Strategic Leadership & Innovation at Apple

We have discussed this further in section 3 (See page 12). We have also looked closely at other players in the industry and identified key features that each stakeholder must contend with if they are to continue to succeed. One of the more interesting points in this regard is how adaptable ACH of the organizations discussed within the case study has become and how individual leaders have embraced change management to deal with both internal and external forces that affect their individual businesses.

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However, our main focus has been to attempt to identify how leadership in Apple caused a lackluster period for the company between 1989-1997 [Herbaceous and Picaroon, p. 2] and how the leadership traits displayed by Steve Jobs helped the company to become one of the most admired in the world today. 4 Apple shares its market place with hundreds of competitors. The authors of Strategic Leadership and Innovation at Apple Inc, Professor Lois Herbaceous and Angelina Picaroon, focus on what they identify as Apple’s main competitors.

All of these companies were created and established by young innovators, and in most cases, these founders are still investing time and energy to lead their respective companies, despite substantial personal fortunes and various other interests. (See Figure 1). Fig 1: Analysis of Leaders – Apple and its competitors. Most of leaders of the companies discussed display the personality descriptors outlined in what is referred to as the “Big-five model of personality Truckee” [Hogan et al, 1994].

This model describes personality traits of leaders in five broad dimensions – they are: currency, agreeableness, conscientiousness, emotional stability and, perhaps most importantly in such a competitive environment, intellect. Also, 5 their status within their respective organizations, and indeed within the wider industry itself, means that they are in a position to display real power [Integer, 1983; Prefer, 1992] and authority [Bernard, 1952] to influence their followers.

However, over time, the industry itself has changed remarkably and many f Apple’s competitors, as outlined by Herbaceous and Picaroon, have restructured their businesses in line with an ever-changing competitive landscape and market environment. MM, for instance, sold its PC and laptop manufacturing business to Leno in 2005 – just two years later, Leno, along with HP, Dell and Acre, accounted for more than 50% of worldwide PC shipments. Instead of focusing on manufacturing, IBM concentrated its efforts on growing the global market for IT products and services.

To achieve its aim, the company sought to build a portfolio around “networked, modularized and embedded cosmologies, including coordinateness architecture, information on demand, overpopulation and open, modular systems for businesses of all [Herbaceous and Picaroon, p. 4] Microsoft, too, faced increased competition in its core business of developing operating systems [Herbaceous and Picaroon, p. 4], mainly from the shift in focus at MM, while Apple, HP, Sun Microsystems and Linux all developed operating systems to compete and challenge Microsoft’s dominance in the sector [Herbaceous and Picaroon, p. ]. HP and Dell also made moves to gain competitive advantage – HP acquired Compact in 2002 and subsequently came the world’s largest computer vendor, while Dell moved to “eliminate the middle man” by introducing “built to order” manufacturing and selling directly to consumers [Herbaceous and Picaroon, p 5]. The company later revised this model and began to distribute its products through the more conventional retail network. However, according to Professor Ron Dander “delivering great products is no longer sufficient for success… Rather, what matters is delivering great solutions. [Dander, 2012]. To that end, an interesting feature that has developed within the industry in recent years is the level of cooperation between imitators within the tech industry- 6 some of the company’s discussed in the case study use the technology or platforms of others. For example, in the report, Herbaceous and Picaroon point to Apple’s offering in 2003 of a (Microsoft) Windows compatible version of tunes and the company’s decision to “switch from Power processors made by IBM to Intel chips. ” [Herbaceous and Picaroon, p. 12].

Some commentators, though, have described the rivalry within the industry as men Great Tech War” [Major, 2011), a battle to lead the way in innovation within the sector. Major predicts that over the next two years, Apple, Amazon and Google will “increasingly collide in the markets for mobile phones and tablets, mobile papas, social networking and more. ” [Major, 2011]. In our view, the leaders of each company will have to display a number of traits to continue to compete but we feel that transformational leadership, above all, will be paramount to their individual success or failure.

In the short term, any change is likely to be incremental and as such, each company will have to evolve and adapt rather than completely revolutionist or reconstruct itself [Balloon and Halley, 2004]. However, as the industry continues o develop at pace, it is not inconceivable that each organization will experience transformational change and move to a radically different future state. With this in mind, it is essential that the respective leaders display an effective style of change management as developments in the industry dictates. Dungy and state, 19931 7 Since Apple was founded in 1977, innovation has always been at the very heart of the organization’s culture. From the creation of the mouse, a revolutionary graphical user interface to color graphics, and a networking and wireless Local Area Network, Apple’s approach, according to Herbaceous and Picaroon, “had en to make use of a personal computer as easy and intuitive as possible” and to “deliver computers that did what they promised. [Herbaceous and Picaroon, However, when Steve Jobs departed the company after his first spell in 1985, the company started to struggle in the market place and at one stage looked as if it would not survive. Indeed, Michael Dell, when asked what he would do with Apple if he was in Jobs’ position when he returned in 1 997, famously replied “I’d shut it down and give the money back to the shareholders. ” [Burrows & Grover, 2006]. After Jobs left the company in the mid-‘ass, none of the successive leaders (Sculls,

Spindled and Amelia) were able to replicate the strategic innovation and success that occurred during Jobs’ previous tenure. The period between 1985 and 1997 was characterized by outsourcing and cost cutting, as well as frequent changes in strategy – Spindled reversed some of the alliances introduced by Scullery (Herbaceous and Picaroon, p. 3), while Amelia entered into three corporate restructures (Herbaceous and Picaroon, p. 3). Jobs’ priority on his return 12 years later was to “revivalist Apple’s innovation capability” [Herbaceous and Picaroon, p. 6].

