The New York Times had an article on Michael Dell’s comeback as CEO at Dell. The former Dell CEO Kevin Rollins resigned after poor financial performance and style. I was surprised to learn that Rollins was aloof and difficult to work with. I recall several articles about Rollins and what a great CEO he was. The old perception-reality gap seems to have been at work at Dell. Although exorbitant compensation was not an issue at Dell like at Home Depot, CEO personality certainly seems to play a greater role in CEO ousters than many consultants and onlookers care to admit.

The article, “Second Acts,” had this interesting data on founders that I did not want to overlook in my blog. “If statistical averages are any guide, Dell’s performance may well improve. Rudi Fahlenbrach, an assistant professor of finance at Ohio State University’s business school, found that a company’s stock performs 9 percent better than the market after the return of a founder, which has happened with 28 companies since 1993. (Mr. Fahlenbrach counted 462 management changes in that period among 1,500 publicly traded companies.)”

Founder reputation is a whole subset in the CEO reputation space — consider Apple’s Steve Jobs and Microsoft’s Bill Gates. When I speak, I often get asked about people like Gates, Jobs and other well-known CEOs. It seems that I always have to point out that founder CEOs are in a class by themselves and cannot be compared to CEOs-for-hire.

I have to admit that I agree with what was said in the article that Michael Dell will be leading a stronger company two years from now.

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This entry was posted on Monday, February 5th, 2007 at 1:37 am and is filed under Company reputation. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.