• “Returnaround” CEOs are founders who walk back into their companies and restore them back to the businesses and brands they once were.
• Interestingly, Returnarounds have seen incredible success not by changing their companies, but instead by returning them back to the values, principles and points of differentiation that originally made them successful.
• Returnarounds illustrate the power of defining our brand – understanding and staying true to who we are as we pursue business growth.

Turnaround CEOs are (sort of) a dime a dozen. They walk in, take a flailing company, and restore it back to greatness.

But what about Returnaround CEOs – those original founders who left their companies only to boomerang back and save the business from itself? While there are only so many examples of these Returnarounds, the cases that do exist provide some unique and interesting lessons for (real) branding that we should all be aware of.

But who gets the vaunted, rare title of Returnaround?  Read on, dear reader, read on.

The Guy You Already Knew: Steve Jobs

Steve Jobs returned to Apple in 1997 after watching then-CEO John Sculley take the company to the near-brink of failure. Within five years, Jobs had returned the company back to greatness, outperforming the stock market by 127%, and creating the momentum that makes Apple what it is today.

How did Jobs do it? Interestingly – and this is a theme you’ll see with all Returnarounds – he refocused the company back to its roots. He brought back Apple’s culture of pure discipline, hard work and restless perfection. He reinvigorated the Macintosh computer. He centered the business back onto its core principles, creating an integrated, simple set of products that are beautifully designed, easy to use, and built for the individual consumer. ¹

In a telling quote, Jobs said in 2005 that “Apple’s DNA hasn’t changed.” That’s accurate, but it took Steve Jobs to tap back into that DNA to safeguard Apple’s future.

Bringing the Culture Back to Coffee: Howard Schultz

Okay, okay, let’s forget about this guy’s doomed pseudo-presidential run. Instead, let’s consider how Howard Schultz re-focused Starbucks when he returned in 2008. Schultz had watched from afar as the brand he built became untethered from its core – adding stores at an insanely fast clip, losing the passion for coffee and adding smelly breakfast sandwiches to its offering.

In the words of Schultz in a 2007 memo, the company had made a series of decisions that led to the “watering down of the Starbucks Experience, and what some might call the commoditization of our brand.”

When Schultz returned, surprise! – he didn’t (immediately) do anything new. Instead, he sought to reconnect Starbucks the company back to Starbucks the brand.

Schultz closed all Starbucks stores to retrain baristas across the country – a lost opportunity cost of $6 million dollars. He spent $30 million dollars to bring all 10,000 store managers to New Orleans for a company gathering that would start, not with a conference, but instead with 50,000 hours of community service. He got back to grinding coffee beans in stores. And he eliminated breakfast sandwiches – representing 3% of sales per store – from the company’s product mix. (Okay, okay, we know the breakfast sandwiches eventually came back.) ²

Within a couple of years of Schultz’s efforts, the company’s stock had gained 143%, a trajectory that wouldn’t stop even to this day, reaching a current valuation of over $100 billion dollars.

Don’t Forget About Chuck: Charles Schwab

Chuck Schwab built a business – and a brand – inherently centered on putting individual investors first. Early on, the company’s strategy and culture revolved around a discount brokerage business for the everyday investor, with low costs achieved through paying salaries instead of commissions, eschewing investment research and processing orders via computer.

But after Schwab went into semi-retirement and let then-CEO Dave Pottruck take the reins in 2003, the business took a dive. Some less-than-savory acquisitions were made to try to “juice” growth, product development went on an unfocused tear, prices were raised and other online discount brokerages began eating away at Charles Schwab’s customer base.

So, in 2004, Schwab came out of semi-retirement. And rather than continuing to search frenetically for growth, he re-centered the business on its core values. Schwab sold Soundview Technologies, a business that simply didn’t fit in with the company’s retail legacy. He cut costs, but rather than increasing profits, he used the capital to pass savings on to customers. And while he did evolve the company’s practices to focus more on the holistic financial services and advice business, he did so in a way consistent with the company’s principles – laser-focused on the everyday end-investor and achieving efficiencies wherever possible to deliver the lowest-cost offering.³

The results of Schwab’s efforts? Before his return, the company’s revenue had dropped $1.9 billion, with profit falling from $718 million to $109 million. By 2006 – just two years after his return – Charles Schwab’s profit had increased year-over-year by 69% to $1.2 billion.

Why These Stories Matter

So, what can we learn from these Returnaround stories that apply to branding? Here are a few important lessons:

• Roots matter. Evolution, adaptation, innovation … these things are important. But our roots – our founding principles, culture and fundamental point of differentiation – these things matter just as much, if not moreso. Successors to the Returnarounds deviated from their company DNA and damaged their businesses as a result. The lesson? Without staying true to our roots, we will untether from our brand and become a shell of the company we once were.
• When the going gets tough, look inside, not outside. It’s easy when our business becomes challenged to look at what everyone else is doing and try to mimic it. Sure, competitive intelligence matters. But Returnarounds didn’t try to imitate the market – instead, they turned inward to reinvigorate their brands, and then moved into growth and innovation mode. When we’re challenged, we must look first at who we were and who we’ve become – and rather than simply reinvent ourselves, we have to recenter ourselves and then invent.
• Profit follows purpose – not the other way around. Interestingly, each Returnaround inherited a company that was aggressively pursuing growth at the expense of its brand. When they returned, they got back to their brand purpose often at the expense of immediate growth … and huge growth then followed from that reorientation. Profit is a byproduct of the right activities, people! As a singular goal in and of itself, it can do nasty things to companies and their brands. 

Of course, there’s a single self-serving lesson from the Returnaround stories that’s the reason for the writing of this article – you have to understand and define your brand’s purpose, values and point of differentiation if you want to be (and stay) successful. By defining who we are and following our principles, we have the opportunity to achieve sustainable, branded growth that’s synonymous with true business greatness.

¹ Jim Collins, Great by Choice, p. 91-95

² Howard Schultz, Onward, p. 5, 23, 25, 35, 38, 78, 86-88

³ Charles Schwab Company History, 2004-2006