• Does Apple Have a Succession Plan?

    January 8th, 2005

    Many feel that when Steve Jobs left Apple in 1985, the company lost its way, and that it only returned to its core values on his return. Of course it still took a while for Apple to really hit the mainstream, and it came like a bullet out of left field, when the iPod transcended the music player arena and became a cultural phenomenon.

    Last summer, news that Jobs had contracted a rare form of pancreatic cancer came like a bullet from the wrong direction, and, for once, raised some serious questions about Apple’s future. Sure, Jobs has apparently recovered from his illness, and, at age 49, appears poised to lead the company he co-founded for many years to come. But he is extremely lucky. Most victims of this type of cancer do not survive the encounter.

    But assuming Jobs doesn’t suffer a relapse, nor any debilitating illness in the foreseeable future, accidents and natural disasters could cut his life short or incapacitate him. Now I don’t want to be morbid about this, but a rapidly-growing international corporation must consider all possibilities and have contingency plans.

    So the big question is this: How will Apple survive without Steve Jobs? Sure there are many extremely skilled people working for the company now, and they would no doubt do the executive office proud. But Steve Jobs is not just Apple’s CEO. He is the soul of the company, and his vision infuses everything it does. Jobs is regarded by many as a marketing genius. If he retired tomorrow, he’d go down in history as one of the great technology executives.

    Certainly the directors of a publicly traded corporation have no doubt considered all the possibilities, and perhaps they are already grooming potential executives for unexpected promotions. That’s an important part of their responsibilities. But how do you replace Steve Jobs? Is there another of his kind within the Apple organization or even now working for some other technology firm?

    How does Apple plan to address possible concerns about its future? As you know, many companies lose their direction when the founders leave. While I’m sure a bank of executives with Harvard MBA degrees are quite qualified to lead any corporation with the utmost efficiency, that isn’t always enough. Lest we forget, both Steve Jobs and Bill Gates are college dropouts, yet that didn’t stop them from becoming incredibly successful. Or maybe the lack of higher education encouraged them to compensate in some fashion. Yet even if Jobs and Gates had doctorates, they’d probably be just as successful, if not more so.

    Now setting up a line of succession in a company isn’t just something to be dealt with during meetings with the board of directors. Both customers and shareholders may require reassurance, and delivering a clear-cut plan on how the executive suites will be occupied in the years to come may be important.

    In the show business world, we know that, unless things change, Conan O’Brien will succeed Jay Leno as host of the “Tonight” show. Now NBC probably was forced to make that deal to keep O’Brien on board, but at least you have a good indication how it will probably turn out.

    One way for a company to test is line of succession is to give assignments to potential CEO’s just to see how they fare. For example, when Jobs was laid up in the hospital, Phil Schiller took his place delivering the keynote at the Paris Expo. Sure, Schiller doesn’t have the charisma of his boss, but he’s a personable fellow with a good sense of humor, and that comes across. Perhaps he would be a good candidate to take over. But, of course, we don’t know what really transpires behind the scenes at Apple, other than the hands-on approach Jobs takes.

    A decidedly different situation occurs at Jobs’ other company, Pixar, where other executives handle pretty much all the day-to-day chores. If Jobs left, Pixar would no doubt live long and prosper and continue to develop great animated films. Here, Jobs was smart enough to hire good people and leave them alone to do their thing.

    At the same time, Apple hasn’t delivered such great products as the iPod strictly as a result of the efforts of Jobs. He hired the right people to design, engineer and market this stuff. The vision of a Steve Jobs would count for noting without the thousands of talented employees who bring reality to that vision. You’ll notice that Jobs almost always thanks his staff at a keynote for their great work. He’d go nowhere without them. But that’s also a characteristic of a great executive, the ability to hire the right people at the right time.

    Now it’s true that some of Apple’s success may just be dumb luck. If you follow the history of the company, as I do from time to time, you’ll see that some of its achievements may have, in the end, been happy accidents. The right elements converged, and magic resulted. Of course, some feel that it was all meant to be. Would there have been a Macintosh if Jobs didn’t take over the project in Apple’s early days? Maybe, maybe not.

    I don’t want to rain on your parade, but you should think about Apple’s future, and whether its directors ought to publicize the details of its succession plan to reassure both customers and the financial community.

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