Work Matters

Tag: Steve Jobs

  • Wired Story Wraps With My Argument That Steve Jobs Is Like A Rorschach Test

    2012_08

    I can't even recall quite when it happened, but several month back a Wired reporter named Ben Austen called me about a piece he was doing on Steve Jobs' legacy.  I confess that kept the conversation short, in large part because I was just getting tired of the story — and I think everyone else is as well.  But this turned into the cover story, which — despite my lack of enthusiasm about the topic — is one of the most balanced and well-researched pieces I have seen.  At least that became my biased opinion after I saw that he plugged my last two books in the final three paragraphs!  Here is the whole piece if you want to read it and here is my argument — you can read the whole excerpt about Jobs as a Rorschach test here, where I put it in earlier post. Here is how Ben Austen ended his piece:

    As he was writing his 2007 book, The No Asshole Rule, Robert Sutton, a professor of management and engineering at Stanford, felt obligated to include a chapter on “the virtues of assholes,” as he puts it, in large part because of Jobs and his reputation even then as a highly effective bully. Sutton granted in this section that intimidation can be used strategically to gain power. But in most situations, the asshole simply does not get the best results. Psychological studies show that abusive bosses reduce productivity, stifle creativity, and cause high rates of absenteeism, company theft, and turnover—25 percent of bullied employees and 20 percent of those who witness the bullying will eventually quit because of it, according to one study.

    When I asked Sutton about the divided response to Jobs’ character, he sent me an excerpt from the epilogue to the new paperback edition of his Good Boss, Bad Boss, written two months after Jobs’ death. In it he describes teaching an innovation seminar to a group of Chinese CEOs who seemed infatuated with Jobs. They began debating in high-volume Mandarin whether copying Jobs’ bad behavior would improve their ability to lead. After a half-hour break, Sutton returned to the classroom to find the CEOs still hollering at one another, many of them emphatic that Jobs succeeded because of—not in spite of—his cruel treatment of those around him.

    Sutton now thinks that Jobs was too contradictory and contentious a man, too singular a figure, to offer many usable lessons. As the tale of those Chinese CEOs demonstrates, Jobs has become a Rorschach test, a screen onto which entrepreneurs and executives can project a justification of their own lives: choices they would have made anyway, difficult traits they already possess. “Everyone has their own private Steve Jobs,” Sutton says. “It usually tells you a lot about them—and little about Jobs.”

    The point at which I really decided that the Jobs obsession was both silly and dangerous came about a month after his death.  Huggy Rao and I were doing an interview on scaling-up excellence with a local CEO who founded a very successful company — you would recognize the name of his company.  After I stopped recording the interview, this guy — who has a reputation as a caring, calm, and wickedly smart CEO — asked Huggy Rao and me if we thought he had to be an asshole like Jobs in order for his company to achieve the next level of success…. he seemed genuinely worried that his inability to be nasty to people was career limiting. 

    Ugh.  I felt rather ill and argued that it was important to be tough and do the dirty work when necessary, but treating people like dirt along way was not the path to success as a leader or a human-being.  Perhaps this is my answer to the Steve Jobs Rorschach test: I believe that Jobs succeeded largely despite rather than because of the abuse he sometimes heaped on people.  Of course, this probably tells you more about me than Jobs!

  • Book Excerpt: Why What You “Learn” From Steve Jobs May Reveal More About Yourself Than Him!

    Tomorrow morning, Fortune's Adam Lashinsky and I are going to spend an hour at The Churchill Club talking about Apple and what other organizations and leaders can (and cannot) learn from the world's most (economically) valuable company.  If you want to attend, I think you can tickets here still available and I understand they are filming our discussion (I will let you know how to see the video when I find out).

    Adam is the author of Inside Apple (see my detailed review and discussion here).   I don't know nearly as much about Apple as Adam does, but like virtually every other management writer, I've produced various pieces on Apple and Steve Jobs because they are irresistible subjects (such as this piece on 5 Warning Signs to Watch for at Apple). 

    Part of me believes that Apple and Jobs have much to teach other companies and leaders.  But, as I wrote in the new chapter in the Good Boss, Bad Boss paperback, part of me is starting to wonder if what each of us "learns" from Steve Jobs amazing life reveals more about our inner selves — our personalities, preferences, and personal experiences — than anything else.  Below is the excerpt from Good Boss, Bad Boss where I toy with this argument (I edited it slightly because one sentence doesn't make sense unless you read the whole chapter).

