Guest Post - Jim Schrager: Does Apple Need Jobs?

I’ve written several times about Jim Schrager who opened my eyes to the difference between strategy and hope at the University of Chicago.

Jim is one of the world’s leading thinkers on why businesses succeed. His resume as a practitioner, teacher and thought leader speaks for itself. I’m proud to call him a mentor and a friend.

Jim reads this blog regularly and wrote a follow up to my Steve Jobs post from last week. As with all great teachers, he answers some questions while raising new ones.  

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Does Apple Need Jobs?

The stock market had a case of the nerves with the announcement that Steve Jobs was stepping aside again for awhile.  As we all know, the market can be at times a rational arbiter of things to come, or an utterly random marker.  Which is it this time?

A change of leadership poses a risk for all organizations.  Some make the transition well, others less so. Strategy is a powerful tool the best CEOs use to think about the future.  Within some boundaries, strategy allows us to process the news streams of the day and select what matters as we think about tomorrow.  One of those boundaries describes what decision researchers call the “task environment. ”That’s a fancy way of categorizing different situations based on the affect people have on it.  Strategy can explain many things in the business world, such as the rise of Toyota, the fall of K-Mart, and the reason why Fortune Brands is changing its portfolio of products.

But when we have a “fashion” business, strategy is much less useful.

Steve Jobs is one of the very few people with the skills required to prosper in the “technology fashion" business.  Like apparel, his business is very creative, and as we note over many decades, success in fashion is very hard to predict.  The folks who can run a business like this are rare, their talents cannot be easily transferred, and when they leave, in almost every instance, the company struggles.

Other fashion business examples beyond apparel include movies, books, TV, and radio.  CEO succession in these businesses poses a special risk.

The reason we watch the leaders of these businesses in a special way is because we know that strategy, used so well in other environments to find the best path forward, won't work in a fashion business. Jobs has had a series of great tech hits, that’s the mark of CEOs who master this tough challenge.  That he has no one else ready to take over is common, because those who can do this are exceptionally uncommon.

Try and find a fashion business that made a smooth transition between leaders, and you won’t find many. Most don't make a transition at all, and simply glide along without the power of new hits until they crash.

Strategy doesn't work here, and we simply must be humble about that.  The stock market is right to know there isn't another Steve Jobs ready to take the controls.

There isn't another Ralph Lifshitz either.

When either of these fashion leaders leaves the stage, it’s fair to expect big changes ahead for their companies.

Written by James E. Schrager, who teaches strategy at the University of Chicago, Booth School of Business.

Is Steve Jobs A Fool?

First, may I wish you all a Happy New Year. My goal is to make more change happen.

There is a story told by former Apple employees of Steve Jobs' instinct for self indulgence.

At 1 Infinite Loop - Apple’s Headquarters in Cupertino - there is a staff parking lot which is notable for two reasons. Its size. And the absence of pre-assigned parking spaces. The strategy being to encourage early arrivals by the simple expediency of offering a shorter walk to the office. 

Steve Jobs is not an early arriver by all accounts. But apparently overcame the penalties for this trait by parking in the spaces reserved for the handicapped. And when in a particular hurry, would park so as to occupy two of them.

This personal inelegance was finally confronted by one of his employees who posted a note on his windshield with a simple suggestion. 

‘Park Different.’

News yesterday that Steve Jobs has to take another medical leave of absence once again raises the issue of his ability to see himself contextually within the company he has built since his return in 1997. And whether Apple is anything like as well designed as the products which have made it such a vibrant business.

To date, the indications are that it is not.

I have long believed that on the day a new product is launched, Steve Jobs (with the money I’ve spent on Apple products I’m sure I’m entitled to a first name based relationship) has a clear vision of the tenth version of that device. What we are sold, is essentially a stripped down version of what Steve already has in his head for the distant future. Which makes both design and construction relatively more impactful, since the company focuses on solving macro level problems, not small iterative ones. 

Thinking on that level is extraordinarily rare since it requires combining the aspirational with the practical. A relationship that most business leaders fail to consummate. Either because they live too romantically or too functionally, and surround themselves with mirrors. Not lenses.

But while each successive Apple product introduction provides us with capabilities that are simultaneously inevitable and awe-inspiring, the management structure of the company has been infused with a particular brand of arrogance. Indestructibility.  As though days like today were not part of a future Steve has been willing to foresee.

The impact of which is that both rumors and realities of Steve’s health have a direct impact on consumer confidence and company valuation. In early trading yesterday on the New Zealand stock exchange - the only one open when news of this latest leave of absence was announced - Apple shares fell 7% in value on the news.

Because when what you’re selling is so clearly presented as one man’s vision, the risk of the man being removed is tantamount to removing the company’s entire operating strategy.

This makes Steve Jobs the equal of most owners of creative businesses who build the company around themselves. An approach which guarantees that the day they are done, so too is the company. A waste of most of that which they and those that work for them have invested.

But, Steve Jobs is a man capable of seeing the future. In ways that would make Nostradamus resentful.

That he is unwilling to incorporate his human limitations into his company’s organizational structure jeopardizes the future of his business.

That his departure, whenever it comes, will take with it the unrealized potential of possibilities the rest of us can only dream of, makes him selfish.

That he knows all this and does nothing to remedy the situation, makes him tragically human.

A Journey With Oprah

In the spring of 1984, Chris resigned from her job at Good Morning America and moved to Chicago to produce a new local talk show. A.M Chicago.

The host, an unknown from Baltimore, was a woman called Oprah Winfrey.

For the next seven years Chris was part of a very small group that managed the  development of the show, the studios and Oprah’s personal profile. She and Oprah travelled the country together, building both the business and the brand by balancing the need to expose the message with the importance of protecting its value.

As in all great and enduring relationships they taught and learned from each other. And marveled at the journey of a black woman from “nowhere” (as Oprah described her background) to the most powerful media influence on the planet.

That no one could forecast how far this would go is true. But the practices that were instilled in those early days created the platform that have allowed Oprah to do what she wanted on her terms. Including deciding how and when to evolve.

In today’s news the media is reporting the final episode of the Oprah Winfrey Show as an end.

It is in fact a transition. To see if she can build something that has value beyond her own personal reach.

The Oprah Winfrey Network may outlive her. Or it may simply prove that without Oprah, there is no business. But she is unafraid to try. Or to let go of her lifeboat.

And though it is easy to decide that a billionaire has little at stake, this ignores the fact that every founder is emotionally intertwined with their business. Often to a point of paralysis.

One of the things we do most successfully is to help owners take responsibility for their business by separating themselves from it. Which creates the possibility that the business can exist without them.

It’s taken Oprah 25 years to do so. But this is her first step to discovering whether when she is gone, she has created a legend.

Or a legacy.