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Apple: The Fruit of Knowledge
Summer D. Leifer
Master Major Comprehensive Project
CAPS600 – Graduate Project
June 22, 2013
Professor Randall Doll
Southwestern College Professional Studies
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Abstract
Apple presents an excellent management and leadership case study as it has evolved from a
small, entrepreneurial company to a global economic powerhouse. Apple’s leadership and
management styles have fluctuated over the past four decades as it has struggled to create and
maintain a distinct culture and product in a rapidly evolving technological market. Many of its
successes are a result of its ability to maintain a balance between innovative creativity with
practical business and marketing approaches. Conversely, many of its greatest challenges and
struggles have been a result of the inability to maintain an appropriate tension between creative
chaos and formalized structure. Furthermore, Apple faces the challenge of maintaining its
persona as an independent, free-thinking company while also holding the dominant position in its
market. The leadership and management lessons presented upon examination of Apple’s history
and current operations, strengths and challenges provide worthwhile lessons to contemporary
leaders and managers.
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Apple: The Fruit of Knowledge
From a small company operating in a garage to a multi-national technology behemoth,
Apple’s evolution provides rich lessons in management and leadership. During the last four
decades, Apple had a wide range of leaders and managers with markedly different styles. Their
approaches met with varying degrees of success as internal and external factors changed.
Furthermore, it is important to note these individuals had distinct strengths and weaknesses and,
as the context of Apple’s vision and operations changed, their individual effectiveness fluctuated.
Current and future Apple leaders are facing new challenges as contextual factors such as
intellectual property right laws, cyber security and technology change. Regardless of changing
leadership and management styles, the foundation of Apple—perfect product design and
experience—the force behind Apple’s creation, continues to underpin the company.
Apple’s CEO Leadership & Management Style, 1977 - 1985
Apple’s inception was the result of collaboration between Steve Jobs and Steve Wozniak.
Jobs and Wozniak were brilliant innovators; however, they did not have a background in
business management. Their growing business required stronger management and leadership
and, upon the advice of Mark Markkula, an Apple investor and its third employee, Wozniak and
Jobs hired the first Apple Chief Executive Officer (CEO), Michael Scott in 1977 (Yarrow, 2011).
With a strong background in business management and leadership, Scott introduced
administrative organization and structure to Apple allowing Jobs and Wozniak to focus more on
product design and less on human and resource management (Yarrow, 2011). Scott focused on
pragmatic concerns and creating a family-type environment within Apple while Jobs focused on
product perfection (Isaacson, 2011). Eventually, the differences in leadership styles proved too
great and, in 1981, Markkula was asked to replace Scott as CEO (Markoff, 1997). Markkula
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stressed three principles: empathy, focus and impute (Isaacson, 2012). Of these three, impute
(the concept that people do judge a book by its cover) became a core Apple leadership and
management principle. This third principle continues to shape Apple product design and
experience. In 1981, as Apple struggled to improve sales, it replaced Markkula with John
Sculley, a former PepsiCo Inc. president and the mastermind behind the very successful Pepsi
Challenge marketing campaign (Markoff, 1997). In a 2011 interview for the FINS website,
John Sculley stated he felt his move to Apple was well-timed as it allowed him to be part of a
company’s transformation while also allowing him to employ his greatest strength: bringing an
underdog to victory over its competitors (Guyon, 2011). During the FINS interview, Sculley
also stated he was not a great manager and preferred to take on tough projects and surround
himself by other great managers and experts (Guyon, 2011). Despite Sculley’s lack of
experience within the technology market and his misgivings about his management skills, his
initial years with Apple were very profitable (PBS, 2013). In 1985, his reputation as a strong
leader was solidified after he led the ousting of Steve Jobs from Apple.
Apple’s Leadership Strengths & Weaknesses, 1977 - 1985
In Organizational Theory and Design, Richard Daft describes the initial forces within a
new organization as the entrepreneurial stage where the owner/s primarily focus on the product
or service and creating a viable company (2009). Jobs and Wozniak’s drive for product
perfection during this stage was appropriate. As Apple first hired Scott and then Markkula as
CEOs, it transitioned from the entrepreneurial stage to what Daft defines as the collectivity state
whereby Apple began to establish distinct objectives and vision (2009). During this stage, Scott
took on the responsibility of bringing a pragmatic business approach to leading Apple while
attempting to establish a positive work environment. Markkula began to formalize marketing
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and sales policies; however, he continued to be primarily focused on product development rather
than company development (Isaacson, 2011). Apple remained in the collectivity stage from
1977 to 1981 and, upon the next crisis—the need for delegation—it moved into the third phase:
the formalization phase (Daft, 2009). During this phase of organizational leadership, the
organization establishes rules, standards, and policies. Once Sculley became CEO, Apple began
its transition into this third stage of establishing a company identity and presence (Daft, 2009).