    I am writing this epilogue in December 2011, two months after the death of Steve Jobs, the most talked-about boss and innovator of our time. Like many others, I found Jobs’s great strengths, startling weaknesses, and bizarre quirks to be fascinating.  For example, I wrote about him in The No Asshole Rule (in the chapter on “The Virtues of Assholes”). Even though Jobs’s nastiness was well documented before Walter Isaacson’s authorized biography was published, I was a bit shocked by tidbits in the book. As his death loomed, Jobs ran through sixty-seven nurses before finding three he liked. Still, there is no denying Jobs’s genius. Even though I would not have wanted to work for him, his design sensibilities, his ability to build great teams, and (in his later years) the way he structured a large organization that moved at the speed of a small one are admirable.

    Recently, however, I had two experiences that led me to believe it is difficult for bosses who want to improve
    their craft to learn from Steve Jobs. The first came after I had taught a two-hour session on innovation to forty CEOs of midsized Chinese companies. None spoke English and I don’t speak Mandarin, so there was a translator to enable communication. I put up a few Steve Job quotes and had fun figuring out that thirty-eight of the forty CEOs had iPhones. During the question-and-answer period, they seemed obsessed with Jobs.

    The most interesting thing happened, however, after I ended the session. As I left, one CEO grabbed the microphone and started hollering into it, and as I walked outside for another meeting, they were yelling at each other. The translator told me they were arguing over whether Jobs was an asshole and whether they should emulate such behavior to be better bosses. When I came back thirty minutes later, the translators ran up to me— laughing—because those CEOs were still arguing over the same thing.

    As I was driving home, I started thinking that Steve Jobs (or at least the idea of Steve Jobs) was so vivid, so
    complicated, and so idolized that for those CEOs, he was like an inkblot test: they projected their inner beliefs, values, desires, and justifications for their behavior onto him. The conversation was sparked by Jobs, but the content had little or nothing to do with what Jobs was like in life or in the lessons he could teach those CEOs.

    Then, a couple weeks later, I went to a party and talked with two people who worked closely with Jobs for years.
    They started pretty much the same argument that those Chinese executives had. Although one asserted the good
    deeds Jobs had done weren’t emphasized enough in media reports or the Isaacson biography, they nonetheless started arguing (and people who hadn’t worked for Jobs jumped in) about whether Jobs’s success meant it was wise or acceptable to be a jerk and when it was worth tolerating an asshole boss. As I listened, I believed once again that the idea of Steve Jobs was prompting people to make sense of and justify their behavior, personal values, and pet theories.

    So I raised my hypothesis: that people couldn’t learn much from Jobs. That he was so hyped, so complex, and
    apparently inconsistent that the “lessons” they derived from him where really more about who they were and hoped to be than about Jobs himself. The two people who worked closely with him agreed. And one added another reason why Jobs was and is a bad role model for bosses: Steve had such a weird and rare brain that it simply isn’t possible for another human being to copy him anyway!

    I am curious, what do you think?  As I re-read this, part of me still believes the argument above and part of me still believes that, well, every boss and innovator can learn something from him (despite the biases we all bring to the table).  I also find it easier to think about Apple and its organization and management in a detached way than about Jobs — perhaps because an organization, even Apple, could never have a personality and presence as vivid and intriguing as Mr. Jobs had. 

    P.S. The event at the Churchill Club was really fun, in part, because Adam and I didn't fully agree with each other.  I especially disagreed with his arguments that Apple was unique in terms of its structure (especially how centralized it is for its size).  We agreed on most things. But we had more fun and learned more — and I think the audience did too — because we pushed each other to refine or logic and examples.  He is a smart and charming guy.

  • Inside Apple: Adam Lashinsky Revealing and Well-Crafted Book

    LASHINSKY_Inside Apple_HCLast week, I opened up my copy of Adam Lashinsky's new book, Inside Apple.   It was about 8 at night, and I figured I would read the first chapter and do something else.  Well, I looked-up, and it was 1:30 in the morning, and the book was done.  Frankly, a business book hasn't grabbed me like that in a long-time.   Adam not only writes well, he provides the most complete picture you can find of how Apple actually is organized, how they divide-up the work, the pecking order, the mindset — the kind of stuff that people like me who are interested in organizations want to know.

