Apple = Sony

Apple will decline in the post Steve Jobs era. Here's why.

Sociologist Max Weber created a typology of organizations in his 1947 book The Theory of Social and Economic Organization. He described three categories: 1) Legal/bureaucratic (think IBM or the U.S. government), 2) Traditional (e.g., the Catholic Church) and 3) Charismatic (run by special, magical individuals).

Charismatic organizations are headed by people with the "gift of grace" (charisma from the Greek). "He is set apart from ordinary men and treated as endowed with supernatural, superhuman, or at least specifically exceptional powers or qualities." Followers and disciples have absolute trust in the leader, fed by that leader's access to nearly magical powers. "Charismatic authority repudiates the past, and is in this sense a specifically revolutionary force."

Sound familiar? Quoting from Adam Lashinky's book Inside Apple: "...Jobs made all the decisions." "He was the final arbiter on matters of taste." Lashinky points out that Apple was an entrepreneurial company, "...but its people generally are not entrepreneurs -- and they are not encouraged to be." In other words, there was one charismatic entrepreneur at the center (note Lashinsky's org chart from Fortune magazine, above) with followers connected via "...an emotional form of communal relationship" in the words of Weber, with the leader.

One of the primary challenges with charismatic organizations is succession. In bureaucratic organizations codified processes like elections yield new leaders. In traditional organizations, long-held rituals (smoke emitting from the Sistine Chapel) elevate the new head. In charismatic organizations, the magical leader must be succeeded by another charismatic -- the emotional connection of employees and (in the case of Apple) customers demands it. Apple has chosen a proven and competent executive to succeed Jobs. But his legal/bureaucratic approach will prove to be a mismatch for an organization that feeds off the gift of grace. What about Apple University, Jobs' attempt to prepare the company for when he was gone? Back to Weber: "Charisma can only be awakened and tested, it cannot be learned or taught."

Without knowing them personally, I would look to Apple executives Jon Ive or Scott Forstall to be CEO. From on far they appear to have some of the charisma and outspoken design sense to legitimately lead the company.

When Steve Jobs departed, he took three things with him: 1) singular charismatic leadership that bound the company together and elicited extraordinary performance from its people; 2) the ability to take big risks, and 3) an unparalleled ability to envision and design products. Apple's momentum will carry it for 24-48 months. But without the arrival of a new charismatic leader it will move from being a great company to being a good company, with a commensurate step down in revenue growth and product innovation. Like Sony (post Morita), Polaroid (post Land), Apple circa 1985 (post Jobs), and Disney (in the 20 years post Walt Disney), Apple will coast, and then decelerate. 

Comments

Apple's future

I am ex engineering leader in Digital Equipment Company when Ken Olsen was changed. What there was in Digital was a strong strategy leadership by one of the board who died in 1989. From that point onwards DEC began to lose its way. Internally there were competing products for funding and many were top of the range. I was involved with building the first network routers the world had ever seen. Decisions on moving them out and selling off and focusing on the VAX and semiconductor processors where Bob Palmer wanted us to become intel. Others wanted us to become a service company and the main Deccies wanted us to remain a product company. What happened? The focus became a warring of the 3 as Palmer wasn't charismatic as you have pointed with Jobs. I think also like Olsen would make the decision even if it seemed mad!! Yes we thought Ken was mad many times especially over PCs. Yet Ken saw cloud computing in the 80s and 90s problem is the desktop had matured to need it. So I have a lot of sympathy for your analysis. I think Apple need strategic decision making that has clarity which is what Jobs did. Maybe many Appleees don't understand them and think he's mad, but as long as there is a core that can make the big strategic decisions. That is why HP having eaten Compaq which ate DEC has strategic indigestion. Concise clear strategy that the core execute is the key. Jobs could drive that, it now depends on whether he set up a decision maker, king maker to do after his absent. Given he kept coming back when he was ill, it certainly doesn't look like it!!

Good Points

I think I'd also add an additional point that China is no longer continuing to remain cheap. Much of Apple's supply chain heroics to some extent rely on the rise of China as a low cost manufacturing hub. We'd need to also see if Apple can still do what they did post Jobs with the addition of this factor, along with the three you mentioned.
There are also a number of other factors that would get into play, including the increased focus of cyber-criminals and malware on iOS based products and possible consumer dissonance thereafter. I'd say the time frame you outlined of 24-48 months seems good enough to test Apple by fire. More than Sony I'd think Apple might just be driven to pre-Jobs levels. I guess we will know in the next 5 years anyway.

