Apple, Steve Jobs, and the Question of Succession

Harvard Business Review

January 15, 2009

by Marshall Goldsmith

Steve Jobs has been a hugely successful leader at Apple. Not only has he been successful, he is recognized as being successful. Numerous business publications, including BusinessWeek, have ranked him as one of America’s greatest leaders. It is hard to argue with this assessment. His leadership of the company has helped to recruit great talent, inspire innovation, increase stock price and build long-term corporate value. He is an iconic figure in the world of technology.

Even the possibility of his departure will naturally cause fear among stockholders.

Steve Jobs is also a human being. I do not know him personally, but he has always come across as straightforward and candid. I was asked, by one reporter, if I believed that Apple’s board had made a mistake in “hiding” information about his health. I have no inside information. My guess is that both Mr. Jobs and the Board have consistently told the truth about his health – as they believe it to be true and hope it is true. I doubt that the Board has been hiding anything in an inappropriate way. Almost no medical diagnosis results in a certain prediction of the future; medical doctors, like most human beings, can only provide best guesses and probabilities.

I was asked, by another reporter, if the company would be better off if he just left, as opposed to taking a leave. I don’t think so. Unlike companies that ask customers what they need, and then try to build products and services around these known needs, Apple has been an innovator. Apple has created products and applications that their customers had not previously considered.

In his new role, Steve Jobs can still provide inspiration to Apple employees. He can help spark and lead the process of innovation. His “day to day” management of the company was probably not his greatest strength in the first place. My belief is that for both short-term and long-term stock value, any role by Steve Jobs is better than no role.

In hindsight, what could Apple have done differently? The company could have placed more emphasis and given more visibility to other leaders at various levels. They could have reduced their reliance on one person as not only the leader, but as the face of their entire organization.

Everyone has ’20/20′ hindsight. As long as his visibility, his image and his leadership were working, I am sure it was difficult for Apple not to promote him and bask in his success.

The problem with iconic leaders is that they are very hard to replace. When I was a Ph.D. student at UCLA, their basketball coach was John Wooden. Coach Wooden is generally regarded as the greatest college basketball coach in history. After he retired, several immediate successors were fired in short order. They just. Were. Not. Him.

Anyone who ultimately assumes the position of CEO of Apple is going to have a hard time. When I was asked how I thought stockholders would react to new leadership at Apple, my reply was, “If Steve Jobs leaves, the stock price will go down if God is selected as the next CEO.”

My hope is the Steve Jobs will continue to help Apple for years, either as CEO or a leader in strategic thinking an innovation.

Who knows? In the long run this could all work out for the best — for both Steve and the company. Hopefully, he will get his health back and continue to help Apple. This would not only be great for Apple, it would be great for the United States! The company will work to develop leadership and plan succession at all levels – and not rely too much on one person. This is a lesson that all companies with highly visible leaders need to learn.