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A Group Research Project conducted for MNGT 5453 W2: Contemporary Issues in Management.  This project was performed per instruction from Dr. Parmer at Southeastern Oklahoma State University.  The group is composed of MBA students Leslie Goutier, Abner Reyes, Denny Rindal, and Aaron Burt.

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A Short History of Apple.Inc’s Leadership

Steve Jobs (left) and John Sculley (right) with an Apple II.

          Apple, Inc is an industry giant focusing on electronics and software.  The company was founded on April Fools Day in 1976, however its future would be anything but a joke.  Founders Steve Jobs and Steve Wozniak incorporated their creation in California during January of 1977.  The famed tech giant has experienced ups and downs over the last five decades, largely due to the leadership during each era.

          Both founders left the company following controversy with the current CEO at the time, John Sculley. Sculley strongly disagreed with Jobs and Wozniak on the direction of the company.  Due to Sculley's history of success as President of Pepsi-Cola, Apple's Board of Directors sided with him and left the founders without control of their creation.  Both Jobs and Wozniak left the company that year, and Jobs shortly started a new venture called “NeXT”.

            Sculley rode the wave of Apple's success through the late 1980's, mostly enjoying sales based off the Apple II unit developed by the company's estranged founders.  A lack of matching competitor's innovation in the early to mid 1990's saw the company backslide in profits.  In 1996, Apple purchased Jobs' new venture, and the founder was returned to his creation.  Having learned from their mistakes the previous decade, the board agreed to make Jobs the CEO of Apple in 1997.

            Jobs led Apple through over a decade of climbing innovation, profits, and success in general.  Many described him as obsessive and difficult to work with, but none could deny his impact on the organization.  In 2011, he resigned as CEO due to health conditions. His place was taken by current CEO Tim Cook, who has led the company successfully for the last 18 years. Cook's leadership style is noticeably different than that of Jobs, and it is universally agreed that his time at the helm has been less challenging.  He may not have faced the challenge of righting the sinking ship like Jobs did, but Cook has seen a growth in net profits almost every year of his time as CEO.

            Though Apple has experienced seven different CEO's over the years; Jobs, Sculley, and Cook are the most notable.  Each displaying different strengths and weaknesses, they undeniable shaped the future of the company in their own respective ways.  A close look at each CEO's reign will allow one to better understand the impact of their leadership styles on the company.

Tim Cook (left) and Steve Jobs in 2010. Photo courtesy of Kimberly White with Getty Images .

Please note that all references will be posted at the end of the blog.

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Steve Jobs - A Harsh, but Effective Leader

          Steve Jobs was a computer designer and innovation executive who is recognized for his contribution to the computer software industry. He was criticized for being headstrong and bearing a tunnel vision with his Macintosh project amid the dwindling sales and dropping the stock price. He was an aggressive and demanding manager who inspired his workers to be hands-on with his projects as he was in control of every detail. He was a transformative leader who involved workers in every stage of innovation. He was fired because he did not keep an eye on the dwindling shares in the market but was focused on his Macintosh project and was perceived as being over ambitions. The significant lesson behind Steve jobs is he championed a strict culture of accountability which informed the company’s end to end responsibility of the company’s customer experience as he did not seek trade-off costs or maximizing profits at the expense of quality which was the basis of Apple’s success in the market.

          His leadership style was related to transformational and transactional systems of leadership. A transactional style of leadership is evident where the managers use rewards and punishment to motivate their workers with a basis on their performance. The leadership of the firm sets the objectives and the members are to approve to adhere to the directions issued by the manager in the organization. Leaders bear the authority to correct and assess employees through training when they fail to attain the objectives. It is often used by the management to increase staff the level of staff engagement and increase the satisfaction they derive from their jobs.

          The transactional style of leadership is where the communication levels from all categories of management are high in order to achieve their predetermined objectives. The leaders directly influence the workers in order to enhance their efficiency and their level of production through high visibility and constant communication. In this style, the top management involves the employees and delegate’s specific tasks to be conducted by the employees. Steve Jobs was a vision centered, inspiring, charismatic leader who stimulated the cognitive development of the employees in order to achieve specific levels of effectiveness. The success of apple business was as a result of the coaching characteristic and the use of the correct word that encouraged his workers. He was a job perfectionist with a strong leading character, as most of his workers indicated he was highly ambitious.

