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Apple Inc. / Technology Sector: Steve Jobs at Apple - the archetypal Transformational Leader? Juliana Gallio Seven Bridges, Vol. 5 (2017)
Published on: 01/07/2017 To cite this article: Gallio, J. (2017) Apple Inc. / Technology Sector: Steve Jobs at Apple - the archetypal Transformational Leader? Seven Bridges, 5, pp.12-22.
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Seven Bridges is published by: Newcastle College Rye Hill Campus Scotswood Road NE4 7SA Apple Inc. / Technology Sector: Steve Jobs at Apple - the archetypal Transformational Leader? Juliana Gallio ABSTRACT: This paper aims to explore some of the strategic leadership issues in the technology sector, including the current paradigm of transformational leaders and the discussion of Adair’s dichotomy of nature versus nurture. Some examples of leaders will be presented; however, the focus will be for Steve Jobs, co-founder and former Apple’s CEO, dead in 2011. There will be also a review of relevant literature about Ethical Leadership, Strategic Management and Strategic Management Issues.
KEYWORDS: Apple, Technology, Leadership.
Introduction This is a case study of strategic leadership issues in the technology sector. Apple and Jobs are the focus because they are accessible and relatable examples of the broader themes and issues explored. The case study looks first at the history, culture and ethical leadership of Apple and then moves into an exploration of strategic leadership within the Technology Sector. Specifically, how far do key Strategic Leaders in the Technology Sector, including Jobs, fit the definition of Transformational Leaders? This leads to a discussion of the weaknesses in the leadership definitions themselves and the Transformational versus Transactional dichotomy that persists in leadership theory at present. Throughout, the case study engages in the issues of Strategic Leadership within Apple.
Literature review Apple Inc. (known simply as “Apple”) is a large, multinational company in the technology sector and is considered to be extremely successful in terms of market capitalisation, sustained growth and a reputation for cool products. It has high brand awareness and has created some the most recognisable technology products such as the iPhone, iPad, iTunes, MacBook and iPod. The Apple brand is highly desirable and the company frequently wins awards, (Graziano, 2013). Apple also has a high, often leading market-share, (Sprague and Sternblitz-Rubenstein, 2016), across its product range. In summary, Apple is a technology company that is large, well-known, successful and desirable. The name “Steve Jobs” is synonymous with Apple. Jobs was an influential figure within Apple. He co-founded Apple in 1976. After having left the company in 1985, he later returned to Apple and led the company as CEO from 1997 to 2011. Jobs stepped down as CEO of Apple in 2011 due to ill-health and a few months later sadly passed away aged 56. He was replaced by Tim Cook as the CEO. Evidence of the market’s view of how important Jobs was to Apple is that Apple stock dropped more than 5% on news of his death, (Kollewe, 2011).
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By the time of his death, Jobs had become a celebrity and household name. Two feature-length biographical movies have been released about his life and the then current President of the United States released a statement upon news of his death, (Obama, 2011). Jobs and Apple are widely seen as a successful partnership and are frequently cited in the media as an example of success. For example, he technology sector seems intent on “finding the next Jobs” (there is even a book on it, (Bushnell and Stone, 2014)). Apple demonstrated that they had a succession plan through the appointment of Cook as CEO prior to Jobs stepping down. Cook remains CEO in 2017, 5 years after assuming the role.
Culture Apple’s culture appears to be changing as a direct result of the change to CEO and “has the necessary characteristics to ensure the company’s leading position in the market”, (Meyer, 2015). The key features of Apple’s Organisational Culture are “Top- notch Excellence, Creativity, Innovation, Secrecy, Moderate combativeness”, (Meyer, 2015). It has been commented that “Steve created, lived and drove Apple’s culture”, (Strigl, 2011). Even though the new CEO, Cook has made public commitment to continue the culture set up by Jobs, it seems only natural and logical that this culture should change over time. The creative and innovative culture at Apple is reflected more broadly in the sector in which it operates. The pace and scale of technological change created by technological innovation can be seen all around us. Since 1997 (when Jobs returned to Apple and became CEO), most people have acquired a mobile phone for the first time, and have gained access to the internet for the first time. Two technological events so familiar and integrated now with every-day life that their cultural impact can easily be taken for granted. More widely, Apple’s culture of excellence has become widely associated with the power of the brand itself, (Badenhausen, 2012). But with this, comes a negative side – the anecdotal stories of Jobs summarily firing of a member staff in an elevator who fail to live up to the standards of excellence demanded as well as the disgruntled employees who write on corporate review websites like Glassdoor about their negative experiences at the company, (Glassdoor, 2016).
