Don't count Apple out -- yet
(MoneyWatch) After the introduction of two "so what?" iPhones, beating up on Apple (AAPL) is all the rage. This is ironic. In July, I called Apple a "dead company walking" after analyzing executives' speeches at an earlier conference. I was so flamed for attacking Apple that one friend suggested that I would have been less of a target if I had insulted the legacy of Mother Teresa.
As I said in July, the mindset running Apple is that of theme-and-variation innovation, not the formulation of new ideas. I stand behind that analysis -- nothing in the event last week shows a new mindset at Apple. But, the claims that it's over for Apple are just wrong. In fact, I'm more hopeful for Apple now than I was in July.
Apple is "dead" in the sense that the mindset that produced amazing new ideas appears to be gone, but the systems and processes of its better days are still in place. We'll see a few more "wow" products that are derivations of ideas from years ago. They'll probably do an iWatch, a new Apple TV, and who knows what else, maybe something out of the movie Minority Report.
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They are highly unlikely to do something out-of-the-box the way they did with the iPod, and all the follow-up innovations from it. Sadly, the public amazement at new products will decrease in the same pattern as aftershocks after a big quake. There will be a few moderate ones, a lot of minor ones, and eventually we'll put Apple in the same category as other companies that were once great -- like General Motors and Sears.
If you want to see where Apple is, and what it can do, you have to understand the Seasonal Model of companies. Companies move through the cycles of spring-summer-autumn-winter.
Spring starts when leaders create a vision designed to change the world and employees decide to embrace the hard work required to close the gap between that vision and reality. Apple's most recent spring was when Steve Jobs returned to Apple in 1997, after the close of the NeXT acquisition. The vision was to end the reign of ugly, dehumanizing technology that was hard to use and stifled the human spirit. Apple's "Think Different" campaign was a beautiful articulation of the sprit of the company's most recent spring.
Summer is a time when the gap between reality and vision closes. People are still working hard, but everyone feels that they are "making the same movie," to quote the filmmaker Robert Zemeckis. PopCap (a unit of Electronic Arts (EA) that makes Plants vs. Zombies 2), is in summer. It's summer at burger chain In-N-Out, with a huge expansion going on. It's summer in many universities, especially those that provide a great undergraduate experience. It's summer at Samsung. They are where Apple was a few years ago -- their devices are amazing. (Full disclosure: my consulting firm, CultureSync, has consulted for Samsung. We had nothing to do with their recent product developments. We have no current financial ties to the company. Nor do we have no business or financial relationships with Apple.)
Summer is followed by autumn, when the company is in full harvest mode. The delusion that can take root during autumn is the belief that the leaders' efforts at that moment are largely responsible for their current bounty. Tim Cook shows evidence of this thinking in his last two public speeches: in July at the Worldwide Developers Conference and again last week. In Apple's case, the distance between reality and their vision of beautiful technology has largely disappeared. It's autumn in many Executive MBA programs, with increasing competition and people now able connect directly with thought leaders over massive online courses and TED Talks. There's still a lot of good to do, but the next decade will see massive disruption in this part of higher education. A few great programs will disrupt the merely good educational experiences.
My fear for Apple is that it is entering winter, and the chilly days could last for a long time. Winter starts when the harvest is done. It's a time when people remember spring and summer, and refer to the passion, vision, and days of "making the same movie" with nostalgia. Winter companies are often obsessed with management best practices. It's when they tighten up their systems and start cutting their costs.
Winter ends in one of two ways. The first is that the company doesn't survive. The second is that people come to the realization that they are in a crisis, and the resulting dissatisfaction brings the company to a new spring.
My hope for Apple is that it realizes it is entering winter and the days of easy harvest are over. If its leaders decide to "think different," they can work on making their winter short and get back to their roots as pioneers. The good news is that Apple has gone through many spring cycles: the original Apple computer, the early days of the Mac, Jobs' return to the company, and the move into consumer electronics with the first iPod and iPhone.
The question is: can anyone other than Steve Jobs lead an Apple Spring? Let me know what you think in the comments below.
