Steve Jobs: The Apple Board Conundrum

By Rob Enderle July 20, 2011

The Apple board has a big problem and its name is Steve Jobs.   They know, given Steve Jobs’ health, that they have to assure the company continues to thrive once Steve is gone but they don’t want to do anything that will damage Apple’s success near term to address this long term problem. Making this worse is the fact that replacing Steve Jobs may simply not be possible suggesting that if they were to damage short term performance and not make a long term fix they’d be doubly screwed.  

Let’s explore this.

Steve Jobs at Apple

Apple was redesigned by Steve Jobs for Steve Jobs.   Steve is a legendary micro-manager and what he does clearly works.   He has his fingers in much of Apple’s major processes from negotiating and enforcing deals with suppliers, to working with carriers, to working with the media content owners, to managing the conflicts between product design and product engineering, to picking what products Apple will build next.  

To say Steve is an integral part of Apple would be a massive understatement.   Steve Jobs is also not well and remains on medical leave.   While on leave he is partially active, enough so that there is no visible erosion in Apple’s execution. In fact it continues to set revenue and profit records.   In short, even with Steve not 100 percent the magic is still clearly surrounding the company.  

Replacing Steve Jobs

The issue with finding a replacement for the board is threefold. The first is that Jobs is a unique talent and training someone to truly fill Steve Jobs shoes would likely be a multi-year process and require a very unique individual.   That person would have to be willing to stay on board with Apple until needed but as soon as they were identified would be targeted by anyone wanting to build an Apple like company or better compete with Apple with an existing firm.  

The second part of the problem is more dire, as soon as this person was identified, Steve Jobs would effectively become a lame duck CEO and that would potentially substantially not only reduce his power but likely his interest in Apple.   Even if that last didn’t happen, Steve values his job highly and would be likely to torpedo this second in command to protect that job.    In short the very act of creating a back-up for Steve Jobs could both reduce the effectiveness of Jobs and force that person out of Apple.   

Third and finally it might not even work. Recall Microsoft after Bill Gates left. Steve Ballmer was effectively training for Bill’s job for years before taking it over. He was the heir apparent for some time as well so the transition went better than most and Bill stayed on to help for nearly a decade easing the transition.   Microsoft still faltered and for most of last decade was a shadow of its former self.   Apple and Microsoft were created around the same time, enjoy overlapping markets, and Bill Gates wasn’t as integral to Microsoft as Steve Jobs is to Apple making that transition vastly easier and still it failed. 

In short if the board doesn’t have a replacement ready when Steve has to eventually leave Apple for good they will look negligent.   If they do get a replacement ready it could have a catastrophic impact on Apple even sooner and they’d look even worse than negligent, they’d be pariahs. In effect there is no good choice here.  

Wrapping Up:   Between a Rock and a Hard Place

Where Apple’s board is isn’t a great place to be and it is no wonder they haven’t named a successor for Jobs yet.    It would seem vastly safer to just hope that Jobs will recover than act and actually create the very thing they are trying to avoid, the decline of Apple.   Sometimes the best decision is not to make one and it would seem that this is exactly where Apple’s board is at the moment.  

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Rob Enderle is President and Principal Analyst for the Enderle Group. To read more of his articles on TechZone360, please visit his columnist page.

Edited by Jennifer Russell

President and Principal Analyst, Enderle Group

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