    This is not an authorized book like Isaacson''s blockbuster Steve Jobs.  But Adam has been following Apple for many years as a reporter at Fortune, and before that, at the San Jose Mercury. He did many interviews with former Apple employees, and although it is unclear how much access that Apple allowed him (and knowing Apple, he likely isn't allowed to say), I can tell you that I've talked to several journalists over the years who have complained that he gets better access than the rest of them. He also does a great job of capturing the complexity and hypocrisy of the place.  I especially loved this paragraph late in the book, on page 175:

    Apple is company of paradoxes. Its people and institutional bearing are off-the-charts-arrogant, yet at the same time, they are genuinely fearful of what would happen if their big bets go bad.  The creative side of the business that was dominated by Steve Jobs is made up of lifers or near lifers who value only an Apple way of doing things — hardly the typical creative mind-set. The operations side of Apple runs like any company in America, but better, and is led by a cadre of ex-IBMers, the cultural antithesis of Apple.  Apple has an entrepreneurial flare yet keeps people in a tightly controlled box, following time-tested procedures. Its public image, at least seen through its advertising, is whimsical and fun, yet its internal demeanor is cheerless and nose-to-the grindstone.

    Good stuff, huh? I was interested in Adam's opening arguments that Job's was a productive narcissist, which he linked to Michael Maccoby's Narcissistic Leaders and to The No Asshole Rule a bit too.  Many other things about the book were interesting, but three especially stood out for me, and reinforced my beliefs (and now some concerns) that I voiced in my post last year 5 Warning Signs to Watch for at Apple:

    1.  Apple is nearly the exact opposite of the kind of organization hyped by people like Gary Hamel and even Peter Drucker.  It is centralized, secretive, fear-ridden, punitive, and not much fun for most people who work there.  But it works because the pieces of the "organizational design" fit together, or at least did fit together when Jobs was there, in an elegant way.  The secrecy is so severe that, when products are launched, even senior people are surprised by the final product because people are on a strictly "need to know" basis.  But this is offset with a system of roles and responsibilities — and crucial to all of it– is what Apple calls the DRI, the directly responsible individual, a centerpiece of the organization.  There is clear responsibility placed on individuals, not so much on groups and committees.  Although groups and some committees do exist, the DRI can always be found and is where attention is focused.  Which means that that it is clear where to go to provide guidance, to integrate their work with others, and who will be fired, blamed, and replaced — and celebrated too. 

    Essentially, and you can see this in the organization chart on one of the first pages of the book, Apple is designed so that all major (and many minor) decisions are made by a very small group of people, they are not influenced much by suppliers, customers, 99.9% of employees or anyone else; rather is what my friend John Lilly calls a "genius driven" organization.  So, with Jobs gone, the question on the table is if the brilliance of CEO Tim Cook and a few others like Jonathan Ive (head of design) and Scott Forstall (head of IOS software) can sustain the firm's dominance and creativity. These are mighty smart people and they have been slowly weaned from Jobs as he was so sick for so many years.  But the design of the organization places more pressure on senior executives doing the right things than any large company I know.

    In contrast, other organizations have decentralized systems where numerous semi-autonomous businesses are responsible for their own profits and losses, and top executives are essentially managing a portfolio.  HP operated quite successfully this way for decades under Hewlett and Packard.  The had numerous divisions (I recall about 45 when I first got to Stanford in 1983), and it was run by what some insiders called the "mafia model:" if  your business was sufficiently profitable (around 10% net profit per year as the going rate as I recall), you simply paid that "protection money" to  corporate, and you could do whatever you wanted within reason.  If your numbers were lower, you would get "help," and if they didn't improve or if senior management lost faith in you, you were removed.  Certainly, this kind of structure places pressure on leaders to prune, merge, and start new businesses –and to deal with overlaps and conflicts between businesses — but such a structure spreads the leadership chores — and risk — among multiple teams, each of which acts with great autonomy.  (Google is much more decentralized than Apple, for example, but is moving to become more centralized.  For example, when Larry Page took over as CEO, they had so many products done by so many different decentralized groups he went to Wikipedia to get a list of them all–and then he and his team started trimming them).

