Jack Dorsey’s return to Twitter Inc: What the co-founder can learn from Steve Jobs, Howard Schultz and Michael Bregman
National Post Tech Desk - Fri, 06/12/2015 - 14:51
When Twitter Inc. announced that co-founder and chairman Jack Dorsey is returning to the C-suite as interim chief executive, it didn’t take long before people started comparing the situation to Steve Jobs’ return to Apple Inc almost two decades ago. Jobs managed to turn the company from a struggling bit player into the most valuable brand in the world. No pressure, Jack.
Bringing a founder or former chief executive back to a company that’s had some challenging times can be very successful. Jeffrey Sonnenfeld, a professor at Yale School of Management who has studied CEO succession, said the most important thing for the returning saviours to remember is to keep their egos in check.
Related“When it works, they are not guided by a romantic, dewey-eyed sense of nostalgia,” Sonnenfeld said. “If it’s a vanity mission all about themselves, it has tragic consequences… it becomes like a rock-and-roll revival act.”
After conflicts with his co-founders, Dorsey was pushed out as chief executive of Twitter in 2008. Since then, the company has struggled to match the user growth of competing social media services.
Dorsey has been named interim CEO for now. If he wants to keep the job permanently and turn the company around, here are some other notable examples of corporate leaders who made a return to the companies they led after a hiatus who can serve as role models.
Howard Schultz
Spencer Platt/Getty ImagesAfter an eight-year hiatus Starbucks' founder Howard Schultz returned to the company.When Howard Schultz became chief executive of Starbucks Corp. again in 2008 after an eight-year hiatus, things weren’t looking good. The company had tripled its number of stores from 5,000 to 15,000, but its stock had dropped 42 per cent in 2007.
In his 2011 book Onward about the Starbucks turnaround, Schultz said the damage caused by growing too quickly snuck up on the company. “The damage was slow and quiet, incremental, like a single loose thread that unravels a sweater inch by inch,” he wrote.
Schultz closed some stores, invested in training and focused on quality, insisting baristas grind whole coffee beans in-store. Starbucks’ stock jumped eight per cent the day after the company announced Schultz’s return and it generated US$16.45 billion in revenue in 2014, up from US$14.9 billion the previous year.
Michael Bregman
Tim Fraser for National PostSecond Cup is still in "turnaround mode." Michael Bregman is seen here at their Toronto, Ontario offices.Schultz’s success was not so good for Canadian coffee chain The Second Cup, however. Once a staple of Canadian mall food courts, the chain lost market share to Starbucks and has suffered declining sales.
In late 2013, two former chief executives returned to The Second Cup’s board — Michael Bregman and Alton McEwen. Bregman was named chairman, and the board appointed former Starbucks executive Alix Box as the new CEO, in the hopes she could help Second Cup win back ground from the Seattle-based coffee giant.
The company is still in turnaround mode, with same-store sales down 4.7 per cent for the full year ending in December of 2014. But Karl Moore, a management professor at McGill University, said having Bregman back is an advantage for the chain.
“For Michael to come back with intimate knowledge of the brand, of the stores, of the people, he’d be a much more activist chairman,” Moore said. “They know the culture, they know the people. People feel they can relax a bit because they’re not in crisis.”
Steve Jobs
Justin Sullivan/Getty ImagesSteve Jobs' return to Apple is a significant part of the company's current success.Jobs, of course, is the ultimate example. After the now-legendary Apple founder was booted in 1985, he returned in the mid-’90s and led what’s widely considered the most successful turnaround in corporate history. Under Jobs, Apple revolutionized the music industry with the iTunes store and the iPod — and brought the Internet to people’s pockets with the iPhone. His death at a relatively young age in 2011 cemented his status as a legend.
According to Forbes, the Apple brand is now worth US$145.3 billion — twice as much as any other brand on the planet. Someone who’s been holding on to Apple shares since Jobs’ return was set in motion in December 1996 would have increased their money by a whopping 14,902 per cent.
Sonnenfeld said Jobs achieved so much by focusing on innovation, not the company’s roots or his own ego.
“He never defined the company by the past,” Sonnenfeld said. “When you get a leader from the past and there is shareholder, employee, customer nostalgia for who we were, they can recognize that but not be blinded by a past strategic vision.”
The bottom line
Because Dorsey has been named interim chief executive, he has to tread carefully, Moore said. An interim CEO shouldn’t make changes so big that they make life difficult for his successor.
If Dorsey wants to stay in the corner office, it’s pretty clear what he has to do: Get those user growth numbers back up. “The best thing is that he just goes out there and performs and delivers the results. If he goes in there and he wants the job and he delivers the results, I think it’s his,” Moore said.
