Clear Thinking - The Business Experience

Thinking

Intelligence™

The Business Experience
Business Performance Improvement Services
for individuals, teams, and organisations

Clear Thinking Case Study of the Month


The Story

December 2010 - January 2011

“Steve Jobs – highly successful Whole-Brained Leader” 

Apple Inc co-founder Steve Jobs is in the news because of concerns that his illness may affect Apple’s business performance. We analysed the stories and found that he is a Whole-Brained leader, and we believe that his wide range of thinking abilities and clear thinking leadership have had a major contribution to Apple’s phenomenal success.

We examine Apple’s success, how Steve Jobs thinks, his Leadership Style and skills, the top team structure and succession planning, and how Apple has achieved its success despite R&D spending being only 20% of that of its main rivals.

Key points of the Story 

A press article in December gave us valuable insights into Steve Jobs’ Leadership Style and preferred Thinking Styles. From analysing various people’s comments about his behaviour, especially Apple’s current and previous managers, we were able to identify his strongest Thinking Styles (ways of thinking) and his preferred Leadership Style/s. We discovered that Jobs is generally a Clear Thinker who scores highly in all the four core Thinking Styles of Whole-Brain Thinking – Visionary, Reasoning, Task, and People Thinking, a very rare range of Thinking abilities.

However news of his illness and indefinite medical leave has raised concerns about Apple’s future. This stimulated us to also examine Mr Jobs’ overall impact as a leader and Apple’s succession planning. Our findings help explain Apple’s incredible success and may be of value to any business leader.
A huge success story

Jobs’ impact on Apple’s share-price began in 2004 when it started its rapid ascent from about 25$ to the current $350. But perhaps the key turning point in Apple’s financial performance came in 1997. Steve Jobs took the lead (again) and made a crucial decision – he entered into a partnership with Microsoft, Apple’s bitter rival. Microsoft invested $150 million into the loss-making Apple and developed Office for the Mac. This one decision allowed Apple to continue business (after $1.6 billion loss in 18 months) and grow to become the second-largest company in the world by capitalisation (second only to Exxon-Mobil).

In 2003/4 Apple began opening retail stores outside the US, stores that looked like modern art museums and “staffed by experts, not cashiers” (Job’s description) offering one-on-one technical support. Another key move was to sign up the major record companies and sell music at 99cents from an online iTunes Music Store to complement the successful iPod music player. This store recently celebrated its 10 billionth sale. Both these strategic initiatives kick-started the performance rocket.
Stubborn Visionary

Apple, at the beginning, had arguably a better user-interface operating system than Microsoft. However, the all-powerful IBM linked up with Microsoft and the fortunes of the two rivals went in different directions. Despite corporate America sticking with IBM, Steve Jobs insisted in continuing with his own proprietary system in personal computers, a decision that almost sank the company. Apple’s share of the PC market shrank as low as 3%. The interface vision was right, but the strategic thinking (we believe) was flawed.

It took until 2006 for Apple to finally capitulate and offer a version that also worked with Windows. PC Market share in America is now nearly 10% as a (delayed) result. However, the strategic decisions to expand the product range to mass-market mobile products such as the iPod, iPhone, and iPad, and music itself, turned Apple into a massive business success story. And Steve Jobs is its chief driver.

 

Analysis and Lessons

Whole-Brain Thinking …Visionary … Reasoning … Task … People Thinking … Leadership Styles … Top Team structure … Succession Planning

A Whole-Brainer 

The comments we have seen indicate to us that Steve Jobs is a rare beast – a genuine Whole-Brained Thinker. He is good at all four quartiles of Whole-Brain Thinking: Visionary Thinking (eg strategic, creative); Reasoning (eg logical, analytical), Task (eg detail, planning); and also People Thinking (eg emotion, customer). We’ll look at each in turn. But what this means is that Steve Jobs is generally a Clear Thinker – he even follows a stage-wise Clear Thinking process for deciding on what domestic washing machine to buy!

 Visionary Thinking

One example of Jobs’ developed Visionary Thinking is the way the iPhone was designed as an open platform for any software developer (in contrast to the original Mac PC which tied developers to Apple’s system). This has led to an enormous explosion of thousands of ‘Apps’, sometimes free applications. [We have just read that the BBC is to release an App for the iPad so customers can watch live tv on the move via the BBC’s iPlayer]. As well as earning revenues from the Apps, this makes Apple’s products even more desirable.

