Reports of Apple’s Demise are Greatly Exaggerated

on April 26, 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.

Related Reading:
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Why Competing With Apple is So Difficult
Apple Will Still be Apple, Even Without Steve Jobs
Apple Turns Technology Into Art

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.