Apple’s CEO Leadership & Management Style, 1985 - 1996
Following Steve Jobs departure in 1985, Sculley continued to serve as the CEO of Apple,
Inc. Initially, Sculley was very successful and increased annual sales from $800 million to $8
billion over the course of a decade (Bloomberg Businessweek, 2011). However, after a series of
bad business and marketing decisions, he resigned his position in 1993 and was quickly replaced
with Michael Spindler (PBS, 2013). Spindler made some wise decisions initially but soon lost
control of the company as a result of his erratic and unpredictable behavior (Hormby, 2006).
Following disastrous sales and a failed attempt to sell Apple to Sun, Spindler was asked by the
board of directors to resign in 1996 (Hormby, 2006). Following Spindler’s resignation, Apple
appointed Gil Amelio as the new CEO in January 1996 (Carroll, 2011). Similar to Spindler’s
early moves, Amelio reorganized Apple and drove Apple’s purchase of Jobs’ company, NeXt, in
December, 1996. The acquisition terms of NeXt brought Steve Jobs back to Apple as an advisor
(Carroll, 2011). Although Amelio’s time as Apple’s CEO was approximately 500 days, he is
credited with initiating the turnaround from a declining company to a profitable company.
Apple’s Leadership Strengths & Weaknesses, 1985 - 1996
During a 2010 interview with Leander Kahney for Cult of Mac, John Sculley asserted
that he should never have been selected as CEO of Apple (Kahney, 2010). Initially, his role as
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Apple CEO was to boost the ailing Apple II sales to facilitate development and marketing of the
next big thing, the Mac (Sculley, 2011). Unfortunately, initial Mac sales far underperformed as
the Mac still lacked processing power and the Apple board of directors chose to remove Jobs as
vice-president of Apple Macintosh Division while retaining his title of Chairman of the Board
(Guyon, 2011). A few months later, Jobs left Apple to start his own company: NeXt. Following
an initial profitable period, it began to suffer setbacks as a result of bad timing, slower
innovation, and Sculley’s decisions to market Apple to the same customer base as its
competitors. When Spindler was selected to replace Sculley as CEO, his decision to flatten the
Apple hierarchy and infrastructure was wise. However, due to Spindler’s weak leadership style,
the company suffered disastrous sales and financial loss (Hormby, 2006). After Spindler’s
resignation following a failed attempt to sell Apple to Sun, the new CEO, Gil Amelio, tackled
Apple’s structure and led the company to buy Jobs’ company, NeXt, ultimately bringing Jobs
back to Apple as an advisor. Apple’s greatest leadership weakness during this time period related
to its lack of a clear, cohesive company vision and focus and its inability to bring its innovative
ideas into reality.
Apple’s CEO Leadership & Management Style, 1997 - 2011
In a Trojan horse move, Steve Jobs maneuvered from his position as an advisor to replace
Amelio as Apple’s interim CEO (Edwards, 2012). During this time, Jobs reduced the Apple
product line by 70%, laid off more than 3,000 employees, replaced several key Apple leaders
with individuals he personally trusted, clamped down on all information coming out of Apple,
trimmed Apple’s advertising agencies to one, and made peace with Apple’s sworn enemy,
Microsoft (Edwards, 2012 & Stone, 2011). The CEO leadership and management style during
this time period was focused on tight company control, product innovation and marketing.
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While Jobs has been described by some as a transformational leader, I would argue he lacked
one important aspect of transformational leaders: individualized consideration (Bass, 2006).
