Mon, May 30, 2005 - Page 11 News List

Tales told by Fortune 500 `comeback kids'

NOT FINISHED YET Carly Fiorina was forced to resign in February in one of the most widely chronicled dismissals in corporate history, and is eager to get back to work. But what are her chances of landing another job running a Fortune 500 company?

NY TIMES NEWS SERVICE

Carly Fiorina delivers a speech during a visit to the Hewlett-Packard's factory in Barueri, Brazil, in August 2004. Fiorina was being considered to head the World Bank, the New York Times said in March.

PHOTO: AFP

When Carly Fiorina, Hewlett-Packard's former chief executive, gave a long-planned commencement speech this month at North Carolina Agricultural and Technical State University, she commiserated a bit with the graduating students who were starting to look for jobs.

"I've been working on my resume," she said. "I've been lining up my references. I bought a new interview suit."

Clearly, Fiorina, who was forced to resign in February in one of the most widely chronicled dismissals in corporate history, is eager to get back to work. But what are her chances of landing another job running a Fortune 500 company?

She can certainly take heart from the examples of others. America, after all, is the land of self-reinvention. Consider Donald Trump, who has weathered crushing debts and bankruptcy to become perhaps the nation's best-known businessman.

Or Steve Jobs, who was booted from Apple Computer as its fortunes flagged, went off to found the successful computer animation studio Pixar and then was invited back to Apple, where he is leading its renaissance.

Even being convicted of a crime need not be a career-stopper. Martha Stewart, most famously, seems to have survived time in prison for having lied to government investigators looking into a stock trade. She returned to her company last March as shareholders applauded.

But for all the success stories, corporate comebacks are by no means easy. In fact, a 1999 study of chief-executive turnover at the 1,000 largest American companies by market capitalization found that fewer than half of the CEOs dismissed for negative reasons had returned to leadership roles. The study also included executives dismissed in the wake of mergers and for other reasons.

"There is a cloud that hangs over you," said Jeffrey Sonnenfeld, an associate dean at the Yale School of Management, who wrote the study with Andrew Ward, a professor of management at the University of Georgia.

"People are fearful of being associated with failure. You have to overcome that fear, and it is very difficult."

And the odds have become only longer since then. Corporate scandals of the last few years, and the governance and disclosure laws enacted in response, have made it more difficult for former chiefs to rebound.

"Corporate boards are more acutely aware of their responsibilities for oversight than ever," particularly after the passage of the Sarbanes-Oxley anticorruption law, Ward said, "and they are more accountable to shareholders, so in turn they are holding chief executives more responsible."

Boards are also less eager to take chances or to give an unemployed CEO the benefit of the doubt about previous performance. In the past, boards "thought of the company as a sports team that had had a bad run," Ward said. "They viewed the chief executive as the coach who, over the long term, had had a good record, and so they were willing to give him another chance," he added. "Now the hurdle is higher. The board is looking much more at the specifics of what happened in that particular case."

Nevertheless, executives can and do beat the odds. Some succeed by dint of their optimism, experts say, others by the skills that took them to the top in the first place. A few use connections made over the years. Often, they attain their goals simply because they refuse to give up.

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