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Noel M. Tichy
Scholar

Noel M. Tichy

Noel M. Tichy is a Professor of Management & Organizations at the Ross School of Business at the University of Michigan, where he directs the Global Business Partnership.

Michael Walsh's Example

No leaders are perfect, they all have flaws, and you hope the ones they have are not tragic flaws.

The role model of how to handle an illness serious enough to concern the Street is the late Michael Walsh, who had an inoperable brain tumor when CEO of Tenneco in the early 1990s. He was very courageous and open and honest. He told the board about his illness and said that as long as his doctors said he was functioning well enough to be CEO he would stay in the saddle. He said he did not want to go and sit on a rock and die, that he was a CEO in his DNA and would add value in that role as long as the doctors and board agreed. The Street knew, the press knew, and he turned over the leadership when he was still functioning well. He ultimately passed away.

As for Steve Jobs, he is great entrepreneurial leader, though not great at transparency. (We might even question some of the stuff on dated stock options a few years ago). We hope he has been good a selecting his successor. His handling of this issue is not a best practice but a bad practice.

By Noel M. Tichy

 |  June 22, 2009; 1:31 PM ET
Category:  CEOs Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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It’s tempting to be overwhelmed by feelings of compassion for a man widely viewed as the founder and savior of an iconic brand. It’s easy to revert to privacy arguments in defending his decision to keep his health issues a secret. Leadership, however, carries specific obligations: one of these is to do what is best for one’s organization, even at the expense of one’s privacy.

In much the same way that the president of the United States understands that his health is the business of citizens and voters, a corporate leader must understand and accept that his health is the business of employees and shareholders.

An alternative argument justifying secrecy - protection of the organization from share value swings - is also inadequate. The possibility that the ill-health of one person may wipe out billions of dollars of shareholder value highlights an issue at Apple which has nothing to do with individual privacy: the company lacks a solid succession plan. Unless and until Apple takes steps to find a credible successor, it can expect to have its stock price spike downward whenever there is any concern that Jobs may be unable to proceed as leader, regardless of the reason.

Yuval Bar-Or, PhD
President, The Light Brigade Corp.

Posted by: YuvalBar-Or | July 1, 2009 11:14 AM
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