Reports of Apple’s Demise are Greatly Exaggerated

by Ben Bajarin   |   April 26th, 2012

The past few weeks have brought out some interesting commentary around the imminent decline of Apple. Yesterday perhaps the most forceful view yet came from Forrester’s CEO, George Colony.

George and others root their argument on the absence of Steve Jobs to influence vision, leadership, and charisma. There is absolutely no doubt that Steve Jobs is irreplaceable and that his vision and overall product decision making helped make Apple what it is today. That being said, he didn’t do it alone and more importantly, the culture of innovation he created internally at Apple is what is unique to Apple and the central part of Steve Jobs legacy. Management theories backing up George’s and others claims are just that theories, and they may be generally true but they are not universally true.

I have written quite extensively about why Apple is poised to remain dominant for quite some time so I won’t go over all those points again. Quickly, however, Apple’s fundamentals as a vertically oriented organization, retail strategy, brand, marketing, ecosystem, and more, are fundamentals that don’t go away just because Steve Jobs is no longer with us. For my thoughts on that specifically, I welcome you to these columns. For this topic I’d rather focus on Apple’s culture as I think it is a point that is broadly missed.

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A Culture of Innovation

I have a number of good friends at Apple in positions up and down the organization. There is a culture internally at Apple that I don’t see anywhere else inside large organizations. The only way to explain it is to use the analogy that the energy, excitement, and passion with employees inside Apple is like that of a startup. Steve Jobs has even used this analogy himself. The conventional wisdom is that once a company reaches a certain size that startup energy goes away and generally that is true, however, this is not the case internally at Apple.

Even in a recent interview with Apple’s SR VP of Industrial Design, Sir Jonathan some very telling differences about Apple’s unique culture came to light. He made a specific statement:

“Our goals are very simple – to design and make better products. If we can’t make something that is better, we won’t do it.”

That may seem entirely obvious and of course this is not a goal unique to Apple. However, Apple’s definition of “better” is different from their competition. Their definition of better is based on their drive to make better products that “they” want in their life. Apple employees are not content with just “OK” products. Steve Jobs was the ultimate end user with a keen eye for user experiences but I would argue that there are thousands of people at Apple who think the same way because that is the culture Steve Jobs created. For Apple employees, to make things better, and make products they enjoy is the only real competition Apple needs. What’s more, Apple’s three-businesses-in-one orientation around hardware, software, and services is what enables Apple’s definition of “better” to become reality.

Can that Culture be Sustainable?

If there was an argument against this thinking it would be that because Steve Jobs is no longer there driving that culture and passion through his charisma, it cannot be sustainable. This is in essence the root of the inevitable Apple demise argument. I agree there are plenty of examples where a charismatic leader is no longer in the picture and the culture is not sustained. But, there is another Steve Jobs company in which he was the CEO, set the culture, and then departed where this culture has also been preserved and it is still intact and flourishing today and that company is Pixar. Pixar thrives because Steve Jobs’ vision was instilled in John Lassiter and his team and he left them a rich framework in which to continue to innovate and grow.

It is interesting to me that those who use the post Steve Jobs argument about Apple’s demise never mention Pixar. I read one of the most fascinating case studies of Pixar in the Harvard Business Review several years ago. It contained many interviews with employees and countless examples of the pains they went through to make a consistently better product and maintain a consistent high quality bar of everything with the Pixar name on it. Pixar employees were not content with just “OK” movies and nothing went out that door that didn’t meet a certain bar. This is a culture that was driven by Steve Jobs internally at Pixar. Although Steve Jobs may have not had the same kind of product impact since movies are different than computers, it is that culture he specifically drove in both Pixar and Apple and they remain intact.

That culture attracts a certain type of person. Again some may balk at comparing a company like Apple to Pixar due to the creative and artistic work of Pixar; however, I think Apple attracts equally creative and artistic employees.

Disney at large is another interesting case study. I have heard this company used in these examples but with a missed perspective. It is true that since Walt Disney left that the successive management teams have had their ups and downs. However, there is a philosophy, outlined nicely in a book called “The Disney Way”, which maintains a consistent experience with Disney products. This is why the experience at Disney theme parks, cruises, etc., has no equivalent. That philosophy and culture created by Walt Disney still remains intact today and is still evident in the Disney experience. Even with that in mind there are still huge differences between Disney and Apple. Disney had lost its drive to innovate around animation and they fixed that by buying Pixar.

Apple is a company is filled with thousands of people who aren’t content with the status quo and drive to push the bar higher making every successive product better. That is something I don’t see elsewhere in the industry. That culture is one that runs extremely deep inside Apple and is likely to keep them growing well into the future.

I could see George’s and others point if Apple was just another company. I simply don’t believe Apple is like any other company. Apple is different because they think different and that is not going away any time soon.

Ben Bajarin

Ben Bajarin is a Principal Analyst at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research. He is a husband, father, gadget enthusiast, trend spotter, early adopter and hobby farmer. Full Bio
  • PeterBlood

    Thanks for rebutting the ridiculous analysis of Forrester’s CEO, George Colony. It’s amazing that so many people don’t get the idea that Apple company culture is different than others. Sony & Apple couldn’t BE more different from each other. Steve Jobs put into place company concepts and followings that keep it thinking fresh like a start-up and laser focus on all the right things and most importantly the all-important user experience. How anyone can miss this fundamental difference is beyond me, especially someone like Colony who should know better or be better informed. It’s funny the more you know yourself the more you realize how many analysts are just dead wrong and that they must be spending all their time reading the funny papers instead of educating themselves about the companies of which they write.