          He used the transformational leadership style which enhances the capability of a leader to bring about changes and inspire innovation on the employees, which was evident in his effort during the creation of the digital technology. The employees were motivated to come up with new ideas as he was leading in the nurturing ideas and challenging the valuable product ideas. The employees were engaged and were working at their best as a result of the need to satisfy the perfectionist nature of their ambitious boss.

          The leadership style of Steve jobs changed the organization as it produced quality computing devices which were highly-priced and satisfied the customer’s preference. The management style of Steve jobs resulted in the development of quality products as he was in control of all elements to the least such as the bus design for the company. He championed a strict culture of accountability which informed the company’s end to end responsibility of the company’s customer experience which was the basis of Apple’s success in the market. He never tried to trade-off costs or maximizing profits and when his Macintosh project was completed by his team, it had a quality assured design basis and it quickly gained the attention of the market based on its quality standards.

A video indicating the demanding nature of Jobs’ leadership, courtesy of Simon & Schuster © 2012.

Please note that all references will be posted at the end of the blog.

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John Sculley - Controversial, but Momentarily Effective

Jobs and Sculley on the cover of Financial Enterprise, Fall 1983.  The issue discussed their vision for the future of Apple.

          New leadership often faces a “hazing” from a pre-existing group.  This is a natural response to new leadership, one John Sculley experienced when he first arrived at Apple.  Steve Jobs recruited Sculley by asking him, “"Do you want to sell sugared water for the rest of your life? Or do you want to come with me and change the world?"(1982).

          Sculley came to Apple with two main goals: market the Apple brand where it could compete against IBM, and keep Steve Jobs under control. Jobs proved difficult for the new CEO to manage. He held ridiculously late meetings, sent out problematic memorandums, and generally disregarded other leadership at the company. Naturally, this made Sculley's job difficult. Due to failed projects and Jobs trying to oust Scully from his leadership role, the board of directors decided to make Sculley the president of Apple.

          In 1983, Sculley became the CEO of Apple.  For a time, he was able to ride the wave of previous success due to innovation by Jobs and Wozniak.  Sculley wanted to reach new customers at home and schools, while taking market share from IBM at the same time. He was putting more of an emphasis towards the customers needs and looking to refocus the products that were being offered to the public. Sculley had a focus approach, as the sales efforts of the company were targeted more towards customers who use their products on a daily basis.

          In the late 1980's, Sculley directed an restructuring of the business operations at Apple, focusing on products. The CEO decided to do a functional structure by having the division based on functional units(Zenger, 2015). Having product-based units had caused competition among these teams, and goals were not met due to lack of communication among the divisions. By instituting more functional organization, Sculley brought momentary stability to the swaying tech giant. Sculley focused on motivating employees by instituting a hospitable work environment.

          Sculley’s management style was more focused on current product line than profitability(Goyens, 1986). This kind of management led to development of successful products like the Macintosh, Powerbook, and an operating system called System 7. These products were great for Apple's image, and drove profits for the company.  Sculley’s management style did have a downfall, however.  He solely focused on current product line, which resulted in too many projects going on at the same time.  Naturally, this watered down the attention each project was receiving. In an interview with Forbes, Sculley explains that he made a lot of mistakes while with Apple(Zenger, 2015). Though moderately successful for a time, his mistakes eventually led to his departure in 1993.

          Sculley was able to raise Apple’s sales from $982 million to $7.9 billion(Weber, 1994). He was oversaw Apple's growth in a competitive industry, though arguable responsible for very little of this success. His management style had its ups and downs, and notable mistakes were made.  Sculley may not be Apple's most impressive former leader, but he was effective during his time there.

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Tim Cook - Effective Results From a New Approach

Photo courtesy of Joe Pugliese.

          Tim Cook, the current CEO of Apple and board of director member, has been at the forefront of Apple since 2011.  His predecessor was Steve Jobs, whom Cook replaced when Steve Jobs took a medical leave of absence.  Following the death of Steve Jobs later that year Tim Cook was officially named CEO of Apple (Apple, 2019).  During his time as CEO Cook has been credited with refining Apple’s supply system as well as leading updates to the numerous products within the Apple product line of iPhones, iPads, MAC desktops, and Apple Watch smart watches.  Additionally, Tim Cook has led Apple past the threshold of being the world’s first company to trade more than one trillion dollars in revenue.

