CEOs Behind Historic Turnarounds
One of the best skills a CEO can have is knowing when it’s time to reset. Even the biggest success stories can get stale, and most big companies—and indeed startups—have found themselves having to change tactic and think creatively in the face of emerging competition and changing consumer trends.
One of the best skills a CEO can have is knowing when it’s time to reset. Even the biggest success stories can get stale, and most big companies—and indeed startups—have found themselves having to change tactic and think creatively in the face of emerging competition and changing consumer trends. Here are five of the most successful turnaround strategies adopted by CEOs of some of the world’s biggest brands. Satya Nadella CEO of Microsoft from 2014 to present day
When Nadella took the helm at Microsoft in early 2014, the company was losing market share to forward-thinking firms like Apple and its increasingly popular iPhone devices. However, in less than five years he was able to change Microsoft's trajectory, making it the world's most valuable company by the end of 2018 with a market capitalization of more than $850 billion, a growth of over 180% from the $300 billion recorded in February 2014.
Nadella's turnaround approach was to focus on segments other than the firm's failed mobile strategy, such as cloud computing and augmented reality. Microsoft gave more attention to its Commercial Cloud business including Office 365 Commercial, Azure, the commercial portion of LinkedIn, and
Dynamics 365. The firm also entered new markets through acquisitions, including the $27 billion purchase of LinkedIn and the $7.5 billion purchase of GitHub.
Peter Cuneo CEO of Marvel Entertainment from 1999 to 2009
In 1996, 13 years before Disney acquired Marvel Entertainment for more than $4 billion, the latter suffered bankruptcy, with $250 million in high-yield debt. When Cuneo joined the firm as CEO in 1999, he initiated a turnaround plan that raised Marvel's shares from $0.96 per share in 2000 to $54 per share in 2009 when Disney's purchase was completed.
Cuneo and his team adopted a new model that aimed to maximize the exposure of the brand around the world, with a focus on the company's most famous characters, including Spiderman, the Incredible Hulk, and Captain America. Two years later, Marvel initiated its toy business for these recognizable figures, making it the firm's largest licensed business. Cuneo's strategy also shifted the company's focus to the film industry, with characters taken out of comic books and represented in motion pictures and videogames. Today Marvel's multiverse movie franchise has a global audience running into the hundreds of millions.
Hubert Joly CEO of Best Buy from 2012 to 2019
When Joly took the role of CEO in 2012, Best Buy was reeling from scandal, falling sales, and plummeting stock price. One
of his strategies was the “Renew Blue,” which he initiated in 2013. Joly announced a price-match guarantee with Amazon, as customers referred to the latter for lower prices than those offered by Best Buy. This has contributed in slowing down the company's financial losses. Joly also introduced big tech brands, such as Samsung, Apple and Microsoft, to Best Buy stores. He allowed them to showcase their products through separate stalls rather than stacking them on shelves. And the new CEO recruited retired employee Sharon McCollam as CFO, who canceled many of the firm's unnecessary expenses and under-performing stores. In 2014, less than two years after Joly came on board, Best Buy had a successful Black Friday, with a 2.5% increase in store sales.
Mary Barra CEO of General Motors (GM) from 2014 to the present day
Faced with a product recall of around 13.6 million vehicles, a shift towards electric vehicles and a trade war facing GM's vibrant China business, Barra's turnaround plan transformed GM's pathway from a firm with stocks of $39.57 per share in January 2014 to one of $53.50 per share in February 2021. Barra's strategy has been to primarily focus on exiting Europe's market, closing some old plants, and introducing GM's first allelectric vehicle, amongst others.
Howard Schultz CEO of Starbucks from 1987 to 2000, and then again from 2008 to 2017
When Schultz rejoined Starbucks as the CEO for the second time in 2008, the company had witnessed a decline in stock prices of 42% in 2007, and had seen its revenues drop by nearly 30% during the financial crisis. At that time, Starbucks had to close hundreds of stores and cut thousands of jobs, but Schultz soon adopted a turnaround strategy that changed the situation.
The firm initiated the “My Starbucks Idea,” where customers were able to send suggestions to the company. Starbucks received around 90,000 ideas, and more than 100 of them were implemented. Schultz also shifted the focus to the “partners”— Starbucks' term for employees—to keep them engaged and informed. As part of his plan, the firm closed stores and restructured its manufacturing and supply operations. Today, the company employs around 346,000 people, with sales of $26.7 billion.