The CEO of Nike abruptly announced his retirement Thursday, after a tumultuous few years at the shoe and apparel company. John Donahoe came from the tech world and was brought on board in 2020. But Nike struggled to contend with new competitors under his leadership and saw flagging sales.

To right the ship, the company is bringing back former executive Elliot Hill, who previously led Nike’s marketing operation.  

A lot of companies have made moves like this, where a CEO from outside the company struggles, so they’re replaced by a familiar leader. Think Disney and Bob Iger, Starbucks and Howard Schultz, Apple and Steve Jobs.

And while bringing back a familiar face to the corner office can bring stability, it also comes with risks.

The best thing about bringing back an old hand when a company’s in crisis is it can happen really fast, said Yo-Jud Cheng, a professor of business administration at the University of Virginia.

For the company’s board, “it allows them to kind of bypass a long, protracted search process and that they already are familiar with the person,” she said. “They’ve been more or less vetted to a certain extent.”

And the returning leader already has relationships with employees and already knows the industry.

“Presumably, they can jump into action quickly,” Cheng said.

That can bring the company some much-needed stability. And in the short term, it could boost the stock price, and even quiet down activist investors.

But over the long haul?

“Companies cannot stand still. They’ve got to continually innovate and grow,” said Charles Elson, the founding director of the Weinberg Center for Corporate Governance at the University of Delaware.

“That person who comes back to stabilize the company may not necessarily be the best person to grow the company,” he said.

Because the company, the industry and the economy may all have changed while that leader was gone. 

For example, Elliott Hill has been away from Nike since 2020, said Chris Bingham, a professor of strategy and entrepreneurship at the University of North Carolina.

“Four years is, like, I don’t know how many generations in consumer products. I mean, that’s a long time in that industry,” he said.

And the strategies that worked in the past may not anymore, he said.

That’s why, in some cases, said Cheng at UVA, companies bringing back a former leader may think of them as an interim CEO, whether or not they say that explicitly.

“But underlying that, the board is generally going and searching more broadly for a longer-term successor,” she said.

The risk is that they don’t find a successor, or the new old boss tries to stick around for too long.