This Day On The Street
Continue to site right-arrow
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
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

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) 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) 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

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, 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
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

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

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!


DOW 18,082.19 +51.98 0.29%
S&P 500 2,090.09 +8.21 0.39%
NASDAQ 4,796.5520 +23.08 0.48%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

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