Apple Death Knell #58: Apple = Sony

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Apple = Sony. So spaketh George Colony, and so landeth Mr. Colony in the Apple Death Knell Counter as entry #58. Writing for Forrester Research, Mr. Colony gives voice to a thought shared, or at least feared, by many. He said that without a new charismatic leader to take over Apple, the company will go the way of other once-great companies like Sony, Polaroid, Disney, and even Apple after Steve Jobs was ousted from his company in 1985.

Apple Death Knell Counter

The Apple Death Knell Counter

Let’s just go right to the death knell itself, and then we’ll chat about it:

When Steve Jobs departed, he took three things with him: 1) singular charismatic leadership that bound the company together and elicited extraordinary performance from its people; 2) the ability to take big risks, and 3) an unparalleled ability to envision and design products. Apple’s momentum will carry it for 24-48 months. But without the arrival of a new charismatic leader it will move from being a great company to being a good company, with a commensurate step down in revenue growth and product innovation. Like Sony (post Morita), Polaroid (post Land), Apple circa 1985 (post Jobs), and Disney (in the 20 years post Walt Disney), Apple will coast, and then decelerate.

Here’s the deal. He could well be right—unless, of course, he’s wrong.

Hold on a second, don’t burn me at the stake for taking the easy way out; there’s more to my pithy dismissal than it might appear. What I mean is that the notion that Apple needs someone talented at the top for the company to continue being great is a compelling one, but only time will show us whether or not that talented person has to be the same cult-of-personality-inducing figure that Mr. Colony argued is required.

The reality is that Apple can’t remain on top forever, though no one seems to have told IBM that. At its heart, Apple is a consumer products company, and heretofore, every consumer product company has had a cyclical life. At some point in its future, the wrong person will be put in charge of Apple, and the wrong decision(s) will be made on what to say yes to and what to say no to.

The question is when will Apple see that change? Many thought it would happen the day after Steve Jobs died. Some thought it would happen as soon as Mr. Jobs took his first or second medical leave of absence. Still more have said (or thought) that Apple can coast for a few years on what Mr. Jobs already set in motion (i.e. two to five years).

Mr. Colony is clearly in that camp, and again, he could well be right.

Interestingly enough, however, my thought is that Mr. Colony is missing a fundamental thing, and that is Steve Jobs himself. The tech icon told biographer Walter Isaacson that the thing he was most proud of having created was Apple, not one of the many disruptive products and services that Apple made.

“Part of my goal has been to make Apple the world’s best company, and having an orderly transition [of leadership] is key to that,” he said near the end of his life.

In the last quote of the book, he said, “My passion has been to build an enduring company where people were motivated to make great products. Everything else was secondary.”

While he worked on products and marketing a lot, and these are the things most people know about his work at Apple, the book showed us that making sure Apple could outlive him was a major priority for him.

I think about this whenever someone writes or says something like Mr. Colony did in his essay for Forrester. The thing I keep coming back to is if one thinks that Steve Jobs was the bee’s knees and the key to all those great products, how can you be so quick to dismiss his ability to build a company?

That’s not to say that Apple can never fall—a downside to the company’s saga is only a matter of when, not if. I think, however, that the “when” in that formula is many years off and that Apple will continue to be the innovative and disruptive force that it is for some time to come.

George Colony’s analysis misses the boat. It’s kind of like Toni Soccanaghi having the temerity to ask Tim Cook during Tuesday’s earnings report conference call why Apple isn’t following Microsoft’s direction of converging tablets and PCs (which earned him the now-famous ToasterFridge rebuttal from Mr. Cook).

Both require some inside-the-box thinking that completely ignores some key aspects of reality.

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Comments

Lee Dronick

Yes, hopefully the when is a long way off.

aardman

Steve wanted Next and Apple, after he became CEO, to run like an organism.  Meaning in every organism, homo sapiens for example, even the seemingly most inconsequential cell had a complete copy of the organisms DNA in it.  He wanted everyone in the company, down to the lowest paid clerk or custodian, to understand what the company is all about, its goals, its values, its culture, i.e. its DNA, so that every employees knows what his or her role is in attaining those goals.  I think Steve achieved this in Apple, for the most part, and that’s why Apple has a better chance than Sony of maintaining its status as the preeminent consumer tech company. 

None of the top brass can replace Steve, but all of them seem to understand what their individual weaknesses are and recognize everyone’s individual strengths.  And as long as they are able to maintain a singular purpose, they’ll be fine.

