Whether it's running a multinational company or a family business, being the CEO requires a special set of skills. The demands are even greater for those taking the helm at a struggling company. A turnaround boss needs to have a clear action plan and goals, a realistic timeline, and the support of the company's board and senior managers. Even the best strategy, however, needs to be accompanied by financial results, whether it’s greater market share, larger profits, a higher stock price, or preferably all three.
Few can rival the success of Apple's Steve Jobs, who returned to the company he founded, transforming it into the most profitable technology player in the world. Not all turnaround stories have a happy ending, however. After starring at Autodesk, Carol Bartz was brought into revive Yahoo! Her vision had a promising start, but a disappointing ending — she was ousted by the board, and the company remains adrift.
So which CEOs have succeeded where others have not? Click ahead for 10 CEO turnaround stories.
By Jessica NaziriPosted 30 November 2011
Tenure: July 1999 - December 2002
Peter Cuneo joined Marvel Entertainment just after it emerged from bankruptcy protection, with a heavy debt load, limited cash, and a depressed corporate culture. He focused on expanding the company's international business and adopting a licensing model for movies, TV, and consumer products. Movies based on its characters became cash-cow blockbusters. Cuneo also rejuvenated Marvel's core comic book business, bringing in new talent for both writing and illustration. When he took the reins of Marvel, its stock was at 94 cents a share; 10 years later (with Cuneo as vice chairman) the company was sold to Walt Disney for more than $4 billion, or $54 a share. Prior to joining Marvel, Cuneo orchestrated successful turnarounds at Remington, divisions of Clairol, and Black & Decker.
Sources: cnn.com, usatoday.com
Tenure: May 2005 - December 2010
Richard Clark, a 35-year Merck & Co. veteran, took the helm amid the legal battle over Vioxx, the company's $2.5 billion-a-year arthritis drug, which had been pulled from the market because of links to heart attacks and strokes. Clark made staff cuts and closed five manufacturing plants in a bid to save nearly $4 billion by 2010. He streamlined management and marketing, and focused energy on Merck's promising pipeline of new drugs. Clark restored the company's reputation, settled Vioxx litigation for $5 billion, and oversaw the approval of eight drugs in two years. By 2008, Merck's share price was back at pre-Vioxx highs and almost double its April 2005 price.
Sources: usatoday.com, merck.com, cnbc.com
Tenure: November 1994 - November 2004
Gordon Bethune joined the company when it was emerging from Chapter 11 bankruptcy protection. At the time, Continental Airlines was losing $55 million a month and consistently ranking last in every measurable performance metric, including on-time performance, customer complaints, and mishandled baggage. Under Bethune, the carrier eliminated unprofitable routes, increased service from its hubs, renegotiated debt and leases, and put in place an incentive pay plan that helped dramatically improve the Houston-based carrier's record for landing flights on time. Under his leadership, Continental's stock price rose from $2 a share to more than $50 a share. It now is consistently ranked among the top airlines in customer satisfaction.
Sources: cnbc.com, continental.com
Tenure: June 2004 - Present
When Sergio Marchionne entered as CEO, the company was deep in debt and losing money. He closed factories, cut jobs, and replaced top management in a bid to increase market share and turn losses into profits. Marchionne also secured a deal with Chrysler and negotiated an end to a bitter partnership with General Motors that netted Fiat $2 billion. Within two years, Marchionne saved the Italian company from collapse and expanded operations to India and China. After 17 consecutive quarters of losses, Fiat's auto unit finally turned a profit in 2005. Marchionne’s turnaround continues with a revamped lineup of trucks and cars, including the Fiat 500 — a tiny, stylish 21st century version of a 52-year-old Italian icon once driven by movie stars such as Marcello Mastroianni and Sophia Loren.
Source: P&A magazine
Tenure: March 2005 - August 2010
Mark Hurd took over for Carly Forina, a high profile but highly controversial CEO. He is best known for stabilizing the integration of Hewlett-Packard's messy 2002 acquisition of Compaq Computer. Hurd sharpened HP's strategic focus, concentrated its investments in technology, and steered a broad transition from analog to digital imaging. To improve operating efficiency, he made staff cuts and companywide pay cuts. Hurd decentralized the sales force and placed emphasis on training, field hiring, and customer support. The company's stock quickly reversed from a slump. Between its 2006 and 2009 fiscal years, HP grew revenue from $80 billion to $114.6 billion, and more than doubled its earnings per share. Despite his business acumen, Hurd was forced to resign because of expense account irregularities relating to an alleged sexual harassment case.
