Ten technology turnarounds

Tech companies run into trouble from time to time. Here are 10 companies and their CEOs trying to affect change. Will they succeed?

Steve Tobak
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Steve Tobak is a consultant and former high-tech senior executive. He's managing partner of Invisor Consulting, a management consulting and business strategy firm. Contact Steve or follow him on Facebook, Twitter or LinkedIn.
Steve Tobak
3 min read

Technology companies run into trouble from time to time. Today it's Yahoo, Dell, and Motorola. Tomorrow it could be Google, Cisco Systems, or Apple.

Lest we forget, it wasn't that long ago that Apple flat-lined for an entire decade before ousting Gil Amelio in favor of ex-chief Steve Jobs. Jobs restructured the company by first cutting Newton and other unprofitable products, then introducing exciting new core products like iMac, and finally branching out into consumer devices like iPod and iPhone.

But that's nothing new. It happens to most companies, sooner or later.

IBM nearly bit the dust until Lou Gerstner showed up and turned the company around. The former American Express executive refocused the company on IT services and launched its e-business branding campaign. That did the trick.

And how about Hewlett-Packard? Within a few months, Mark Hurd did what Carly Fiorina couldn't do in five and a half years--achieve profitability and growth for the computer giant.

Every company has its ups and downs. What causes them? Endless competition, the grueling pace of innovation, entropy--I don't know, take your pick. It just happens.

And when it does, it's the CEO's job to turn things around. In most cases, the board recognizes the problem and brings in a new chief to do the job. Sometimes it works, like in the above examples. But lots of times it doesn't. In any case, the stakes couldn't be higher.

Here are 10 technology companies in need of turnaround, repositioning, or something different, or with turnarounds in various stages of progress:

Advanced Micro Devices
Hector Ruiz reignited the company when he took the reigns in 2002, but the rescue operation failed and the perennial No. 2 microprocessor company is back in trouble...again.

While profitable, top-line growth has stalled and the company's positioning lacks focus. The board ousted founder George Perlegos and installed Steve Laub in his place as CEO. Now that a protracted proxy battle is over, the ball's in Laub's court.

Hired in 2004, Chief Executive Michael Fister has dramatically improved operating results, but a bearish revenue outlook crashed the stock and blunted the turnaround. Sigh.

The computer market of the past two years has been all about HP, not a good thing for Dell. Back at the helm, Michael Dell's got his work cut out for him to return the company to its former growth.

An acquisition spree has left the leading electronic manufacturing services provider with a case of indigestion. Michael McNamara, who took over from longtime CEO Michael Marks two years ago, needs to integrate and refocus the company--more of a repositioning than a turnaround.

Top-line growth, check. Profits, check. Share price, lack of sustained momentum. OK, maybe it's not a turnaround. Call it what you want, but Steve Ballmer's got to do something to reinvigorate the stock, and I don't think acquiring Yahoo is it.

The role of fixing the mess that is Motorola now falls to Greg Brown, who replaced Ed Zander as CEO in January. The company's market valuation is minuscule, and I don't believe a spinoff of the handset business is the answer.

The board replaced Jack Messman with Ron Hovsepian to stop Novell from getting clobbered by Red Hat and every other enterprise software company. Good luck.

Since its top three execs got axed in 2006, the Vitesse mess just seems to get, well, messier and messier. The company desperately needs a turnaround CEO to restructure the company and current chief Chris Gardner isn't it.

The board had its chance to bring in a turnaround guy after the departure of Terry Semel but installed a yahoo--Jerry Yang--instead. Now Microsoft's offer looms large and time is running out.

So there you have it. Ten companies in need of change; ten top executives in the driver's seat, tens of thousands of employees and shareholders waiting to see what happens, hundreds of billions of dollars of market capital in play.

Just another day in the technology industry.