Dell’s Return: A New Era for Boomerang CEOs?

By Del Jones, USA TODAY (All Rights Reserved)

The Comeback of Michael Dell

When Michael Dell returned to lead his company on Wednesday, he became the first “boomerang CEO” to take the reins of a Fortune 500 company since 2005. At 41, Dell, the founder of the tech giant, replaced Kevin Rollins, 54, who had served as Dell’s chosen successor just two years prior.

The Rise and Fall of Boomerang CEOs

Boomerang CEOs, or former CEOs returning to lead their companies, used to be a common phenomenon. Between 1999 and 2003, an average of 10 former CEOs returned to lead the largest 1,500 companies each year. This frequent turnover prompted Ohio State assistant finance professor Rudi Fahlenbrach to co-author a study titled “The Market for Comeback CEOs,” which was published in November.

However, the trend has seen a significant slowdown in recent years. In 2006, no boomerang CEOs returned to Fortune 500 companies, and only two did in 2005 (at TJX Cos. and First Data). According to Leslie Gaines-Ross, chief reputation strategist at Weber Shandwick, this shift shows how rare these types of returns have become.

Michael Dell: A New Kind of Comeback Kid?

Michael Dell’s return is generating comparisons to Steve Jobs’ iconic comeback at Apple in 1997. Jobs’ return marked the beginning of a remarkable resurgence for Apple, driving a stock increase approaching 2,000%. While Jobs’ situation is unique, as many boomerang CEOs stay just long enough to stabilize the company and put succession plans in place, Michael Dell faces different challenges.

The Challenges Ahead for Dell

Jeremy Garlington, an executive leadership consultant, notes that unlike Apple, Dell operates in an industry “racing to the bottom of the commodity barrel.” While Garlington recognizes Dell’s proven track record, he suggests that even Dell himself might acknowledge that turning the company around will be a lengthy process.

Is Dell’s Comeback a Sign of New Leadership Trends?

Dell’s return raises the question of whether the “boomerang CEO” trend is making a comeback. Although the pace of boomerang CEOs has slowed in recent years, Dell’s case may signal a new era where once-discarded leaders are given another chance to right the ship.

Whether Dell can replicate Jobs’ level of success remains to be seen, but one thing is clear—his return marks a significant moment in the ongoing story of corporate leadership and the evolving role of CEOs.