The resignation of Steve Jobs yesterday as CEO of Apple may not have been surprising, but it was still a shock. Entire industries are reeling today, trying to make sense of what it will all mean to them. From computer manufacturers to mobile phone makers to entertainment executives, Jobs departure has high-level, closed-door meetings happening in boardrooms all over the world. They will strategize about whether the news will create opportunities for them: can they now dare to take tougher negotiating stands on licensing; will component markets open up; will some sort of magic hold on consumers now wear off; will Apple fail to come up with the next big thing. Billions of dollars will be re-channeled; billion-dollar businesses will be re-conceptualized — all because of a few paragraphs written by one man to tell his friends he is stepping down from a job.
The short truth is that Apple will not change much in the next few years, mostly because it will be running more or less the same way it has for the last few. Tim Cook, Apple’s new CEO, had already been running the day-to-day operations of the company—and pretty darned well by any measure you care to apply. As interim CEO during Jobs’ medical leaves and as COO, Cook has been calling most of the shots for a long time now.
He is generally credited with many of the operational achievements that have made Apple untouchable by competitors. For one thing, he’s kept device costs down, eliminating the one lingering criticism that the company’s products are overpriced. More importantly, his strategy of buying out supplies of key components—cornering the market, as it were—hobbled the competition’s ability to price their own devices competitively and often caused serious delays in getting them to market. Jobs’ vision married with Cook’s pragmatism made for a killer combination.
Further, Apple’s product line is well laid out for the next couple of years at least. Even if Apple stopped coming up with new ideas today (it won’t), what’s already in development would keep it on top for the foreseeable future.
There will be no dearth of new ideas coming out of Cupertino. Jobs did not come up with all the ideas, he decided which to green light. He famously said that coming up with great ideas is not the hard part, it’s knowing which ones to say “no” to.
And that’s where Apple will be tested. Will Cook have that same talent for knowing which product ideas to kill? If not, will he have people in place who do? I think yes. Apple executives talk a lot about the company’s DNA and what’s in it, and that’s not hyperbole. Apple understands the importance of creating a culture that has this DNA. It may not use focus groups, but it does pay a lot of attention to how decisions are made and how culture is infused into its employees. They’ve even reportedly devoted a significant effort to studying—and documenting—the process.
They were essentially—in a project that no doubt had Job’s blessing—working to ensure not only that Steve Jobs≠Apple, but that Apple becomes more like Steve Jobs, and can thus better handle his eventual departure. It’s the ultimate succession plan: To use a crass science fiction analogy, they worked to create a Steve Jobs virus and then infected the company with it. <Cue evil laugh.> No, Jobs may not be Apple, but the company is doing its best to make sure it becomes Steve Jobs. Now that’s a legacy.
The biggest change, then, is in perception. For many (probably most) people, Jobs is the face, the very personification of Apple. Cook may not have Job’s Reality Distortion Field generator at his disposal, but who does? I’ve been a proponent for some time now of the idea that Jobs should not be appearing at company announcements and press events, in order to overcome the idea that Jobs is Apple and there is no Apple without Jobs. But Apple did something even better in retrospect, and that’s to transition Jobs out of the role.
It started clumsily, perhaps unintentionally, with Phil Schiller’s presentation of Apple’s last Macworld Keynote in 2009. But since then, Jobs has appeared on stage more in the role of emcee, leaving the bulk of the presentation to other Apple executives. That puts far less emphasis on a single person(ality) and makes it easier for Cook to step into that far-less-challenging role. The fact that Jobs remains on Apple’s board leaves open the possibility that he will continue to make an occasional appearance, presumably health permitting.
So far, the stock market seems to be buying it. Although it dipped about 5 percent in after-hours trading following the announcement, Apple stock has rebounded, trading down 1.3 percent as of this writing, better than NASDAQ as a whole. While there was probably no great time for Jobs to step down, the performance of the company and its short term outlook probably make this one of the best times for it to happen.
Personally, I wish Steve a long and healthy tenure as Apple’s chairman of the board. I’ll admit, though, that there’s a part of me that’s relieved that the issue of when he would step down is over, so know we can just focus on what’s next. Thanks, Steve, for putting a “dent in the universe.” May your influence be felt for a long time to come.