Ethical Leadership That said “many of Apple’s product components are manufactured in countries with low labour costs”, (Sawayda, 2011). This raises ethical concerns because Apple is a global brand and Apple products retail at a high value, luxury price-point. How far Apple ensures high working standards is unclear and “the potential for misconduct is high due to differing labour standards and less direct oversight”, (Sawayda, 2011). Given Apple’s exceptional year-on-year profits – it was once reported that Apple had more liquid assets on hand than the US Treasury – it feels like Apple could do more to visibly lead the way in terms of improving oversight and working conditions within their offshore operations. Unlike many companies, Apple’s popularity and success are such that in many cases, it is able to dictate terms to suppliers such as making them
13 sign a Supplier Code of Conduct, (Sawayda, 2011). One of Apple’s key cultural aspects is secrecy, which is to guard against corporate espionage. Apple has had long-running legal battles with a major rival, Samsung Electronics Co. over patent infringements relating to the design of smartphones and tablet computers. By July 2012, the two companies were embroiled in more than 50 lawsuits around the globe, with billions of dollars in damages claimed between them, (Mueller, 2012). At best, it is not clear how successful Apple’s ethics leadership has been to-date, and at worst, they are being litigated around the global for multiple patent infringements.
Strategic Management and Strategic Leadership Issues At a company level, Apple is complicated, and they work in a competitive sector. What about their former high-profile Strategic Leader, Jobs? To explore this subject, it is important to compare with other Strategic Leaders and work with clear definitions. A Strategic Leader is “the leader of a whole organisation, with a number of operational leaders under one’s personal direction”, (Adair, 2005). And in that sense, Jobs clearly fits the description of having been the Strategic Leader of Apple during his tenure as CEO from 1997 to 2011. Equally, Jobs is not the only example of a high-profile Strategic Leader in the technology sector. There are a number of high-profile past and present strategic leaders: Bill Gates, Jeff Bezos, Marissa Mayer, Elon Musk, Ballmer, Richard Branson, Mark Zuckerberg, Larry Page, Sergey Brin, etc. They have all achieved a level of recognition beyond their immediate company and sector. The companies they work(ed) for as a Strategic Leader also have high levels of recognition: Microsoft, Amazon, Yahoo, Paypal, SpaceX and Tesla Motors, Virgin, Facebook and Google. The technology sector seems to have a track record of having high-profile Strategic Leaders. The issue is whether they can also be understood to be examples of Transformational Leadership. Transformational Leadership “occurs when leaders broaden and elevate the interests of their employees, when they generate awareness and acceptance of the purpose and mission of the group, and when they stir their employees to look beyond their own self-interest for the good of the group”, (Bass, 1990). It is contrasted to transactional leadership, which is defined as being “based on legitimate authority within the bureaucratic structure of the organisation. The emphasis is on the clarification of goals and objectives, work task and outcomes, and organisational rewards and punishments. Transactional leadership appeals to the self-interest of followers. It is based on a relationship of mutual dependence and an exchange process of ‘I will give you this, if you do that’”, (Mullins, 2010). With that in mind, how far do these leaders embody the classical dichotomy of the transformational versus transactional leadership – what is the basic approach of the key Strategic Leaders in this sector?
On the one hand, there is ample evidence to suggest that these individuals embody the Transformational Leadership approach. Consider the following selection of inspirational messages given by these individuals:
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Elon Musk: “Now is the first time in the history of Earth that the window is open, where it’s possible for us to extend life to another planet… that window may be open for a long time – and hopefully it is – but it also may be open for a short time… I think the wise move is to make life multiplanetary while we can”, (Wall, 2015). Mark Zuckerberg: “The biggest risk is not taking any risk… In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks”, (Branson, 2016). Larry Page: “If you’re changing the world, you’re working on important things. You’re excited to get up in the morning”, (Lashinsky, 2012). Finally, from Jobs: “Being the richest man in the cemetery doesn’t matter to me. Going to bed at night saying we’ve done something wonderful, that’s what matters to me”, (D'Onfro, 2016). At a superficial level, the leaders are elevating their employees’ vision and broadening it beyond their basic needs and towards a higher purpose – i.e. the archetypal Transformational Leader. Yet, on closer inspection, these leaders seem to be rallying not just their own employees or shareholders or customers, but speaking directly to the general population. On the surface, they may be Strategic Leaders displaying Transformational Leadership in the Technology Sector, but here they are extending their reach beyond our narrow definition of Transformational Leadership. They are pushing the definition beyond speaking “to their employees” only. If they do not fit the definition of Transformational Leader, then either we must amend the definition of Transformational Leader or find a new definition for this type of leader. It seems apparent that they are not political leaders, (Cohen, 2016), as they are seeking votes and they are not religious leaders, (Ford, 2009), seeking the faithful. The theme throughout these messages seems a desire to persuade the listener to agree with a concept. Perhaps then, they go beyond the narrow definition of Transformational Leader and into new territory; perhaps they may be considered Conceptual Leaders.