Although Jobs demonstrated transformational component behaviors, his underlying intent was
often self-serving and he sought to be idolized through manipulation and intimidation. In a
Leadership Quarterly journal article, Ethics, Character and Authentic Transformational
Leadership Behavior, Bernard Bass and Paul Steidlmeier assert pseudo-transformational leaders
“seek power and position even at the expense of their followers’ achievements” (1999). Critics
have repeatedly asserted Jobs personally took credit for the design work and innovation of his
employees, such as Johnathan Ives, to further his own legacy as a genius. Jobs intentionally
distorted reality to suit his personal vision and self interests (Isaacson, 2011). Furthermore, Jobs
was convinced the perfect product would lure consumers into buying things they had not even
known they wanted—and he was proven right (Isaacson, 2011). Regardless of the judgment one
has of Jobs’ leadership style, it was effective and he successfully established Apple as a global
powerhouse.
Apple’s Leadership Strengths & Weaknesses, 1997 - 2011
During this time period, Jobs brought a laser focus to the company’s products and
culture. He streamlined Apple’s products into four quadrants: personal or business and laptop or
desktop. Additionally, he redirected Apple’s resources into creating a distinctive product and
niche. In 2001, Apple introduced the i-Pod and many consumers were enticed into the Apple
world through its sleek design (Stone, 2011). Likewise, many top business leaders and star
designers were attracted to Apple attracted by Jobs’ vision for Apple and its revitalized image as
a cutting edge company (Edwards, 2012 & Stone, 2011). The biggest shadow cast over Apple
during this time, was Jobs’ cancer diagnosis in 2003 of which he maintained tight secrecy. Jobs
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continued to be an unbeatable force of nature as he used Apple’s growing clout to strongarm the
music industry into $.99 sales and AT&T into an exclusive contract (Stone, 2011). Jobs’
commitment to creating the best company and product through distilling Apple down to the
essentials combined with his ability to define reality led to a distinct Apple culture.
Apple’s CEO Leadership & Management Style, 2011 - Present
Upon Jobs’ resignation as a result of his deteriorating health, Tim Cook was chosen as
Apple’s new CEO (Tyrangiel, 2012). Whereas Jobs’ leadership style was often described as
volatile, Cook has been described as more even tempered and transparent. Cook has turned
long-standing Apple policies on their head. As CEO, Tim Cook values diversity, to include
within leadership, collaboration, transparency, listening to the customer, focusing on the few
things Apple does well, and admitting mistakes (Tyrangiel, 2012; Markowitz, 2012). Cook’s
leadership style is aptly described as authentic transformational leadership. In addition to
providing intellectual stimulation, inspirational motivation and idealized influence, he does give
individualized consideration to his constituents. According to Bass and Steidlmeier, authentic
transformational leaders “who may have just as much need for power as pseudo-transformational
leaders, channel the need in socially constructive ways into the service of others” (1999).
However, Cook has not completely changed the Apple culture or business model. During the
Worldwide Developers Conference this past week, he stated,” We spend a lot of time on a few
great things...until every idea we touch...enhances each life it touches” (Farber, 2013).
Furthermore, Cook has retained the teamwork business model put in place by Jobs relying on
teamwork and synergy (Farber, 2013).
Apple’s Leadership Strengths & Weaknesses, 2011 - Present
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Cook’s commitment to transforming Apple’s public image has contradicted many of
Apple’s long-standing policies. For example, he initiated a program to match employee charity
gift giving, paid out shareholder dividends, delivered public apologies, and decided to bring a
portion of Apple manufacturing, i-Mac, to the USA (Dilger, 2013; Macworld, 2012;
Mourdoukoutas, 2012; Tung, 2013). These actions all directly oppose the stance Job took that
Apple was under no obligation to publicly declare charitable donations, pay out dividends,
apologize or bring final phase production to the U.S. (Isaacson, 2011). Although some investors
and stakeholders feel these are risky decisions, the general public has responded well to the more
open Apple atmosphere. On a critical note, some naysayers feel Tim Cook lacks the passion,
vision and flexibility to continue to lead Apple into a successful future (Satell, 2013 & Kaipa,
2013). Tim Cook’s leadership has, thus far, been lucrative for Apple and he has made progress
and built stronger connections with his stakeholders, customers and employees. It remains to be
seen if Cook’s significant departure from some of Apple’s core principles will strengthen the
company and its reputation and allow it to maintain its autonomy or lead it further down the path
of market homogenization and traditionalist business practices.