          So how does a CEO take the reins from an iconic figurehead such as Steve Jobs and turn a company into a technical powerhouse in the ever changing and competitive tech industry?  Mr. Cook says that his leadership is focused on people, strategy, and execution (Fuqua School of Business, 2013).  He focuses on placing the proper people together in a collaborative environment and empowering them to take ownership of their programs and processes. Furthermore, he ensures that his team members know their role in the company by asking insightful and in-depth questions that ensure that all managers and team members can demonstrate they are aware of what’s happening within their own program (Investopedia, 2019).

          One other area that Tim Cook was able to optimize would be Apple’s supplier and manufacturing processes.  Mr. Cook was initially brought into Apply by his predecessor, Steve Jobs.  Apple’s competitive advantage in technology and electronics stems from its cohesive user experience.  To help facilitate this, Apple strictly maintained control of their supply chains to help build the multiple devices that Apple produces.  This led to supply lines that were overstocked and waiting for manufacturers to request the parts.  While this type of supply management is useful for predicted large releases, such as for a new product, it can be costly in terms of storage and distribution due to the unnecessary overhead.  

Apple CEO Tim Cook talk about the three things he focuses on each day. Cook spoke as part of his class reunion at Duke University's Fuqua School of Business.(www.fuqua.duke.edu)

Please note that all references will be posted at the end of the blog.

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In Conclusion: A Leader’s Impact

          Three very different leadership styles were displayed by Apple CEO's Jobs, Sculley, and Cook. Some were popular, while others were merely respected.  Interestingly, each proved effective during their time at the helm.  This is largely due to the fact that they were faced with three very different states of the company when they were made CEO.

           Undoubtedly the main reason for Apple's rise to fame, Steve Jobs is the most notable leader to have led the company.  Famously regarded as difficult to work for, Jobs was a hardcore perfectionist.  This quality led him to force his employees to work in circumstances that were sometimes unethical.  He allowed nothing less than perfection from his team, and would verbally berate employees who produced work that he considered sub-par.  While being the reason he was disliked by many, this perfectionism was also the key to Jobs' success.  He was a classic case of a High-Task, Low-Relationship” leader.

           Though he may not have been a popular leader to work for, Jobs was charismatic nonetheless.  He exhibited a set of traits and behaviors that, while not necessarily likable, created the impression that he was endowed with ineffable capabilities (Gulati, Mayo, Nohria, 2017).  While charismatic leaders are often considered likable and popular, Jobs was an exception to this unwritten rule.  Lack of popularity did not stop him from having a Midas touch. Every project or group he had control over was destined for success, at the cost of maximum stress on the whole team.

           While often credited with responsibility for Apple's success during his time as CEO, John Sculley merely rode the wave of the company's success as he was present at the right time.  When Jobs and Wozniak left, innovation slowed to a halt, and no amount of marketing expertise could keep the sales going.  His high focus on internal organization left a deficit in development, making him a textbook example of a “High-Relationship, Low-Task” leader.

           It would be unfair to say that Sculley didn't work hard, or that this style of leadership is ineffective.  After all, he did contribute to maintaining the wave of success spurned by Apple's early years of innovation.  Those that worked with Sculley widely regard him as someone they enjoyed working for.  He was known for treating his employees well, though he wasn't as charismatic or inspirational as Steve Jobs.

           Tim Cook had big shoes to fill as Jobs handed him the reigns of Apple.  Widely considered likable and inspirational, Cook is a solid example of a High-Relationship, High-Task leader.  Cook is known for making slow and well though-out strategic decisions.  A big reason for his popularity in comparison to Steve Jobs is his hands-off approach to management.  Less of a perfectionist, Cook trusts his team to take care of their respective duties.

A 2018 interview with Former Apple CEO John Sculley, who often publicly endorses the leadership style of  Current CEO Tim Cook.  Video courtesy of CNBC. 

            In conclusion, we can see that each of these leadership styles was effective for a time at Apple.  We can learn that each leadership style in the Relationship-Task chart can be effective in the correct environment.  They each have positive and negative impacts on the company, leading to varied levels of success.  Perhaps an effective leader must be capable of displaying each of these styles in answer to whatever situation they find themselves in.

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References

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