JC Penney CEO’S departure one of biggest flameouts
Ron Johnson’s short- lived tenure as JC Penney’s CEO will go down as one of the biggest flameouts in corporate America. The former Apple executive was hailed as a big thinker when he was hired by the ailing department store chain, but his radical moves ended up alienating shoppers, sent sales plunging and left the company even worse off. He lasted 17 months.
Here’s a look at some other major oustings in recent times. Carol Bartz, Yahoo The internet company hired technology veteran Bartz in 2009, with the goal of bringing in a nononsense leader who would develop a clear vision. Bartz shook up Yahoo’s management and instituted a costcutting programme that helped boost the company’s earnings. But revenue failed to grow even as the online ad market expanded. Bartz, known for her very direct approach and sometimes- colourful language, pleaded for patience from shareholders, pointing out that it took Steve Jobs years to revive Apple after his return in 1997. But after more than two years of financial lethargy, Yahoo ousted Bartz in 2011.
Leo Apotheker, HewlettPackard
When HP hired Apotheker in November 2010, it was seen as an aggressive push by the company into the software business. But many analysts mocked the choice, considering that Apotheker had just been forced out of his previous job as CEO of German business software maker SAP following ill- timed price hikes and widespread employee dissatisfaction. Apotheker was supposed to be a steady hand to steer HP out of a tumultuous time but his strategic decisions were drastic and did little to inspire confidence. After just 11 months, he was forced out and replaced by former eBay CEO Meg Whitman. Charles Conaway, Kmart Conaway had won many fans on Wall St as the number two executive at CVS, where he helped build the drugstore chain into an industry powerhouse. When he was hired by Kmart in 2000, Conaway inherited a company with a long list of entrenched problems, including outdated technology and drab stores. Analysts say Conaway made strategic mistakes, such as trying to compete with Wal- Mart on price and focusing on exceedingly cheap groceries rather than on its exclusive Martha Stewart brand. In early 2002, Kmart filed for Chapter 11 bankruptcy and Conaway resigned soon after. Bob Nardelli, Chrysler Nardelli was hailed as an outsider who could help save the US auto industry by private equity firm Cerberus Capital Management, which installed him as the head of Chrysler in August 2007. But Nardelli, who spent most of his career in the executive ranks at GE before leaving to run Home Depot, had no experience in the complex business of auto manufacturing, and it showed. Instead of investing to improve Chrysler’s substandard line- up, Nardelli focused on cutting jobs and closing plants. By the time the financial crisis hit in 2008, Chrysler was in serious trouble. Nardelli testified before Congress and obtained loans to help the company survive, but it was too late. Chrysler filed for bankruptcy in April 2009. When Chrysler exited bankruptcy that June, Nardelli was out and Fiat CEO Sergio Marchionne took over. Kevin Rollins, Dell Rollins joined Dell in 1996 and became CEO in 2004, including chief operating officer, vice- chairman and president of Dell Americas. The company had been struggling with a market glut of low- cost, low- profit PCs and weaker- than- anticipated sales of its pricier, more lucrative desktops and notebooks. In 2006, it lost its number one position in the industry to rival Hewlett- Packard. The key parallel with Johnson may have been overpromising. Rollins took the reins of a company doing little more than US$ 40 billion a year in business and painted pictures of bumping that to US$ 80 billion — which Dell has still not approached. Rollins stepped down in early 2007.
Friday, Apr 12, 2013