Apple’s Current & Future Leadership Challenges
Apple’s current leadership challenges center on defining Apple’s culture and vision
following Jobs’ departure. Tim Cook and his leadership team continue to lead a profitable and
growing company. Cook and his team must choose which aspects of Apple’s culture should
remain unchanged and which aspects should evolve. It remains to be seen if the changes already
put in place such as transparency, stock dividends and charitable giving will realize significant
success or endanger the company. Likewise, as Apple moves into the future it will increasingly
face intellectual property battles, cyber security threats and emerging competition. Apple’s
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future leadership challenges will likely include maintaining a balance between established
organizational infrastructure and an agile atmosphere of innovation. Apple’s future leaders must
demonstrate an ability and willingness to employ complex strategic thinking, creative problem
solving and unprecedented innovation. They will need to have a commitment to maintaining a
formalized structure while balancing on the edge of chaos. -For it is on this delicate edge
between structure and creative chaos where innovation often occurs.
Apple’s Leadership Experience & Comparison
As I compared Apple’s leadership history with my own experiences, I noted some
distinct commonalities and differences. As a professional working in the intelligence field, I
have a great appreciation for technological innovation and creative thinking. The products and
services we provide rely on critical thinking in a highly dynamic context. To accomplish our
missions and support our customers, we must maintain strict adherence to policies and guidelines
while also employing creative processes and techniques to maintain information superiority. As
a leader within this field, I often seek out and employ advanced technological tools and
applications while encouraging thoughtful and creative thought processes among my
constituents. On the other hand, as a military professional, I adhere to a hierarchical chain of
command and clear guidance and instructions to inform my decisions. The act of balancing the
two ends of the leadership and management spectrum, allow me to appreciate the different
leadership styles of Apple’s past and current CEOs. I can identify with the need to have
structure and practical processes in place while the need for innovation and creativity also
resonates with me. Furthermore, I appreciate the use of different leadership approaches applied
based on the situational context of the organization to include internal and external factors.
Whereas transformational leadership is often lauded as the most desirable leadership style, there
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are times when transactional leadership may be more appropriate. Finally, regardless of
preferred leadership styles or organizational structures, it is imperative for leaders and managers
to adjust their approach based on the overall vision, goals and context.
Impact on Personal Leadership & Management Style
Apple’s wide range of CEO leadership styles and their varying degrees of success have
demonstrated the importance of assessing leadership effectiveness within a holistic context.
Leadership is part of an overall system and does not exist independently of the follower/s, the
organization, the environment or the stakeholders. As a student of leadership and management, I
understand the importance of analyzing leaders and their respective styles without bias or
preconceived notions. Furthermore, to glean true lessons from past and current leaders, one must
be willing to examine all aspects of the leader and her/his style and the impact she/he had on an
organization without prejudice. Through my research of Apple’s leadership and management
styles, I have further solidified my belief that leaders and managers must adjust their respective
styles based on organizational vision, needs and contextual factors to remain relevant and
effective. It is important for leaders and managers to remain self-aware and aware of external
factors as they shape their styles and organizational structures while also remaining true to an
organization’s vision and foundation. Although leadership and management styles may need to
adjust dependent on the situation and context, proven core competencies and organizational
vision should remain steady and guide leadership and management decisions and actions.
Conclusion
From its beginnings, Apple has thrived on shaking up the status quo, breaking the mold
and creating the perfect product. Apple prides itself on its status as a rebel turning its back on
traditional paradigms of leadership, management and business operations. However, as it has
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grown into a global company with enormous profits, it has been faced with a growing dilemma:
balancing free-thinking, innovation and creativity with formalized, standardized infrastructure
and organizational hierarchy. As one examines Apple’s various leadership and management
styles over the last four decades, one notes the ebb and flow of transactional versus
transformational, controlling versus empowered styles shaping the organization and the impacts
of these changes on the company and its stakeholders. Currently, Apple is once again in a state
of transition as its operating paradigm continues to evolve under new leadership. Its greatest
challenge will involve maintaining its reputation as a maverick while also saturating the global
market. Every great company initially began as a novel idea—different from the status quo.
Large scale success erodes the novelty and the rebellious persona of startup companies. If Apple
does not find the balance between effective structure and creative chaos while retaining its
foundation based on perfect product design and experience, it risks becoming a caricature of the
companies it once mocked.
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