Comeback Secrets From CEOs
Most people have encountered professional challenges of one kind or another. But as any successful entrepreneur will tell you, success comes after you master the art of making lemonade, so to speak. On today’s “Squawk Box," CNBC spoke with three high-profile business leaders who prevailed after suffering a serious setback.
In his new book, Firing Back: How Great Leaders Rebound After Career Disasters,author Jeffrey Sonnefeld examines how to overcome a professional setback. As guest host on today’s "Squawk Box," he introduced the team to three business leaders profiled in his book.
JetBlue CEO David Neeleman
Low-cost carriers have single-handedly changed the airline industry, revolutionizing everything from the ways tickets are priced to the way labor contracts are negotiated. And JetBlue is at the center of the revolution, but the airline would not exist had its CEO not been fired from Southwest.
“I sold my company to [Herb Kelleher], and I had intended to go work with Southwest, and when I got down there I realized it wasn’t going to work,” said David Neeleman in an interview on CNBC. “It was the best thing to happen to me.”
Although Neeleman had plenty of money, he wanted something more. “I wanted to do it again, I felt like I had learned enough at Southwest.”
Neeleman recognized a need for a low-cost carrier in the Northeast and started JetBlue. Since its initial public offering on the NASDAQ in 2002, JetBlue has become one of the most popular airline stocks in history and currently has about $2 billion dollars in market capitalization.
Vanguard Founder and Former CEO John Bogle
Bogle’s name will forever be synonymous with the mutual fund industry. But, by Bogle’s own admission, he would not have founded Vanguard if he had not been fired more than 30 years ago.
In the 1960s, Bogle went to work for a man named Walter Morgan to revive the Wellington Fund, once a leader in balanced fund investing. Bogle established a strategy that included purchasing a Boston investment bank with an aggressive growth fund. The merger did not go well, and Bogle was fired. ““It was heartbreaking,” Bogle told CNBC’s Joe Kernen. “Walter Morgan, the founder, had turned the company over to me, and I had done a very unwise merger. And I was totally devastated."
Bogle, however, was determined to revive his fortunes. “It gave me the opportunity of a lifetime as it happens.”
The Vanguard Group of Investment Companies opened for business in July 1975.
Keenly aware that investors wanted lower costs, he became a pioneer in what is now called a “no-load” fund.
Today Vanguard is one of the most successful mutual find companions in the U.S., managing more than $520 billion.
Realogy Chairman and CEO Henry Silverman
Realogy exists today due to a decision by Cendant to spilt into four companies that followed allegations of a corporate scandal and accounting fraud.
Here's what happened. Cendant was accused of fraud after the company's merging of CUC International and HFS Inc. in 1997. When this report was released to the public, the resulting damage to the company was approximately $14 billion, with the company's stock trading from a high of $41 down to nearly $12. At the time, this fiasco was the largest case of accounting fraud in the country's history.
“I think the first thing that you learn from crisis management is the mantra, 'tell the truth, tell it all and tell it now,' ” said Silverman.
The mantra worked. Thanks in large part to Silverman's leadership Realogy not only survived, it thrived. Today, the company is currently involved in a deal to be acquired by a private-equity firm; the transaction is valued at approximately $9 billion.