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Business Management
What Would You Do? Case Assignment
Apple
Cupertino, California
CEO and co-founder Steve Jobs is synonymous with Apple. Fired from Apple in 1985, Jobs founded NeXT Computer, bought the Graphics Group from Lucasfilm and transformed it into Pixar Studios, and then returned to Apple as CEO in 1995. In his absence, Apple lost billions and its share of the personal computer market dropped from 9% to 2%. Jobs saved Apple by procuring a $150 million investment from Bill Gates and Microsoft, and launching the iMac, a desktop machine that became one of Apple’s leading sellers. Most importantly, though, Jobs directed the development of Apple’s new operating system, OS X, an operating system that is speedy, simple to use, incredibly stable, and easy to write software for. OS X, in combination with easy-to-use software for film and picture editing, desktop publishing, presentations, and word processing, stabilized Apple’s sales and market share and put it in a financial position to eventually create the iPod, the iPhone, the iPad, and now iCloud. Today, Apple’s 10% share of the personal computer market is growing, it has a large market share in smart phones, and a commanding market share in tablets and digital music. Furthermore, its combined stock value is greater than Intel and Microsoft combined.
Jobs was known for his highly demanding and influential leadership at Apple. When Apple’s MobileMe service (which synchronized calendar and email and files across Macs, iPhones, and corporate networks) launched to terrible reviews and buggy performance, he berated the MobileMe team, telling them, “You’ve tarnished Apple’s reputation. You should hate each other for having let each other down.” He named a replacement manager on the spot. Jobs was also famous for saying “no.” A former Apple executive says, “Over and over Steve talks about the power of picking the things you don’t do.” Jobs said, “We’re always thinking about new markets we could enter. But it’s only by saying no … that you can concentrate on the things that are really important.” Yet, despite his toughness and discipline, Jobs was able to inspire Apple’s managers, software engineers, and designers to create elegant, simple, innovative products. Jeff Robbin, Apple’s lead software designer for iTunes and the iPod said, “I remember sitting with Steve and some other people night after night from nine until one, working out the user interface for the first iPod. It evolved by trial and error into something a little simpler every day. We knew we had reached the end when we looked at each other and said, ‘Well, of course. Why would we want to do it any other way?’”
Apple’s future is bright, but Jobs’ health was a concern. In 2004 and 2009, he took medical leaves due to pancreatic cancer, a liver transplant, and an inability to maintain weight. In January 2011, he announced his 3rdmedical leave, telling Apple’s 50,000 employees, “I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.” In October 2011, Jobs died, one month after handing the CEO position to long-time COO, Tim Cook.
Jobs’ charismatic leadership was clearly central to Apple’s success. But can Apple succeed without him? What steps should Apple take to increase its chances of continued success without Jobs as CEO? Are there ways to substitute for Jobs’ leadership at Apple? Next, is Tim Cook the right leader to replace Jobs? Jobs was demanding, creative, and controlling; Cook is not. Should Tim Cook try to emulate Jobs or should he run Apple using a different leadership style? Should Cook focus more on managing or leading Apple? Finally, Jobs was at the center of all of Apple’s key decisions over the last decade and a half. Jez Frampton, group CEO of Interbrand says, “Now the worry is the organization has to rewire itself and learn how to make decisions on its own.” Should Apple become more participative, involving more managers and employees, or continue to use Jobs centralized approach to decision making, which was less participative and highly influenced by the founder and former CEO?
If you were in charge at Apple, what would you do?