United Airlines. Providian Financial. Warnaco. Xerox. Gillette. Campbell Soup. Just a few of the companies that have hired so-called turnaround CEOs in the past year.

The list is growing daily — and little wonder. In these recessionary times, the promise of salvation by a white knight exerts a powerful hold on corporate directors of troubled companies. "Boards want to be seduced by someone whom they have been told is a turnaround artist. They're looking for someone to help them out of a desperate situation," explains associate professor Laura Resnikoff, who teaches a course in turnarounds at Columbia Business School. Investors like them, too: The appointment of a CEO with turnaround credentials rarely fails to boost even the most moribund stock.

But experience suggests that the phrase "turnaround CEO" is only rarely accurate. More often it's simply optimistic (think Ford's Jacques Nasser) or even a complete misnomer (think Sunbeam's Al Dunlap). Few of them (think IBM's Lou Gerstner) return a company to its former luster. At best, most of them succeed only in slowing the fall and providing a reasonably soft landing for investors, whether through sale, merger, or even Chapter 11 filing. In fact, a May 2000 article in the Harvard Business Review estimated that 70 percent of all turnaround efforts are failures.

But thanks to the itinerant nature of their careers, turnaround CEOs are usually off to the next assignment before the success or failure of their previous charge is known. "These guys get their halos way too early, before we've had five to seven years to see what they did," says Resnikoff.

So how should their records be fairly assessed? What really separates the successes from the failures and the patch-up jobs? And what are the chances that their next turnaround will be the one that solidifies their reputations?

To find out, CFO examined the careers of three CEOs who have made names for themselves as turnaround guys: Norm Blake, CEO of Comdisco Corp.; Allen Questrom, CEO of J.C. Penney Inc.; and Robert S. "Steve" Miller Jr., CEO of Bethlehem Steel Corp. Collectively, their résumés include 20 attempted turnarounds, with only eight outright successes, five question marks, and several failures. And while the jury is still out on their latest efforts, their track records serve as fair warning to any company expecting "happily ever after": turnarounds are inevitably painful, invariably different from what was envisioned, and often too difficult for one individual to achieve.

Three Leadership Styles
What Blake, Questrom, and Miller have most in common is that they have made careers out of troubled companies. Without question, their arrivals have been greeted with great relief (on Wall Street, if not necessarily in the employee ranks). That's not surprising considering the messy situations they tackle, says Resnikoff. "Many troubled companies drift for a long time," she says. "Someone who is willing to assess the problem and take action is recognized for his leadership."

But that's where the resemblance among the three men ends. Miller, for example, defines his primary objective as stabilizing a company--he usually adopts the title "interim CEO," and describes himself as an expert in crisis management, not turnarounds. "My role is to arrest the decline and create a foundation for rebirth and growth," he says. In fact, he adds, "I would not be a good hire for a company that is doing well--I'd probably mess it up."

He's also quick to point out that his success rate is considerably less than 100 percent. Proud of his work at Chrysler, Morrison Knudson, and Aetna, the 60-year-old Miller considers his efforts at Federal Mogul, Waste Management, and Reliance Group Holdings either mixed bags or outright failures. That's no surprise, as he is famous for accepting assignments within 24 hours. "I come in without any due diligence; if you have to study a company for a month before you commit, you're probably the wrong person for the job."

Blake, in contrast, calls himself "more of a builder than a fixer." Quick to express contempt for "Chainsaw" Al Dunlap, Blake winces at being dubbed "Pink-slip Norm" for cutting staff by 53 percent during his first three years at USF&G Corp. "Anybody can fire somebody," he says. "The real tough stuff is building a new business on top of a broken one."

In practice, Blake, 60, seems more likely to spruce up companies for sale. He sold USF&G to The St. Paul Cos. after eight years, sold Promus Hotels to Hilton after only a year, and is now orchestrating the sale of Comdisco's top-performing businesses in bankruptcy court.

Of the three, Questrom, 61, seems most willing to see the building process through to completion. He has spent 30 of his 37 years in business working for various divisions of Federated Department Stores, including a 7¹/2-year stint rebuilding the parent company. And analysts believe his singular focus on retail will be an asset in his new role as CEO of troubled J.C. Penney. "Even Questrom's competitors refer to him as one of the best merchandisers in the business," notes Wachovia Securities analyst David M. Maura in a recent report. That's key, says Resnikoff, in an industry where "there is an opportunity to disappoint your customers every minute."

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