But What About The Lessening of Cruelty?

Given that accounts of Steve Jobs' reign shows he could be quite a cruel man and enjoyed humiliating employees, will the lessening of cruelty be noted if Apple goes downhill?

Unless, of course, the cruelty continues?

Great topic, but predicting

Great topic, but predicting the future is no easy game.

The very fact that Tim Cook reported directly to Steve Jobs leads one to suspect that while he is a talented organization-man, and he may well be a graceful man, he is not "gifted with grace."

And sorry George, but Jon is also not the charismatic leader you find him to be - brilliant designer but not "gifted with grace."

Apple will need to nurture and/or acquire numerous "Steve Jobs' " which a $110 Billion cash hoard will easily afford.

Apple makes the best products in the world. Even Mercedes Benz could learn a few things. Jobs also placed his company in the centre of the publishing universe. He gave his creation over 5 years lead on any potential usurpers.

Read the book and agree

The fact that Steve Jobs determined everything from miniscule design improvements to major contract negotiations and supplier conditions, means Apple will soon deteriorate with regards to design and product innovation, but also profit models, licensing models and IP protection. Apple sold 7 million Iphones in China this quarter without having a partnersip with China's biggest telco provider China mobile who have 600 million customers! There will be a lot of growth from China in the years to come, but there will be a sqeeuze in which products and specifically product components bevome less innovative and major psrtnership contracts will become less profitable. I give Apple 5 years of strong revenue growth from BRIC on the front end, but rapd deterioration on processes, design and future vision.

Begs the question - how will

Begs the question - how will Forrester fare post George, George?

An answer

Wrong assumption

The wrong assumption here is that it's only organisations with charismatic leaders that grow or innovate. Apple doesn't need a charismatic leader to succeed - a lot of Apple's success were down to Tim anyway, as well as Ive and others.

"a lot of Apple's success

"a lot of Apple's success were down to Tim anyway", you obviously know Tim better than anyone else in this world.

Read the full comment

You are obviously skilled at taking things out of context. I said "a lot of Apple's success were down to Tim anyway, as well as Ive and others", which doesn't imply Tim did everything. I said "Tim, Ive and others", meaning other people in the team have the vision to keep Apple going. If you're going to misquote me, at least make a good job of it.

Tim *anyway*, as well as Ive

Tim *anyway*, as well as Ive and others.

Sorry, you are misquoting yourself by conveniently dropping "anyway" which gives your statement a whole new meaning, with anyway, ive and others comes across as a mere afterthought!!

Happy now? I guess not.

You are obviously skilled at taking things out of context. I said "a lot of Apple's success were down to Tim anyway, as well as Ive and others", which doesn't imply Tim did everything. I said "Tim anyway, Ive and others", meaning other people in the team have the vision to keep Apple going. If you're going to misquote me, at least make a good job of it.

-- Adding "anyway" doesn't quite make sense now as I was inferring the names of the people he had neglected to mention, as he thought I had originally mentioned just Tim (even though you can see other names there if you read my original statement properly). My original argument still stands, and you're an idiot.

Steve Jobs designed products

Steve Jobs designed products based purely on his own convictions. He never bent to market pressures (a bigger iPhone, a smaller iPad). Does the new team have what it takes to maintain the same "we wont bow to market noise, we know better" attitude?

Thank You

Too much emphasis on charisma here. IMHO you nailed it.

Apple is still the best positioned company

It is hard to argue that Apple minus Steve Jobs is still the same Apple. It is not. However, the top management of Apple was hand picked by Apple. The processes at Apple were established by Steve Jobs. Future products from Apple may not be as ground breaking as the iPhone, but I have no doubt that they will be better than those from any other company.

Disagree. Read my version.

I actually wrote on this subject a few weeks ago when CNBC was having this debate on my blog at www.milesmatthias.com. Check it out for my rebuttal.

Totally Agree...

