When Gene S. Godick joined Verticalnet Inc. in the summer of 1998 as CFO, anything seemed possible for the company, at that time an operator of Web-based business communities. But after the roller-coaster ride of going public, watching the stock price skyrocket, seeing the staff grow to a high of 1,700 people, and then watching it plunge to 250 people in 2001, Godick left. He thought the company’s business model was flawed and was sure more layoffs would follow. “It was like witnessing a crowd of hungry people struggling to get the last slice of pizza,” he recalls.
So why did he return to the troubled company the following year?
“I thought it would give me closure. And I thought I could make a difference,” says Godick, 39, who received a phone call from Verticalnet’s chairman in November 2002 informing him that the company’s CEO and CFO were about to resign. The board wanted his help in preparing the company for sale. Although shepherding a company through bankruptcy — a possible next stage for Verticalnet — wasn’t a happy prospect, it was an experience Godick thought could offer useful lessons. And the job posed little career risk, according to one of Godick’s mentors “If you succeed, you’re a hero,” he said, “and if you fail, I’m not sure anyone blames you.” So with some persuading from former colleague Nathanael Lentz, who had just become Verticalnet’s fifth CEO in two years, Godick returned to help sell or save the company. He served as a consultant until February 2003, when he became CFO again.
A returning finance chief is often walking into a high-pressure situation, says executive recruiter Peter Crist, founder of Crist Associates. “Usually [the return] has something to do with turning the company around or fixing a problem, and it means that the board places a premium on that person’s knowledge of the company,” he says. “The board is looking for a steady hand on the oar.” The need for someone who can get up to speed quickly is the main reason companies rehire an executive, says Crist, although existing relationships with lawyers, bankers, accountants, and other constituents also play a role.
For their part, finance officers who have returned to their former posts cite two key factors in their decision: the challenge of the new task and personal loyalty to the company or former co-workers.
Friends in Need
Personal relationships played a significant role in veteran finance executive Karl M. von der Heyden’s decision to rejoin PepsiCo in 1996. Sitting finance chief Robert Dettmer was retiring, and Pepsi needed a strategic overhaul. Roger Enrico, then the soft-drink maker’s brand-new CEO, thought von der Heyden was the man for the job. “I was initially not at all interested in rejoining a large company,” says von der Heyden, now 68. “I had done that for almost 40 years.” But Enrico, a longtime friend from von der Heyden’s previous stint at Pepsi, forecast it would take just a year to get the company back on track. Von der Heyden says he also felt a sense of responsibility to the outgoing chairman, the late Wayne Calloway. Calloway had initially hired him to join Pepsi’s finance team in 1974, and was ill with cancer.