While Enron did not survive its epic 2001 collapse, some companies do survive scandals. And it takes a rare breed of executive to make that happen.
These are the guys who clean up the mess. Their task: to separate a company, its employees and its culture from the scandal.
In the case of HealthSouth, it's a complicated task; because the man at the heart of the events that nearly brought down the company, former CEO Richard Scrushy, just won't go away.
And why should he? A jury found him not guilty of fraud, so as far as he's concerned, the company he built had no right to fire him. So scrushy has sued HealthSouth for $70 million, and the company countersued.
Welcome to Scrushy-successor Jay Grinney's world: moving his company into the future while fighting ghosts the past.
CNBC: "(Scrushy) keeps popping up, doesn't he?"
Grinney: “Yes, he does. But it's like background noise. You know, it's not anything more than sort of an irritant."
As a senior manager at healthcare giant HCA in 2004, Grinney had his pick of opportunities. But he picked this one: a company on the verge of bankruptcy; shareholders and regulators bearing down.
But where others saw nearly $3 billion in fraud, he saw something else.
"I saw great assets,” he said. “I saw dedicated employees providing really high quality care. I saw a company whose services were sort of in the sweet spot of health care."
But getting everyone else to see it was another matter -- starting with the employees.
One of his first steps was to allow regular employees, for the first time, into the lavish executive suite -- Richard Scrushy's inner sanctum.
“They were looking around saying, 'To think about all the times we had to go out and buy our own supplies, our own pencils, or own pads of paper, and this is where the money went," said Grinney on a recent tour of the suite. “I think people were sort of wondering is he coming back, if he's coming back? Is he going to have a director role or management role? … Our position on that is it's about time to move that behind us, and it's really not an issue at all. Today the questions are more, what does our future look like?"
And for the first time in years, the future at HealthSouth is showing some promise. The company just held its first shareholders meeting since 2003. Next comes filing updated financial statements with the Securities & Exchange Commission and getting listed again on a stock exchange.
“I think that what's required is a very clear understanding of where you want to go and a very good understanding of what you have to work with,” said Grinney. "I think it takes a very thick skin to be in this kind of position. And I think maybe in my situation, it might be a little bit different because the former CEO is still out there kind of hovering around, and from time to time likes to make noise."
Grinney is considering ways to distance the company even further from Scrushy -- like maybe selling off the 100,000-acre corporate campus -- or changing the company's name.
CNBC: “When do you think you think you'll be able to do interviews like these, talk to people, have analysts meetings without Mr. Scrushy's name coming up?
Grinney: “Oh I think that's going to be very soon, I really do… And every day that we go by, the past becomes even more distant, and we're just, you know, we're focusing on the future."
HealthSouth stock got as low as 4 cents a share at the height of the scandal. Today, it's trading at more than $5 a share.
