Analysis of IT news

Sunday, January 25, 2009

Apple without Steve

With Steve Jobs taking a leave of absence to treat an undisclosed health problems, everybody wonders about Jobs' actual health, if Apple will need to continue without him sooner rather than later, and if Apple can survive its CEO and co-founder.

Some claim that Apple has a lot of very talented people and will do fine, thank you very much. Others claim that Jobs is too unique a CEO to be replaced.

I personally think Apple cannot survive Steve Jobs in the long run, and I have several reasons.

For one, highly narcissistic leaders like Jobs aren't the greatest when it comes to succession. They cannot cope with the fact that someone else might do as good a job as them - let alone a better one. If Steve is notorious for being a control freak it means he doesn't trust anybody at Apple to do good enough a job without his enlightened supervision. As a result, narcisistic leaders often secretly wish (sometimes unconsciously) that the company fails after them.

Second, take a look at Apple history. Apple has been doing very well when Steve was CEO, and not so well otherwise. From the date of its creation in 1976 to 1985 where Jobs left, Apple did very well. It made a killing with the Apple II and revolutionized the computer industry with the Mac. Then, after a power struggle between Steve Jobs and John Sculley, the former was forced out of Apple. Not too long after started a long spiraling descent for Apple, releasing uninspiring products like the Apple Newton and less and less inspiring Macs. Even some professionals in the photo industry, one of Apple's strongholds, started to switch to Windows NT. Three CEOs succeeded Jobs and none of them were able to alter the trend. They lived off the Mac's legacy without introducing anything really new that would revive the brand. In 1997 even Steve Jobs, then asked to join back Apple as an "interim CEO", didn't believe in the company he co-created (he immediately sold all of his stock but one even though they were at an all-time low). But Jobs did turn the company around. He was able to make the Mac glamorous again, and Apple released two killer products: the iPod and the iPhone. Apple now is in a great position buzz-wise, operation-wise and cash-wise.

So something tells me that when the board appoints the next CEO they will do as crappy a job as they previously did.

To be fair, Jobs wasn't the best CEO in 1985. He was seen as unruly and clearly lacked operational effectiveness (and why would he? Apple quickly had so much cash at hand back then). One of the first tasks of John Sculley was to streamline the company. Steve later learnt the importance of sound operations when he started his own company NeXT and when he led Pixar, purchased from George Lucas, as he didn't have the luxury of Apple's treasure chest. As a result, Jobs was much more well-rounded when he came back at Apple and streamlined his company even better than any of his predecessors.

But Jobs has always had several rare traits, even in the 80's. Besides having a gift for generating buzz (the famous Steve Jobs reality distortion field) and being a world-class negotiator, Steve has always been a visionary who has been able to make his visions come true. Under Jobs' guidance Apple released several killer products: the Apple II, the Macintosh, the iPod and the iPhone. His company NeXT created what is now the much-admired Mac OS X. And he turned Pixar from a small company into a box-office champion that came to Disney's rescue. People should consider themselves lucky if they lead the creation of *one* killer product. Steve led several.

Sure, it's Steve Wozniak who designed the Apple II and it's Xerox which invented the graphical interface. But it's Jobs who made those projects come true, recognizing the potential of the right concepts, wooing the right developers, insisting on aspects such as look, etc. Quoting Wayne Gretzky's ice skating analogy, Steve Jobs doesn't skate where the puck is but where it's going to be.

And that's what any Jobs successor will likely lack. Apple COO and acting CEO Tim Cook is operationally very strong, but he's unlikely to be as good a visionary as Steve. Let's face it, if Cook - or anybody else for that matter - could replace Steve then Steve wouldn't have hired him in the first place. Unfortunately, Apple's business model needs a constant flow of visions. You cannot keep selling the same high-margin, cutting edge type of product forever. There will come a time where a new iPod won't wow anybody because the concept has become so ubiquitous. That's why Apple come up with the iPhone, but the same fate will eventually struck the iPhone. Sure, Microsoft has been making tons of money for decades selling Windows and Office, but those two products have stopped making people dream a long time ago. Apple is in a position where if its products aren't sexy they don't sell, period.

So my prediction is that when Jobs is replaced (Apple will likely survive Jobs even if he lives to be 100) it will be the beginning of the end for Apple. Not immediately, but eventually. Remember, Apple lived 12 years without Steve Jobs and was still alive when he came back on board, albeit in dire straits. If Jobs were to go now Apple would be in a much better position than it was in 1985. But I highly doubt they'll come up with further killer products like they're doing now. And that might be what Steve secretly wants.