The sometimes conflicting strategies introduced by leaders fore Jobs’ return lead him to comment that “Apple had forgotten who Apple was. ” [Burrows, 2004]. After the tenures of Scullery, Spindled, Amelia came to an end and Jobs had returned as Apple’s CEO, it was no coincidence that Apple once again flourished and achieved 8 a high level of strategic innovation with spectacular results. The company subsequently launched the Imax, the pod and tunes and more recently, the pad. These products created completely new business for the company and opened doors to new markets.

With Jobs cited as “co-inventor” on 103 separate patents of Apple products up until 2008 [Liked, 2008], it is clear that his adhering has had a profound effect on strategic innovation at the company. Furthermore, we feel that Apple’s level of innovation could not have been achieved without multiple high quality Leader-Member Exchange Relationships, which are known to be positively correlated to innovative behavior (Janssen and van Preen, 2004). One can deduce that Jobs was a transformational leader who encouraged followers to: “… Ransacked their own self-interest for the sake of the organization or the team”, which resulted in a high level of creativity. ” [Bass, 1985]. Furthermore, Herbaceous and Picaroon claim that employees at Apple”… Want o be part of a company that believes that the best way to predict the future is to invent it” and that “employee pride stems from a corporate culture that fosters innovation. ” [Herbaceous and Picaroon, p. 14] This transformational leadership and corresponding follower behavior is clearly evident throughout corporate culture within Apple. The high praise as well as high criticism made people try harder, jump higher, and work later into the night. ” [Herbaceous and Picaroon, p. 15]. This reward and punishment style was embedded in Apple’s tradition and appears to have been a significant driver of employee performance under Jobs. Other examples of the transformational leadership behavior in Apple can be seen through intellectual stimulation; more specifically, Jobs challenged assumptions of his followers and others within the industry.

According to Bass [1985], leaders with this style encourage creativity, whilst also nurturing and developing followers who think independently. This is highlighted in the case study when Herbaceous and Picaroon refer to followers “meeting up in the hallways (and) calling each other in the middle 9 of the night to share a new idea or the solution to a long thought as unsolved problem. ” [Grossman, 2005]. This lends credence to Herbaceous and Packhorse’s assertion that Jobs believed that “a critical mass of talent makes existing products better and opens the door to entirely new products. [Herbaceous and Picaroon, p. 11]. Jobs also demonstrated idealism influence, an element within transformational leadership which Bass [1985] describes as “providing a role model for high ethical behavior, instilling pride, and gaining respect and trust. ” One of Jobs’ followers, Terry Momma, an industrial product designer who was involved in the design of the original Apple Macintosh computer said: “Even though Steve didn’t draw any f the lines, his ideas and inspiration make the design what it is. To be honest, we didn’t know what it meant for a computer to be friendly until Jobs told us. [Herbaceous and Picaroon, p. 16]. Conversely, however, it could be said that Jobs himself was unethical in his dealings with followers, especially employees. He certainly promotes his own vision and while some decisions may be seen as collaborative from the outside, Jobs, more often than not, promoted his own personal view. Grossman [2005] quotes Jobs talking about the Imax: ‘When we took it to the engineers, they said ‘Oh’. And they came up with 38 reasons. And I said ‘no, no, were doing this. ‘ And they said, ‘Well, why? ‘ And I said, ‘Because I’m the CEO and I think it can be done. And so they kind of begrudgingly did it. ” Of course, there are many leadership qualities displayed at Apple that have contributed to strategic innovation. As a charismatic leader, Jobs “emerged with a radical vision that offered a solution to a crisis and attracted followers who believed in the vision” [Yuk, p. 249] on his return to the company in 1997. 10 Many of his followers testify that Jobs had an ability to see opportunities that there failed to recognize – in his own words, Jobs said he could anticipate the wave of future technology, and most importantly, choose wisely the waves that Apple was going to surf. Herbaceous and Picaroon, p. 8]. Also, Jobs demonstrated impeccable timing. Herbaceous and Picaroon pay particular attention to his contention that “the time had passed for the introduction of the PDA as soon, mobile phones would carry that capability. ” [Herbaceous and Picaroon, p. 101 There is no denying that his vision and timing were key charismatic leadership traits. 11 Part Three Critically Assess Steve Jobs Strategic Leader at Apple “One traditional management philosophy that’s taught in many business schools is diversification.

