After Steve Jobs' Death, Culture Shock Is Inevitable at Apple
byOct 29th 2011 7:00AM
It's a new day at Apple (AAPL). The transition from a dynamic leader like Steve Jobs to a new generation at the helm of the iGiant will change the culture. It won't change in a year -- or maybe even five years -- but before you know it, we'll be talking about Apple in the "good old days" back when Jobs ran things.
It's inevitable. The precedent is already set.
The First Time Jobs Left
Jobs was at the head of Apple's innovative and secretive culture. Every product had his fingerprints on it, every leak drew his ire, and the future was led by his vision.
We already have a blueprint for what went on in his absence: When he was fired in the 1980s, Apple went from the forefront of the personal computer to a technology wanderer for the next decade.
What's different this time around is that Jobs has left a well-oiled management machine at the head of the tech giant and a load of cash that could keep the company afloat even if the next decade is a complete flop.
Still, despite management largely staying in place, there are changes that will come about now that Jobs is gone.
Elvis Has Left the Building: Now What?
One of a CEO's most important jobs is setting the tone for the company and defining exactly what its culture will be. There are a handful of innovative companies whose reputations are largely built by a single dynamic leader.
One is 3M (MMM), whose CEO from 1929 to 1949 was William McKnight. McKnight didn't lead from out front like Jobs did but allowed innovation to flourish under his watch. His famous quotes include "Hire good people and leave them alone" and "Listen to anyone with an original idea, no matter how absurd it may sound at first."
These mantras and the freedom that surrounded them made 3M one of the best innovation machines in America. From an obscure Minnesota mining company emerged Scotch tape, Scotchgard, and long after McKnight's time, the Post-it Note. The foundation he built drove 3M for decades, showing that an innovative culture can be built to last for quite a while.
Success also followed Walmart (WMT) after Sam Walton died. It wasn't until he was gone that the supercenters we know today were rolled out to the masses and Walmart went on an expansion binge to take over the world's retailing.
The Inevitable Shift
But eventually the vision changes. The hunger that drives innovation and excellence eventually fades and becomes apathy and self-indulgence. The focus moves -- quickly or slowly, but it moves -- from simple design to improving margins.
In 3M's case, it hired a CEO, Jim McNerney, from the outside in 2001. McNerney was focused on costs, not innovation. For Walmart, the retail giant's cost-cutting ways began to look cheap as the company became bigger.
Some companies see the errors of their ways and move to reverse them.
- Dell's (DELL) founder Michael Dell stepped down in 2004 to let Kevin Rollins take over as CEO, but the move was a disaster. Within three years, Dell was back running the company and is still trying to recreate its former magic.
- The story was similar at Starbucks (SBUX), where founder Howard Schultz stepped down in 2000 when the company was growing rapidly and had a great brand name. After competitors began chipping away at Starbucks' success and the company admittedly made strategic mistakes, it was time for Schultz to come back into the fold. In 2008, he returned to Starbucks to right the ship he saw going astray.
Apple doesn't have the luxury of bringing Jobs back to right the ship.
Whatever Will Be, Will Be
There's just something about a founder-led company that keeps the business dynamic and scrappy. Maybe it's that unique vision derived in the early days as a struggling start-up. It's the kind of hunger for constant innovation -- the creative and artistic DNA that can dream up the iMac, iPod, iPhone, and iPad.
Now that drive will need to come from someone else.
Maybe it'll be Jony Ive. Maybe it's Tim Cook. Maybe Apple's next generation of leaders can keep the magic flowing. Or maybe it died with Jobs.
Soon enough we'll find out whether Apple will remain the golden child it is today or another company that lost its way after losing an iconic leader.
Motley Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool and check out his personal stock holdings. The Motley Fool owns shares of Apple, Microsoft, and Starbucks. Motley Fool newsletter services have recommended buying shares of Dell, Apple, Microsoft, and Starbucks, as well as creating bull call spread positions in Microsoft and Apple.