LEADERSHIP: The problem with gods is that they are hard to replace. What will happen to Apple if its charismatic co-founder and chief executive Steve Jobs doesn't return from his current sabbatical?
‘WHY JOIN THE Navy when you can be a pirate?” This is the word, according to Steve Jobs.
Back in the old days, when it all started, before he went away and came back again – a return known to all as the Second Coming – Jobs took to wearing a T-shirt with “Pirates! Not the Navy” imprinted on the front. He gave them out to his closest disciples at business meetings. And as with any god, his words were ransacked for meaning.
Is Microsoft the Navy, Steve? And Apple the pirates? Is that what you mean? No, don’t tell us; don’t explain. Far better that we project ourselves, our hopes and dreams onto you and your logo that can be anything we want it to be.
Yes, we’re the sexy renegades breaking all the rules. Down with Microsoft, their (too) geeky leader and their monopolist tendencies. Down with IBM, the backbone of bureaucracy, and Dell, with its connotations of middle management and career disappointment. They are the enemy, the old regime. We’re breaking down the walls. They are the wall.
Steve Jobs brought us the iPod. The iPhone. The iPad. Then he was Pixar, with Buzz and Woody and Mr Incredible. Steve wears a black polo neck and faded jeans, and hides wafer thin laptops in an envelope. When he appears, he brings the future.
Tell us what to buy, Steve; show us where we’re going. We want to be pirates. Because we too are Apple. To the core.
The problem with gods is succession. And right now, Jobs has shifted from being Apple’s most valuable corporate asset to being the subject of the most frequently asked question – one that hangs over the long-term future of the company.
What will happen to Apple if Jobs, the company’s co-founder and long-time chief executive, doesn’t return from his very public sabbatical, brought about by health problems?
The question came first from an unlikely source: the Central Laborers’ Pension Fund of Jacksonville, Illinois. This fund owns a small amount of Apple stock but when it asked the company’s board for details of its post-Jobs plans, it was rebuffed. Further pressure came from bigger investors, but still nothing concrete has been offered.
The Apple board’s aloofness stems from its confidence that it has the backing of the majority of shareholders. After all, the value of Apple shares has doubled every year for five years. But there’s something else at play here: a need to keep the company’s internal workings away from the glare of the media and the iPhone-buying public.
“Apple completely misconstrues the intent of the shareholder proposal,” said a spokesman for the Central Laborers’ Union, holding out an olive branch. “If Apple talked to us that would have been cleared up.”
A betting man would take a wager that the Central Laborers’ Union of Jacksonville has a less, shall we say, nuanced view of branding than Steve Jobs.
The Apple board knows only too well that the very last thing the company needs is for us to begin viewing it as just another computer manufacturer, peopled not by wizards and elves but by real people with flaws and human failings. At that point, the magic dissipates and the brand equity to which Jobs has devoted his adult life begins to fracture.
In an ideal world, when seeking the truth behind how Jobs works, we would talk to him and he would tell us. But Jobs, and Apple, is an information black hole to the extent that a cottage industry has grown up to fill it. Jay Elliot worked alongside Jobs for five years in the early 1980s and has written a book called The Steve Jobs Way.
There’s plenty in there about the importance of the product-centric approach, of the passion and attention to detail for which Jobs is famous. In it, Elliot describes his former boss as a “talent magnet”. He believes the company’s senior executives have the competence to continue to make very high quality products.
But the question remains: do they have “the vision thing”? On this Elliot hedges. “Those around him have a clear idea for Apple,” he says, when we speak earlier this month. “His leaving won’t have that much of an impact immediately. He has always worked five years out, so that’s when the impact will be felt. The short-term effect (of his leaving) will be small. In five or 10 years’ time we’ll look back and make a judgment.”
Elliot cites precedents of charismatic leaders who have had a similar impact on corporations. “When Walt Disney died, Disney the company continued. David Packard and Bill Hewlett left and HP continued on,” he says.
But a recent news story generated yet more speculation. It suggested that Jonathan Ive, Apple’s chief product designer and the man credited with the look and feel of many of the groundbreaking run of products since the iPod, is thinking of leaving the company. Ive is British and, so the rumour goes, is keen to relocate and educate his children in England.
“Jonathan Ive was hired during Jobs’ break from Apple. When Jobs came back he cleared out the senior executives and brought in his own people. But Ive survived that cull, because he shared Jobs’ product vision.”
“Steve’s break from Apple” is the big moment in Apple’s back story. Jobs left the company in 1984, following disagreements over the direction it was taking. This period is talked of in hushed tones, the dark age when Apple fell in to the same trap it is now trying so hard to avoid: ceding control to Wall Street.
“Back in the early 1990s, Apple went in a corporate direction rather than a product direction. That’s when the company almost went bankrupt,” says Elliot.
This reveals perhaps the most underrated of Jobs’ talents: his ability to keep the banks and the market analysts onside, and to fight the market’s demands for more and more product. The run of huge success Apple has enjoyed since Jobs’ return in the late 1990s is due, in no small part, to his management of investor expectations. “I’m proud of the products we didn’t make,” is a favourite Jobs sound bite, referring to the company’s ruthless adherence to excellence in production, design and, later, retail, both online and via the Apple Stores.
“Steve’s brilliance is that he understood the whole process – from product development through to shipping the product to the consumer – right from the start, back in 1978,” says Elliot. “He was already thinking about how he wanted people to think about Apple. It’s about products. Other companies tried to brand the company. But if the product is not up to it, the brand gets dragged down with it. Steve has always been about the product – never about the funding, or ‘how much money do I or the company have?’, or the stock price.
“He’s not caught up with Wall Street and the financial stuff. For those following, that’s tough to manage. He’s the world’s best user. He uses products. He wouldn’t produce a product he wouldn’t use himself.”
Elliot chuckles ruefully as he recalls a recent news story to illustrate his point.
“Ford is calling back 150,000 trucks which had an airbag that went off by mistake. If I was the of Ford I’d be furious, but if he drove one of those trucks home every night he might understand why his products aren’t as good as they could be.”
Jobs’ involvement in Pixar has influenced Apple, says Elliot. “The future of technology is about who is going to control content.”
Meanwhile, the company’s dominance of the music industry via its iTunes platform is being expanded. The fight of the next decade may be with Google and its streaming channel YouTube rather than with other computer makers.
"When he took over Pixar they hadn't done anything longer than a two-minute cartoon. Then they did Toy Story.Steve learnt from Pixar that content is king."
Were Steve Jobs to retire, he would have “left them with three or four years of vision from a product point of view,” says Elliot. The question is whether they can find someone to replace him who’s made of the same stuff.
Elliot’s answer to that one seems to be shared by the money men from the Central Laborers’ Union of Jacksonville: “I don’t think that person exists.”
