No Pass for WellPoint's Colby

Posted by: Jena McGregor on June 4, 2007

Last week brought an odd chapter in the annals of executives behaving badly. Healthcare giant WellPoint Inc. announced last Thursday that CFO David Colby had been pushed out for unspecified violations of the company’s code of conduct. While the company was careful to say that Colby did nothing illegal, and that Colby’s actions did not relate to the business of WellPoint, it refused to reveal exactly what the guy had done wrong. It gets even more bizarre: News emerged today that Colby has been sued by a woman who claims he owes her a house in California. It’s not clear whether or not the suit is connected to his forced resignation.

Some analysts, befuddled at the news given how widely Colby was respected on the Street, asked if he’d been given a second chance. Their questions remind me of the news last month that Chris Albrecht, HBO’s then Chairman and CEO, allegedly assaulted a female companion at an event in Las Vegas. It apparently wasn’t the first time: In 1991, reported the Los Angeles Times, “Time Warner Inc.’s HBO paid a settlement of at least $400,000 to a female subordinate with whom Albrecht was romantically involved after she alleged that he shoved and choked her, according to four people with knowledge of the matter.”

I applaud WellPoint for holding their executives to the same standards of conduct they hold the rest of their employees, though I think their crisis communications strategy needs work. (Why not say what happened, nip it in the bud and move on? The uncertainty over Colby's departure, combined with a new incoming CEO, even affected the stock: It dipped 3.5% the day the ouster was announced.) Frequently, star execs--Albrecht, whose bosses initially just suspended him, is just one example--get a pass for bad behavior when their performance is off the charts.

Coaches see a form of that practice all the time. "It’s so hard to find [good] people outside that organizations are still tolerating a lot," says Kathy Gallo, managing principal of executive coaching firm Marshall Goldsmith Partners LLC. Gallo doesn't really see extreme cases, such as what Albrecht is alleged to have done, but frequently watches companies hire an executive coach to help a manager who's worth investing in correct behavior that's too aggressive, temperamental or downright disrespectful. She still gets the sense that some of her HR clients are cautious about doing anything that could disrupt the executive's stellar performance. "HR managers have said to me 'this is a very high performer, I don’t think we’re really talking about fixing him,'" Gallo notes.

When should executives be given a second chance? When should a coach be brought in to help "fix" an insensitive manager? And is the tight market for talented executives hurting or helping the transparency of behavior in the corner office?

 

About

How can you manage smarter? Bloomberg Businessweek contributors synthesize insights from the brightest business thinkers, critique the latest management trends, and comment on leaders in the news.

BW Mall - Sponsored Links

Buy a link now!