Apple will continue to be Innovative and Successful despite the Passing of Co-founder Steve Jobs
by Paul Pagliaro
In what probably has seemed like 36 short years for those who lived through it, Apple Inc. has grown from a two man circuit board building operation in the Jobs family's garage to the biggest company in the world today when ranked by market value at halfway between 568 and 569 billion dollars(1). The companies co-founder and primary forward-thinking visionary, Steve Jobs, passed away on October 5 of last year, and this concerned many for a good reason; JobswasApple. The image of Apple's newest product unveiling's was inexorably linked to Jobs on stage clad in blue jeans and the iconic black turtleneck. We were led to believe not only was it Jobs masterminding the creation of the newest, cleanest game-changing and lifestyle-changing product, but the product came from somewhere deeper inside Jobs, like it could have only originated from his mind. Perhaps this is true, but I doubt it. He certainly built an empire, and when he was done, our perception of the PC, laptop, tablet computer and phone was significantly altered. Just as Walt Disney's playful grin is ingrained into our minds when we think of Mickey Mouse and animation, so do we see Jobs and his turtleneck in our mind's eye when we think of MP3 players and tablet computers, and just as Disney continues to be successful and full as anyone could hope for a business, Apple too will remain an industry leader and consistent innovator for some time to come.
Steve Jobs was undoubtedly a genius, but like the rest of us had some glaring flaws. He was a perfectionist, a tough boss, and not the most personable guy to ever emerge from the techie underworld of software programmers. It may seem brash or nonsensical to say Apple may be better off without him, but if employees can relax and engineers not be screamed at and a better work atmosphere results, then I would like to get my most presumptuous argument out of the way first. I am not saying that engineers should not be pushed to do their best work, but workplaces where people can relax while doing their life's best work tend to retain employees and eventually become known as great places to work. Fortune magazine relates a story about an ex-Apple employee having lunch with a current Apple employee. They had finished eating and the ex-Apple employee encouraged the current employee to get back to work, thinking he would need to. The current employee said 'Eh, I have time for coffee if you like', leading the former to conclude 'I think people are breathing now' and "it's not necessarily a compliment" (to the work atmosphere during Steve Jobs tenure as CEO at Apple) (2). To put things a little more bluntly, we have journalist Michael Wolff who says"There's the mercurialness; the tantrums; the hours-long, dictator-like speeches; the famous, desperate, and transparent hogging of credit; and always the charismatic-leader complex […], through which he has been able to seduce and, subsequently, abandon so many of the people he's worked with. He may be as troubled and unsocialized (and, too, as charismatic) a figure in American business life as anyone since Howard Hughes" (3). If Jobs was irreplaceable, then why then why did he feel the need to “hog credit”? Surely then there is enough innovative people besides Jobs at Apple to usher in a new era. Then to contrast Wolff’s criticism, Steve Evangelist, who worked for Apple under Jobs, argued that Jobs' abuse had a positive impact on him and his work as he states in his blog,"I was incredibly grateful for the apparently harsh treatment Steve had dished out the first time. He forced me to work harder, and in the end I did a much better job than I would have otherwise. I believe it is one of the most important aspects of Steve Jobs's impact on Apple: he has little or no patience for anything but excellence from himself or others" (4). Still, the bottom line is Jobs is gone, and new CEO Tim Cook is unlikely to verbally abuse the employees for better or worse. The environment is going to be more laid back, and that does not need to be a bad thing for Apple.Maybe Jobs needed to push his employees a little harder to get the company to where it is now, at the top tier of the electronics and technology world (when they were once struggling), but now they only need to maintain. The organization of the management and the project development in the company that was designed by Jobs is a large factor in the company’s success and will continue to work in Jobs’ absence so long as it stays in place. "As opposed to traditional product management, products don't pass from team to team: they are worked on in parallel, all at once, in some sort of organic process punctuated by cross-team meetings" writes RomainMoisescot on his website AllAboutSteveJobs.com(5). As far as corporate development, under Cook the company is becoming " 'far more traditional,' meaning more MBAs, more process, and more structure" (6). If Cook thinks more structure is a good idea, it probably is.In other words, he is a competent leader and a perfect choice as a successor.
