The news of Steve Jobs’ leave of absence has left journalists, fans, medbloggers, and stockholders to wonder about the severity of his health issues, and Mac junkies to bemoan the lameness of this year’s MacWorld keynote. As a management junkie I am struck by the issue of maintaining Jobs', or any iconic leader’s, legacy: Will Apple be as powerful and innovative in the absence of a qualified successor?
In a previous life I worked at an executive development firm whose task it was to help Fortune 500 companies develop a strong leadership pipeline, enough talent to choose from to keep the company thriving. Despite the job-hopping endemic with today's youngest working cohort, many large companies try to identify, track the growth, and groom talented young employees (called "high-potentials" or "hi-po's") from entry-level to senior management. Sure hi-po's could decide to bail for a better job title elsewhere, and the economy could tank, forcing a company to let go of some of their best talent. But these companies still put substantial resources toward cultivating leadership from within. To them, not having a plan is bad business.
But can succession plans ensure continued brilliance of new leadership? Douglas A. McIntyre of 24/7 Wall Street, an analysis and commentary site for the financial industry, makes an interesting observation, attributing Apple’s success to Jobs’ audacity in the face of market norms—something that’s hard to teach:
Sociologist and business consultant Watts Wacker has pointed out that the most successful enterprises in the world are created by people who are willing to be a zebra in a field of horses. His rather rough way of describing this is "the deviant's advantage." Steve Jobs has had that advantage throughout his business career. ...
Jobs has been successful because he believed in his technology and he did not care about what the outside world told him about what wouldn't work. All he could see was opportunity.
You can prepare for leadership transition, but you can’t replicate individual genius, or in Jobs’ case, genius and timing.
And, as a business matures, many companies need to move beyond the individual brilliance of their founders to survive; witness the recent departure of Yahoo! CEO Jerry Yang for industry outsider Carol Bartz. Yahoo's board decided that the company was so broken that elevating leadership from within would be even more damaging .
In an article explaining why a succession plan is critical to Apple’s future, Wharton management professor Peter Capelli provides an interesting counterargument:
"Investors get worried if they think the future of an entire company depends on a couple of key individuals. In fact, that is almost never the case. This bias -- attributing the success of organizations to individuals -- is pretty common. Several studies have looked to see what happens when CEOs ... die unexpectedly. All the studies show that, rather than collapsing, share prices in fact actually go up. The current leaders are not that crucial. Companies don't collapse when the leader departs and there is some time to fill the job."
Think of the most powerful organization in the world—the U.S. government—and how it runs. Even if previous leadership is determined effective, it must be turned over regularly. It’s a necessary regeneration designed to keep the nation powerful. Why shouldn’t this be the same for companies? If Jobs’ absence becomes permanent we will miss him at the helm, no doubt, but Apple’s chances at remaining great shouldn’t diminish.
The real barometer of Jobs’ effectiveness is not the extent to which he’s brought his company to greatness, but the degree to which he’s inspired others to keep it that way.
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