Nathan Gwilliam Blog :: e-Business, Social Enterprise, Faith

This month Fortune magazine released their “Most Admired Company” rankings. This year Apple is at the top, and never, in the 26 year history of this award has the winning company so closely resembled a one-man show.

Steve Jobs was the charismatic boy wonder who started Apple in 1976 in his garage. By age 25, Steve was worth $200 million. At 26, he was on the cover of Time magazine.

At 28 Steve wanted a seasoned CEO to help him, so he approached John Skully, the president of Pepsi, and asked him, “Do you want to spend the rest of your life selling sugared water, or do you want a chance to change the world?” However, within about two years at Apple, the relationship between Skully and Jobs turned south.

Skully latter wrote, “Apple was supposed to become a wonderful consumer products company. This was a lunatic plan. High tech could not be designed and sold as a consumer product.” Of course John Skully was dead wrong. However, at 30, he and Steve Jobs had a power struggle, and Steve was thrown out of the company he had founded.

In his “wilderness years” away from Apple, Steve moved on to create Pixar, the phenomenally successful animation studio which produced hits such as Toy Story, Monsters, Inc., and Cars. Pixar was purchased by Disney in a deal that now makes Jobs the largest Disney shareholder with 7.3%, valued at $4.6 billion. During those years he also founded Next, a hardware and software company which was sold to Apple when Steve was re-hired.

While Steve Jobs was away from Apple, the company had floundered and was on the ropes. Apple had lost tremendous ground to Microsoft and others, and many questioned whether Apple would even survive.

In an almost fairy tale series of events Steve returned, and worked his magic to raise the metaphorical Phoenix from the ashes. Since his return, he has launched amazing products such as the iPod, iTunes (iTunes recently became the #2 music retailer in the world), the iBook, the iPhone, and the new MacBook Air. His products are insanely great. I am a passionate iPhone user. I purchased my iPhone just a few weeks before the price was dropped $200. I loved my phone so much that I didn’t even care.

$1,000 of stock in Apple right before Steve returned would be worth $36,000 now. Apple currently has a market value of $108 billion - greater than Merck, McDonald’s or Goldman Sachs.

With this recent award placing Apple as the most admired company in America, it symbolizes a full-circle metamorphosis that the company has had after Steve’s return. Steve Jobs has become the premier high-tech superstar. Jack Welch has dubbed Jobs “the most successful CEO today.” He has shaped the entertainment we watch, the way we buy and listen to music, and the devices we use to communicate and work.

Allan Kay, a personal computer pioneer, said “Steve understands desire.” His product announcements are made to packed houses and celebrity appearances. When was the last time that the market was cultishly fanatical about a cell phone launch, as they were with the iPhone?

With all of his success, it is interesting to note the pattern related to his initial firing. Steve Jobs, the visionary leader, built an amazing company with a cult following. There were stumbles as a result of his immaturity, and a board of directors felt that they didn’t need him any more. After a nightmare of an existence without him, it became very clear that they were wrong. Apple could not survive with a manager to maintain Steve’s vision. Apple needed the visionary leader, and not the manager.

It is amazing how often this pattern to replace the visionary founder happens to the detriment of companies. A visionary entrepreneur builds a company that is successful. Then, the company gets so successful that investors, boards of directors, or others are convinced that the company has outgrown the entrepreneur, and a seasoned manager is hired. However, that seasoned manager does not have the vision of the entrepreneur and is unable to sustain the growth.

So, if you are an entrepreneur, and they are trying to replace you, believe in yourself. You can probably do a better job than anyone who would be hired to replace you. If you are an investor or board member, and you are thinking about replacing the visionary entrepreneur, be patient. You might be throwing away one of the most important elements which has made the company successful. You may not have outgrown the entrepreneur, but instead your future growth may be predicated on his continued vision.

(As an aside, because of my adoption connection, it is interesting for me to not that Steve Jobs was adopted.)

(source for much of this article: Fortune Magazine March 2008)

Posted on March 21st, 2008 by admin
Filed under: Business Management, Entrepreneurship, Leadership, e-Business