    My point here, and this follows an old conceptual perspective called "contingency theory," is that other organizations that want to be like Apple –and that seems like so many now — need to be especially careful about copying individual pieces, because the reason it works is that the multiple elements fit together. 

    2.  I am very impressed with how thoughtful Apple's team is about allowing people to focus on what they are doing, and to not be distracted by so many of the other things that most organizations expect from their people. They don't believe in the concept of general managers.  They don't give groups or businesses P&L's… there is only one, that is for the whole company.  They focus on saying "no."   As Adam quotes Jobs, his "Focus is not saying yes. It is saying no to really great ideas."  This "elegance is refusal" philosophy is extended to strategy and organizational design as well.  There are simply a lot things that weigh on many managers and employees at other places that aren't present or are less present at Apple.  Managers aren't asked to be responsible for a local P&L, they know amazingly little about what is going on in other parts of the company, they aren't asked to go to as many meetings or be on as many committees and are instead expected to do what they do perfectly and as little else as possible. 

    This focus on simplicity and reduction of load is also seen in the emphasis on keeping teams as small as possible. The tendency to make teams ever bigger is an awful disease, not so much because it costs more money, but because, as Harvard's J.Richard Hackman has shown, it slows teams and undermines their performance as members end-up spending more time dealing with coordination issues and coalitional battles and less time doing the work at hand.  Apple gets the importance of small teams at all levels (e.g., Adam reports that a 2 person team "wrote the code for converting Apple's Safari browser for the iPad, a massive undertaking”).  They also have an unusually small board of directors — seven members — for a company of that size.  

    This extension of the elegance philosophy beyond their products has huge advantages as the "signal to noise" ratio appears to be quite impressive at all levels and in all functions — people tend to get good information, the information they need (and no more), and aren't confused or distracted by other things.  At senior levels, this means they get the information they need and it means that, although there is discussion and debate at times, when a decision is made, there is less of the usual arguing or undermining.    And if there are failures in implementing, you will be forgiven if senior executives believe you acted intelligently enough and hard enough, but you will be shown the door very quickly if they believe you were dumb or lazy.

    3.  Adam did a great job of describing the company with all its warts and negative side-effects.  I was struck by how Apple is a place that is driven by the pride of doing great work, that it was not about having fun.  That it is was also not about getting rich for most employees. Apple pays competitive salaries for Silicon Valley,  but not at the very top of the market like NetFllix.  And only a few employees who were in early made big fortunes from the stock.  In fact, Jobs hated talking about money.

     My personal reaction, and others no doubt have different motivations and preferences, is that it would be an awful place to work.  The extreme secrecy means there is extreme paranoia.  It means you often don't even know a lot of co-workers, let alone what they are working on — and if you ask them, you can get in big trouble.  Fear is everywhere.  Apple seems to take pleasure in pushing around other companies — competitors, suppliers, and those that just get in the way — just because it can.  And, let's face it, while Jobs was one of the most effective assholes in history, he was still an asshole (Isaacson reported he went through over 70 nurses before finding 3 he liked).   I worry that the bully worship that has emerged in the wake of Jobs death has not only apparently been long institutionalized at Apple, it is now being imitated and gloried by people who lack Jobs' obsessive genius and who are not embedded in an a system that is designed to amplify the best qualities of a obsessive perfectionist and to dampen the worst.

    Jobs said the journey is the reward, a nice sentiment, and I like the pride, thirst for excellence, and action orientation that Adam describes, but spending my days deep in fear, paranoia, and secrecy isn't for me. Life is too short.

    In any case, if you can't get a job at Apple or don't want to, Inside Apple provides the best — most complete and balanced — coverage of how the place works, the elements you might want to copy, and those that you might avoid — that Apple has apparently succeeded DESPITE rather BECAUSE they are used. 

  • Andy Hargadon’s Brilliant Post On Jobs Versus Edison

    Andy Hargadon, a Professor at the University of California at Davis, just wrote a fantastic blog post that compares Steve Jobs and Thomas Edison.  Although there are many shallow comparisons of this kind coming out in the press, none are written by anyone who spent years studying Edison as Andy has done.  Andy also worked at Apple as a product designer in the 1990s and still has connections to the firm; and in his book and articles often does a brilliant job linking the history of innovation to modern applied and conceptual problems.  I couldn't help goading him to write something, and although he resisted at first, he couldn't help doing it — he just knows too much about the topic.  Here is his full post.  And here is a taste:

    How both men dealt with their very public failures is a morality tale far richer in their differences than in the simplistic connections between them. 

