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With Apple founder and CEO Steve Jobs having taken his third medical leave in the last seven years, there have been numerous questions regarding the company’s ability to function should this or a future illness prove terminal. For every discussion of how Apple owes its shareholders an explanation of its succession plans, there’s been an equally valid argument that Jobs’ personal health is nobody’s business but his own. The situation at Apple presents an almost perfect case study on the importance of having a clearly identified successor.
I’m hard-pressed to come up with an example of a manufacturing entity that’s been as closely identified with its founder as Apple is; the only one that comes to mind is Ford Motor Company. In that case, Henry Ford dominated his company for almost half a century, to the point that he almost drove it out of business twice. The first time was due to Ford’s insistence on keeping the Model T in production long after competitors such as Chevrolet had emerged. The second example was during World War II, when the company’s executive dysfunction following the death of company president Edsel Ford became so apparent that Henry Ford II was granted a discharge from the U.S. Navy in order to take the reins of the family business away from his grandfather.
But Apple is not Ford Motor. For one thing, there’s no Edsel or Henry II in the Jobs family to act as a replacement. For another, the companies are in completely different situations. Ford Motor during the war years was an integral part of the supply chain that was keeping the armed forces in airplanes and trucks. Apple, on the other hand, is strictly about consumer technology. The company’s decision last year to abandon the Xserve underscores the commitment to mobile devices in preference to big iron.
Those who claim that Apple can’t survive without Jobs point to the company’s decline after his departure in 1985 and its near collapse in the mid-1990s. The problem with that argument is that the Apple of the 1980s and 1990s was entirely dependent on the sales of Macintosh; LaserWriter printers were the only other product line that mattered, and even those were merely adjuncts to the computers.
The Apple of today is a completely different enchilada. Against all odds, the company retains a dominant position in portable music players and mobile phones, and has reinvented tablet computing in much the same way as the Macintosh’s interface reinvented desktop computing. Apple today is far more diversified than it was in 1985, 1995 or even 2005.
For another thing, Apple’s executive bench is deeper than it looks; COO Tim Cook is not new to the role of understudy to Jobs, having filled in during Jobs’ first two leaves. It’s hard to tell whether he has the same ability to drive and inspire Apple’s designers and engineers for which Jobs is famous, and that’s the part that could prove tricky. Given that the iPhone 5 and iPad 2 are headed into manufacturing, any problems with those won’t belong to Cook. But if Jobs’ medical leave extends into 2012, Cook will be the one credited with the success or failure of the devices that follow those models.
One last thing needs to be said: I don’t believe that there’s another company that has been asked to publicize its succession plans in the way some are demanding that Apple do. At least Tim Cook will have a lot of practice at the top job, if it turns out that he has to take it over for good.