Comeback Kings, Economist January 10th, page 57

In November’s edition, I reviewed Steve Jobs biography and since then he has been in the news for all the wrong reasons; his precarious state of health has caused him to take six months leave, leading to concern about the impact on Apple’s market value without him.

He also features in this Economist article for a different and more positive reason, that he is one of the very few examples of high profile CEOs who have succeeded when brought back after leaving their company.

One of Jobs’s great rivals – Michael Dell – is quoted as the main example of a CEO who resigned to hand over to others but who, after poor company performance, could not resist coming back to ‘sort things out’. The article suggests that Dell is not delivering right now and that he is but one example of many CEOs who have failed in a similar way. Other examples quoted are ‘comeback CEOs’ from Starbucks, Xerox, Enron and Gateway Computers.

The article suggests that one reason for these failures is that, in many cases, they had never really left the company and their own flawed strategies were still being implemented. The poor guys who followed them were being made scapegoats for implementing their predecessors’ plans. Then, unable to resist coming back as heroes, they found they had nothing new to offer to meet the high expectations.

The difference with Steve Jobs is that he was sacked from Apple and was away from the business for a number of years before coming back with new ambition and new perspectives. He also saw that a new strategy was necessary and had the vision to see the potential from entry into the music business.

The article closes by suggesting that Michael Dell is belatedly accepting the need for a different strategy but the jury is out on whether it will be successful. His decision to move into retail outlets means that his company has lost the unique differentiation that created success in the first place and there must be doubts about its ability to compete with Apple and HP, those resurgent stars of the sector, over the long term.



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