None of the comments seem to mention the customer's role in Apple's success. I believed in Steve's charisma as well... and therefore, I will, unfortunately, think less of any new products as they will not have that Midas touch (real or imagined) that Jobs brought to the product line. I too read Steve's book... and agree that he pushed the design/detail/sleekness that attracted the customers, and truly believe that based on his presence gone, things will go south. Apple will just be another Tech company and run along the same lines as other tech companies... they will not be a stand-out anymore. This doesn't mean they won't be successful, but they won't be *APPLE*... they will just be Apple...

Customers and charisma...

As with employees following a charismatic figure, customers may also be influenced by the gift of grace... Especially when that gift yielded so much pleasure, productivity, and pure joy.

To quote Buckminster Fuller: "I see God in the instruments and mechanisms that work reliably."

I can see how popular Apple

I can see how popular Apple has been in the last few years, but I am still skeptical. I like a keypad on my phone. I find Apple computers to be overpriced and lacking in software. What software comes with the machine is generally of lousy quality (iPhoto is the exception). I played with an iPad recently and I just don't get it. What is the fascination with paying a lot of money for products that look like someone's senior project from design school (with all the shortcomings that implies) when very good products exist that cost significantly less and perform as well or better? Yes, we have a Mac at home because my wife likes it. I think the money would have been better spent on a "real" computer.

iPad

You can't just "play with an IPad" to get it -- it's something you must immerse yourself in to get it. I'm using one now -- with the Apple wireless keyboad and s great stand -- to write a column as I do regularly.

It's more convenient than a laptop and has a jillion apps that make sense when someplace other than home or office -- I'm in Barnes & Noble at the moment and have news apps -- pulse, AP, Times and web access to all others, weather, and all the loook up services.

You dismissive remark of the Mac vs a "real computer" reminds me of teh MS-DOS and UNIX technies who dismissed GUIs as unneede and unefficient -- they missed the boat. We're in an iPad world and millions get it, even if you don't. I go back to pre-System 360 mainframes and I get it.

Be well

Sorry, you and people who

Sorry, you and people who want a 'real computer' are not Apple's target market. And that is why they have left the competition in the dust. The realized that making computing devices that absolutely anyone can understand (even little kids) makes your product marketable to everyone on the planet, not the just the tech nerds.

A 'real' computer needs an IT expert

Apple can be credited with making computing finally a true consumer subject. I have seen 2 year olds using the iPhone or iPad and they get 'it'. All others have simply copied that approach. Steve Ballmer is no longer laughing about the lack of a keyboard. For a lot of typing I attach my Bluetooth keyboard and hey ... I got it.

What will happen with Apple after Steve depends on too many factors including competitors and patent battles. It is unlikely that anyone will take his place and we will see the radical user focused innovation (he did not invent new product per se) he was capable of. iPads will likely become an enterprise tool sooner than later, but potentially one of the competitors will be clever enough to encroach on that. So let's see.

Great post, George. Pity you are not writing a lot lately ...

It's okay

You can be skeptical or even just not like Apple, its products, or its people. No one can please everyone nor should they try. The physical keypad for your phone – I get that even if I don't agree. Then you went on to make some comments that just don't make sense starting with the "overpriced and lacking in software". First overpriced compared to what? If you mean Apple doesn't build cheap crap for desktops, laptops, tablets, and phones – then you'd be correct. But then – using a car analogy, not many people liked the Yugo either. And when you try to compare like featured and like quality machines, it is a very different story than the one you are trying to portray (which seems to be a held-over track from the 90's). As an example, companies are still trying to catch up to Apple's iPad and MacBook Air on price.

Software? You'll need to be specific here. Because I've been in the computer business since the mid-'70's and I can't find anything out of the OS X and UNIX applications missing. Sure, there are software developers that still only develop for Windows and some just for Linux. However, even those are available to Macintosh users to virtualization. So…the software statement just makes you look like your are stuck in a 90's mindset with your eye and ears closed.

Design? While design is in the eyes and hands of the beholder, even the loudest critics of Apple products concede design even when they really get what makes an Apple design what it is and how it attracts users. Did you see the latest customer satisfaction ratings for the iPad – 98% customer satisfaction. Name another consumer product with that level of satisfaction. That would seem to indicate that while you don't like them, quite a few others that can spend their money like what they purchased. Again, it is okay that you don't get it.

