By Geoff Colvin and Ryan Derousseau
October 6, 2016

This morning we see four leaders — two each in business and government — facing developing crises. The common factor: All four could have avoided or at least diminished the crisis by facing it earlier, playing offense instead of defense. But they did what most people do, refusing to confront reality in apparent hopes that it will fix itself. To absolutely no one’s surprise except their own, they end up in a hole that just keeps getting deeper.

-Mylan CEO Heather Bresch faces new EpiPen pricing trouble. She has tried fighting back against loud anger over Mylan’s aggressive price increases for its life saving EpiPen. The damage was mostly to Mylan’s reputation until yesterday, when the federal government accused the company of overcharging Medicaid for the device over several years. The direct cost to Mylan could be substantial, considering that Medicaid spent $797 million on EpiPens from 2011 to 2015. Most striking in the whole saga is that Mylan was so oblivious to public outrage over pharma pricing at Valeant Pharmaceuticals and Martin Shkreli’s Turing Pharmaceuticals. Seeing the trend, it could have revised its pricing and made itself an industry leader. It’s too late for that now.

-Wells Fargo CEO John Stumpf becomes less visible, not more so, in the fake-accounts scandal. It’s a common problem: When a leader is overwhelmed by a crisis, he or she becomes consumed by meetings and phone calls at just the moment when a leader need to be more visible. The situation is arguably worse in Stumpf’s case because his only high-profile appearances have been at congressional hearings, giving the impression that he has to be forced to answer questions about the problem. It all goes back a month, when he and the company apparently hoped that announcing it would pay $185 million to settle cases involving over a million fake accounts and the related firing of over 5,000 employees would blow over and be forgotten. This hope was perhaps not realistic.

-New Jersey Governor Chris Christie looks increasingly vulnerable in the Bridgegate scandal. A former ally, David Wildstein, has been testifying for days about the deliberate creation of a massive multi-day traffic jam in Fort Lee, N.J., in 2013 to punish the town’s mayor for not endorsing Christie’s reelection. Each day it gets harder for Christie to keep saying he knew nothing about it. Wildstein has now testified that Christie knew exactly what was happening and why, as it played out, and that he laughed when he heard how severe the traffic problems were.

-New York City Mayor Bill de Blasio is fighting long-standing suspicions of corruption, and he’s losing. It was revealed yesterday that a state ethics panel has served an extremely broad subpoena on City Hall as it apparently widens its investigation of de Blasio’s political non-profit and whether it broke lobbying laws. A number of other investigations are examining other behavior by the mayor, who has hired excellent lawyers to fight the investigators.

As J.P. Morgan Chase CEO Jamie Dimon has observed, your hardest problems do not age well. It’s continually surprising to see high-level leaders forget that fact.

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