Learning from Steve Jobs's Success

Apple, as an aging company, still is taking necessary risks to assure its future.
Posted January 27, 2010
By

Rob Enderle

Rob Enderle


Although I’m writing this before the launch, the Apple tablet is likely the biggest bet the company has made in its existence. It anticipates a future that is more appliance-centric in concept than the Mac, or any PC, has ever embraced. And is likely, on paper, vastly closer to what people wanted. It also showcases how Apple is out executing Microsoft.

However, by signaling a change, they could stall the markets that are converging, which include their Macs, iPods, and iPhones. This would stall until these new products are right and, during that stall, someone else could rise up and displace them as market leader.

This just points out the extreme risk in being a company that is driving the change. But the potential benefit of emerging vastly more powerful than they currently are is likely well worth the risk. And Apple does this at a point when it is at the top of its game.

Typically you would expect companies that are heavily staffed with younger people to be more willing to take this kind of risk. Older firms tend to trend toward risk avoidance, which is why younger firms often out play and replace them.

Apple and Steve Jobs are clearly not going quietly into the night and we should explore this.

Aging Companies

One of the things that seems to happen as companies age, compared to younger firms, is the tendency to avoid risk. This seems to come down to a sense that as executives age their time and ability to make up for a mistake that could end a career grows more limited. Major decisions are avoided in the belief that by avoiding these decisions risks can be avoided as well.

In watching companies over the years I believe this is not only not an accurate assessment of what results, it actually creates more risk for the firms. This is because effort goes into preventing bad decisions from being challenged as opposed to identifying them quickly and then correcting the mistake.

Not making a decision or not fully backing up a made decision can both be mistakes. It’s mistakes like this that made it so that Apple and Microsoft could benefit from Xerox’s ideas in the early years. Avoiding a decision or under resourcing may allow blame to more easily go elsewhere. But they are still company killers and if the company dies it really doesn’t matter to the folks laid-off who got the blame.

Reverse Evolution Marketing De-emphasis

What seems interesting is that companies go through an evolutionary “only the most fit” survive process to become successful. But often don’t’ seem to understand what they initially did right.

As a result, as they age, they seem to dismantle the very structure that made them successful. If they were lean and fast moving they become bureaucratic and slow. If they were defined as being a great place to work they dismantle the entitlements and collaborative environment that made this possible in order to save money. And if they were highly trusted eventually they will trade off that trust in order to foster short-term revenue growth.

In addition, as companies age the folks that helped the firm market its products and become successful tend to drift away from the firm and marketing types tend not to do a good job of mentoring. This was most evident at Intel. The company went from having one of the best marketing organizations in the technology market under Dennis Carter to a train wreck because Dennis clearly didn’t mentor those who came behind him.

Over the years I’ve rarely seen a great marketing executive mentor anyone, which may be a result of excessive competition in the field. But it’s still a problem that needs to be addressed if a firm is to successfully survive the departure of a marketing superstar.

Apple nearly failed in the 90s and what saved them was bringing back someone, Steve Jobs, who could redefine the company. He redefined it not only as a better reflection of its youth but as one that was more capable of making good decisions, leveraging those decisions successfully, and understanding how to market Apple’s unique differences.

In the end it doesn’t matter if you have special products if buyers don’t appreciate what makes them special. A good book to read to understand this is “The Presentation Secrets of Steve Jobs.”

Apple’s Difference

To manage around this growing inability of an aging firm to make good decisions, Steve Jobs cut the complexity of Apple down sharply so that it could never be buried under a large number of mistakes. Instead of focusing on making bad decisions look good, he focused on making decisions actually succeed. In addition he reformed the management team around NeXT and new hires designed to rebuild Apple’s ability to move and execute.

The end result is they can bring out something as potentially revolutionary as their new tablet and execute on the potential. This is much better than focusing on really good reasons why the failure of the idea wasn’t their fault.

For too many companies, the focus has been how to successfully pass blame without realizing that those chickens eventually do come back to roost. And that if you are successful in the first place you don’t need to become expert at passing blame.

Apple’s Long Term Risk

As much as we admire Apple we shouldn’t forget that the firm’s success was largely the result of having a marketing-oriented CEO who could reform the company. As a group, folks with Steve Jobs’s skill set don’t mentor well. And Steve is known for being particularly bad at this.

The end result is that Apple, when Steve eventually moves on, may simply become another aging company again and lose the very essence that has allowed it to be so successful.

This too is a lesson. For not only should firms learn what assures their success and how to protect it, but build in mentoring so that key skills aren’t lost as the company ages.

Wrapping Up: What Apple Teaches

Apple’s success goes back to taking a badly aging company down to the bare walls and rebuilding it so that it regains the advantages that initially made it successful. The new Apple Tablet reflects a level of execution that few companies can showcase and it is both an example and a caution.

An example of how to take necessary risks while limiting the potential liability and a caution that while companies are potentially immortal, they can be killed by the mortality of the great people who initially made these companies great. Apple teaches both lessons but only the first one on purpose.

This new Tablet is likely Steve Jobs’s last “bet the company” decision. These things don’t happen that often, and we should take from what results not just how well the product does but what it took to create it. Apple, as an aging company, still is taking necessary risks to assure its future. And that is something I think we can all admire as we are waiting to buy Apple’s latest toy.




Tags: Apple, Mac, steve jobs, tablet PC, tablet


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