AMD vs. Yahoo: The Anatomy of a Turnaround

 

There is a process to doing a corporate and, given how frequently companies find their markets, competitors and prospects changing, you would think it would be wide-ly taught. But it isn’t. Largely, the reason why the majority of efforts perform poorly is that the CEO is effectively learning on the job. The process has four major phases; 1) the selection of the team, 2) the diagnosis of the company, 3) the formation of a plan, and 4) the execution of the plan.

In contrasting two recent turnarounds in process, ’s CEO Rory Read, who participated in the turnaround of the IBM PC company under Lenovo generally has been a showcase of best practices, while ’s Marissa Mayers has not. Part of the difference between them is that there is a critical piece that needs to be in place to ensure successful results: The board doing the initial selection for a new CEO needs to know what business the company they are attempting to recover is in.

For AMD the business segment was clear. For Yahoo, not only is their segment undergoing dramatic change, it wasn’t clear which part of it they were actually going after, making the board’s job much more difficult.

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NOTE: This column was originally published in the Review.

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