While it remains to be seen if it is possible to replicate Jobs innovative sense and knack for marketing, Apple will be able to remain successful as masters of efficiency and management, which are current CEO Tim Cook's strong points. It may turn out to be impossible to teach innovation, but it is not impossible to teach how to operate a successful business. Said Trip Chowdry of Global Equities research"you can teach people how to be operationally efficient, you can hire consultants to tell you how to do that, but God creates innovation" (7). Perhaps true, but Apple mastered a formula, andhas "one of the best executive benches in the world" (8). Cook was the former Chief Operations Officer for Apple before being promoted to CEO when Jobs passed. Essentially, he ran the company day-to-day to free up Jobs to do what he did, which for the most part was a whole lot of everything. Fortune magazine writes "Cook is the master of operational efficiency, having joined Apple in 1998 to revamp its badly broken system of factories, warehouses, and suppliers" (9). "If anything, Apple under Tim Cook will embrace efficiency to an even greater degree, especially as the company grows bigger and more complex - to the dismay of those who think techies should rule the roost" writes Fortune (10). Although Cook is more business-minded than Jobs and has made some changes since taking over the reins (for example, granting a first ever dividend), he in no way plans to reform the company's focus or tramp out the innovative spirit Jobs leaves with them. Essentially the atmosphere and structure may change, but the culture will not.Said Cook at the Goldman Sachs investor forum "Steve grilled in all of us over many years that the company should revolve around great products and that we should stay extremely focused on few things rather than try to do so many that we did nothing well" (11). No doubt the quality of the products will be the tell of the real changes at Apple, but for now we can be sure that Cook "A 14-year veteran of the company, [Cook] is maintaining, by words and actions, most of Apple's unique corporate culture" (12). One of the minor changes Cook has made that could bring mammoth results is just being slightly more open and accessible as a CEO. Probably the best thing Cook could do for Apple is to go ahead fearlessly, blazing his own path, without trying to be Steve Jobs, and to do what is best for Apple rather than to "do what Steve might", for after all, as I mentioned earlier, Jobs did some things out of his purelyobstinate nature. At the end of the day, Jobs might just be too hard to replace. Time Magazine relates Apple to Sony, the portable electronics giant and major innovators in the industry before Apple came along and invented the iPod. Sony's founders, Akio Morita and Masaru Ibuka were visionaries much like Jobs, and when they left, Sony was never the same. Of course Sony still exists today, and is very successful, but it is believed they faltered by trying too hard to "recapture the old Morita-Ibuka spirit to guide the company to its future" rather than looking forward and actively creating it (13). Cook does not seem the type to get passive about this, but it is sound advice regardless, and although Cook is more the business type than Jobs, he still understands that for Apple especially it is all about the product. Again at the Goldman Sachs conference he reiterated "The paramount thing is the product. It is the focus. Of course distribution, we’ve recognized the difference there and in purchasing power" (14).Goldman Sachs research analyst Bill Shope said of Cook "by any quantitative measure, so far his performance is phenomenal" (15). And he is only getting started. Cook himself said "Apple is this unique culture and this unique company. You can't replicate it. I'm not going to witness or permit the slow undoing of it.I believe in it so deeply." (16).
Apple is not going to just sputter out with their leader gone. People have fallen in love with the Apple aesthetic that Jobs worked so hard to cultivate. They have tremendous momentum right now and seemingly more people converted to the Apple faithful every day. Apple's market value has gone up about $140 billion since Cook took over as CEO almost a year ago. He has not earned full credit for the surge in stock price, the only products that have come out under Cook has been the iPhone 4S and the iPad 3, but the point is the company is not "rudderless" without Steve Jobs, as some had feared it would be. Cook has worked hard tostrengthen rapport with contract manufacturers in Chinaand improve working conditions for employees of Apple factories, which on any given day are garnering criticism from somewhere in the media. Cook has gone as far as to register Apple with the Fair Labor Association, a third party group that is designed to monitor them and their practices. They plan on "doubling down on manufacturing in China“and upgrading manufacturing facilities (17).
Apple plans products years in advance. Jobs apparently left detailed product designs and plans to carry the company through the next 2-5 years. Said Gene Munster, a longtime Apple analyst "They're going to do just fine the next two years.It remains to be seen if they can conceive the next big thing after that" (18).In the realm of innovation, there is probably going to be a more advanced version of the iTV soon enough as Apple moves forward with their plans to dominate all screens in your house(19). They are hard at work on their iCloud platform as well to store information on a "cloud" and allow a user to access their files where ever they are or happen to go, which is brilliant because it makes it more appealing to own multiple Apple products if you know you can always quickly and easily access your files (20). Long time Apple analyst and Mac User, Gartners Michael Gartenberg believes the iCloud is absolutely essential to the companies future success especially for Apple because they develop not only the device but the software that runs on it, "end to end" as he puts it, so for consumers to realize this function and put it to use by purchasing more Apple products is a powerful selling point (21). It is also part of Cook's belief that customers should be happy and not "pulling their hair out" and this is another way Apple succeeds (22). They are making their way into the education market with the hope the iPad can help improve the educational system. There are already more than 20,000 educational apps developed for the iPad and 1.5 million in use in the education system.Apple is also making it very appealing to become a developer on the iPad. Said Cook at the Goldman Sachs conference "If you invited everyone working on iOS [to a hotel conference room] or on that other operating system [OS X], you wouldn't be able to fit everyone [into the conference room]!" (23). Apple is growing every day. They are attracting more users that are going to buy multiple Apple products to use. They continue to grow, and people are clearly willing to pay what’s on the price tag. This has left them with a surplus of cash (around $98 billion) that will allow them to continue their growth and innovation.
Apple is in a state of transition, but they have been in a state of transition for the past decade at least. They are in a constant state of flux, and this is a huge part of their success: their ability to reinvent themselves and adapt to the changes within their own company and those outside forces as well. Long time Apple analyst and Mac user Gartners Michael Gartenberg said "Apple has always been a company in transition" (24). They thrive on it, and are the best in the world right now. They have dealt with Jobs departure well and will benefit from the absence of his more difficult character traits. Tim Cook is steering the company in the right direction already and will undoubtedly keep the company thriving. Only once Apple dominates the screens in your house will they need to worry “what’s next?” And probably even then, they have built a culture that will figure out the answer to that question.
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