Control at Core of Apple and Jobs' Health

Last Updated Jul 28, 2008 11:15 AM EDT

Harpocrates, Greek god of silence and secrecyIs Steve Jobs sick or isn't he Is he or isn't he (and Apple) being honest? Although you could reasonably argue that much of Apple's success is due to Jobs, the second question doesn't matter, because it's not the real issue.

Joe Nocera wrote an interesting piece about how Apple was handling questions about Steve Jobs and his health:

The final reason, to be blunt about it, is that Apple simply can't be trusted to tell truth about its chief executive. Under Mr. Jobs, Apple has created a culture of secrecy that has served it well in many ways -- the speculation over which products Apple will unveil at the annual MacWorld conference has been one of the company's best marketing tools. But that same culture poisons its corporate governance. Apple tells analysts far less about its operations than most companies do. It turns low-level decisions into state secrets. Directors are often left out of the loop. And it dissembles with impunity.
His quote from an actual conversation with Jobs was telling: "You think I'm an arrogant [expletive] who thinks he's above the law, and I think you're a slime bucket who gets most of his facts wrong." It's a self-portrait that at least some others in the business agree with -- usually while adding that he's an impressive CEO. While the observation may have its merits, to focus on a "culture of secrecy" is to mistake the symptom for the malady.

What I've seen of Apple over the years, admittedly at a distance, speaks of a CEO and corporate culture desperate to control everything. From announcements of new products (what company in its right mind sues a college student who broke news of an upcoming launch and unnecessarily incurs the massively bad PR?) to its history of wanting to stomp hardware clones out of existence to crafting a non-disclosure agreement that may be, by reputation among those who have signed, the most restrictive and severe in the business, Apple and Jobs have made it clear that no one should be able to take a step without permission.

There are times this trait serves the company well. What else but the attention to detail summoned by the desire to control could result in so many good product designs? And what else but that same trait, running unchecked, could result in a first iPhone model that required users to ship the unit back to Apple and to pay $70 so someone else could replace the soldered-in-place battery? It's a double-edged sword that probably helped create the Apple mystique and also single-handedly kept the company from becoming the dominant personal computer in the world years ago.

In FY 2007, Apple's revenue was just over $24 billion, according to its annual report, or just over a third of what Microsoft recently announced. What would it have been had the need to control all aspects of all hardware and software loosened up enough to let the Mac OS and licensed hardware replace the PC in market share? By how much would they have missed $100 billion? That's seems a particularly painful question when Macs now represent only about 29 percent of the company's total sales with, what, a five percent market share? So much unrealized financial potential.

What makes the hunger for control ironic to a degree worthy of a good literary novel is that such perceived power is often illusory. Either people can get information other ways, or the importance of keeping an iron grip exists only in the imagination of the so-afflicted. They want to have product news come out as a surprise -- understandable from a marketing view. But when something slips, management can become vindictive even though a victory may be Pyrrhic at best, and possibly cost them, and their shareholders, far more than they gained.

Harpocratic Eros Louvre image via Wikimedia Commons

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    Erik Sherman is a widely published writer and editor who also does select ghosting and corporate work. The views expressed in this column belong to Sherman and do not represent the views of CBS Interactive. Follow him on Twitter at @ErikSherman or on Facebook.