Apple’s ‘He’s-No-Steve-Jobs’ Problem
If it had not been used already, "Great Expectations" might make a perfect name for a book about Apple. The company reported earnings of $8.2 billion last quarter on sales of $36 billion. Wall Street’s reaction? Shares slid below $600 for the first time in months. The revenue number was below analysts’ expectations.
In the same report, Apple forecast sales of around $52 billion for the holiday quarter. That would be the most earned in a single quarter by any electronics company in history, according to MarketWatch. But due to the anticipation of higher costs related to innovative new production details, analysts were disappointed by the revenue projection.
Meanwhile, MarketWatch commentator Therese Poletti reports that many industry watchers are griping about Apple top management. They see the recent ouster of Apple Store head John Browett on the tail of the departure of Scott Forstall, the exec in charge of mobile software, as signs of turmoil in the executive suite. And there is no lack of complaints about Apple’s new product releases, from the poor debut of the company’s replacement for Google Maps to disappointment over the pricing of the new iPod mini.
Inevitably, fingers point to the top of the pyramid where CEO Tim Cook is in the unenviable position of carrying on the Steve Jobs legacy. Similarly, many have also raised Ron Johnson, original visionary of the Apple Stores concept, to Olympian heights. Did John Browett ever stand a chance of continuing in the tradition of innovation Johnson established? Says Forbes contributor Laura Heller, "It’s unclear if there’s anyone currently working in the U.S. retail industry up to the task."
Ms. Poletti of MarketWatch also points out that there are perhaps more analysts in favor of the executive shake-up. They compliment Mr. Cook for his ability to make tough personnel decisions and for emphasizing a collaborative atmosphere. Some say that the new administration is bringing more fairness and consistency to company management and product execution relative to the famously temperamental Steve Jobs.
Discussion Questions
Does Apple need to innovate at the pace set by Steve Jobs to maintain its market position? How would you grade the performance of Apple CEO Tim Cook? Can you see anyone in retail (or elsewhere) suitable to take the old Ron Johnson position as head of Apple Stores?
Apple needs to market at the pace set up by Jobs. If your brand promise is that users will be on the cutting edge of cool — at least as they define it — you don’t have much choice but to be innovative.
Microsoft’s Surface is a case in point. A tablet that lets you run PowerPoint, Excel, etc. could — over time — pose a significant challenge to the iPad.
Tim Cook’s job performance will always be a matter of debate. That’s what you get when you try to operate in the shadow of a myth.
Finding someone to run Apple Stores is probably an easier task — at least once you start looking outside the circle of “usual suspects”.
Whenever someone succeeds a popular leader, the successor is invariably compared and found wanting. Tim Cook is doing a great job at Apple, but no matter how well he does, he will be compared with Steve Jobs, and some will find him lacking.
Ron Johnson, who was widely praised at Apple, has been trashed at JC Penney.
Wall Street is fickle. It likes to build up heroes and then tear them down. Time and distance will put Tim Cook’s leadership of Apple in perspective, not the rush of the lemmings on the Street.
Short Apple now! They can’t sustain the level of innovation. It’s questionable whether the products they have today are top of the category from a value proposition to the consumer.
The performance of Tim Cook is a B+. He is starting to make his mark but he is obviously a different style of leader. He recently shook up the leadership team and is starting to put his stamp on company direction through the people in place.
The problems at Apple point out Steve Jobs’s failure to develop a true succession plan even though he knew his health was in jeopardy for years. Tim Cook has been operating in Jobs’s long shadow for the past year but appears finally to be taking control of the company. This starts with his management team, and by confronting the dysfunctional egos that made major missteps with the iOS 6.0 launch and The Apple Store.
As to Ron Johnson, I wouldn’t be so quick to credit him (and blame his successor)…The Apple Store is clearly a product of Steve Jobs’s vision as much as Johnson’s operating skill. JCP has been more than a match for Johnson’s management talents so far.
