This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

3 Business Lessons from Joe Paterno

NEW YORK ( MainStreet) -- Advice from the greats? First Steve Jobs, then Warren Buffett, now Joe Paterno.

The beloved Penn State football coach died early Sunday at the age of 85. He was suffering from lung cancer, but many speculated that the stress of child-sex allegations against former assistant coach Jerry Sandusky contributed.

Paterno, nicknamed "Joe Pa," was fired in November after a 45-year tenure as Penn State's head coach as the Sandusky scandal escalated. The school's board of trustees originally agreed to let Paterno finish out the season, but growing opposition led the board to reverse course and remove him immediately so as to not further sully the Penn State name.

Joe Paterno, the beloved Penn State football coach, died early Sunday at the age of 85.

While Paterno was not accused of wrongdoing -- reports say he alerted his superior after learning of the allegations -- many believe he should have done more, such as contacting the police. Paterno was beloved, but the scandal dimmed his reputation.

What can we learn from all this? Here are three business lessons:

1. Create a succession plan. Paterno led the college to multiple championships, but his leadership is not easily replicated.

"He should have retired a long time ago," says Carolyn Thompson, director of human resources at accounting firm Dixon Hughes Goodman. "He probably lived to work, but at a certain point he should have cut back. They kept him because of the reputation and whole legacy, but it wasn't good for his health."

As for the business -- Penn State's football program, in this case -- there wasn't somebody ready and able to step into Paterno's place. Tom Bradley was named interim head coach for the rest of 2011, and this month, Penn State named Bill O'Brien, the offensive quarterback coach for the New England Patriots, to formally replace Paterno. (O'Brien will finish out with the NFL team as it goes to the Super Bowl on Feb. 5.)

O'Brien's leadership skills may be sound, but he has a steep climb to earn the respect and reputation earned by Paterno. Like Apple's (AAPL - Get Report) beloved Steve Jobs, who died in October, Paterno was considered an icon in the football world and the face of Penn State's football team, and the sudden absence of an icon -- even when illness or aging made the change inevitable and obvious -- is tough to overcome. (Succession is a question dogging Buffett's Berkshire Hathway (BRK.A - Get Report) too.)

Business owners, although they surely lack quite the same iconic stature, shouldn't be left in the same position. They should be grooming and developing a successor to take their place. "At a certain point, realize you're going to have to let go," Thompson says. Paterno could have "stepped back and stepped back gracefully."

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,191.37 -195.84 -1.13%
S&P 500 2,002.16 -27.39 -1.35%
NASDAQ 4,637.9940 -43.5030 -0.93%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs