It is ironic that my post last week talked about a phenomenon known as Leadership Attribution Bias. In that post, I described how people have a tendency to overweight a leader’s contribution to the effectiveness of an organization. Steve Jobs is that rare leader that clearly had a dramatic (and positive) impact on his organization. In addition to lionizing him, the press is doing their best to divine the future of Apple and the technology world.
Before I provide my thoughts on the future, I’d like to add my views on his legacy. Steve Jobs is unique in the history of CEO’s for the following reasons:
- He is the founder of a start-up that grew to be the world’s largest company while maintaining a consistent brand and vision
- He has been an active leader, instrumental in direction, innovation and product introductions
- His company and their products are legendary for transforming industries and for delighting passionate customers
There is no CEO who comes close to Jobs when measured by the points mentioned above. The two that come to mind as a point of comparison are Henry Ford and Bill Gates. While both were extremely accomplished corporate leaders in their own right, I believe Jobs sits above them on his own tier of success.
So what should we expect from an Apple where Steve Jobs has a diminished role. Let’s go back to my opening sentence and previous post covering Leadership Attribution Bias. While I firmly believe that Steve Jobs was a valuable and productive leader, it is easy to overstate his contribution. He is such a dominant and visible face of Apple, that it’s easy to overlook the vast contribution of his talented management team. He has also established a culture of excellence and innovation that will not be instantly derailed by his distance.
In the short run, I would expect very little difference in the success of Apple’s products. The R&D and product pipeline is full of to-be-released items that have his magic touch. He will still be contributing, albeit in a reduced role, unless his health deteriorates further.
There is something that could stand in the way of Apple’s future that is unconnected with his resignation. It is rare for any success story to go on indefinitely. Apple has been on a complete tear over the past decade, with blockbuster products and incredible stock performance. The concept of regression to the mean tells us that dramatic performance is typically followed by more average performance.
There are several reasons why one could see regression to the mean occurring for Apple. First, competitors are likely over time to produce more capable products in Apple’s space. I know that sounds silly as many have failed recently (e.g. tablets) trying to copy Apple’s model. But sooner or later someone will come forward with competitive, or even ground breaking products. Anyone who thinks this is crazy should look at history for a lesson. IBM, Microsoft, AOL and RIM are all companies that seemed untouchable in markets that they dominated. All of them ultimately saw their run of dominance ended by nimbler and more creative competitors.
Another phenomenon that would work against Apple is the inherent bureaucracy and cultural baggage that develops as companies grow. While this has not hampered them to date, inevitably very large enterprises lose their edge and can not adapt to fast changing technologies and customer tastes. Ultimately smaller and nimbler competitors are able to beat them to market.
Last is the factor of luck. Generally when a company has such a tremendous streak of success, it’s due to a combination of capability and planetary alignment. There are a host of random factors such as the timing of product announcements, competitor missteps, and the reception of the press and customers, that all contribute to the success a company. Clearly, a large part of Apple’s success has been due to their innovative products that resonate deeply with customers. But their perfect record would have been unlikely to continue, with or without Steve at the helm. Like the ace pitcher throwing a no-hitter through six innings, they are unlikely to continue the feat forever.
So here is my wimpy and uncontroversial prediction. Apple will continue to be a dominant player in the tech space for the near term. Looking forward (2-5 year timeframe), they will see that dominant position erode. They will be faced with nimble competitors, yet unseen paradigm shifts and their own big enterprise baggage. While I believe they will remain a major force for many years to come, their “perfect game” performance will surely end.