When Leaders Return: New Battle Plans for Returning Generals

History tells us that a comeback is possible—if managed judiciously.

CEM_SONNENFELD_GSCan leaders return? A year after Twitter founder Jack Dorsey returned to office, his stock has crashed by over 60%. Similarly failed returns plagued Charles Schwab and Yahoo’s Jerry Yang, raising the question of whether leaders can ever go home again.

Yet, ample evidence suggests that retired generals can be recalled to active duty to lead a mission to greater glory. World War II was a triumph of heroes returning to office, such as: Winston Churchill, Charles De Gaulle, Douglas McArthur and George Patton. Surely the success of such returnees as Apple’s Steve Jobs, Dell’s Michael Dell, Starbucks’ Howard Schultz, Google’s Larry Page, Reddit’s Steve Huffman and Procter & Gamble’s A.G. Lafley remind us that such heroic returns are also possible in corporate life.

General McArthur proclaimed, “Old soldiers never die, they just fade away.” Corporate generals, too, can stage successful reentries. Some, such as ITT’s feared Harold Geneen and CBS founder William Paley, may even help undermine successors to trigger their own glorious return.

“Returning CEOs, as ‘generals’ must bring new plans for changed conditions.”

In 2008, Twitter’s Dorsey was pushed out due to distracting interests. Returning as chairman, in 2011 he tweeted, “Today I’m thrilled to get back to work @Twitter leading product as Executive Chairman. And yes: leading @Square forevermore as CEO. #200%.” Dorsey resumed the role of Twitter’s CEO while still “distracted,” serving as CEO of the mobile payment company Square that he took public in October 2015.

Often, a general’s return is driven by nostalgia for a rosy period in the enterprise’s history, raising concerns that he or she will be intent on replicating a romanticized earlier version of the company. For example, some analysts wrongly feared that Schultz’s Starbucks return would herald a retreat in expanded food and beverage offerings. Schultz addressed the culture but did not take Starbucks backwards. At the time of his 2008 return, the company’s stock price had been flat for over eight years. The stock jumped 8% the day Schultz’s return was announced—
soaring 520% since and adding $68 billion in market cap.

In 2001, Google co-founder Larry Page stepped down as its CEO under pressure to “build a world-class management team.” Yet, it was Page, not successor Eric Schmidt, who signed off on the 2004 IPO and led the 2005 purchase of Android. Returning to office in 2011, he profoundly restructured Google’s operating units. By early 2016, four months after creating parent company Alphabet—separating its Google search, Android, and YouTube businesses from newer, riskier ventures—the company soared past Apple to become the highest-market-value company on the planet.

In 2013, Dell Technologies Founder Michael Dell, who had returned its as CEO in 2007 after a three-year hiatus, led a historic $22.8 billion privatization. His success repositioning the PC
business to focus more on business segments than consumer markets allowed Dell to build the nation’s most integrated technology firm with big new investments in the cloud and analytics even as competing firms had to divest businesses.

“As a private company, Dell now has the freedom to take a long-term view,” said Dell, just prior to his $67 billion purchase of data storage giant EMC. That $67 billion transaction, the largest tech acquisition in history, was funded largely with low-cost investment grade financing thanks to the company’s rise under his lead. In Q1 2016, Gartner Group rated Dell No. 1 in U.S. PC sales.

What can be learned from this litany of successful re-entries? It’s key to avoid the distractions of political maneuvering between warring fiefdoms and conflicting external interests. In addition, all too often generals wrongly reapply the prior lessons from a past war. Returning CEOs, as “generals” must bring new plans for changed conditions. As baseball legend Yogi Berra warned, “The future ain’t what it used to be.”


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