sector — to IBM and GE. In those days, Reginald Jones was the chair of the Wharton Board of Overseers. So, of course, you are going to work for Reginald Jones’s company. So I went to work for GE.

It was an amazing company because I think one of GE’s consistent products has been management leaders. They have a DNA which they embed into you right from the very beginning. Everybody at GE aspires to be a general manager who can deal with all aspects of business and not just focus and excel in one narrow aspect.

[email protected]: What was the impetus for you joining Radian? You became CEO in 2005. How did that come about?

Ibrahim: Radian’s board decided to make a change in their CEO. Having worked for large companies, I had moved to a small company. It’s a story in itself. Because I was traveling all over the world and my wife and son wanted me to be in one place, I joined my previous boss from Chemical Bank, at a small thrift in New York called GreenPoint. He asked me to focus on growing the mortgage business. I acquired a mortgage business in California and moved there to run it. We took it from $6 billion to $60 billion in six years, which was an amazing journey.

In that process, I had become one of the most important customers of Radian. And the board wanted to bring in a non-traditional person from a related industry and they were insightful enough to say that bringing somebody from a customer perspective was important. So I went from having been a customer to running the Radian Group, which at that time was a $140 billion-$150 billion credit risk company headquartered in Philadelphia, but with major operations in New York and London.

[email protected]: During your tenure, to what extent did that grow?

Ibrahim: I joined the company in the middle of 2005, so I had the luxury of a little over a year before the downturn hit. The company’s market cap when I joined was probably in the mid-$4  billion range. For some unexplainable reason, right after I joined, which one of the leading equity analysts of our industry dubbed the “S.A. effect,” the [market cap] went up to $5.5 billion and it became equal to that of our closest peer.

Then, we decided to combine the two companies just before the downturn. We announced the merger and the stock hit an all-time high of $60 in February of 2007. A week later, HSBC issued an earnings warning related to the subprime business. And from then onwards, it was one piece of bad news after the other externally until it started affecting our businesses, taking it right down to unwinding the merger. Our market cap shrank to just a little over $100 million.

[email protected]: I know that in previous conversations you have described your experience as a “journey to the gates of hell and back.” I wonder if you would explain this. And how did you come up with the strategy to deal with it?

Ibrahim: Radian had two major businesses: the Philadelphia-based flagship business took a layer of mortgage credit

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