Where to from here? Warren Buffett’s cancer challenge
Wednesday, April 18, 2012/
Warren Buffett’s diagnosis of prostate cancer has made world headlines – signalling some of the leadership issues he faces as he attempts to come to grips with his illness, manage his treatment and make decisions about his future.
Buffett is the face of Berkshire Hathaway (BRKA: US), the funds management company he founded and of which he is chief executive. This puts the future of the multibillion-dollar business in the perilous position of being seen to be less valuable without him.
For the Type A personalities in the C-suites of leading companies, the intrusion of personal illness, grief and accidents into their working life sparks particular challenges.
Organisational psychologist Sarah Kearney advises transparency – although not necessarily to the extent Buffett has chosen: making a public announcement that his cancer is stage one, and that he feels wonderful despite it.
“Our advice is to be as open as you can with someone you can trust, so that your illness is not read as a dip in performance or a lack of commitment,” says Kearney. “But there is resistance to that. Type A personalities take their careers very seriously. They are in no way flippant about taking time out. There is often a feeling of guilt around putting extra workload on colleagues.”
The director of education at the Institute of Executive Coaching, Hilary Armstrong, says personal problems cannot be hidden. “Freud famously said, ‘… betrayal oozes out of him at every pore’ – meaning that you cannot hide what you are feeling. It is important that leaders don’t kid themselves.”
Like Kearney, Armstrong says leader must be selective about who they tell, but that talking about their crisis is essential.
“Research of post-traumatic stress, which is a little different, tells us we need to tell a traumatic story 25 times to get it disconnected from the emotional response,” Armstrong says.
Leaders must be aware of obligations to their boards. Kearney says the best prepared companies have a strong executive team that is visible so the leader is not the only face of the company, a risk management plan describing who is next in the chain of command and the public relation policy, and a robust succession plan.
Not everyone gets it right; some do.
Here are three lessons from history on how leaders have responded to a personal crisis:
Don’t try this at home – Len Ainsworth
The succession story of rich list member Len Ainsworth is a cautionary tale.
Ainsworth made his family’s fortune ($838 million in 2011, BRW says) by transforming his father’s modest dental equipment making business into a poker machine producer, called Aristocrat (ASX:ALL).
In 1994, Ainsworth was diagnosed with prostate cancer, and decided to bequeath his company to his seven children before he died. A few months later, he was given the all-clear, but the kids wouldn’t return control of the empire to their father. Ouch.
Infuriated, Ainsworth started another pokie machine maker, Ainsworth Gaming Technology (ASX:AGI) and entered into bitter competition with Aristocrat. His actions divided the family for many years. Although today the family presents a united front, Ainsworth was never allowed back into the management of Aristocrat.
AGT has never turned a profit, and has consumed millions of the personal fortune of the 90-year-old businessman. But Ainsworth plugs on.
Bad professional advice and poor family communication underlie the many failings of Ainsworth’s response to his personal health crisis – failings that have impacted on him and his family for decades.
To the bitter end – Steve Jobs
The priorities of the founder and chief executive of Apple Computers, Steve Jobs, barely shifted after his diagnosis of pancreatic cancer in 2003.
He continued working through his ordeal until he died last year, aged 56.
These seven years allowed Apple enough time to organise a credible succession plan, despite the company’s success being so strongly identified with Jobs’ personally.
Jobs took it upon himself to determine the future of his company from the grave, reportedly leaving behind detailed plans for the next four generations worth of iPads, iPhones, iPods and MacBooks.
He later admitted that he regretted aspects of his treatment decisions, including treating his cancer with alternative medicine rather than having surgery and chemotherapy. He used his biography, by Walter Isaacson, to explain to his children – Eve, Erin and Reed, and lovechild, Lisa – why he wasn’t “there for them”.
Organisational psychologist, Hilary Armstrong, says many leaders change their life priorities in the face of personal illness. “When we are talking about serious illness, there is a shift of priorities and life goals. A lot of what I do as a coach is about talking about meaning – the meaning of life.”
Honest, resilient and real – Gillian Franklin
Founder and CEO of Heat Group, Gillian Franklin, grappled head on with the leadership challenges of the breast cancer diagnosis she received in November 2007. Her cosmetics company was in its eighth year, and had revenue of $75 million, selling brands include CoverGirl, Max Factor, Bourjois, Elite and Ulta3.
Franklin’s approach was totally open – as she revealed in detail to SmartCompany in an interview in early 2008.
In a nutshell, she sought emotional support, took a positive approach, revealed the whole experience to friends and colleagues (raising funds for the Breast Cancer Network Australia in the process), and decided to continue working.
She scheduled medical appointments to fit around work and her family life.
She informed her staff in a PowerPoint presentation called “Gillian’s Plan”. As well as outlining her approach to treatment, she informed them of the good things: redeploying the net savings of time and money she spent on hair (which falls out during treatment) for a fantastic pair of “cancer shoes”.
She was explicit about how her staff could help her, and kept her board and investors fully informed.
Franklin took the same courageous approach with her three children – then in their late teens – and her husband, enlisting their support for her recovery.
Franklin did recover from the cancer, as predicted, and Heat Group has continued growing successfully, as LeadingCompany recently reported, including a recent licence deal with Warner Bros Consumer Products.