Steve Jobs was a larger-than-life individual who changed the arc of how humans interact with technology and, in doing so, achieved mythological status. More to the point, everything about what Apple did was a reflection of him, enabled by many extraordinary individuals he gathered around him. Following a mythological creature is, to be sure, a daunting task. Is Tim Cook Steve Jobs? Of course not. Time will tell if he will be able to continue the amazing success that Apple has enjoyed. The same applies to Apple Retail, although looking at what’s going on at JCP, I think that’s a different discussion.
“Need” is a funny word. I think Apple “needs” to stop releasing OS’s that are buggy. I’m relatively new to the Apple fold, but have experienced problems when upgrading to both Lion and Mountain Lion. I never used Google maps (love Verizon’s Navigator), so the switch to Apple maps doesn’t matter to me, except as joke fodder. But I just got my iPhone 5, and I love it, except Siri still doesn’t work well. Microsoft would have been tarred and feathered if it put together a track record like that (remember Vista?).
The Apple store head question is more interesting. Someone just asked me the other night who I thought might be a good replacement. I couldn’t think of anyone – except perhaps someone from either Nordstrom or Tiffany. Apple doesn’t really make typical consumer electronics. When all is said and done, it’s a luxury brand, and that’s the ethos infused in its stores. I think that’s the bigger issue. The Apple Store is a singularity.
The problem with Apple is that they have a well-deserved reputation for being smug. From their “we are so cool and clever” commercials, to their product announcements, right down to their premium-pricing. People are okay with smug but they expect top quality and mind-blowing innovation in return. What has Apple done in the last 2 years? Slightly faster processors and better resolution. You call that innovation? Samsung and indeed Microsoft are running circles around them in that department. And let’s not forget Siri and Apple Maps which are widely ridiculed. Apple would do well to become a little more “humble” or better yet…let the reality rise up to the hype and actually innovate again.
Any expectation that Apple will remain exactly the same company in the wake of Jobs’ departure from this Earth is frankly unrealistic. He was a force of nature, a prophet-tyrant, and he led the invention of new classes of consumer products and services, not just new items.
This is a set of circumstances that will not be repeated. Mr. Cook is no doubt a talented executive, but that is evidently not enough to meet shareholder expectations.
So yes, Apple “needs” to match the Jobs-era pace to maintain its market hegemony. But no, that is highly unlikely to happen – regardless of who sits at the helm next.
Press adulation is a knife that cuts both ways. Tim Cook is not Steve Jobs. The press is already starting to eat their young.
I think a solution to the store problem may be at hand, as Mr. Johnson may well become “available” soon; as for replacing Mr. Jobs…
There goes that phrase of “analysts expectations” again!
No one is Steve Jobs. Expecting a clone will certainly disappoint.
Their options at retail are vast. Exceptional retailing people are found at exceptional retailers. It’s not that long of a list. However, they do exist.
Any one filling that position would be feeling the same pressures and having the same skeptics. The name and the person are irrelevant.
Many times, those following those perceived like Steve Jobs just don’t make it because they followed them. Unfortunate, but it may be until the second replacement until the famed “analysts” find someone else to turn on at another company.
Steve Jobs set a pace and expectation that very few successors can match. At this point Tim Cook needs to define his metrics for success which ultimately are connected to shareholder returns and market share. In terms of Ron Johnson’s replacement, I am surprised they don’t have someone in house they can promote. The Apple Store is very unique (closest thing is the Disney store), it is a very difficult transition for traditional retailer executives to adjust to.
I see these executive changes as Tim Cook putting his stamp on Apple and demanding exemplary performance, which neither person exhibited. The standards need to be kept high and the innovation needs to keep coming for Apple to retain its position. This was a good move. Selecting replacements will be the next big step.
Tim Cook isn’t trying to be Steve Jobs. He is seeking harmony over conflict. The dismissal of Scott Forstall is another in a pattern of moves to weed out the temperamental, self-centered leaders who Jobs tolerated.
As the saying goes, one rotten apple spoils the barrel. In a company transitioning from singular top-down leadership to a more multi-polar collaborative style, chemistry is crucial.