This is a partial transcript from Your World with Neil Cavuto, November 12, 2003, that was edited for clarity.

Watch Your World w/Cavuto weekdays at 4 p.m. and 1 a.m. ET.

NEIL CAVUTO, HOST: Time for a little leader soul-searching. Let’s ask one of the best reads in the business -- I admire the heck out of this guy. I’m talking, of course, of "Forbes" legend Jim Michaels.

Jim, of course familiar story here. You know? The big guy in trouble, blames the little guys who work for him.

JIM MICHAELS, "FORBES" EDITORIAL VICE PRESIDENT: You know, there is nothing wrong with firing your subordinates when they do a bad job. That’s part of leadership. After all, Abraham Lincoln fired four or five generals before he got General Grant, a winner. And Winston Churchill fired a lot of his generals.

That’s OK. But you’ve got to believe in your product. With Lincoln, the product was preserving the union. With Winston Churchill, it was winning the war. Kerry’s problem is the product.

CAVUTO: But do you think that, you know, when you start getting your campaign staff fired left and right, much like the CEO comes in and fires all the top managers, you have to have a vision first off that is consistent, right?

MICHAELS: Exactly, Neil. And, Kerry has done such a flip-flop that the public sees him as a fuzzy, uncoordinated character. And he can’t blame that on his staff.

If the staff had simply not been able to get across a vision of the true Kerry, then OK, fire him. But that wasn’t the case. The problem was the product itself was a lousy product. And he’s blaming his subordinates for the fact that he has a product the public won’t buy. I’m using product, but the same thing.

CAVUTO: But you are absolutely right. You are selling a name and an image.

Let me ask you, John Kennedy, of course the Bay of Pigs could have been a huge fiasco for him. He admitted to the problem even though it was something that was planted in the Eisenhower administration. The opposite with Richard Nixon. Of course, had he probably said early on that this Watergate break-in was stupid, and I regret it and all that, he never did. So what lessons should corporate types learn from this?

MICHAELS: Well, I think to take something very recent, Martha Stewart. If Martha Stewart had said right off, look I transgressed what was right, I made a little profit here I shouldn’t have made. I’m going to give it all to breast cancer or AIDS or something and won’t do it again, she would have been a public hero.

One of the great business stories of recent times was Johnson & Johnson during the Tylenol...

CAVUTO: Absolutely.

MICHAELS: And they could have said well, it’s not our fault some cuckoo planted this stuff. Instead they said, we take full responsibility, we’re pulling all the stuff back, we’re going to go in for new safer packaging. They didn’t try to find a scapegoat.

CAVUTO: And, by the way, they had nothing to do with the cyanide tampering. And here’s the kicker -- it’s a good example you’re using. When all was said and done, Tylenol’s market share, the pain reliever market had increased. So they had handled that well.

MICHAELS: Yes.

CAVUTO: The lesson that you want to pass along to John Kerry then is what, Jim?

MICHAELS: I think a lesson I want to pass along to him is, you’d better get your message straight or get out of the race.

CAVUTO: All right. Good point. All right. I always remind our viewers, if they have a problem with the show, let our producer know. If they love the show, let me know. Is that a good rule of thumb?

MICHAELS: I think it’s a very good rule of thumb. And I think something else to know is that people who tell you the truth are your friends and people who flatter you are your enemies.

CAVUTO: Oh, I’m going to run all the bad e-mails, then. All right. Thank you very much. Jim Michaels the "Forbes" legend.

Content and Programming Copyright 2003 Fox News Network, Inc. ALL RIGHTS RESERVED. Transcription Copyright 2003 eMediaMillWorks, Inc. (f/k/a Federal Document Clearing House, Inc.), which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, Inc.'s and eMediaMillWorks, Inc.'s copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.