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October 30th, 2006
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"We thought, because we had power, we had wisdom." -- Stephen Vincent Benet |
Last week, I listed the components of power, looked at the first three, and applied them to Apple based on my recollections of what I saw. This week, I'll look at the last two -- which can be more controversial.
- Judgment and restraint
- Money and influence
The Purpose of Power
Utimately, power and authority are granted in order to achieve some goal. No one person can do everything, and so authority is delegated. Unfortunately, for reasons described last time, very little real authority is delegated at Apple. And so an examination of power leads more or less to the upper levels of Apple.
Before I can do that, I want to make an observation about the progression of power. An easy way to do that is to take a look at people who have a great deal of money.
Initially, when one comes into great money, the natural impulse is that one can buy anything. But when one has billions of dollars, there are only so many things one can buy. (Except for Larry Ellison.) One is quickly sated. So the next adventure is that one can experience anything. This can manifest itself in things like a trip to Mount Everest, racing yachts, setting world records (like Steve Fossett), learning to fly a business jet (like Steve Wozniak), and so on. Eventually, one either becomes exhausted or realizes that these things are fairly dangerous. About this time, after one has bought everything and experienced everything, there is a subtle and dangerous transition. One can do anything. And by that I mean do anything at all. Not getting caught becomes the thrill.
For an independently wealthy adventurer or a movie star, this sometimes leads to excesses such as we've seen in the news. I won't name names. You can think of many.
But if you're the principal of a company, then that slight human tendency to take the last step, over the line, can affect the lives of many other people. Enron is a good example.
Judgment and Restraint
One of the most popular columns I've ever written was in 1999. It was a column about a Canadian teenager, Abdul Traya, who was 16 at the time. Abdul had legally registered the domain "appleimac.com", but Apple wanted it. The thrust of the article was that Apple took by force what a young boy had obtained legally. Yes, Apple needed that domain to avoid scurrilous Internet crooks. And they grabbed some similar ones. Even so, I pointed out that it was the responsibility of Apple's most senior executives to step in when lawyers go overboard, but they didn't.
Years later, not much has changed. Apple's attorneys, it seems, manage to get on the wrong side of sensitive issues regarding the treatment of those less powerful and wealthy. We tend to hope that the company we love best will manifest its power in ways that earn our respect and live up to Apple's vision of individual worth and self-realization. But when Apple's attorneys are on the loose, Apple's executives appear to turn their heads and look away. So do we.
Another area where we see some questions raised about restraint is the well-known tendency of Apple to fire people for infractions that would, at other companies, result in some stern words, mentoring, and encouragement. Apple is very selective in its hiring and only hires the cream of the crop. So it is rather odd that some Apple managers take too much pleasure in firing talented people who make a human and relatively minor mistake. Since this is an internal matter, you don't hear much about it. I think it happens more than it should and for not enough good reason.
It reminds me of Germany. For historical reasons, many houses are handed down, and there isn't a lot of new home building in Germany. So people spend their money on cars. Also, the German culture is a little more rigid about some things, so people take refuge in the Autobahn where they can exercise some personal freedom. When people don't feel empowered to do certain things, they find alternative, creative ways to exercise their power anyway.
If Apple has a weakness, it is that authority is so restrictive that talented, aggressive people find ways to exercise their power within Apple that don't always reflect judgment and restraint. It's almost as if their natural tendency to solve executive problems gets subverted by their powelessness, so they seek other avenues to solidify their authority. I would give more examples, but I think it's more important to analyze the overall effect than drag out the uncomfortable history of others.
As Apple moves from being merely a company that produces computers and software into a more mainstream consumer electronics company, the ritual of tactical surprise will become less and less useful. The war with Microsoft will fade out of the limelight, especially as Microsoft itself fades from prominence. Millions of consumers who have never heard of Macworld and WWDC will become customers of "iTV" and the iPhone. In time, it will be necessary to slowly convert Apple to a more conventional company in which executive power is focused on the new tasks at hand instead of turned inwards on the employees.
Money and influenceThis is an area where I have to give Apple high marks. Steve Jobs and his hand picked executive team have always felt that the way to succeed is to build great products that people appreciate. It's been a long, uphill battle to get consumers to take harder looks at Apple products. After ten years of Steve Jobs' leadership and ten years of infrastructure building, Apple is finally seeing the benefits. That kind of patience is rare in corporate America.
