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TURANAROUND CEOs
A PERSPECTIVE

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BEST TURNAROUND CEOs
FOREWORD
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. So which CEOs have succeeded where others
have not?
CEO

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BEST TURNAROUND CEOs
PETER CUNEO- MARVEL ENTERTAINMENT
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. Tenure- July 1999- Dec 2002

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RICHARD CLARK- MERCK & CO
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.
Tenure- May 2005-Dec 2010
BEST TURNAROUND CEOs

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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.
Tenure- Nov 1994-Nov 2004
BEST TURNAROUND CEOs
GORDON BETHUNE- CONTINENTAL AIRLINES

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SERGIO MARCHIONNE- FIAT CHRYSLER
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.
Tenure- June 2007-July 2018
BEST TURNAROUND CEOs

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MARK HURD- HEWLETT PACKARD
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.
Tenure- March 2005-Aug 2010
BEST TURNAROUND CEOs

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TERRY S SEMEL- YAHOO
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. Tenure: May 2001- June 2007
BEST TURNAROUND CEOs

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LEE IACOCCA- CHRYSLER
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. Tenure- 1979-1992
BEST TURNAROUND CEOs

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JAMES CANTALUPO- McDONALD’S
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.
Tenure: 2002-2004
BEST TURNAROUND CEOs

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STEVE JOBS- APPLE
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. Jobs resigned as CEO in
August 2011, and he died of pancreatic cancer three
months later.
Tenure- 1996-2001
BEST TURNAROUND CEOs

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MICKEY DREXLER- GAP
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. 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. Drexler was fired from the Gap
in 2002 when its stock took a major plunge — but has
since taken the helm at J. Crew. Tenure- 1995-2004
BEST TURNAROUND CEOs

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CARLOS GHOSN- NISSAN
Carlos Ghosn is a Brazilian-born businessman who also
has French and Lebanese nationality. Ghosn has served as
the CEO of Michelin North America, chairman and CEO
of Renault, chairman of AvtoVAZ, chairman and CEO of
Nissan, and chairman of Mitsubishi Motors. Ghosn was
also chairman and CEO of the Renault–Nissan–Mitsubishi
Alliance, a strategic partnership among those automotive
manufacturers through a complex cross-shareholding
agreement. In 1996, Renault's CEO Louis Schweitzer hired
Ghosn as his deputy and charged him with the task of
turning the company around from near bankruptcy. In the
early 2000s, for orchestrating one of the auto industry's
most aggressive downsizing campaigns and spearheading
the turnaround of Nissan from its near bankruptcy in
1999, he earned the nickname "Mr. Fix It".
BEST TURNAROUND CEOs

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