Seriously now, Jony Ive as CEO?  He’s a great designer and probably best embodies the unique Apple DNA.  But CEO as Mr. Colony suggests? C’mon.  He’s not even interested in the job.

geoduck

Apple is a consumer products company, and heretofore, every consumer product company has had a cyclical life.

Tell that to Ford, founded by a charismatic leader Henry and still going strong, albeit with some ups and downs a century later. Tell that to General Electric, founded by a charismatic visionary leader Thomas Edison and still going strong, albeit with some ups and downs over a century later.

IMO Apple shows all the signs of becoming this centuries General Electric. They will continue to expand and revolutionize one field after another and I expect to go to a grave dug by an iBackhoe and carried by iPallbearer robots.

wab95

...by an iBackhoe and carried by iPallbearer robots.

Good one, geoduck.

Bryan: I wondered how long it might take you to add this one to the dust bin death knell.

In fairness, Mr Colony may be correct. I think we need to disaggregate Mr Colony’s comments into their two chief components.

One is that Apple, writ large, coasting on its current momentum, but lacking the drive of a charismatic leader, may succumb to the inertial drag of the ordinary, and drift from being a great company that makes insanely great products, to being just a good company that makes good products. The implication being that it will lose mindshare, if not market and profit shares. The premise rests on his assertion of those three things that he avers SJ took with him to the grave, and of which Apple are now bereft.

The second concept is that of the timeline, 24 - 48 months.

In my field of work, one can make no assertion in the absence of evidence without challenge from one’s colleagues that this is little more than idle speculation or opinion, but not fact. Mr Colony provides no evidence that SJ ‘took’ these things with him, that Apple are shorn of them, that they do not remain at Apple in another form, or that, in fact, Apple even require them. I happen to concur that these are important to Apple’s current level of performance, but continue to argue, as does SJ’s own biography, that Jobs’ greatest invention is Apple itself. While I fully anticipate that the company’s preeminent position must wax and wane over time, I think it too soon to dismiss its prospects for remaining a dominating force for years to come. Its current mindshare, and sheer range dominant products and services across whole industries place it in a category with few peers in living memory, and none in the context a global market linked in real time by social networks. We have no precedents for making hard and fast predictions. Mr Colony’s predictions are therefore little more than conventional wisdom drawn from earlier models. Whether the prediction proves right or not, the model is wrong.

As for the timeline, I think he simply hasn’t thought it through. It seems a bit short, in my view, given the above about the range and scope of Apple’s influence, but time will tell.

Meanwhile, I think that geoduck is safe in planning for that iFuneral.

mrmwebmax

+

IMHO, one of the biggest flaws in Colony’s argument is that he discounts the contributions made by now-CEO Tim Cook. Does Cook have the charisma of the late Steve Jobs? No…but who does? Jobs was a master showman, had a keen eye for detail, and knew just as often when to say NO and when to say YES. But Tim Cook?

No idea if he has the eye for detail or the YES/NO vision of Jobs. What he does have, though, is perhaps the world’s greatest grasp of supply-chain management. It was Cook, not Jobs, who turned Apple into the supply-chain machine that it is today. Remember before the iPad came out? Everyone said it would be too expensive, with most predicting $1000 price tags. Apple came along with a full-featured $500 tablet, maintains the same price two years later, has margins that are the envy of the consumer electronics industry, and still manages to undercut the competition on price. Yes, Apple undercutting competition on price. Now there’s a new one for ya.

Thank Tim Cook for that, and thank SJ for having the vision to make him COO while Jobs himself was still CEO.

Then there’s Jony Ive. NO, he should NOT EVER be CEO. He is a creative genius who is right where he belongs: Heading up Apple’s world-leading industrial design. He also has, according to SJ himself, equal powers to Tim Cook.

So…. Apple has the world’s leading industrial designer working equally with the world’s leading supply chain manager. Every quarter continues to be a blowout. And despite having the lion’s share of worldwide components and manufacturing capacity (again, thank you Tim Cook), they still can’t keep up with demand (thank you, Jony Ive).

The missing link that SJ left behind—and here’s hoping he instilled it enough in everyone’s DNA so that Apple doesn’t lose it—is knowing the YES/NO thing. And having that eye for detail, and perhaps more so, simplicity. So long as Apple can maintain those core values, I see no downfall in their immediate future. I’ll even go so far as to say they’re good for at least five more years.

What’s going to stop them? Android tablets? (OMG, laughing so hard my sides hurt!)

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