On the other hand, it is difficult to be truly certain if these individuals are clear examples of Transformational Leaders in their workplace. Most people will not have the experience of working for, or with, any of them. One of the key sources of bias in the Transformational/Transactional dichotomy is the individual who makes the assessment. The same individual might make a very different assessment of the same Strategic Leader in a different context. The weakness of a Transformational/Transactional dichotomy is that it fails to account for the bias of the individual assessing and the nature of the relationship between the assessor and the Strategic Leader. Further, Transformational Leaders are often considered more inspiring and it would be in the interest of the organisations they represent to elevate the perception that their Strategic Leader is Transformational and inspiring. “CEO transformational leadership exerted direct effects on organisational performance”, (Barling, 2014). It could be that what the public sees of these individuals differs significantly from how they behave with their subordinates within the confines of the organisations’ boundaries. It is perhaps better to break-down the
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Transformational/Transactional Dichotomy into a sliding spectrum instead. In so doing, it would be possible to account for more range and flexibility in the categorisation. It would potentially be possible to overlay this with a situational flexibility spectrum as well to create a 4-quartered grid to better show and articulate how leaders behave in certain situations as viewed by others. In spite of this, there is still some credibility to the premise that several Technology Sector Strategic Leaders are also classic Transformational Leaders. “CEOs differ in terms of whether they are the owners and/or founders of the organisation, or have been hired as CEO by a board of directors… These differences could have meaningful practical and psychological implications… CEOs hired to their position are accountable to an external group that has the power to monitor, influence, and reward the consequences of their leadership behaviours, and thus these CEOs would be limited in the decisions they make and the actions they take”, (Barling, 2014). Many of the CEOs listed above as Conceptual Leaders are also owners/founders in their respective companies. Jobs was a co- founder of Apple. It is easy to speculate that Cook does not enjoy the same level of freedom and self-actualisation that Jobs may have enjoyed in the same role as he is not an owner/founder CEO. To what extent Apple is challenged or inspired by the legacy of Jobs is hard to assess, but there are some clues. Adair remarks that “Leadership is always embodied”, (Adair, 2005), which is a peculiar absolutism, because there are several examples where clearly that need not be true. For example, a moral code or set of values can provide leadership. Faith in a cause greater than one individual can provide leadership and direction. It is perhaps more accurate to say that followership is always embodied; or that business and political leadership are almost always embodied. It depends on the exact definition of the word “embodied” – for it is different from “personified”. In modern networks – particularly counter-intelligence and terrorist networks – embodied leadership risks failure or exposure. More fundamentally, Adair, by asserting truth through an absolutist statement, is being sloppy. Ironically, the use of an absolutist statement encourages passive followership/agreement (whereas the use of questions provokes the receiver to exercise their own powers of reason and judgement.) When told that “Leadership is always embodied” our response should be “is that true?” to simply accept that truth is an abdication of our responsibility as free-thinking individuals. In itself, an ironic and microcosmic example of leading versus following. Do you accept what you read without question and thereby, in turn, start choosing to read only what you accept? Or do you question everything before making your own judgement on a subject? Adair’s statement is so powerful because your response to the statement strikes at the heart of what leadership is to you as a reader of this essay – it demands that you ask yourself “am I led, or do I lead?” In the animal kingdom, bees and ants perform tasks at a group level, with no clear leader – but work together towards a common goal, where each component part works as part of the wider network. Further, within human structures, a similar disembodied leadership approach can be seen with creative ideas such as open-source coding – where there is a collective disembodied leadership approach or more nefarious examples such as terror networks which operate in a strict vacuum from leadership to
16 retain anonymity and resist widespread penetration and destruction. Margaret J. Wheatley describes the leadership approach within terrorist structures as “self- organised networks… that stand in stark contrast to… hierarchies and chains of command... We observe that [terrorist] networks are fuelled by passion and meaning, not by traditional commanding leadership. They are ‘webs without a spider’”, (Wheatley, 2007). Therefore, it could be argued that leadership is not always embodied – the embodiment aspect of leadership may be displaced or substituted by a vision, concept, idea or goal. And what matters more: the vision or the visionary? Apple may well be asking itself this question. Regardless, Apple – and to some degree, the technology sector more widely – has been forced to grapple with this issue. Having lost its visionary Strategic Leader, Jobs, Apple had to move forwards. They turned to Cook, who redefined Apple’s vision statement, (Investopedia, 2015). How Apple is handling the issues of Strategic Leadership can be seen very clearly in the way it has handled the developing vision for the company. So it is worth comparing Apple’s new vision statement under Cook with Apple’s previous vision statement under jobs because it highlights a significant difference between the two Strategic Leaders. Job’s vision statement for Apple in 1980: “To make a contribution to the world by making tools for the mind that advance humankind.” This vision is clear and simple. It is a powerful example of transformational leadership. It broadens and elevates the employees’ perspective. Note how succinct it is at just one sentence. It is memorable and it even rhymes. It is a grand statement that feels specifically designed to inspire, it ties the work of the company to the both the entire world and to the lofty goal of the advancement of humankind. In comparison, Cook redefined Apple’s vision in 2013: “Apple designs Macs, the best personal computers in the world, along with OS X, iLife, iWork and professional software. Apple leads the digital music revolution with its iPods and iTunes online store. Apple has reinvented the mobile phone with its revolutionary iPhone and App Store, and is defining the future of mobile media and computing devices with iPad.”
