Friday, July 18, 2008

Steve Jobs is a Level-4

On December 31, 1992 Lee Iacocca stepped down as Chairman and CEO of Chrysler. It would be the last time the charismatic boss would walk the halls of the company's Detroit headquarters as the carmaker's leader.
Book tours, motivational speaking engagements and a $500,000 annual pension awaited him in retirement. Iacocca looked back on the fourteen years he'd helmed the company and smiled; he saved Chrysler from bankruptcy, helped it persevere through recessions and high gas prices and his marketing brilliance and tough-guy management style had not only helped the company survive, but thrive.
The industry landscape of the 1980s included shrinking market share and intense competition from Japanese imports. Such a landscape required a doggedly determined leader like Iacocca. He'd singlehandedly restored Chrysler to prominence with grit and a no-nonsense attitude and in the process became the first "rockstar" CEO.
Last weekend Version 2.0 of the iPhone hit shelves and sold 3 million units in three days. Apple's stock is currently trading at $172, down a smidge from its high of $188 when the 3G version of the phone was first announced. However, $172 is still a far cry from the company's $7 price when Steve Jobs reassumed the CEO position ten years ago.
Most of Apple's success during the last eight years is directly attributable to their enigmatic leader's demanding style, marketing genius, micromanagement and charisma. Nothing at Apple escapes Jobs' watchful eyes and no product is released if it doesn't meet his exacting standards; entire projects have actually been scrapped during final stages because Jobs didn't approve. The iCEO micromanages everything at Apple, from products to company communications (the PR department releases nothing without explicit approval). Every press release and piece of marketing literature passes his desk first, and Jobs has instilled his tight-lipped discipline into all his employees.
Apple's growth under Jobs' stewardship has inspired a Wired article and recent book by Leander Kahney, who celebrates the iBoss' abrasive, in-your-face management. Jobs has indeed shunned the 'wisdom of crowds' approach favored by other techies like Google and Microsoft. He's flown in the face of conventional management doctrine by not treating Apple's employees as keys to the company's success but rather as slaves to his directives and whims. Kahney, the News Editor at Wired, defends Jobs' egomaniacal, S.O.B. personality by glorifying Apple's current success. He likens the low-growth prospects currently surrounding many Silicon Valley firms to the mid-1950's industrial landscape, and contends a leader like Jobs is practically required for a company to survive in such a world.
The problem with all of this is that Kahney stands awfully close to the line that separates journalist from Fan-Boy. He's written three books about Jobs and Apple (so far), created the Cult of Mac blog, and at one time was thought to be a fake version of Jobs, secretly leaking Apple information to the public through Even if we subtract the obvious reverence Kahney holds for Jobs, there would still be the likelihood of proximity biased reporting. I'm not condemning Kahney for all this, after all he's not the only person worshipping "rockstar" Steve Jobs nor is he alone in granting jerks wide allowances for their performance. What I am trying to do is draw attention to what should be a painfully obvious parallel... that Jobs is basically Iacocca Version 2.0.
Okay, so what's wrong with that? Well, what happened to Chrysler after Iacocca left? It tanked. Miserably. Iacocca's massive ego limited his instruction and management to the people in the company. When he departed, everyone there had been used to doing their job to "please Lee". He never consulted his subordinates on decisions or taught them to think for themselves. He treated them like slaves to his whims instead of keys to the company's success. Does any of this sound familiar? Does it sound like Jobs? Well it should.
I believe Wall Street (and the rest of the world) fully expects Apple to collapse once Jobs departs. In fact, Jim Collins' masterful and diligently researched 2001 book, Good to Great pretty much proved it will. Collins is what Jobs would call a Level-4 Leader: an egotistical, micromanager who can take a company to great heights singlehandedly but then leaves it to crumble after his departure (this crumbling feeds the ego, since it proves the company can't survive without its leader). Collins' book showed that for a company to have long-term, sustained success it needs what he has termed a Level-5 Leader. These CEO's and Presidents are highly motivated, but also fair, encouraging and nice. Their underlying drive and motivations are not the same as the Level-4 Leaders'. They don't want to make themselves look great, they want to make the company itself great.
As a society we nearly always excuse an S.O.B. personality in light of success. But what Collins proves is that being an a-hole isn't an intrinsic part of that formula. In fact, it's usually antithetical to it and only the most charismatic and talented people can make a company flourish for even a small period of time whilst being jerks. The basic point here is that thousands of companies have been successful with nice leaders and managers, and if it can be done with nice-guy attitudes, then it SHOULD be done with nice-guy attitudes. Too many things in the business world are beyond the control of any leader or manager at every level to guarantee success, so the guarantee should be that they'll be fair and nice.
Don't make the mistake here that Collins or I are claiming fairness and nicety are the keys to success... motivation, intelligence and hard work come first. But "a-hole" is not a part of the formula anywhere and everyone should remember that.


Anonymous said...

Interesting article over on the times discussing Jobs' health. At the end he sure comes off as an S.O.B.

Isaque said...

We have been seeing more and more of Apple's executives participating in the presentations of new products. Maybe it's a sign that Job's is changing and becoming a Level - 5 Leader.

Sprizouse said...

That's entirely possible Isaque... one wonders what effects Jobs' poor health have had on his entire outlook. Does he believe his legacy rests with him personally, or with the future success of the company he created?