Nearly a year ago, I wrote about an unloved company in the technology sector. The company was Cisco Systems (CSCO). And a year ago, many investors were shying away.

That’s because the company had several disappointing quarters and was only just beginning to turn itself around.

Today, the company’s margins and outlook have improved. The dividend has been raised. And, following the weakness of “Web 2.0” companies like Groupon (GRPN) and LinkedIn (LNKD), companies providing Internet infrastructure seem a much safer bet.

So why was Cisco’s turnaround successful? After all, all companies go through rough patches. The economy could turn, a new competitor could gain market share, management could go on a binge of acquisitions or lose track of its core competency.

Today’s highest-flying stock, Apple (AAPL), was once itself a turnaround, requiring a bailout from Microsoft in the late 1990’s. But well before that it had been a high-flying stock back in the 1980’s.

Over a long enough time period, a similar pattern will bear itself out at many other companies. Hype surrounding a company is followed by pessimism, only to repeat itself.

Some companies that tried to turn themselves around in recent years have failed. Companies in this area include General Motors (GM) or Eastman Kodak (EK). Why did they fail where Cisco succeeded?

For starters, Cisco may have been in the doldrums the past few years. It may have seen competitors sweep in. But the company didn’t lose money. GM and Kodak had problems as their industry transitioned, and they lost money as a result. It should be telling that Cisco initiated a dividend during its struggle, whereas GM and Kodak ended up eliminating theirs.

Next, the company made relatively rapid changes in response to the market. When digital photography came out, Kodak sat on the sidelines for far too long, losing out on an area it could have easily dominated. As the global economy demanded lower costs to manufacture automobiles, GM relied on a top-down bureaucratic and unionized approach in line with other American automakers.

Yes, GM and Kodak are old companies with a long operating history. They have large pension obligations. But they also had a powerful niche and brand that they let slip away. That’s why we still know the phrases: “What’s good for GM is good for America” and “It’s a Kodak moment.”

At some point, a company trying to turn itself around will likely succumb to a rapidly changing world. But if you want to invest in turnarounds, look for a company that can still make money when the market’s written them off. Also make sure management is willing to make the changes necessary to not only survive, but thrive.

Management ego has done more to destroy corporations than a new competitors, lower costs, or improved technology. What’s important to remember is that the market—the decisions of millions of people—is ultimately in charge. That’s what management has to respond to.