The Legacy of Steve Jobs – The Curious Future of Apple after Steve Jobs calls iQuit

Sat, Oct 1, 2011

In Focus

There have rarely been occasions in history when one man has revolutionized an entire industry over and over again. Surely there have been myriad innovations in science, technology, arts, literature, sports etc. but there hardly has been a person who has consistently reinvigorated a whole sector for decades. He has been a standout performer in the times of cut-throat competition due to his vision, drive and immaculate business sense; and in doing so has carved a niche for himself and endeared to billions in this world.

The name Steve Jobs is considered synonymous with innovation, functionality, aesthetic design and perfection. The co-founder of Apple has consistently mesmerised the world with technological marvels which have turned out so well, we couldn’t have improved on them even if we’d mapped our own lives in advance. From the revolutionary Macintosh to the cult-status iPod, from the scintillating iPhone to the awe-inspiring iPad, the technology czar has flummoxed rivals and satiated consumers for around three decades. Now, as he steps down the mantle at Apple, we come to the end of an era which even the best can only hope to emulate.

20-year old Jobs started Apple Computer Inc. in his father’s garage with Steve Wozniak and Ronald Wayne and launched his first commercially successful PC, Apple II. Jobs then realized the potential of mouse, GUI and multiple type-faces fonts which then gave birth to Macintosh in 1984. It heralded the start of a riveting journey for one of our generation’s greatest visionaries. Little did the world knew that a small white box resembling a television set would change the world of computing forever! But Steve’s journey hasn’t always been this easy. An industry-wide sales slump towards the end of 1984 created a rift in Jobs’ working relationship with the Apple Board, and at the end of May 1985, Jobs was fired from the company he founded!! He says “it probably was the best thing to ever happen to me, as the heaviness of being successful was replaced by the lightness of being a beginner again.” In 1985, Steve founded NeXT Computer, which would later go on to become the platform used by Tim Berners-Lee to start the World Wide Web. In a bizarre turn of events, Apple bought NeXT in 1996, and Jobs was reinstated as the interim CEO of Apple. The years that followed marked the meteoric rise of Apple to the zenith of the industry. As of September 2011, Apple is the most valuable company overtaking Exxon Mobil this May.

What makes Steve Jobs special is his passion for perfection in each and every Apple product and his consummate skills at persuasion and salesmanship. As former Senior Vice-President at Apple, Jay Elliot notes, “Steve Jobs is the world’s greatest consumer. His ability to view a product from the point of view of a commoner is what drives him to make pursue perfection.” Jobs is one of the world’s few CEOs who take an active interest in product design and development, right from its inception. He takes an active interest throughout the product life cycle which has in most parts ensured Apple’s amazing reputation in the consumer electronics industry. Steve Jobs survives, thrives and changes the society by following his own passions.

Steve Jobs has been one of the most written about personalities of our generation. His visionary ideas and iconic methods have been well documented in a host of biographies and books e.g. The Steve Jobs Way: iLeadership for a New Generation, iCon Steve Jobs: The Greatest Second Act in the History of Business. His keen marketing acumen and his stern man-management methods have been analyzed, criticized and applauded time and again. His drive and passion for excellence made sure that Apple is as fresh as it was when it started back in1970s. Steve Jobs provides probably the best example possible of how a leader can implement innovation and run a very large organization as if it were in start-up mode. All his qualities made him a charismatic leader whose soul will remain in Apple for a long time as he always said ‘I love Apple.’

So unsurprisingly, his recent resignation from Apple sparked hysteria of speculation, regarding Apple’s future without its charismatic leader. On 24th August 2011, long-running COO Tim Cook took over as the CEO of Apple Inc. and it heralded a new beginning for the technology giant.

Steve Jobs shall remain one of the legends of contemporary times.

Now that Steve Jobs is leaving, Apple will change but it remains to be seen how successfully Apple emulates itself in the post-Jobs era.