Well, that’s not us. We are the intenseness school. ” (Burrows, 2007) Figure 2 – The Leadership Traits of Steve Jobs as outlined in Professor Herbaceous’ and Professor Packhorse’s case study – Strategic Leadership and Innovation at Apple Inc. Steve Jobs displayed a strong internal locus of control, believing that he could influence his own destiny, and the performance of the organization. [Yuk, p. 54]. “Apple’s DNA has always been to democratic technology. If you make something great, then everyone will want it. [Herbaceous and Picaroon, p. 7].

He is often referred to as a visionary and unconventional leader, but many of the traits illustrated in Figure 2 above are also attributed to him. Many who have studied and critiqued his leadership style believe that he brought people – staff, investors and customers – along with him and made them buy into his beliefs on how products should be created, how messages should be marketed, and how business should be done. There is little to doubt his ability to generate revenues – between 2003 and 2008, sales of Apple products tripled to $ban and profits increased to $3. N, up from $mm [Herbaceous and Picaroon, p. 2]. However, despite Jobs’ innate ability to create innovative mass consumer products, he demonstrated many leadership styles during his tenure. As discussed in section two, he displayed many attributes of a charismatic leader; however, some of his actions and attitudes to followers tended to lean towards directional, and reward and punishment styles of leadership. When he left the company in 1 985, he was considered “a threat” and was “accused of trying to ‘play manager’ and control areas over which he had no jurisdiction.

He was noninsured a temperamental micromanage whose insistence on total control and stylish innovation had doomed his company to irrelevance. ” [Herbaceous and Picaroon, p. 14]. Ironically, with these very same traits, Jobs is now hailed as one of the greatest Coos of his generation. Furthermore, Jobs’ social exchanges with followers were characterized by direct expressions of approval or disapproval. Some followers have stated that fear of a reprimand by Jobs was a driving force in increasing their performance. Working for Steve was a terrifying and addictive experience. He would tell you that your org, your ideas, and sometimes your existence, were worthless right in front of everyone. Watching him crucify someone scared you into working incredibly long hours… Working for Steve was also ecstasy. Once in a while he would tell you that you were great and that made it all worth it. ” [Herbaceous and Picaroon, p. 14] In the case study, there is also evidence that Jobs exhibited some elements of Robert House’s Path-Goal Theory of Leadership.

He was certainly participative and achievement-oriented: “The reason a lot of us are at Apple is to make the best computers in the world and make the best software in the world. We know that we’ve 13 got some stuff that is the best right now but it can be so much better… That’s what’s driving Us… And we’ll sleep well when we do that. ” [Steve Jobs, Herbaceous and Picaroon, p. 8]. Participative leadership can take many different forms and a variety of different decision procedures may be used to involve other people in making decisions (Yuk, 2002).

In the case of Apple, the decision-making process can be viewed as consultative – opinions and ideas are proactively canvassed and encouraged from employees but ultimately the final decision was made lone after considering the various suggestions and concerns of followers. However, Herbaceous and Picaroon find that despite the fact that Jobs made many decisions alone, innovations that Apple has introduced were based on intellectual stimulation resulting from “deep collaboration”, “cross pollination” or “concurrent engineering’. [Herbaceous and Picaroon, p. 8].

Moreover, the level of innovation at Apple could not have been achieved without multiple high quality Leader-Member Exchange Relationships, which are known to be positively correlated to innovative behavior. Janssen and van Preen, 2004]. Jobs also understood the importance of flexible and adaptive leadership and was capable of modifying his leadership style to a particular situation. He appears to have had a very high sense of self-awareness – during his tenure as CEO of Apple, he was known to insist on total control, and was a “demanding and impulsive perfectionist” [Herbaceous and Picaroon, p. 0]. This is in stark contrast to his behavior at Paxar, where he took a hands off approach and was considered a “benevolent benefactor” by employees of the company. [Herbaceous and Picaroon, p. 15]. 14 Steve Jobs, in our view, can be considered an anomaly – he does not, we can conclude, fully conform to any conventional theory of leadership. Throughout his tenure at Apple, he has displayed the attributes of a wide range of leadership styles.

A typical example of this is displayed in House’s Path-Goal Theory where Jobs clearly exhibits a high level of participative and achievement- oriented behaviors. However, there is little evidence of supportive leadership traits to fit the theory alongside his leadership style. Jobs’ ability to revive the compass financial fortunes since his return in 1997 also meant that he had to demonstrate attributes of directive leadership. Herbaceous and Picaroon refer to Apple as a company of indiscipline due to its relaxed management style [Herbaceous and Picaroon p. 5] – the authors credit Jobs with introducing a level of authority that transformed the company into a “tightly controlled and integrated machine. ” By guiding and structuring his follower’s activities, as well as clarifying expectations and work methods, Jobs created a sense of cohesion and heightened the organization’s effectiveness. Also, it can be argued that Jobs created a culture of innovation and creativity thin the company and as such, the passion and drive to invent and create that has been instilled within followers could be a substitute in replacement of the leader himself.