A legitimate question here might be: “Is that a vision of the future, of a vision of the present?” It is certainly longer and more prosaic. It is three times longer. It does not seem to fit the definition of Transformational Leader as comfortably as the vision set by Jobs because it focuses more on the present transactions, products and past achievements and less on the broader aspirations of Apple. This vision statement also lists the things that Apple currently does, tied to their current product offerings, rather than a vision of what they aspire to do in the future. In light of the way Jobs was celebrated and admired, it must have been challenging for both Apple and Cook to move forwards with the CEO role. Yet, a year after Job’s death, Apple’s shares had soared “almost 75% in value”, (Barling, 2014) – and there are cases to be made that the credit for this should be given to either Cook, Jobs or divided between the two. Yet, Apple’s more recent results have been mixed with sales down and overall revenue
17 down, (Allsopp, 2016). This suggests the loss of the influence of Jobs can be seen over the longer term, but it may also be the results of many other competing factors, so it is hard to confirm that any loss in fortune is tied specifically to one person. It is a complicated subject and difficult to assess the impact of Jobs’ loss to Apple in the longer-term because it is indivisible from other factors that may also be factors in company performance. There are many variables that play a part in this including the “characteristics of the deceased CEO, the organisation, and the board [that] influence how the CEO’s demise affects the organisations. When the deceased CEO was the founder of the organisation… the effects of the CEO’s death on investor wealth are more likely to be negative, probably because founder CEOs are perceived to exert a stronger influence on the organisation, in some cases even reflecting the personality of the organisation they led”, (Barling, 2014). Perhaps the shock and gravity of the loss of Jobs are what leads Apple and the wider sector to lionise him and seek to find similar individuals. Adair asserts that the prevailing thought used to be that “leadership remained in the lap of the gods to bestow upon a favoured few. We now know that is not the case”, (Adair, 2005). Yet the prevailing narrative seems to be that the next leader is out there – but just needs to be found. Adair would surely contest that the next Jobs needs to be nurtured and in some ways created. Interestingly, there seems to be a pattern of successful CEOs founding companies while they were young and driving the company forwards towards success: Mark Zuckerberg of Facebook, Bill Gates of Microsoft, Elon Musk of Paypal, Jobs of Apple. While these Strategic Leaders seem to fit the Adair paradigm of being young when they first started in the role of CEO at their respective companies, it is not clear that any of them received any formal leadership training and to that end, it is not clear whether these examples prove or disprove Adair’s theory. They certainly play into the suggestion that “one solution [to the problem of how to grow leaders] is to catch people before they become the older generation and to give them an opportunity to think about leadership at the strategic level at a point where they have had sufficient experience but before they are committed”, (Adair, 2005). Further, in the event that an older generation of leaders is not able to be taught how to be effective strategic leaders, Adair does not address the strategy of how to combat the existing reality that many positions of leadership right now break “the basic principle in leadership development… that an organisation should never give a team leadership role or position to someone without training. We don’t entrust our children to bus drivers who are not trained; why place any kind of worker under leaders who have no training?”, (Adair, 2005). To state it clearly, if the objective is to have effective strategic leaders and educating the leaders of tomorrow is the right strategy, what should be done with the existing, incumbent Strategic Leaders in the meantime? This question remains unanswered. Perhaps the most compelling part of the theory remains unaddressed. In the same way that Adair believes that developing future strategic leaders, and selecting them is likely to prove more thoughtful if leaders are selecting young and who already display natural leadership potential, there appears to be an analogy with sport, where the same ideas are espoused. People may be born with a predisposition for a particular sport or athleticism, but it is only through rigorous training and diet that most are able to become elite. Yet, the missing piece of the theory is this: the world needs leaders and leadership. It is not just needed, it is a fundament part of society
