I saw in the newspaper that Aaron Beam was recently sentenced to three months in prison. Beam is one of the guys who helped Richard Scrushy found the HealthSouth Corporation in 1984, which has been the subject of a big financial scandal over the last few years.
This little news bite caught my attention because I remember where I was the day a jury found Scrushy innocent of the fraud charges shareholders filed against him. It was June 28, and I was returning home from a business meeting in Duluth, Minnesota, where I heard a speech by a former Navy commander named Scott Waddle. Scrushy and Waddle could not be more different. Waddle took responsibility for his actions. Scrushy pointed the finger at others.
Waddle was a rising star in the Navy when his submarine collided with a Japanese fishing vessel, resulting in the death of nine civilians. The accident occurred on February 9, 2001 and after an inquiry, Waddle was honorably discharged. Although the story of the accident is dramatic, the pinnacle of Waddle’s presentation -- which he calls “Failure is not Final” -- is his description of apologizing to the victims’ families. Against the advice of the Navy and his legal counsel, Waddle took full responsibility for the accident and ultimately traveled to Japan so he could personally apologize to the families of each of the nine victims. (The Right Thing is the name of a book Waddle wrote about his experience.)
Listening to the news on the radio on my way home from Duluth that day, I got a little better sense of the magnitude of what Waddle had done. Earlier that day, a jury had acquitted Scrushy of fraud charges related to his leadership of HealthSouth. Scrushy was the former CEO of this company that at one time employed 50,000 people and ran health care facilities in all 50 states. Over several years, the company had inflated its earnings by $2.7 billion. When shareholders and government auditors began asking questions, Scrushy denied knowledge of any financial shenanigans and blamed his financial officers, including Beam. Amazingly, a jury bought it.
I don’t know any more about this case than what I have read in the newspapers, but it is hard for me to believe that the CEO of the company didn’t know how the books were being kept. Scrushy is a man who refused to take responsibility; he blamed subordinates. Waddle, it occurred to me, could have done the same thing. But he didn’t. He took full responsibility. It is not too difficult to figure out which of these two men is really a leader.
tMichaelB is the web site for Tom Bengtson, who writes about business, religion, family and politics.
Thursday, September 08, 2005
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