So...what is a "real" computer to you? Because your very vague and outdated comments seem to indicate that you have been under a rock or probably in your home-built computer case trying to work out some issue with drivers or device incompatibilities.

Max Weber? 1947?

Max died in 1920 -- so he probably wasn't writing in 1947. The date you quote may have been the publication of a new translation from the German.

As far as Apple goes, it has established the iPhone, iPod, iTumes, and iPad as standards for a generation and once something is entrenched, it is difficult to move people away no matter how good the new prodict is. Apple learned that from its long term battle to draw people away from MS-DOS. I think that Apple is here to stay and agree with Tim's analysis of the new new Apple leadership.

It doesn't always follow that an entrepreneual company falls when its original leader goes away. Tom Watson, Jr. grew IBM to heights that his father had not reached -- Jr. embreaced computers whereas his father had not. Each of the Watsons had seized on a new technology and run with it -- Sr. on punched card processing and Jr on computers.

Jobs did a similar thing all by himself -- he, with Wozniak and Markkula, seized on microcomputer and built Apple -- during Jobs II, he seized on media and mobility. It looks as though Cook will carry on.

The big problem that I see is that Apple's gang of enemies continues to grow. We have the originals -- Microsoft and the Linux folks -- then joined by the music companies, and Google -- and now those companies afraid of Apple's projected move into TV -- the TV makers and the cable companies. I'll still bet on Apple

Good point!

Good point!

IBM...

Thank you on the Weber clarification. I was referring to the 1947 english translation.

I've thought a lot about the Watsons and the type of organization that IBM followed. I would have said that the company started as a charismatic organization under Tom Watson, but his son pivoted the company to a bureaucratic/legal organization. The legitimacy conferred on the son enabled him to navigate this transition successfully -- perhaps because he retained a residue of his father's charismatic authority.

Does anyone think that Apple

Does anyone think that Apple will never fall, or drop from where it is? They will because they all do. This would have been true even if Steve lived another 30 years.

I think Steve would have possibly given them a few more years at where they are at, because of his focus and the attention he brought to Apple, but even then consumers will get bored, Internet favor can swing against you etc.

The perfect example is that Microsoft today is doing great things (Windows 7, Windows Phone, Office, Server products, Hyper V, Xbox Live etc) but they fell out of favor and there many, many bloggers out there that not only hate Microsoft, but they wont even give them any press unless its positive. Example Skydrive vs Google Drive, I read some Mac sites and most did not even cover the Skydrive announcement, but they were all over covering the Goolg Drive announcment....because Google is still hip and cool and right now still Ok with the Apple fans....even though I think the SkyDrive upgrade is better.

+1 on the SkyDrive comment,

+1 on the SkyDrive comment, better product and 25GB for free can't beat that!

This is just another silly

This is just another silly linkbait article. Apple is nothing like Sony. They have tight management with focus and visions and they don't try to make everything under the sun including cheap unreliable products that sully Sony's name. Anything can happen in the future but the current management team shows zero tendency to head in Sony's direction.

Apple and Sony

Yes, I agree that there is much that the two companies do not share. My comparison was focused on the question of CEO succession -- life after Morita and Jobs.

Two sides to every coin.

Apple without Steve or Aws....for short

I think the blog states some excellent points. However, the difference between Steve and Jonnie or Scott, is that Steve also formed Apple. It was his baby, his lifeblood. So besides having Charisma, everyone knew it was his company as well and those two factors made Apple a very successful, profitable and highly innovative company. I don't believe that Jonnie or Scott can pull it off in the long run. Lets wait and see who is right.

Like all great things, Apple

Like all great things, Apple too will come to an end one day, but it's highly unlikely that they will decline in 24-48 months the way you describe. First of all, this post is almost entirely based on a book written by a man that has been dead for 92 years. (It would have been nice to see some of your arguments in it instead of Weber's, especially since Weber never conceived of anything like Apple.) I agree with the three institutional structures Weber refers to, but it's not a complete list of the various types of structures. You're trying to categorize Apple into a simplistic, one of three categories list which, to me, is one reason why your argument doesn't work.

Steve Jobs was certainly charismatic, creative, and brilliant, but he was not metaphorically supernatural, superhuman, or magical, and I think most fans of his share that view. He was a man. I didn't buy Apple products because I wanted to buy something from a charismatic guy. I bought them because they're reliable, efficient, and beautiful. Steve may have had the final say so on design, but he wasn't the only brain there coming up with ideas. Jon Ive's ideas have been hugely instrumental in their success as well.

