Tim Cook has received a large amount of attention for his deft handling of the post-Steven Jobs era at Apple. He has produced excellent financial results and his approach while a contrast to Jobs, presents an important continuity for the company. He is working well with investors and taking an interest in infrastructure needs to sustain Apple’s success. However, the handwriting is on the wall.
Here are the five reasons why Apple will not be escape its decline.
1. The Headquarters curse.
What this refers to is argument that when an organisation completes its headquarters its purpose has changed. The idea is that once an organization achieves its first purpose, it designs a new headquarters, which suggest that its focus is changing. As a symbol of the company achieving a certain type of success, the new headquarters symbolizes trying to control what cannot be controlled (for very long): ambition and creativity.
2. Founding a regime is different from maintaining it.
The more the MBAs move in to Apple, the more it moves from a founding regime to a maintaining regime. The transition will work to a point and Cook is demonstrating that it is possible. However, with each step that Apple becomes more “corporate”, the less it becomes Apple. The less competitive it gets. Will it stay successful? Yes. It can continue to roll out Apple IPhones, IPods, and IPads for years to come. Over time, such success will be a diminishing return. The market and the consumer move on to the next innovation. To put it differently but directly, how many Apple innovations came from MBAs? The MBA is about procedures, efficiencies, and management. All of these are important to fundamental success, but they will not, cannot, unleash the creative, innovative, cutting edge success needed. In effect, Cook is saying that Apple will be like Microsoft because it will have to look externally for innovation.
3. After you go to the top 100, what is next for your ambition?
Apple relies upon creative ambition for its success. The products it has created have been successful because they embrace and exemplify creative ambition. The people designing and developing these products really believe they are changing the world. They have egos and ambitions to match that reputation. So, the question is how do you reward that ambition? Jobs has done that by the top 100. For a company, rather than a political society, it is an excellent device. You are chosen on what you have done and what the senior managers think of you. Immediately, your ambition and ego are satisfied. However, what do you do after the first, second, or third time? What keeps you interested? Yes, your boss thinks you are great, but what if you think you need or deserve more (freedom, resources, creative control) than your boss can give you. You either stay, with less, or go sideways (a bigger officer for example), or you go somewhere else where your ambition and ego can be nourished. What Apple faces is a problem that has endured since Thucydides reconciling individual ambition (love of glory) with the common (corporate) good. Perhaps Apple has solved this enough to maintain its success.
4. Does Ive have anything left in the creative tank?
The question for Apple and Ive, in particular, is whether he has anything left in his creative gas tank. Ive remains a powerful force. Without a doubt, he has talent, skill, and ideas. However, does he have “the next big thing?” At some point, the creative process slows to the point where it is a variation on a theme and not a new theme. At the same time, will Ive be able to move aside and accept ideas, designs, and ambitions that run counter to his vision? Like the earlier point about ambition, eventually, the incumbent has to step aside. Perhaps Ive can, and does, nurture the talent within Apple. However, there can be only one Ive. Like Jobs, there can be only one. As there can be only one, perhaps the ambition is to be the Ive at another firm.
5. Who runs Apple after Cook is the issue that haunts Apple.
Cook is living with a momentum he helped to create under Jobs. He is also adapting that momentum to the market. He is taking Apple in a new, if subtle, direction. The next big thing maybe Apple TV or some sort of home entertainment/business system (perhaps the mythical stim/sim idea can be an Apple product). However, who will lead Apple after Cook? At that point, we will see a fundamental challenge to what Apple is or means for its workforce. Do you get someone from inside or outside the firm? Are they pre or post Jobs/Cook? Do they have the same focus on what the Apple idea is for the company?
From these five issues we can see that Apple’s future is neither secure nor certain. To be sure, it is enjoying an excellent financial position. However, the challenges and challengers are emerging. One in particular to note is that Apple is doubling down with its manufacturing in China. By relying on that manufacturing base, it will present an important advantage, which has sustained its ability to fend off larger rivals, but it presents a significant vulnerability. How soon before China turns that reliance into dependence, and then subsumes it into compliance? None of this is certain, but investors and Apple insiders are going to be concerned with the political and economic stability within China as it faces its own choices between its role in the international system.
If Apple is to survive, it must find the “next big thing.” For Jobs, it may have been reinventing the idea of a corporation. Yet, that can only take it so far. If the next big thing cannot be sustained with an Apple platform, the next 8 years will be extremely painful, and costly, for Apple.
- Apple CEO Cook’s doing a good job, but Jobs ‘would have lost his mind over Siri’ (pcadvisor.co.uk)
- Apple designer Jonathan Ive “winced” over some Apple design choices (arstechnica.com)
- Sir Jonathan Ive on Design process in Apple (worldisgreen.com)