    Once ousted, both men jumped immediately back into the arena, intent on proving their detractors wrong. And both failed again. Edison returned to an earlier project, the phonograph, but would soon become embroiled in, and ultimately lose, another standards war. In 1985, Jobs founded NeXT computer, describing in a name his desire for redemption. Interestingly, both invested in new movie technologies (Edison pioneering moving pictures with a system of film, camera, and projector; Jobs investing in Pixar and the development of computer animation).

    Here, at the end of their second acts, our two heroes faced their greatest challenges and, here, their paths diverged.  

    Edison kept roaming. Whether by temperament or temptation, he kept pursuing the next great invention, investing his and investors money in ultimately fruitless ventures such as magnetic iron-ore mining and concrete cast-in-place houses (both doomed by a toxic combination of huge capital costs and his well-known predilection for experimenting).

    Jobs returned to Apple.  Clearly the wiser for these experiences, he discussed publicly the lessons he learned from his original ouster from Apple and from the failure of NEXT despite its brilliant technology.  Even brief conversations with former colleagues told me he had brought a new humility to the company’s innovation efforts. Gone was the effort to prove Apple’s technical genius, or inventive power.

    Great stuff, make sure and read the whole thing.

  • 5 Warning Signs to Watch for at Apple

    I declined several media inquiries to comment on Steve Jobs and the impact his departure will have on Apple.  I did so because predicting the future of any company is always hard, but especially so for Apple where the secrecy is so severe.  For example, although Tim Cook has stepped in and out of the CEO role multiple times, the assumption seems to be that Jobs has retained influence on daily operations throughout the past three or four years. Clearly, Steve is quite sick and has been for a long time, which leads me to wonder to what extent Steve Jobs himself versus the IDEA of Steve Jobs has held stronger sway in Apple.  In any case, it is clear the Cook has been running a big proportion of day to day operations for years now.  But perhaps Jobs has had little more than symbolic influence for years.  If that is true — and I have no idea if it is — the odds that Apple will continue its impressive run might be a bit higher than pundits predict.  Regardless, in the short-term, my hunch is the capital markets have the right take on Apple (the stock is holding rock steady) as it has such great products, pizazz, stores, and operations that sudden trouble seems unlikely.

    When I finally did a media interview for FT Germany yesterday, I got to thinking about Apple from an organizational and cultural perspective.  I was especially influenced by Adam Lashinsky's magnificent Fortune piece called Inside Apple.  The story that emerges from Adam's piece and other bits of information is that Apple's structure, work practices, and beliefs about how to get done are woven together to support a highly centralized model of decision-making, where very talented individuals and small teams are given specific tasks, individuals are held highly accountable for implementation, and extremely strong cultural, interpersonal, and performance pressures are present. 

    Although I won't dig into the debate about trade-offs between centralization and decentralization, centralization works best when leaders face a relatively small number of important decisions, when they find ways to reduce the emotional and cognitive load on the relatively small number of people making major decisions, and tight personal, organizational, and cultural controls mean that decisions from on high are implemented quickly and without much question.  At its best, in a centralized system, there is much confidence in leaders, fast communication up and down, and relatively little time spent on dysfunctional politics (as there is no power vacuum, little second guessing, and severe penalties for ignoring or undermining orders from on high).   Although it is mighty hard to know exactly what is going on in Apple, this description seems to fit most stories and other information about the place under the shared leadership of Jobs and Cook. 

    Assuming this is more or less accurate, I started wondering, what would be some signs that such a system was heading for trouble? Consider five:

    1. The size of the board of directors starts to grow.  Apple has been criticized for having a board that is too small, only 7 people.  Smaller teams not only make better and faster decisions, and have better dynamics, a small board helps a senior management team move faster as there are fewer masters to serve and, on average, the speed and quality of their advice should be better.  If more members are added to Apple's board (especially if they get to 10 or more) it would suggest the board and top team are putting too many things on their plate, trying to please too many masters, and creating more complex group dynamics that will slow and complicate decision-making and implementation in both groups. 