Another key to Apple's success was the character of Fred Anderson, Apple's CFO for many years. Fred was so cool, so talented, and so honorable that the all of Apple's finances could be placed in his hands with full confidence. Apple is where it is today, in part, because of the way Fred Anderson managed Apple's money. And he mentored Peter Oppenheimer to do the same.
As a result of the above, Apple can afford to be rather low key in its political donations and selection of board members. You won't see him on a yacht with Governor Schwarzenegger, drinking Martinis. When Steve uses his business jet, it's for business (so far as I know) and not to extend favors to people he wants to influence. Asking Al Gore to be on the board was designed to keep tabs on the winds of influence in Washington D.C. and point to Apple's sense of responsibility towards the earth and its people. It's the kind of low-key, passive thing Apple does. After all, many important things are simply a matter of exercising good taste.
You won't see Steve Jobs at big Hollywood parties. When design awards are handed out, he sends Jonathan Ive or someone else. It seems to me, Steve pays much more attention to family, such as he can in his position, than many other executives of equivalent rank.
When Steve does work with Hollywood executives, it's intended to work out something mutually beneficial. Steve has his vision and his terms. As we've seen in the stories about Steve's work with the record studios, and now the movie studios, it's not about selling out for short term gain. It's all about making life better for Apple's customers, creating a worthy legacy, and remaining true to his vision.
Final ThoughtsApple has had to run a tight ship since 1996. Often, draconian measures were taken. The spirit of a company about to go under still lingers.
Now, Apple is entering a new era. As they move into consumer electronics, they'll start to face challenges in terms of customer support that they have never faced before. When a customer calls and wants something made right, Apple will have to start thinking in terms of employee empowerment to make the customer happy on the spot. Penalties for bad decisions will have to be further training and mentoring, and not dismissal -- so that their people actually build a repertoire of skills instead of new guys repeating the same old mistakes. There won't be time to run approvals up the chain to a VP when there are 50 million iPhones in the field.
Apple is also going to be severely challenged in terms of management talent for the next few years. When Apple was a $5.4B company, they could be managed by a coterie of ten or so people. Now that Apple is nearly a $20B company headed for $30B in a few years, they'll be hard pressed to be successful unless genuine authority is delegated to a more mature breed of serious, capable VPs brought in from other Fortune 100 companies. These men won't put up with the constraints typically imposed on Apple VPs whose attraction these days is mainly to put in a few years with a fun company, get rich, get pushed around by Schiller and Jobs, and then move on to the golf course. They'll need more men like Tim Cook. Mature, competent, self-confident, and equally energetic in their vision.
The time to prepare these men, inculcate them with the Apple vision and values, is now. Steve is old enough and successful enough that he no longer needs to feel threatened by VPs, men and women, who can assume significant responsibility and delegate authority to others. That's the road to $30B and beyond.
John Martellaro is a senior scientist and author. A former U.S. Air Force officer,he has worked for NASA, White Sands Missile Range, Lockheed Martin Astronautics, the Oak Ridge National Laboratory and Apple Computer. During his five years at Apple, he worked as a Senior Marketing Manager for science and technology, Federal Account Executive, and High Performance Computing Manager. His interests include alpine skiing, SciFi, astronomy, and Perl. John lives in Denver, Colorado.
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Observer Comments
Mon Oct 30, 2006 11:07 am Subject: German stereotyping
I agree with guest. That was clear racial stereotyping. It is a commonly repeated fallacy that German's like freedom, when in fact, they are good socialists like the rest of Europe. If you're gonna blast a culture for liking freedom, keep it to the Poles or the Estonians or the Americans. It's ok to pick on them for not getting with the European program because they don't even make an effort, those capitalist pigs. But the Germans are very sensitive about this kind of thing and have done their best to build a socialist Europe. Geez, you can't say "National Socialist" without "Socialist", ok? They have longstanding cred on this issue...
Mon Oct 30, 2006 12:52 pm Subject: last time we mass hired managers from Fortune 100...
Mon Oct 30, 2006 3:33 pm Subject: whozawhatsitnow?
How was John being racist in his comments on Germany? He was making an observation on how one aspect of its culture operates. All human beings crave freedom and personal expression. He was simply saying that since new home building is low in Germany, because houses tend to get handed down (does that mean there are lots of multi-generational households, then?), people find those outlets in driving fast cars on the Autobahn.
Americans love cheap crap, hence the popularity of big box stores like Wal-Mart. In addition, cheap gas (compared to the rest of the world; many countries pay 3 or 4 times what we pay per gallon) lets us drive SUVs and mini vans to our hearts' content. Am I being racist in making those observations?