One quote about Apple is that “They know what products they are launching at least two years, and maybe three or more, into the future”. In this fast-developing industry, this is true Visionary Thinking.

Design Thinking is another key Thinking Style in this quartile and Steve Jobs also scores highly here (alongside his design guru Jonathan Ive). We believe that this is one reason why Apple has achieved its incredible success despite an R&D spend at 20% that of rivals Microsoft and Nokia. Jobs even gets involved in the design of icons. Design is one of Apple’s core business skills that translate into USP’s – Unique Selling Points.
Reasoning Thinking

One of the key drivers of Apple’s success since Jobs rejoined them has been their control of the new markets they have entered or initiated. Everything Apple does is designed to allow them to dictate who they deal with and on what terms, and limit rivals’ room for manoeuvre. This is the ideal Marketing Strategy and requires a high level of Analytical Thinking, Business Thinking, and Marketing Thinking (all part of the Reasoning Thinking quartile).

One example of this market analysis is that the success of the iPad allowed Apple to dictate terms to publishers. As a result it has persuaded News Corporation to publish a new online daily newspaper (The Daily) solely on the iPad. And the runaway success of the iStore means that Apple can take 30% of revenues from all products sold on the online store.

 Task Thinking 

Jobs is famous for his attention to detail and performance control/measurement. All his main presentations are prepared in minute detail and rehearsed to perfection. He even vets his business partners’ speeches before they are presented. This is powerful Detail Thinking and Controls Thinking, and to have these skills in addition to Visionary Thinking (diametrically opposite Thinking Styles) is a rare and extremely valuable gift.

He is also highly focused on pursuing only the most practical ideas and plans that have high growth potential (Practical Thinking). He also excels at Planning Thinking, as demonstrated by the care given to the controlled information output and timing of new launches to achieve maximum effect (see below).

 People Thinking

Apple rarely uses focus groups to check the potential of new products. It relies instead on Steve Jobs’ intuitive sense of what customers will buy and how they will respond to communications – the ultimate skill in Customer Thinking.

Jobs may not have the Empathy Thinking skills of Ronald Reagan or Bill Clinton but he does demonstrate one vital element of Emotions Thinking – passion. His passion for his products and business is obvious and contagious. All staff who stay with Apple share this passion – a terrific motivator. Jobs passion, and vision, inspires tremendous staff loyalty – Chief Designer Jonathan Ive has been with Apple since 1992.

Customers queue to buy Apple’s new products. Jobs knows how to stimulate Desire for his products, even at high prices. His carefully controlled drip-feed of information/hype, and the brand image developed over many years, generates customer excitement that few other companies can match.
 Jobs' Leadership Styles

 “Charismatic; inspirational; almost preternatural insights; imagination; inspires devotional loyalty from his followers; control freak; visionary spirit; obstinacy at the negotiating table; creative tension; ability to convince; a stern taskmaster; practical visionary (understands the art of the possible); brave; courageous; perfectionist; it is clear who calls the shots; savage and temperamental management style; demanding; notoriously finicky; instinctive decision-maker; creative; passionate”. 

These are some of ways people who know Steve Jobs have described his Leadership Style. In simplistic terms this is what is commonly called an Autocratic Leadership Style. But the sheer breadth of behaviours indicates a more complex mixture (or range) of four Styles, some negative but overall mainly positive. For example, the (usually) negative Coercive Style is balanced by the (usually) strongly positive Authoritative Style. The Style that “demands immediate compliance” is more than balanced by the Style that “mobilises people towards a vision”.

The top team and Succession Planning

Apple has an unusual top team. Rather than recruiting or developing versatile general managers, Jobs hires the best person in a particular discipline. The top team is a well-organised, close-knit group of highly skilled specialists, such as Jonathan Ive (Apple’s long-term design specialist). The 10-member executive team resembles more of a start-up than a board of directors. It can afford this highly effective structure because Jobs has focused the business on a relatively small number of high profit-margin, huge volume, products.

Apple has kept secret its Succession Plan but insist there is one in place. The only team member with more general management experience is Chief Operations Officer Tim Cook, who has taken over the day-to-day Leadership role during Jobs’ absence. Whilst highly competent at running the business at operational level Cook is untested as a CEO and top Leader. Investor concerns have yet to affect Apple’s share price (to date) but the feeling amongst some analysts is that Apple will miss Jobs’ creative spark. We wish him a speedy recovery.



Click to go back to the top of the page.