Apple Is Becoming a Normal Company

With its visionary founder gone, Apple's executives start behaving like regular guys.

We've been waiting to find out whether a post-Jobs Apple soars to ever greater heights, or sees its edge slowly erode. Maybe even quickly erode. One sign is highlighted in a new post by Matt Yglesias: managerial infighting that has cost the firm one of its top executives:

One of the greatest challenges facing a company like Apple is how to retain the best people. Its senior executives are all rich and successful and could retire in comfort or easily obtain funding to start their own companies. Under those circumstances, how do you keep people like that working for the man? Well, one way is to not subject them to other people they dislike. So if you want to keep Mansfield, you ditch Forstall. But it looks in retrospect as if one of Jobs’ main assets was that he had the prestige and the charismatic leadership necessary to keep the team together. As Apple’s founder and savior, he was the undisputed leader. If Forstall was the best person to lead iOS, then he was going to lead iOS, and everyone else would learn to deal with it.

. . . The remaining members of the executive team, it seems, are all comfortable with one another, and now they’re closing ranks and pulling up the ladder. But this kind of politicking is exactly the kind of thing that turns successful companies into stagnant ones. Executives at a company as profitable and cash-rich as Apple can afford to run things however they please. A forceful personality like Jobs could steer the ship, but—adept though he may be—new CEO Tim Cook is no Steve Jobs.

Cook’s decision not to try to play the part—to give up on herding cats in favor of simply purging the herd of troublemakers—may be the right call at this moment. But it’s also a reminder that all business empires eventually crumble. A team of stars is going to be a team of egos. As long as Apple had a superstar at the top, that was OK. Under Cook it’s not. That hardly means collapse is around the corner, but it’s a big step in the direction of complacency and away from excellence. Fans of Apple’s products should be worried.

On average, the death of a corporate leader is not necessarily doom for a firm. Here's a sentence for corporate boosters to ponder: "The data in table 3 indicate that (on average) a small, positive share price adjustment is associated with the unexpected deaths of senior corporate executives."

But that same paper notes that founder deaths don't display the same result, and that there's very wide dispersal in the results, implying that death often rids the firm of a bad manager, but also sometimes takes away a gifted leader without whom the firm will never be the same. (Or at least that the market thinks this to be the case.) And if there was ever a CEO who fit the latter description, it was Steve Jobs.

The problem with Apple post-Jobs is not that everyone is going to suddenly become stupid. It's that deprived of their guru-like leader, they'll suddenly become more like a normal company. And it's hard for a normal company to hold a bunch of driven geniuses in one small executive suite. You see this cycle in all sorts of industries, but it's particularly pronounced in technology: the "It" firm where everyone wants to work eventually becomes sort of boring and normal, and then the disruptive visionaries want to work somewhere else. It happened to IBM, and it will have to happen to Google and Apple eventually. And in the case of Apple, that time may be now.