18 and reality. If you put an elite group of athletes together and ask them to create a sport, they will need to exhibit some form of leadership dynamic to work that out, but they need not then do the sport. In another sense and to return the focus to Apple, in the event that over the longer-term, Cook is not the right person to lead Apple, Adair does not address what should happen to such incumbents and how the transition from one generation to the next should take place. Ultimately, Apple can perhaps take comfort in the knowledge that the right leader is often dependent on context: that the right Strategic Leader depends on the situation. The qualities and attributes to be successful in one situation do not necessarily apply to another situation, nor would lead to the same outcome. Apple can move from a basic approach of led by--Jobs towards an inspired-by--Jobs approach. In the longer-term, perhaps that is the most sustainable and sensible approach for Apple. This would simultaneously honour his memory while allowing Apple to move forwards and change. Perhaps fittingly, Jobs himself articulates this point succinctly – and it could now be seen as a topical piece of advice to Apple: “Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice… have the courage to follow your heart and intuition. They somehow already know what you truly want to become”, (Jobs, 2015).
Conclusion In summary, this case study has explored some of the strategic leadership issues in the technology sector, including the current paradigm of transformational leaders and the inherent issue of perspective influencing the process of defining transformational leaders. It has questioned and discussed the limitations of the current leadership theory surrounding archetypal transformational leaders and offered suggestions as to how the theory could be expanded from the narrow transformation vs transactional discussion. For example, certain aspects of leadership theory such as the false dichotomy between transformational leadership and transaction leadership do a disservice to the broad spectrum that truly exists. Yet, it is a peculiar and fundamental desire for categories that helps us understand our world more readily and swiftly that draws us back to dichotomies rather than the richer, broader tapestry of spectrums. This is what makes leadership theory such a fruitful area to explore in more detail, such as what has been explored in this case study – the discussion of Adair’s dichotomy of nature versus nurture and the debate as to whether leaders are born or nurtured? Such closed questions are logical fallacies that beg the question: why can’t it be both? Leaders have existed throughout history and exist today without formal training; they may then receive nurturing and training and become emergent leaders. There is certainly space for more training in leadership. Unlike many aspects of our lives, there’s little equivocation for leaders. Our lives and professional lives seem to demand leadership – embodied or otherwise; this is true even to the extent that the outcome is poor leadership being adopted – this truth seems inescapable. Within that context, Adair’s desire to train and grow future leaders seems to be something that resonates loudly in the technology sector - with the desire to find the next Jobs - today.
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While there are limited examples of systems working without centralised leadership, it seems unlikely that leadership is going to be replaced by another system in the near future. Through Apple and Jobs, the case study has assessed some of the issues regarding the definition of Transformational Leaders and proposed a new, more fitting definition: Conceptual Leaders. Perhaps it is a sign of how rare such inspirational leaders are that they appear deserving of a classification all of their own. By looking more broadly at some of the Strategic Leaders within the wider sector, it has been possible to assess patterns that help support the idea that the Strategic Leaders in the technology industry are more than just Transformational Leaders. While the case study has explored the possibility that owners/founders may appear to be more transformational than the CEOs who are later appointed, the causes for this seem speculative and it is not clear if they apply to the group of strategic leaders in the technology sector. Finally, the importance of the CEO role itself seems clear when viewed through the work of Jobs. The case study compares the former and current visions of Apple to try to understand some of the key differences between the two CEOs, yet this is a little narrow in focus – while symbolic and deeply important – the vision is just one aspect of a company. The case study also looked at the relative success of the company under the two CEOs, yet it is hard to distill how much of the success of otherwise of a company is directly attributable to the CEO because the performance has so many causes. Jobs is also unlikely to be the most typical example of a CEO. Not only due to his fame and success, but due to his death. He is the only example of a CEO in the list who has died. Apple is one of the world’s most successful companies and losing such a high profile leadership figure in such a high profile company is not a common occurrence. In many ways, Apple and Jobs may end up serving as the case study for future companies who suffer a similar misfortune. The case study suggests ways in which Apple can look to move forward.
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