But then, in January 2005, a mere eight months after May bought Field’s, the May CEO resigned; Khan was under fire for vastly overpaying to cinch the deal. Lundgren immediately seized the opportunity to buy all of May— much bigger game purchased for a fabulous price. “After selling assets that were part of the bigger $11 billion deal, we ended with a net purchase price of $3 billion,” he recounted, “which is $200 million less than what May paid for Marshall Field’s. I got Marshall Field’s plus all of the May Company assets that we wanted in order to expand our brand.

Some years earlier, Federated had snapped up the venerable Macy’s chain, and Lundgren proposed that as part of going international, Federated should change its name to Macy’s Inc. and change the names of its regional stores— Burdines in Florida, Lazarus in the Midwest, Robinson’s May in Los Angeles— to Macy’s. Some shoppers loyal to the Marshall Field’s chain were outraged, especially fans of the beloved flagship Marshall Field’s store in Chicago. Customers marched in protest, carrying placards calling for a boycott and jeering “Macy’s Is Just Wal-Mart with Pretension.

What Lundgren intuited— which tool a good deal of persuasion to impress upon stakeholders, both within and outside the company, over the course of the next several years— was that the more online sales challenged brick-and-mortar retail, the more important a truly national brand following would become. Federated had launched a retail website back in 1998, when Amazon’s business model was still a matter of much dispute and Amazon hadn’t yet branched out into broader department-store categories.

The CEOs who are most successful in this middle stage come to understand that they won't be able to lead the transformation envisioned for the company without a personal transformation. Larry Merlo had never spearheaded strategy. Terry Lundgren came up in retail as a master of in-store merchandising, with no experience in online sales or in technology generally.

Crocs negotiated with Blackstone to sell it a 13 percent stake for $200 million, rather than an outright buyout, and awarded two board seats as part of the deal. Blackstone was deeply engaged in assisting with the turnaround, digging into data and helping drive change. The firm’s involvement also provided “tremendous air cover,” Rees said, meaning protection from the market’s punishment of the stock. For five years of “what was a very challenging, deep-seated turnaround,” he described, Crocs “didn’t worry about quarter-to-quarter decision-making; rather we set our focus on long-term, multiyear decision-making, which was initially difficult, as our stock was moving dramatically” due to those moves.