How Much Does Steve Jobs Matter?

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With Steve Jobs’ mortality very much on the front pages, opinions about Apple’s future post-Jobs range from apocalypse to no big deal.

There’s a very interesting article from Harvard Business Publishing that lauds Jobs for his game-changing products and impact on Apple but knocks him for being among the worst business managers around, this due to his autocratic and idiosyncratic management style. The author wrote:

“Jobs, for all of his virtues, clings to the Great Man Theory of Leadership — a CEO-centric model of executive power that is outmoded, unsustainable, and, for most of us mere mortals, ineffective in a world of non-stop change.”

Obviously not an Apple Acolyte – and an interesting point about leadership styles and what to emulate, or not. There is no doubt that Jobs asserts his style on Apple in ways that I find “interesting” – allegedly parking in handicapped spaces, micro-managing, off-the-wall secrecy and tyrannical outbursts that are legend among Apple’s workforce. This is a price that Apple’s Board is all too willing to pay for his magic touch. Right now, Apple is Jobs. As stated in the latest Annual Report:

“Much of the Company’s future success depends on the continued service and availability of skilled personnel, including its CEO, its executive team and key employees in technical, marketing and staff positions.”

What some are debating is how intricately intertwined Apple’s future is tied to Jobs. Lacking cloning, Apple at some point will enter the “Post-Jobs” era, for better or worse. I think its instructive to look at General Motors for some clues as to how much the guy at the top influences a company.

GM recent history started with Roger Smith. Smith by education is basically an accountant. I have been in a company where at one point the CEO was an accountant and the company’s culture distinctly shifted to watching the numbers rather than watching the market. In an effort to control costs, Smith reorganized GM to share common components across car divisions. What happened? Buick looked like Chevy like Cadillac etc. Smith reigned over a series of disastrous moves that set GM on a downward course that never reversed.

Where was the Board in all of this? Boards are funny creatures – many Boards are packed with the CEO’s friends who are reluctant to kick out their pal. I’ve seen that first hand and it’s more the operating rule than not. So Smith reigned for some nine years leaving quite a mess in his wake.

Roger Stemple succeeded Smith for two years. An engineer by training, he only lasted two years; whether a scapegoat or just not up to it, obviosly he had no real allies on the Board and wasn’t around long enough to leave his imprint on GM.

John Smale came in from 1992 to 1995 and succeeded in getting GM on its legs – not just by cutting costs or improving efficiencies:

“Smale was instrumental in reforming the management structure of General Motors. He upgraded management systems by focusing attention on customers in both car design and sales. He hired an executive to act as marketing czar and pushed for strong brand management. He also promoted more efficient production methods. Smale directed GM towards a strong, unified corporate vision and a strategy.”

Ah – the “vision thing”. Now note that Smale was NOT a GM guy – he came from P&G, a tried-and-true consumer products company which is known for its consumer marketing skills. Companies in trouble need change agents, and rarely does a change agent come from within. Smale had a full career at P&G and after turning things around, stepped down.

John Smith Jr. succeeded him and then Rick Wagoner who was recently thrown under the bus by the government this year. Wagoner’s decision making prowess included:

  • Cost cutting
  • Focus on gas-guzzling SUVs
  • Axing the EV1, GM’s electric car

I hate to say it, but Wagoner’s background is finance.

In contrast, Ford recruited its change agent from Boeing (Alan Mullaly) and benefited from the “vision thing” of William Ford, Jr., who apparently saw the writing on the wall as to where energy prices would take the market and emphasized smaller more fuel-efficient cars. Mullaly, much to his credit, de-powered the financial organization’s influence, very much to Ford’s benefit.

All of this inevitably points, I think, to the degree to which the guy at the top impacts every nook and cranny of a company. In Apple’s case, I believe Jobs’ has so influenced and ingrained his idiosyncrasies on its culture that Apple without Jobs will definitely be a different company. Mind you it will not collapse, it will not flounder and it will be profitable – it just won’t be as much of a game-changer as it is now.

Apple will be at least an OK company post-Jobs and maybe a very good player, but anyone who thinks Apple will be as much a force in the market as today is deluding themselves.

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