Apple’s Steve Jobs Problem

Apple has a problem with Steve Jobs.

The problem isn’t that investors, legal scholars, and company shareholders are charging that the company might have run afoul of securities regulations by not disclosing more about the severity of Steve Jobs’ medical condition, which climaxed in his having a liver transplant at a hospital in Memphis, Tennessee.

That, in and of itself, is a problem, but it’s not the big one.

Just to address the first issue, though — regarding how much Apple was legally required to divulge about Jobs’ imperiled health — opinions diverge. The upshot seems to be that public companies are not legally responsible to divulge private details of an executive’s health; but they are required to disclose “material” facts, which would comprise information and knowledge that investors would require before making a stock-related investment decision.

So, the argument can be reduced to the following question, as articulated by the AmLaw Daily blog:

Is Apple’s stature so dependent on Jobs that his health is, in effect, a material fact? Also at issue is whether the company knowingly played down the seriousness of Jobs’ health problems even though officials knew better, according to experts interviewed by the LAT (LA Times).

There is much dispute on this point, all of which leads to Apple’s primary Steve Jobs problem.

Simply put, the legend and mystique of Steve Jobs, once such an invaluable marketing asset to the company, now threatens at least a significant measure of its continued prosperity.

The business press often is guilty of what might be called “the great man syndrome.” Rather than focusing on complex factors — shifting market dynamics, technological advances and dislocations, functional or dysfunctional boards, and corporate cultures and processes — business journalists like to focus on the leader, the man or woman at the top of a company’s corporate hierarchy. In their coverage, reporters tend to give the CEO too much credit for a company’s successes and too much blame for its failures.

In Apple’s steady and seemingly inexorable ascent, Jobs seems to have gotten far too much credit for the company’s achievements, to the point where his legend has become practically impregnable and unassailable. To be fair, it wasn’t his doing. Apple’s public-relations and marketing mavens, shrewdly perceiving the business’ press weakness for the “great man” angle, played up Jobs for all he was worth in media adulation and effusive praise.

Now, though, the drawback of the “great man” strategy is coming back to haunt Apple.

To Apple’s credit, it is seeking, ever so gradually, to change the narrative. It is pointing out that others, including Chief Operating Officer Tim Cook, have picked up the slack in Jobs’ absence. Apple is emphasizing that Cook and others at the company are more than capable of keeping the company pointed in the right direction and moving forward, technologically and commercially. After years of putting Jobs front and centre as the guru at the core of its mythology, Apple is now emphasizing the company’s executive bench strength.

That’s absolutely necessary, and it’s something Apple’s must continue to do. At long last, Apple must portray itself as a successful, publicly listed technology company, not a cult of personality.

In companies, especially public ones, nobody is or should be irreplaceable. The show at Apple must go on, with or without Steve Jobs.

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