Regular readers will remember that I wrote about Apple’s reliance on Steve Jobs back in March of last year. Wired had commented on the way that Jobs ran the company, suggesting, somewhat naïvely, that he was somehow unique in this regard. I pointed out that Apple is far from the first company to succeed brilliantly under a specific, charismatic leader, only to fall by the wayside once they leave. They won’t be last. Now it appears that others are beginning to wonder the same thing. What will happen when Jobs leaves Apple?
While other companies have decayed into oblivion after their heroic leader departs, Apple is special because this has already happened to the company. Jobs departed the company in 1985 for a variety of reasons. They sold record numbers of Macintosh personal computers for a time, but by the early ’90s, Apple was floundering. Many wondered if the company could survive. Predicting the date of Apple’s descent into Chapter 11 bankruptcy protection had become the technology press’s favorite hobby.
But then Jobs returned to the company in 1996 when Apple bought NeXT. Jobs’ ability to turn the company from a struggling has-been to the epitome of cool is now legend. Like the Macintosh of 1984, Apple released more products that can be truly called game changers. The Apple iPod, and its associated iTunes online store, have changed the music industry forever. The iPhone shocked a complacent mobile phone industry into thinking about user interfaces for once. Despite other flaws, it remains the most user-friendly mobile phone for the average consumer.
Jobs’ single-minded focus on Apple’s customers has no doubt been a major reason their products have found such mass appeal. The question now being asked in wider circles is what will happen when Jobs is no longer CEO? What is the succession plan? Jobs has been the singular focus of attention for so long, who can step up to replace him? They are big shoes to fill, certainly, but is this truly a fair assessment?
The next Apple CEO will not be Steve Jobs. This should be obvious, yet the tech press, and Wall Street, have a habit of forgetting even the most basic of principles when large amounts of money are at stake. Expecting the new person to be Steve Jobs II is unfair, unreasonable, and yet unsurprising. Jobs’ habit of micromanaging the company may have done his subordinates a disservice. How can any of them be expected to replace a man famous for his new product announcements? The Apple board, if they haven’t already, should be discussing the succession plan for the CEO in some depth. Apple’s shareholders should be pressuring their board for details on this most basic of board functions: their single most important job is selecting the CEO. Jobs, as a board member himself, should also know this.
I have nothing personally invested in any outcome. However, I think that watching this all play out will be most instructive to students of management and investing. No matter the decision made by the board, the market is likely to be disappointed in the short term if the change is made in the next year or so. Whenever a changing of the guard occurs, they are inevitably compared with the previous management. Unfortunately, Jobs has held the spotlight for so long, and the turnaround since 1996 has been so dramatic, that whomever replaces him will be under much greater scrutiny than normal. I do not envy them the challenge.
There is a way a transition from Jobs to his replacement could be handled well, but it will take time.
Jobs is unlikely to give up the reins anytime soon, provided his health recovers. This provides Apple with a tremendous opportunity, and perhaps Jobs’ absence from MacWorld this year is part of the succession plan in action. Now that people are starting to realise that Jobs cannot be CEO forever, grooming a successor in the public eye may be a good idea. If the transition to a suitable replacement can be made gradually, then perhaps Wall Street may view it as a fait accompli rather than as a mêlée. This would help the company continue business as usual during the transition, rather than getting distracted by market commentary on who the next CEO will be. This is not a new product announcement, and should not be sprung on unsuspecting stockholders without forewarning.
Whether or not the new CEO will be up to the task is another question entirely. The performance of Apple in the 2nd post-Jobs era will be very interesting indeed.