Finally, I find it odd that you assign so much of Apple's success to Steve Jobs' charisma and vision, but somehow you suggest that vision suddenly disappeared in selecting his successor. Don't you think Steve Jobs knew what he was doing when he picked Cook? Obviously, he knew a good CEO is a good accountant and that's what Cook is. He doesn't have to be the idea guy, he just has to responsibly manage Apple's resources so the people who are idea guys can keep doing their work, and that is something Jobs was obviously confident he could do. Cook even shows us this in that he doesn't run the Apple keynotes the way Jobs did. He does the introduction, gets off stage, and lets the design people come on and talk about the products they're all so proud of. You say Jon Ive would have been a better pick for CEO, but that would have been a mistake. It would have taken Jon away from doing what he needs to be doing for Apple, designing and inventing. Jobs knew what he was doing in preparing Apple for his death. After all, he had the "gift of grace."

We'll find out who's right in 24-48 months.

Ive and others

As I point out in my post, I don't know Ive or the other Apple executives. So you may be right when you exclude them from consideration...

Regardless of who grows or

Regardless of who grows or declines, it will be intersting to see how this technological revolution pans out. As a civilization I definately get a sense that we are on a new frontier.

Aples decline

Simple: I do not know who I am - no Identity - then a Totem stands up and says you belong to me -S Jobs - people become his tribe - the trisbes leader dies and has no successsor. Going from Great to good to less to nothing. Aka biggest bubble ever, love ya B Gates 3 buying stocjk for 0. Actually Bgates and his old firm Msoft owe and will decide what to do. Thanks for the juice Jobs but at the end you where just a sour grape.

Who is the winner in the future ?

Market dominance is a snapshot in time. It is applicable for any dominating player in consumer electronics the market segment which is highly profitable as well as very dangerous.

Can Mr.George Colony explain who is going to be next dominating player in consumer electronics space in the next decade ?

Google, samsung or chinese companies ... who is having more possibility ?

look at the history...

People seemed to greatly have underestimated the impact Jobs made when he returned to Apple. I believe they are equally underestimating the impact his departure will have.

Get your head out of your ...

This is a man / CEO, George Colony, who lives of speculation, he doesn't look at Apple.
Apple is one of the largest closed companies in the world! What does he know about Apple and what is happening in terms of creative or innovative decisions within the company walls. Tim Cook may not be Steve Jobs, but he will bring the company to newer level in the market, with or without Steve. Tim is a person of fewer words or excesses, but perhaps equally grotesque acts. He wears the standards and values ​​when Steve was in the lead and were used. For clarity, the Apple philosophy! Tim is also not alone, but has whole team of people who inspired the company to keep on the right path.

People like George Colony are not realists, but depressing people for our "speculative" economy today. Pull your head out the ground and try to be more positive when you look at thinkings my "dear friend".

Kind regards,
Jordi
from Belgium

An analysis of potential Job's Successor.

I seriously doubt Scott Forstall for a long run. The problem with him, he mimics Steve Jobs in all aspects. (No individuality) If you try to mimic great persons it will finally ended in failure. Scott Forstall is a great engineer who is responsible for iOS software for mobility devices. There is no doubt on that.

Jonathan Ive is one of greatest living legend in industrial design(around 600 patents under his belt). He got more individuality and likeness(He always pronounce "We" rather "I" .A great human being as well as a humble genius and dream person for any employer as well as employee who work with him). He shares patents with all other inventors in Apple Industrial Design.

The problem with him is lack of "Necessary crooked" behavior which is essential for Successful CEO.

Apple is innovation

I can honestly say that you are missing the mark completely when it comes to calling for Apple to coast and then decelerate.

I will give credit that Steve Jobs was the man making the Kool-Aid for the masses of Mac Heads that have been part of the faithful for many years. I will also agree that his loss has impacted the company as a whole because I don't see Tim Cook being the Man of the Show.

However, where I think you and several of your pundits are wrong is that while Apple is the face of one person, Jobs, it is a company of many. Guys like Jonathan Ive and Scott Forstall are the guys who are making Apple a force that others are trying to become. Innovation was insisted and instilled by Jobs and executed by these incredible teams of people who still, after many decades, want to be different.