    2. The number of products expands dramatically.  When Jobs first returned to Apple, they had a huge pile of products — he killed all of them within the year.  For example, as Jobs said ten months after his return, they had so many different kinds of Macs and other hardware that Apple employees couldn't even tell their friends which ones to buy (See this old 1998 video, especially minute 5:20 to 7:30 or so).  In contrast, look at the product line now, they only make one iPhone at a time, one iPad, and have a pretty narrow set of Macs too.  If you are going to run a highly centralized organization (as one friend of mine calls it "genius driven"), a smaller product line is especially important because, that way, the senior team need only track a relatively small number, which averts placing excessive cognitive load on them.  As I wrote here earlier, Jobs has argued that a hallmark of great companies is that they not only kill all the bad ideas, they kill most of the good ones too so they can focus on doing a few things well and not design inelegant products or experiences that reflect an effort to jam every seemingly good idea in someplace.

    If Apple's product line gets bigger, especially a lot bigger, it gets harder to run the organization without delegating more major decisions.  In addition, and perhaps most crucially, when an organization has an irrationally large product line, when consumers and even insiders can't understand the logic, the real explanation often is that there are many medium power groups that have enough resources and influence to build their own hardware, software, or whatever BUT not enough power to stop others.  As a result, many medium size fiefdoms emerge, attention turns inwards to gaining political advantage over competitors, and away from what is best for the company and customers.  I saw this at GM before the bankruptcy.  This was also exactly the situation that Jobs faced when he returned to run Apple in the mid 1990s. My conversations with Apple insiders suggest that dysfunctional politics explained the big product line, not the strategy.  So a big increase in products — and one that doesn't seem to make much sense — would signal the team is putting too much cognitive load  on itself, moving to a more decentralized model that does not fit with other elements of Apple, and that people are spending more time battling to get THEIR product out and to kill others developed by colleagues instead of making a few INSANELY GREAT products.

    3. Departures of senior executives.  One of the most consistent strengths of Apple that observers emphasize is the quality of their top team.  The same goes for their board too, with perhaps the star being the amazing Bill Campbell, one of the most renowned coaches and mentors on the planet and THE most desirable board member in Silicon Valley. Presumably, Tim Cook has had years to work with them, and the dynamics are healthy; I suspect one reason Apple is so effective partly is because of this stability.  When people start leaving any group, there is good evidence that the resulting disruption undermines group performance as it takes time for groups to absorb and learn how to work with new people.  I would be especially concerned if people who left are replaced by outsiders, as Apple clearly has distinct ways of thinking and acting that would take time for even the most able outsider to learn.  Moreover, when people start leaving a top management team at unexpectedly high rates, it often signals trouble: They are unhappy with their CEO and fellow executives, they are being forced out, or both. Note that there have been some key departures of senior executives  in recent months, so this is something to keep an eye on.  In particular, if head designer Jonathan Ive left, that would signal that something is terribly wrong.

    4. Leaks to the press.  As an outsider who would like to know more about Apple, and who often talks to journalists that cover Apple, the difficulty of learning anything about the company just amazes me.  It took me a good four months to confirm that my former Stanford colleague Joel Podolny had become head of HR after hearing the first rumor it had occurred — and of course Joel was too smart and well-socialized to answer the email I sent him asking him if the rumor was true.  While information does sometimes get out (consider Adam Lashinsky's great Fortune piece) a hallmark of Apple's culture is that people in the company take secrecy so seriously — especially when it comes to forthcoming products and release dates (the current secrecy around the iPhone 5 being a case in point).  I have friends who work at Apple, not just Joel.  It is amazing to see what happens to them when they go to work there.. they stop talking, they won't return emails, and you learn — if you do run into them — not to ask them about anything sensitive.  After all, should they slip and tell you, they are putting their own jobs at risk.  Now, such paranoia, although unattractive in some ways, does have advantages in that competitors are kept in the dark and consumers don't really know when an Apple product they buy will be outdated.  Apple has been able to do an especially brilliant job of tweaking production levels (thanks to Tim Cook's amazing supply chain) and pricing so they can squeeze the most out of existing but soon to be outdated hardware and software.  Perhaps even more important, Apple's infamously effective secrecy is a sign of fantastic cultural control and individual commitment to the company. If we start seeing more leaks than in the past, it signals the strength of the bonds among people are weakening and their fear of breaking this most sacred of Apple commandments in waning — that Apple's carrots and sticks aren't working as well as in the past.

