Apple's job one: Getting Jobs back
Apple investors should be pulling for a swift recovery and comeback for ailing Steve Jobs -- and not just out of the kindness of their hearts. The cold reality in business is that companies that wave goodbye to rock-star CEOs often see their magic disappear. That happened at Apple the first time Jobs left, in 1985, and it's a surprisingly common pattern. Why? It's simply tough to replace the energy that flows from the passion and vision of a star CEO. And being the superstars they are, these departed CEOs often continue to meddle just enough to hamstring their successors. Here's a look at some high-profile chiefs and what happened after they left center stage.Starbucks' coffee passion
As a young coffee aficionado, Howard Schultz caught espresso-bar fever in Italy. He brought it home and persuaded Starbucks, a small Seattle coffee bean company where he worked, to open its first coffee bar in 1984. In 1992, Starbucks went public. When Schultz left the corner office in 2000, the retail phenomenon had about 3,500 outlets and had earned early investors a cool 1,000% return.After Schultz: Growth, then trouble
Starbucks didn't lose its buzz the moment its rock-star CEO stepped down; the stock climbed on to peak near $40 a share in 2006. But with Orin Smith at the helm, followed by James Donald, who brought a background in supermarkets, Starbucks grew too fast and lost its focus on service. Howard Schultz returned as CEO in January 2008, but Starbucks hasn't regained its magic. The stock currently trades around where it was when Schultz left: about $10 a share.The first Dell dude
Michael Dell revolutionized the sale of personal computers with a company he launched from his dorm room in the late 1980s. Consumers loved the lower prices his "virtual" company offered because it carried no inventory. By the time he handed over power in March 2004, investors had earned a bundle. The stock was trading above $30 a share, a spectacular gain for anyone who bought at the equivalent of 10 cents a share in 1988 when the company went public.After Dell: Falling behind the trends
Under the watch of Kevin Rollins, a former management consultant who took over in 2004, the once-dominant computer vendor missed key trends, such as a shift in consumer preference away from Internet sales toward buying computers from stores. Competitors also cut costs, removing one of Dell's key advantages. This stock is down more than 70% since Michael Dell left, and his 2007 return hasn't helped yet.Citigroup's heyday
The consummate deal maker, legendary banker Sanford Weill rewarded Citigroup shareholders by aggressively piecing together a vast financial empire reaching into all corners of finance -- and the globe. As CEO, Weill had no qualms about pulling strings to knock aside long-standing banking rules to build his empire.After Weill: A bank battered
Sanford Weill handpicked his friend Chuck Prince to follow him as CEO in 2003 -- a disastrous move for shareholders. Analysts say Prince, a lawyer, lacked the operational skills necessary to integrate all the pieces of the Citigroup empire. And on his watch, Citigroup ventured into the world of toxic mortgage-backed securities. Savaged by the credit collapse, Citigroup now trades for less than $4 a share. That's down from a peak of nearly $50 in 2003, the year Weill left.Nike off and running
Phil Knight launched his iconic company by selling running shoes from the trunk of his car at track meets in the mid-1960s. Knight introduced the original Nike shoe in 1971, and the line caught on through "word of foot," as Nike liked to say back then. The company went public in 1987, and early investors enjoyed a nice run under Knight's tenure. They had booked a spectacular 40-fold return by the time he left the corner office in 2004.After Knight: Nike keeps pace
Instead of hitting the skids, as many companies do when their rock stars depart, Nike prospered. Analysts chalk it up to the skills of William Perez, who came in from household cleaning supply company S.C. Johnson & Son, and Nike veteran Mark Parker, who became CEO in 2006. The stock advanced 75% from the time Phil Knight left, to hit $70 last year. Down to $46 lately, it's still higher than the $40 it traded for at Knight’s departure.GE's giant
During the 20-year reign of the legendary Jack Welch, which came to a close in 2001, General Electric became known as "The House That Jack Built." Welch's hard-driving style focused on cutting costs. The approach brought lots of layoffs, earning him the nickname "Neutron Jack." But Welch helped investors build fortunes. Shareholders earned 6,000% on his watch.After Welch: Was it just bad timing?
General Electric gets praise for taking the time to groom Jeffrey Immelt as Welch's successor, but Immelt's tenure has been a dud. GE stock has dropped 60%, to $14 a share, since Immelt took over. Some analysts fault Immelt's kinder, gentler management style. Others cite the departure of top managers who were passed over, or simply bad timing. Immelt came in just before 9/11. And the credit crunch has been particularly hard on GE. Its finance, infrastructure, medical equipment and consumer products divisions all rely heavily on the availability of credit.Related Stories
Published 1/21/2009
Editor's note: At the time of publication, Michael Brush did not own or control shares of any company mentioned in this slide show.
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- Do you believe the loss of Steve Jobs as CEO of Apple will adversely impact the company?
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