Apple success comes from the understanding of what its core customers want and need while creating products that anyone can use. It is the simplicity of their products and software, the way that they seamlessly work together that will allow the company to further expand. Look at what Microsoft and Google are doing. Apple has three devices; iPhone, iPad and Mac that work into each other and allow the customer experience to be pleasant.

It's easy for anyone to point at a company and state that their success will eventually end. It is easier to be a pundit than a cheerleader in the age of internet sarcasm. I think that Apple will be fine. They will have some swings and misses on new products and will have grandslams with others. Lets remember that the field of mobile computing was changed by Apple and if we are to believe that Jobs mapped the road for his companies success for decades to come, I don't think we have anything to worry about.

This is ridiculous. . .

This is ridulous speculation based upon the false premise that Apple was, and is, a "Cult of Personality". In fact, this has never been the case. Jobs was a minimalist and developed into a great CEO precisely because he learned to get out of the way and finally learned to bring out the best work in people. This was not the case when he was younger, but with wisdom he learned to build a corporate culture which embodied his values.

Indeed, Jobs had a vision. . . But how different is this from Gate's Microsoft? Sure, Gates is less charismatic, but he had a clear vision for his company. Contrast this with leadership under Ballmer who, under his watch, has gotten one thing wrong after another and has seen MS flounder with no direction or innovation. I believe that Windows 8 will be their biggest failure to date, with the confusion surrounding their tablet and desktop OS. But, for some reason, nobody is talking about the fact the MS is destined to be relegated to the garbage heap of history while they are more than eager to foresee this for Apple.

What bothers me the most is any lack of evidence for this prediction. Has Cook stumbled as CEO? Were Jobs' ideas always successful (the cube, for example), or did a lot of their success depend on making great products which anticipated consumers' needs? Contrast the management team at Apple with MS or any other major corporation and I guarantee you'll find a much faster, innovative, and responsive company in Apple.

And BTW, under this logic, shouldn't Pixar start to suck, too? It was, after all Jobs who built that organization so that it could also run itself on all cylinders.

Hooray! - Someone else gets it

Glad someone else understands what Jobs accomplished between Apple I and Apple II: Pixar!

See my comment on Page 2 of the comments "Pixar Redux - Why Apple will Flourish Post Jobs"

Its easy to see

The 'Jobs Disciples' are literally why the company will coast and decelerate to a sudden halt. They are the ones that got it going, and they will eat themselves alive now that he's gone.

All it will take is a few mishaps on new innovation that fails, and the magic will be gone once and for all.

Suddenly, even the most dedicated Jobs disciple will see...it was all just smoke and mirrors.

Corporate death watch

Shouldnt the corporate "death watch" be on MicroSoft and RIM, two of the worst managed tech companies around?

The ONLY reason that MS and RIM have held on is because of their old products being "corporate standards". None of their recent products are being widely used in the corporate market, they are much smaller companies with far less in cash reserves than Apple, and neither company has ever shown the ability to innovate or anticipate consumer needs.

Your comments led me to

Your comments led me to wonder what will happen to Forrester without George Colony at the helm?

An answer

I answered this question in a previous comment: http://blogs.forrester.com/george_colony/12-04-25-apple_sony#comment-17006

On the similar news, 5 years

On the similar news, 5 years ago

`The iPhone will not substantially alter the fundamental structure and challenges of the mobile industry,'' Charles Golvin, an analyst at Forrester Research Inc., said in a report this month.

Heard this before

Cannot agree with Forrester. It's hard to predict this.

If everyone believes that Steve Jobs single handedly made Apple succeed. They are wrong!

The hardworking and visionary team that developed these products ultimately helped Apple succeed.

Jobs' biggest contribution will be to help guide the company in the right direction in terms of establishing new product lines. But the team behind was crucial in its success.

So there is a culture of excellence at Apple that exists. It will take more than decade to change, if the leadership and employees believe in the company strongly. As long as the financial performance and focus in execution continues, which is what was Tim Cook was anyway doing, all those years Steve Jobs was there, I believe success will continue.

But this is not about prediction, but about a belief based on being part of teams where excellence was norm and how that played out.