Why turnaround CEOs must race the clock

September 16, 2011: 5:00 AM ET

Executives who take on the challenge of devising a corporate turnaround must face increasingly tighter deadlines to show results. But how much time should a comeback actually take?

By Shelley DuBois, writer-reporterWhy Turnaround CEOs must race the clock

FORTUNE -- Everybody loves a corporate comeback. They sure look good on a resume, too, which means that the prospect of a turnaround often lures executives to take charge of troubled companies.

But CEOs who do accept the challenge are on the clock in a way that they may not have been before. In a society accustomed to instant gratification, especially when it comes to a return on the money we invest, the timeline for turnarounds are shorter; everyone has access to more information, and they can monitor a company's progress.

Recently, some CEOs have borne the brunt of shareholder impatience. Yahoo's (YHOO) board ousted Carol Bartz from the CEO chair earlier this month after what they saw was an unsuccessful two-year attempt to revive the struggling tech company to its former Internet glory.

Likewise, shareholders are getting restless about Tim Armstrong's turnaround strategy for flagging digital brand AOL (AOL). The company's most recent quarterly earnings report was dismal, and many in the industry are anxious to see positive results.

But how much time should a turnaround take? Eight quarters, says Mark Jaffe, president of executive search firm Wyatt & Jaffe. "I remember when it used to be 16," he says, "but that was before the Internet bubble. Back in the 90s, we used to give people more time. We simply thought it took longer to do things." More

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