  • mhikl

    Jon Ive: “Our goals are very simple – to design and make better. If we can’t make something that is better, we won’t do it.”

    I notice he did not say invent or originate a product. I would add, though, that Apple’s first iterations are often so well designed they could almost be mistaken for inventions.

    I can think of so many designs around our home of products that did not have Apple design in their DNA.
    - an electric kettle that seems perfect except for the difficult pinching action to open it,
    - the water pick with so many design flaws from shape of contain, the two compartments of the container, to the placement and action of the on/off and pressure buttons. The experience is horrid; one does not get used to the flaws and it can’t wear out fast enough.

    I have all my original Apple equipment and except for my Pismo; they all still work as if from the factory. The Pismo had a good run and lasted five years.

    Ben, in discussions, mention is often missed of the company that turned away from the culture of Steve Jobs and was on the brink of failure until he returned to save it. Re-birth and re-direction seems to be successful strategies in Apple DNA. That habit may be an empowering influence to the Apple way that few companies have experienced, succesfuly.

    What Apple has been able to do is to seemingly pull from air products that seem new, even unthinkable. Sure there were MP3 players and smart phones and laptops before Apple, but Apple was able to bring out products that were gems, not just rough stones waiting for slow innovations to improve them.

    As is the usual, Ben, this article adds to the venue of Apple discussion, ideas rare to be seen elsewhere.

    • benbajarin

      Thanks for the comments. Apple itself from birth to decline to rebirth and whatever else is to come will make one of the most interesting case studies for business students of the future.

  • http://www.facebook.com/people/Richard-Taylor/1646090087 Richard Taylor

    As I noted elsewhere, Disney seems to be doing fine. Yes, that adorable mouse doesn’t need to be reinvented every year, but when was the last time you saw a Mickey film? Disney wallowed around for a few years after Walt’s death before new people joined the organization and steered it toward success, doubling down on the Disney dynamic. Apple will be fine under its new leadership, far better than it was during Jobs’ first absence since the company was never this successful before. Now if you want to see a company in dire trouble, look no further than MS. Its products are aging, it’s so top-heavy with bureaucracy a gentle gust of wind may capsize it, and it too has lost its visionary leader.

    • steve_wildstrom

      Microsoft’s visionary leader is still very much with them as a huge shareholder and chairman of the board. If Bill Gates is unhappy with the direction of the company, he has never done anything to indicate it. True, these days he is much more interested in the foundation, but he still cares about Microsoft which, though it has its problems, is hardly in danger of fading away.

    • Rich

      “Its products are aging”? You forgot the Xbox 360 and the Kinect. However I do think Microsoft doesn’t know what to do with mobile.

  • SteveP

    MINOR quibble.
    Unless you’re a Brit, Ben, he’s not “Sir” Jonathan.

    • benbajarin

      :) I was more trying to quote that specific article where they referenced him in the interviews. Normally I wouldn’t do that.

  • Rich

    Steve Jobs has been gone 6 months and already people are trotting out the “Apple will decline” stuff? It’s almost like some people *want* Apple to deteriorate. Let’s wait until Apple brings out a few products that don’t set the market on fire before we start this. And BTW I suspect the Apple TV that’s coming will shut the negativists up. Steve did say “I finally cracked it.”

  • http://twitter.com/ccoc Colin Crawford

    Maybe Forrester’s CEO, George Colony could spend his energies improving the research companies forecasting abilities – their track record on Apple has been less than stellar. Tim Cooke will prove himself or he won’t. His approach and leadership style is different and time will tell if it will be truly effective. Steve was unique and the company’s achievements under his leadership were significant but it was not all “perfect”. Rather than ridiculous speculation – let’s see Tim;s results over the next several years. I found George’s post disingenuous and totally lacking substance.

    • benbajarin

      Lacking substance is a nice way to put it. I have racked my brain on why George did this and I just don’t understand it. I don’t see how this helps him or Forrester in any way, in fact I think it hurts them and some of their very good analysts.

      Also I don’t know how you would even dare tackle a subject like that, that is going to stir massive controversy and backlash in a 500 word post with no real solid analysis or supporting arguments. The point he used was poorly supported and not articulate at all. The whole thing just baffles me but I have seen a number of other similar arguments from other analysts or media so that is why I choose to make a counter argument.

  • Alfiejr

    Forrester’s piece is really lame.

    first of course, the Apple team will be executing the roadmap Jobs drew up for at least two years, since that is the lead time for any major new products/initiatives. and we know they are very good indeed at “execution.” where the Apple team goes from there with product/service development completely on their own we will finally see in 2015. who knows?

    second, Sony? well maybe if Apple goes and buys a Hollywood mediaco too, which gave Sony – 20 years ago – a permeant case of management/leadership/identity schizophrenia that cripples them to this day. Japan vs. US business culture, techie vs. hollywood corporate culture. it was a colossal blunder. one big test for Apple’s new team certainly will be how they use their $100 billion in cash – Jobs totally punted on that one, didn’t he? my recommendation: buy global bandwidth – satellites, etc.- and drive the price down relentlessly with Apple technical innovation. free us all from the damn telcos.

    third, base a complex real-world analysis on any single book’s meme? seriously? well, it’s ok for a high school paper, i think i did that once. but then you grow up.