Is this where political correctness has taken us?
Mon Oct 30, 2006 5:22 pm Subject: Limelight & Hollywood
In the article, John wrote, "The war with Microsoft will fade into the limelight ..." Sorry, but "limelight" means the center of attention. You could change it to, "fade FROM the limelight."
Also, "You won't see Steve Jobs at big Hollywood parties. When design awards are handed out, he sends Jonathan Ive or someone else. It seems to me, Steve pays much more attention to family, such as he can in his position, than many other executives of equivalent rank."
Given Jobs' health problems in the not-so-distant past, can you really blame him? It sounds perfectly reasonable to me.
QuoteGuest wrote:
How unfortunate to see people so hyper-sensitive. My heritage is German, and I could care less about this example, because it's mostly true.
The point of stereotypes is that they are funny or illustrate a point, because they are based on a basic truth.
Get over yourself people and enjoy life a bit.
Actually, the point about stereotypes is that they usually are not true. Frequently, stereotypes have arisen in order for one group (ethnic, religion, whatever) to feel superior to other groups. By using a negative stereotype, one can feel superior--and nearly all stereotypes are negative.
To see the effect, just exchange "black" for "German." If that would make a statement offensive, then it is offensive in the original. Whether you, or any other particular person in the "target" group, feels offended doesn't mean that the statement is not generally offensive.
This is not about "political correctness," either. It's about being clear and accurate. There is little need for stereotypes. John could have left out that statement without affecting the meaning of his article. I doubt that John is an expert on German culture. He may have lived in Germany--as an outsider, but that doesn't guarantee expertise. Also, FWIW, it's not just Germans who drive very fast: plenty of people do that in other countries, as well. The difference is in the traffic laws and enforcement.
As for, "enjoy life a bit," what makes you think that someone else doesn't, when you know exactly nothing about them--or, are you using another stereotype (another word for "prejudice")?
Mon Oct 30, 2006 10:12 pm Subject:
You're talking about stereotypes as though they're a bad thing. From the essay: "For historical reasons, many houses are handed down, and there isn't a lot of new home building in Germany." What is wrong with this? It's true. See here. From these figures you can see that the majority of Germans rent their houses. In New Zealand, for example (and I work for Statistics New Zealand, so I have ready access to the data (actually, you do too...)), the reverse is true.
So there are no negative connotations there. So on to the next phrase: "Also, the German culture is a little more rigid about some things," - well, it's true. Germans don't like chaos. This doesn't go for every German, of course, but generally a sense of order is important to them. We (countries) all have quirks that make us different and interesting, but they're not in themselves bad.
Now for the next phrase: "so people take refuge in the Autobahn where they can exercise some personal freedom." This is an extrapolation from the above. I don't know where John took this from, but Germans can and do drive extremely quickly - it's true! - and it seems like a reasonable extrapolation at that.
Up until 1999, Montana famously had no speed limit and Montanans (? it'll do) could and did drive extremely quickly. If I were from that state, I drove quickly and somebody said that I did it to exercise personal freedom I would not be offended. I may disagree, but at worst I would shrug my shoulders.
I think you're being a bit precious.
I think I'll go up to Montana soon,
And raise me up a crop of dental floss...
Look Fritz... This may sound like nails on a chalkboard, but we are all trying our best to not offend Germans. Did the French ever offer you such a courtesy? I think not.
I think gslusher said it best: To see the effect, just exchange "black" for "German."
So, I will try the substitution. "Blacks like freedom and drive fast." Patently offensive. I'm sure there are many blacks who preferred pre-Civil War slavery or 1950s style segregation. Freedom is so overrated. And if blacks drive so fast, why is Bill Lester the only black driver on the left turn circuit?
(OK, so I was and am joking, and I really hope gslusher was joking, because that "substitute blacks" thing has got to be the most patronizingly awkward example of liberal political correctness I have ever seen. Fuzzy Zeller's comments about Cablanasian cuisine look downright reasonable in comparison.)
Tue Oct 31, 2006 4:37 pm Subject: could have been worse..
It's too bad that the discussion focused on such a somewhat trivial detail of the big picture of the article.
To weigh in, I think the article wouldn't have lost anything without the controversial paragraph. I found that paragraph to be highly opinionated, but stated as though it were well-known fact. It didn't bother me, but it wasn't necessary.
Besides, he could have gone with a much more controversial example of what happens when people have pent-up frustrations... Catholic Priests anyone?
Overall, nice article. Good insights. Just realize that they are opinions.
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