What's Next for Apple?
The outpouring of grief, analysis and pretentious nonsense that has followed the death of Steve Jobs has been pretty overwhelming. Astute observers noticed a pattern of outstanding, seemingly impossible negotiations with the likes of record labels and movie studios. Less insightful commentators claimed that Jobs had re-invented capitalism and single-handedly designed every product Apple ever launched. The good news is that, bar the forthcoming biography (another brilliant launch) most of the idiocy should now die down, leaving Apple's leadership to confront some significant issues.
1. Success
Success is always dangerous for companies. A big part of Apple's success has been its niche positioning. MacBooks were cool because they were a minority product. They cost a great deal more than the average PC and they were targeted at and consumed by trendsetters: designers, artists, the digerati. For much of its life, Apple's marketshare ran to single digits but that was okay because being a minority supplier added luster to the brand while the cost of those products added piles of cash to the bottom line. Moreover, that Mac had such small marketshare was a very big part of what made its products so secure. Who wanted to target viruses at a mere 5 - 10% of the world's PCs?
But now Apple has 23% of the market. That's no longer trivial. Nor does it include the volume of pirated software which always offers the most fertile ground for malware. That MacBooks could become mainstream threatens both its brand value - and the security of its products. This is a uniquely weird byproduct of success. Can it be addressed by putting prices up? Would you want to do that in the midst of a recession?
2. Mourning
I once sat on the board of a business that had lost a charismatic and brilliant founder. For over a year, the company was effectively in mourning, which is to say it had lost its capacity for crisp decision making and for risk taking. Jobs's exit has been better planned that most and the succession more smoothly executed. But the risk of unoriginal thinking persists. Instead of asking 'what's the right decision?' many Apple executives will find themselves asking 'what would Steve do?' The problem with this is that, in their head, Steve is static - even though he never was in life. How does the company keep as forward focused as Jobs always was?
3. Competitors
Of course all of Apple's competitors will be hoping to see it stumble. And competitors come from everywhere: phone companies, Amazon, Google, Samsung, as well as a host of companies no one even knows about. So fierce a competitive arena can be profoundly de-focusing. Instead of setting tomorrow's agenda, it can feel more responsive to respond to every threat. Tactics can easily absorb all the time that strategy needs.
4. Cash Burns a Hole...
Sitting on a mountain of cash - some $75 billion - represents a temptation only the steeliest executives can resist. Assailed by strategy-free investment bankers and surrounded by great companies now going cheap, the lure of M&A could prove irresistible. This could be where legacy helps. Apple didn't grow through mergers or acquisitions - an interesting anomaly in itself - and it would do well not to start now. With a failure rate between 50 and 80 percent, it's rare that shopping pays anyone but bankers.
5. Succession
Of course what everyone will seek, as a solution to these problems, is a new Steve. They're most unlikely to find one. Which means that the company needs to reset itself, its identity and the way it operates. That's a tall order for a large business. The one thing you can be sure of is that Apple's best new leader will look and act nothing like Steve Jobs.
Illustration courtesy of Flickr user f.e.weaver
Further Reading
The Leadership of Steve Jobs
Lessons from Steve Jobs
The Perfect Resume
