Some people want you to believe that Apple is a dictatorship, with Steve Jobs micromanaging everything and relying on his temperamental personality to make critical corporate decisions. Good or bad, it means that, were Jobs to bow out, the company would be on the skids in an extremely short time.
There may be something in this description of Jobs’ mercurial personality. Certainly he can be blunt and unpredictable, but it’s also fair to say that Apple is a fairly big company, with over 30,000 people depending on them for their paychecks. Does a one-man-band really work in that environment?
What the critics fail to realize is that Apple has lots of brilliant people, starting with Chief Operating Officer Tim Cook. As you may have seen when Steve Jobs took six months off, during which time he got a liver transplant, Apple did surprisingly well despite the worst economic slowdown in decades. It seemed the company hardly missed a beat, and it strains credibility that Jobs would, while still on the mend from major surgery, somehow keep his hands on every spoke in the wheel.
When you look at Apple’s balance sheet, you see they have done a load of things properly. There is no corporate debt, and they have nearly $40 billion in the bank, more even than Microsoft. Earnings and profits keep increasing, and Apple is now number five among all companies on the planet when it comes to market cap. There’s even the possibility they’ll match Microsoft some time during the coming year.
So does that strike you as a company managed by a lunatic whose sole grasp on reality is the one he creates for himself?
Yes, we all know about the legendary “reality distortion field,” but all that really means is that Steve Jobs is a brilliant marketing person. He knows how to sell Apple’s gadgets, how to convince people that they are the greatest products ever.
More to the point, Jobs knows how to hire good people and allow them a reasonable degree of freedom to express their creativity. Perhaps he does have a handle on everything they do, which isn’t necessarily a bad thing, because he runs a tight ship. But he doesn’t do product design or software and hardware engineering. He does, however, have great instincts about what people like and do not like. Unlike most tech companies, Apple has a vision.
I also believe that the recent serious illnesses have given Jobs a clear picture of his own mortality. He fully understands that he will have to step down sooner or later, because of the state of his health, his declining interest in the job, or some combination of both. While Apple is not going to release names, I am quite convinced that they have one or more candidates in mind. Perhaps they are grooming someone behind the scenes to take over when the time arrives, whether due to an emergency or a long-term succession plan.
The feeling is that Tim Cook might have first digs at becoming CEO. It’s not that has hasn’t done the job, since he took over briefly when Jobs was first treated for pancreatic cancer and again during last year’s sick leave. Among all potential contenders, he would seem to be best suited, even if he doesn’t possess what some call star power. Maybe he can grow into it, or simply choose other spokespeople to handle the special press events.
The larger question is how will Apple continue to build trendsetters without Jobs at the helm. The assumption here is that he originated the iPhone, the iPod and lots of other products that have taken the industry by storm. Sure he may have given the green light to such concepts, but I do not for a moment believe that he originated most of them.
Consider the iPod, for example, which is credited to a large degree with Apple’s resurgence. As history shows, the idea didn’t originate with Apple, but with Tony Fadell, a former employee of General Magic and Phillips. But Fadell didn’t fare well trying to convince industry players to pay attention to his concept of a tiny MP3 player equipped with a hard drive. Apple’s executives understood Fadell’s vision and brought him onboard.
As you probably know, iTunes is the successor to a third-party music playing app, SoundJam. The main author, Jeff Robbin, is now a vice president of consumer applications at Apple, and the lead software designer for iTunes.
The key is whether other executives at Apple have the vision to take inventions from both inside and outside the company, and realize their potential. One of the purposes of Apple’s huge war chest, other than to fund the company during a serious sales downturn, is to allow them to acquire small companies and technology that would enhance their portfolio. That’s why they bought PA Semi, whose expertise was reportedly used to create the Apple A4 processor used in the iPad.
In short, assuming Apple has put a proper CEO succession plan in place, and when you consider the fact that the current executives are in lock step with the vision of Steve Jobs, I see the company prospering for a good long time.
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