Sep 1 2011
The news that Steve Jobs, co-founder of Apple Inc and CEO during the most successful period of its history - had stepped down prompted a dramatic drop in the companies shares, falling as much as 7 percent in the USA following the announcement. Jobs is so intrinsically linked to Apple that the news came as a shock to many, but the subsequent response asks the question: how important is a CEO to a company, and how deeply does a departure affect its wellbeing?
The fall in share prices suggests that shareholders fear that Jobs was so influential, and bore so much responsibility for the dramatic upturn in Apple’s fortunes in recent years, that his departure could begin a decline in their technological innovation and market domination.
However, as of September 2010, Apple had almost 50,000 employees – is it really fair to give such weighting to the influence of one man? History shows that the departure of an iconic leader can signal a downturn – the departure of Bill Gates from Microsoft in January 2000 affected the business in a manner that they are yet to fully recover from. Analyst Trip Chowdhry points out that Apple struggled once Steve Jobs was forced out in 1985, and only recovered once he rejoined again. “"Apple is Steve Jobs; Steve Jobs is innovation; innovation is Steve Jobs; and Steve Jobs is Apple," he says.” That’s the equation."
Terry Connelly, dean of the Ageno School of Business at Golden Gate University in San Francisco, takes a different stance on the level of importance a CEO holds, saying, "A company is dependent on its ability to institutionalize... genius in the corporate DNA. Apple shows every sign of having done that”
It is a view echoed by Ben Wood, research director at technology analysts CCS Insight, who supports the idea that a company is a sum of its parts rather than the sole product of a single CEO: "Steve Jobs has been a tremendous leader but no man is bigger than the company itself."
Perhaps the answer is somewhere between the two extremes – while it seems unlikely that a single person amongst thousands could hold so much sway over a companies success, it certainly should not be underestimated how valuable an excellent leader is. In the case of Apple it is the view of many that, while its much-admired CEO has now gone, he has left the business in good hands going forward and his legacy may well be the culture of innovation and attention to detail that he has left behind.
This article was written by Chris Storey, Marketing Assistant at the Association of Executive Search Consultants (AESC).
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