    5. Acquisitions, especially big ones.  Just this morning, I was reading some stories quoting management professors who predicted that Apple is sitting on so much money that they would probably go on a shopping spree and buy a bunch of companies.  If this happens, I would really start to worry.  Yes, small strategic acquisitions to bring specific people or specific technologies that Apple needs to move ahead are probably necessary and wise.  But if you look at research on acquisitions, especially big acquisitions, not only do they tend to fail, they do a bunch of things to organizations (especially senior teams) that would be especially deadly for Apple.  They distract leaders from the day to day operations of their firms, increase the overall cognitive and emotional load, bring in different and change resistant subcultures that are usually harder to transform than senior executives predict, they result in additions (and subtractions) to the top management team and board of directors (and thus create the group dynamics problems outlined earlier), and often broaden the product line (The Compaq/HP merger being a case in point).  As such, it seems to me that doing a big acquisition — or worse yet, a stream of them — would be an especially efficient way to undermine Apple's seemingly magnificent structure and culture.  Apple got big by doing a fairly small number of things very well and by doing them for themselves.

    As I said at the outset, it is impossible to predict Apple's fate.  I would speculate, however, that regardless of whether all or none of the things above happen, the best bet is that Apple will slip a bit in the next decade.   One reason is simply regression to the mean, that things even out over time, so extreme outliers in any distribution tend to drift toward the average.   There are some forces that helps this process along in very successful companies.  As my colleague Jeff Pfeffer likes to say, whether it comes to a great restaurant or a great technology company, the inevitable distractions, overload, outside scrutiny,  arrogance, confusion, and fear of screwing things up (rather than focusing on making things better and better) mean, all too often, that "success ruins everything."   Regardless, regression to the mean seems to happen in most or all systems where large variance in performance is seen.  Certainly every high flying technology company that ever existed has eventually drifted toward the middle or bottom, at least for awhile.   Even the most enduring, such as IBM, have gone through some hard times and, of course, Apple had some mighty tough times in the mid 1990s. 

    Meanwhile, I confess that I hope Apple continues to be great and become greater.  If the iPhone 5 is as cool as I hope, I will get one.   My old 3GS is still running strong, but I don't think I will be able to resist.  About a year ago, I had dinner with design guru Don Norman , who was once a senior executive running advanced development at Apple,  Don was quickly fired when Jobs returned.   Don, who is smart, charming, and has a sharp tongue, noted that Jobs' decision was understandable, he just wished that Steve had been a little nicer about it.  Don — who owns both a Droid and iPhone — made an interesting comment.  That you could argue all day about the technical pros and cons of each phone, but he pretty much always grabs the iPhone because it is just more fun and that "fun thing"  is a reflection of Steve Jobs' and Jonathan Ive's combined genius: Something no other technology company seems to ever figure out quite so well or so consistently.   If Apple can protect and keep spreading that human magic across its products, and keep running that amazing supply chain, nothing that any of us say will matter.  Their greatness will persist.

  • Secret Features of Apple’s Proposed New Campus

    Apple has proposed a most inventive new campus in Cupertino. The folks as joyoftech.com had good fun imagining the "hidden features." I especially like the empty part of the building where no one is allowed to go — and is meant to create mystery.  That is VERY Apple.  Thanks to Alistair Davidson for sending this my way:

     

    Real Scoop on Apple HQ

  • “Lend Me Your Wallets:” Research on the Link Between Charismatic CEOs and Stock Price, Featuring Steve Jobs

    I was exchanging emails the other day with Dave Ulrich, my co-author on Asian Leadership, and asked him what he was working on.  He answered that he was pretty interested in the link between CEO actions and stock price.  Dave's interest reminded me of a delightful and imaginative 2004 study of such links by Frank Flynn (co-author of the narcissism study I discussed last week) and Barry Staw.  It is called Lend Me Your Wallets: The Effect of Charismatic Leadership on External Support for an Organization.  Flynn and Staw did two studies on charisma in this paper, which they defined as follows:

    Such individuals exude confidence, dominance, a sense of purpose, and the ability to articulate a vision for followers
    to grasp (House, 1977; Conger, 1991). Charismatic leaders are able to communicate this vision to their followers, and by the force of their own excitement and enthusiasm, induce their followers to support this vision (Yukl and Van Fleet, 1992). In this sense, charismatic leaders are said to have remarkable influence over subordinates who internalize the leader’s vision of what can be achieved through collective effort (Bass, 1985).

