02/02/2011

By Brian Chernett, Founder, The Academy For Chief Executives

In January 2011, Steve Jobs, Founder and CEO of Apple told staff at the technology company that he was taking medical leave, but he didn't say how long he would be absent or why. He said he would continue to be involved in product decisions. Mr Jobs had suffered from pancreatic cancer in the past when he also took medical leave from the company.

The Independent reported, on 19th January, “The absence of the company's visionary founder unsettled investors less this time than in 2008, when he took time off for a liver transplant. Shares fell 2.2 per cent yesterday, and then rebounded 1.5 per cent in after-hours trading, after the results were announced” - see Apple announce forecast-busting quarterly results - Those results were above Wall Street forecasts and reflected substantial sales of iPads and iPhones.

Given Steve Jobs’ iconic status as the driver of Apple’s success, it could have been worse. Chief Operating Officer, Tim Cook, will run Apple during Jobs’ absence.

We all get ill sometimes. It is a fact of life and one that, for most of us, may mean a day or two on reduced power or off work altogether. Sometimes, though, illness is longer lasting and may disrupt a business significantly especially when it is the Chief Executive who is ill and the more so when the CEO concerned is so closely identified with the business and its success.

Chief Executives are not immune from illness, nor are they immortal. To think otherwise would be to deny the obvious and to ignore such facts would be negligent in the extreme. Acting in denial of those facts might put the business at risk.

When thinking about the effects of the illness of an employee, there are two aspects that the business and the Chief Executive need to consider — the person and the role. When it is the Chief Executive who is ill, these aspects are heightened by the special role that the Chief Executive plays and the need to cover it.

Within the business, the best place for long term health concerns is out in the open. The person who is facing those concerns most likely wants to talk to you about them. Their concerns about themselves and their family will be mirrored by their concerns about their job and about the role they should be playing for you. By sharing their concerns, you open a conversation that will allow you to understand the circumstances and to make plans to deal with them in the best way for both the business and the employee.

When the person who has long term health problems is also the Chief Executive, then it is important that he or she discusses them with their closest colleagues, the Board, non-executives and the Chairman or with the management team, so that plans can be made to cover the role as needed. Most Chief Executives carry some of their plans and knowledge in their head. If the illness is severe, there is likely to be a period of uncertainty following the onset and in that period, the business is vulnerable.

Policies and planning are crucial here, if you want to manage the business through illness smoothly and without loss of momentum. Work with what you know — that all of us are vulnerable to illness and accident — and formulate a strategy, at least for the key people in the organisation, that will ensure that someone can cover the role at short notice. You should also be putting in place a longer term succession plan with development plans to support it.

When we consider other risks to the business, such as competition, product failures, manufacturing downtime and the like, we also need to consider our people. A clear policy on sickness and absence will make it easy for your team to understand what happens to them, in work terms, when they are ill, and remove uncertainty. Company private health insurance can reduce the amount of time your key people are left waiting for important medical procedures and permanent health policies can ensure that employees are covered when sick pay runs out. Finally, formal work shadowing can ensure that someone is always there who can pick up a role quickly and prevent unintended consequences from occurring. People continuity is part of business continuity — a very important part.

The other key concern is to what extent you make your shareholders and the world at large aware of the circumstances of the illness and the prognosis. Apple has chosen to say very little about Steve Jobs’ illness beyond the announcement of his withdrawal from day to day business. A debate is developing about the best approach.

The Denver Post 'Apple breaks no laws with silence on Jobs' health', suggests that “Apple didn't have to say more, according to legal experts, even though what happens to Jobs, 55, matters to its shareholders because he's considered the creative force behind the company.” There is no standard approach, they suggest. “a handful of other companies, including American International Group, Sara Lee and McDonald's, have dealt with similar issues in recent years – each in its own way. AIG, for instance, announced a succession plan even though it hasn't had to use it.”

Balancing your CEO’s (or any other staff member’s) rights to privacy at what may be a difficult time for family and friends with the rights of shareholders will always be a tricky decision. One contributor to the Wall Street Journal discussion of the issues 'Should Apple disclose more of CEO Steve Jobs' medical history?' puts this case into some context, “Until the public is shown that Steve is not Apple, we need to know what his status is.” Personally, I think that, whatever the reason for Steve Jobs being seen ‘as Apple’, the truth behind the scenes is likely to be much different. Results like those posted by Apple and their enviable record of product development and innovation aren’t the product of one man. There is, I’m sure, a great team there and they will pick up and run with the business without during his absence.

There is probably no one answer to the disclosure question, however, by examining the possibility that such an issue may arise and making plans to handle it, maybe creating criteria about disclosure, you can ensure that if the worst should happen, you will be able to react to it quickly, effectively and fairly to all concerned.

As with all business issues, it is important to anticipate potential risks and to plan for them. Illness of a key resource needn’t harm the business if there are plans in place to cover their role and to ensure that business in progress is not adversely affected. The best PR, of course, is proactive and not reactive, so what you say and do in the good times will also matter.

It allows the CEO or senior person peace of mind to get on with combating their illness knowing that the business will still be there on their return.


Brian Chernett is the founder of The Academy for Chief Executives and Chairman of Academy Group ACE2. Having stepped down as Chief Executive of the Academy, Brian is now developing his own coaching and mentoring business — Wisdom Forums - for senior executives and building a new charity, The Ella Foundation, to coach and mentor Chief Executives in Charities and not for profit business.

Watch a video of Brian Chernett, Founder of The Academy For Chief Executives, explaining how The Academy For Chief Executives inspires business leaders.

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