Maybe It’s Better if the CEO isn’t a Rock Star: The Case of Steve Jobs

Posted on January 17, 2011

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This blog generally does not stray too much into general management issues, but I was struck today by both the volume and tone of coverage of Steve Jobs’ announcement that he is taking another medical leave from his job as CEO of Apple.

Much of the coverage of the story has centered on whether Apple will continue to thrive. According to a New York Times article on the topic:

Mr. Jobs’s leave is certain to cause anxiety with investors and consumers, because of the heightened competition the company faces. Perhaps more than any other chief executive, he is seen as inseparable from his company’s success.

“He may be the most vital C.E.O. of our era,” said Michael Useem, a professor at the Wharton School at the University of Pennsylvania and director of its Center for Leadership and Change Management.

In the Wall Street Journal, in a column entitled “With Jobs on Leave, Will Apple Shares Stay Healthy?” Brett Arends writes:

In the past 13 years, Steve Jobs has proved himself to be the most extraordinary chief executive in the world and among the most extraordinary in living memory. His leadership adds enormous value. Therefore his absence must subtract enormous value. That’s grade-school arithmetic. There’s no way around it.

And a headline in the Los Angeles times reads “Steve Jobs’ medical leave rattles Apple, Silicon Valley.”

Can one individual – and, remember, we’re not talking about a political or religious leader, or even a star athlete – be so unique, so irreplaceable, that stock markets move on the news? Can a CEO be that critical to a company’s success?

According to another New York Times article on the subject:

No one expects Apple to suffer in the short term, as the company has a long product cycle. But some raise questions as to what will happen over the long term if Mr. Jobs does not return.

“The problem here isn’t the operations of Apple and their ability to execute and keep doing what they’ve been doing,” Munster [an analyst with Piper Jaffray] said. “As far as what they’ve got in place, no doubt they can deliver, but as far as inspiring products you haven’t thought up yet, that’s what you’re going to lose.”

“The problem, really at the core,” he said, “is that Steve Jobs’s inspiration is irreplaceable.”

The health of a company is, of course, intimately tied to the strength of its leadership. But Apple’s problem is not that Steve Jobs may be out of the picture for some length of time but, rather, that so many people fear for Apple’s future without Steve Jobs. For a CEO to become a larger than life figure creates a whole host of problems for a company. If an organization wants to survive in the long run then it is the responsibility of that organization’s leaders to make sure that they build a team in which no one individual is irreplaceable.

Posted in: HR—General