    The first was a field study, where they compared 46 firms led by CEOs who were identified as charismatic (a total of 44 CEOs.. it appears two were used twice) who led Fortune 500 firms between 1985 and 1994.  They found that, independently of objective financial information, firms led by charismatic CEOs enjoyed higher stock prices.  Moreover, this effect was magnified during difficult financial conditions — during economic downturns, charismatic CEOs had an even stronger effect on stock price. (Perhaps when people are under duress, they especially gravitate to the hope and energy that such leaders exude).

    This first study was used to set the stage for a second study using Steve Jobs. Note that although this study was published in 2004, the data collection was actually done years earlier (things move slow in academia), in late 1998, barely a year after Jobs had returned to Apple.  There was a lot of hype and hope about Jobs, but he was not seen as the magical CEO heis now.  This research was done  in the very early and uncertain days of the turnaround. 

    The set-up of the study was as follows (I am simplifying): 150 students were asked to imagine they had inherited $10,000 from a relative and were asked to alocate the money among three investment options: an indexed mutual fund, a money market certificate, or Apple stock.  All were shown objective fiancial information about Apple's recent performance (and the performance of money markets and mutual funds too). Half were given information suggesting that Apple's prospects for a turnaround were bright and half were given information that Apple's prospects for a turnaround were dim.  Then came the big manipulation: Half were shown a videotape of Jobs doing a 20 minute presentation at a trade show (I am pretty sure I loaned this to them for the experiment, Jobs talks about all the ways things are getting better and is his usual compelling self) and half did not see the video. 

    The results were pretty interesting.  The subjects who saw the film rated Jobs as considerably more charismatic than those who did not. And those who saw the film were willing to invest more money in Apple than those who did not. This effect was driven primarily by people who were presented negative predictions about Apple's future. Those who did not see Jobs invested an average of $1329 but those who saw Jobs invested an average of $3327 (compared to a $400 bump for those who saw the film but were presented information suggesting that Apple's future was bright).

    This study is imperfect, as all studies are. But I find it fun, imaginative, and intriguing.  For starters, it shows both the dangers of charismatic leaders — because they can distract people from the facts or at least color the ways those facts are construed (especially when fear and pessimism are in the air).  This research also shows how charismatic leaders have the potential to start a positive self-fulfilling prophecy.  And in the specific case of Jobs, it is intriguing to think about the astounding long-term success of Apple under his leadership the last 13 years or so, especially in light of Jim Collins dim view of charisma in both Built to Last and Good to Great.  I have complained about Collins' mediocre and over-hyped methodology before (see here and here) and the fact that he elected to ignore literally hundreds of past studies (including many studies on charisma and performance) and to simply rely on two very small samples to make sweeping claims.  As I have also said before, I find his books to be compelling in terms of the writing and despite this specific complaint about charisma, I generally agree with his claims and  could point to many other studies that support them.

    What do you think?  Is Jobs' charisma an important part of the Apple turnaround?  And what are the virtues and dangers of charismatic leaders?

  • The Agony and the Ecstasy of Steve Jobs

    This is the title of an upcoming performance, described as a monologue, by Mike Daisey, at the venerable Berkeley Repertory Theatre.  Here is the description (go here for more details and to buy tickets):

    In The Agony and the Ecstasy of Steve Jobs, Daisey dives into the epic story of a real-life Willy Wonka whose personal obsessions profoundly affect our everyday lives—and follows the trail to China where millions toil in factories to create iPhones and iPods.

    I wonder if it will be any good.  I am tempted to see it.  At the same time, I confess that I am starting to feel sorry for both Jobs and Mark Zuckerberg in some ways. The bright glare of attention has many disadvantages and isn't much fun.  But they are both fascinating characters and it is hard to resist following their antics and speculating about their motivations.

    P.S. Thanks to Marijke for pointing this out.