Apple has stood out during the last decade or more as an incredible growth engine for customers, investors, workers and partners. However, it wasn’t just Apple. If Apple is a steak, then Steve Jobs is a sizzle. How important is the sizzle? Will Apple still be Apple? Without Steve, has Apple lost its mojo? Will growth slow down? Will innovation decrease? The real question is what is at the heart of Apple’s success, and can that be duplicated? What makes customers line up the night before a product launch to be the first to buy? In other words, what makes Apple as Apple?

Apple’s customers can be divided in two segments, first is loyal customers who are basically attached to company because of charismatic and innovative leadership of Steve Jobs and because of premium segmentation of its computer business. The second segment is new customers who joined Apple later and are not much concerned about brand Steve Jobs but value brand Apple more. After resignation of Steve Jobs the decline in share prices was only 5% which signals that though Steve Jobs is important for the company but now the company is in a healthy stage. Now, without Jobs it will be interesting to see how company will satisfy both its loyal customers and new ones especially when it lacks a charismatic leader and its size is increasing exponentially.

What is the next big wave of innovation for Apple? Will Apple continue to transform industries going forward? If so, which is next? Or, Apple will lose its lustre and become just another company in the mind of the marketplace as Steve Jobs will not be there feeding the fire as the master brand.

Most analysts are unreservedly enthusiastic about the talents of Tim Cook, as an operations genius, adept at cutting costs while delivering complex products on time and coping with staggering growth targets. When he joined Apple he closed down almost all the manufacturing units of Apple and outsourced most of its manufacturing to Asia leading to higher operations efficiencies. He is also monastic and incredibly devoted to Apple. During Jobs’ previous three absences, Cook steadied the corporate ship efficiently. Still, during those past medical leaves, Jobs has remained involved in all major strategic decisions. In that respect, Tim Cook is untested as a potential CEO. The rest of Jobs’ team is studded with star role players but not accomplished generalists. Jonathan Ive, Apple’s design chief, joined the company during its churning descent in 1992 and is now the most famous industrial designer in the world. But he lacks overall business expertise and credibility with Wall Street. Marketing Chief Philip W. Schiller is loyal and effective but isn’t considered a tech visionary. Scott Forstall, Apple’s software chief, carved out high profile in Silicon Valley by creating a platform for iPhone that made it easy for developers to create applications. But the long-time Jobs ally has little experience minting new hardware. Ron Johnson, the head of retail operations, has helped turn Apple into one of the world’s most profitable chainsbut he is a retailer, not a technologist.

Business history is replete with visionary founders whose companies survived and even thrived after they stepped away. Ford Motors reached its zenith in the 1950s, a decade after the death of Henry Ford. HP continued to grow after its namesake founders retired. Disney foundered after Walt Disney died in 1966 but was revived two decades later under Michael Eisner. Jobs may be the best example of a new breed of business leader who can intuit customer emotions. Another is Howard Schultz, the long-time CEO of Starbucks, who is selling not just high-priced coffee but also the idea of a “third place” between home and work. Such leaders are not easily replaced. When Schultz retired from Starbucks in 2000, the company went into a steep decline, and he was compelled to return in 2008. There are examples like Michael Dell and Charles Schwab who were compelled to come back to company when they failed in their absence. Even without Jobs, company can continue to give returns to shareholders, like IBM, however it may not remain as attractive as today but company market position and products will surely help it to remain industry leader for at least a few years. All this is speculative, of course, given the uncertainties about Jobs’ health and it will keep the industry personnel perplexed in coming months.

Few philosophers believe that with change in leadership organisations tend to be less radical in their policies over time, and adopt a less innovative structure in order to bypass the risks. But at the same time others feels that this philosophy doesn’t fit in the context of Apple. Whatever be the case, one thing is for sure that Apple cannot separate out Steve Job and his ‘way’ of thinking when it comes to its product innovation.

The period after the charismatic leader is gone is always perilous, but in hyper-competitive, fast-moving industries, the loss becomes apparent much more rapidly.

Monica Agarwal and Nitin Bharadwaj

MBA Batch of 2013

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