Sources: CNBC, businesspundit.com, ibscdc.org, hp.com
Tenure: May 2001 - June 2007
The longtime Warner Bros. veteran took over Yahoo at a time when morale and ad sales were plummeting amid the dot-com implosion. Semel replaced the popular senior executive and one-time heir apparent Timothy Koogle, while having to answer questions about his lack of experience in Internet technology. He led the turnaround by strengthening Yahoo’s consumer product marketing and distribution. He also tried to move the company from an online advertising model to a fee-based one. Semel launched a deal with phone giant SBC Communications (now AT&T), selling broadband access to millions of American homes. Semel silenced doubters when the company earned $43 million on revenue of $953 million in 2002, reversing a $93 million loss on $717 million in revenue in 2001.
Since Semel’s tenure, however, Yahoo has struggled amid stiff competition including Google and Facebook.
Sources: prmagazine, businessweek.com
Tenure: 1979 - 1992
After being fired as president of Ford Motors in 1978, Lee Iacocca tackled rescuing Chrysler Motor — an American icon on the brink of bankruptcy. Iacocca renegotiated contracts with car-rental agencies, laid off workers, and secured $1.5 billion in federally backed loans as part of a historic government bailout. He succeeded in reviving Chrysler, starting with the compact to mid-sized K-car line in 1981. He followed that success with the first minivans, the Dodge Caravan and Plymouth Voyager, which set the standard for family-friendly transportation. In 1983, Chrysler earned $925 million, and was able to pay back the government loans.
Sources: businessweek.com, forbes.com
Tenure: 2002 - 2004
James Cantalupo, who had retired as president of McDonald's International in 2001, was lured out of retirement to reverse McDonald's two-plus years of sagging U.S. sales. The fast-food chain had developed a reputation for unhealthy food, which didn't fit well with consumers seeking a healthier lifestyle. Cantalupo addressed the needs of health-conscious consumers by introducing salads, apple slices, and a low-carb menu in select markets. Sales began a steady march higher, as did the company's earnings and share price. By early 2003, Cantalupo's success was evident. First-quarter net income was $327.4 million, versus $253.1 million a year earlier. The stock began a long steady ascent.
Cantalupo died from a heart attack while at a McDonald's convention in April 2004.
Sources: www.icmrindia.org, nytimes
Tenure: 1996 - 2001
Steve Jobs, co-founder of Apple, returned to the company in 1996 to become interim CEO after its purchase of NeXT, Jobs latest venture. He became Apple’s permanent CEO in 2007. Early on, Jobs helped the cash-strapped company secure a $150 million investment from rival Microsoft in return for non-voting shares — and an assurance that Microsoft would support its Office software on the Mac platform for five years. Jobs streamlined the product line, opened stores to sell directly to consumers, cut operating expenses, and focused marketing on personal computers. He also led an early move into online music, which helped establish the iPod, and reinvented the mobile phone business with the iPhone.
Since Jobs reclaimed the helm in 1997, Apple’s stock price has risen more than 9,000 percent. More than 314 million iPods, 129 million iPhones, and 29 million iPads have been sold, according to A.M. Sacconaghi Jr., an analyst with Bernstein Research.
Jobs resigned as CEO in August 2011, and he died of pancreatic cancer three months later.
Sources: businessweek.com, nytimes.com
Tenure: 1995 - 2004
Gap was facing intense competition when Mickey Drexler took over in 1995. His turnaround plan included the decision to stop selling Levi's jeans and other non-brand items. Drexler focused on selling Gap-only apparel that appealed to older, higher-income customers. He reinvented the product line, redesigned stores from floor to ceiling, and ushered in breakthrough ad campaigns. Drexler introduced stylish but affordable clothing, and built the Gap into a $14.5 billion company. Within a decade, khakis and casual Fridays were widely associated with Gap. The company also acquired Banana Republic and launched Gap Kids and Old Navy — the last of which Drexler grew to a billion-dollar company in four years. Under Drexler’s leadership, sales at Gap leaped to $9.1 billion in 1999 from $6.5 billion a year earlier. Gap's bottom line grew even faster than sales, rising 54 percent to $825 million.
Drexler was fired from the Gap in 2002 when its stock took a major plunge — but has since taken the helm at J. Crew.
Sources: forbes.com, businessinsider.com, latimes.com, sfgate.com