A Look at Crazy or Incompetent Corporate Executives
December 9th, 2010There are no doubt some people in our audience who feel that Steve Jobs is a little loose in the head, maybe not the sanest person on the planet, but is a positively brilliant visionary and businessperson. After all, who else in the tech industry, even Bill Gates, could have taken Apple in 1997, ruthlessly jettisoned underperforming products, righted the sinking ship, and, in the ensuing years, made it an industry leader?
That sure explains why Jobs keeps getting all those “CEO of the year” awards. Such accolades aren’t bestowed casually, and don’t forget that there are many financial and media people who have it in for Apple, and Jobs in particular. They can’t wait for the opportunity to put them down, for real or imagined indiscretions.
At the same time, so many corporations can undergo executive realignments, departures and arrivals, and yet sales and profits seem to follow the same path dictated by the state of the economy. Visions be damned. This quarter’s sales and those for the next are what matters. For the rest, just follow the industry trends, toss a bunch of products and services to the winds, and hope a few will catch a breeze.
When it comes to Microsoft, Steve Ballmer is most everyone’s irrational CEO. Of course, he’s a salesperson, not a designer or programmer. Put him before a PC to design the next version of Windows or Windows Phone 7 for that matter, and he wouldn’t have a clue what to do next. Ask him to parse and predict industry trends with reasonable accuracy, and he’d be way out of his element.
It’s fair to say Bill Gates didn’t take to the corporate visionary position very well either. Sure, he had the right idea early on to dominate the business PC market, but many of his predictions for our technology future have been all or mostly wrong.
Well, I suppose he had it somewhat right about the potential for tablet-based computers, but he envisioned something running Windows, and leveraging existing hardware. He wasn’t able to see beyond those narrow confines. But Apple did, which is why the iPad took off so fast, and the industry is engaged in a huge initiative to play catch up.
Whether the so-called iPad killers will bear fruit is an open question. Yes, I suppose the global rollout of the 7-inch Samsung Galaxy Tab was a reasonable success, but it’s hard to know if the initial demand will taper off. Reviews are mixed, and it may well be that there will be buyer’s remorse before long. Bear in mind that netbooks were also initially adopted rather quickly, but demand has stagnated, even as the products become less expensive. That’s because the PC industry didn’t spend much time building those designs, aside from simply finding ways to shrink the hardware, and use the cheapest components possible. It was all about being cheap, rather than providing meaningful value.
Many customers clearly saw through the deception.
Now when it comes to the lazy or clueless executive list, I’m wondering if you can’t add RIM CEO Mike Lazaridis, the result of his recent comments at an industry conference, Or at least according to a commentary from Daniel Eran Dilger, in his Roughly Drafted Magazine blog.
To be fair to RIM, the BlackBerry set the tone for the smartphone industry. Here you have an independent company beating the pants off not just industry giants as Microsoft, but Palm as well. The BlackBerry, and its original physical keyboard, became big business for the Canadian tech company. Even President Obama has opted to own one, though you wonder if an iPhone isn’t on his radar.
In any case, RIM is in a different place today. The iPhone has totally altered the smartphone landscape. Although tens of millions of units are still sold with RIM-style keyboards, many also support touch. The App Store and fancy consumer-level features may have even caught RIM flat-footed.
It’s not that RIM doesn’t want to compete, and isn’t trying. But when Lazaridis couldn’t justify performance problems with the BlackBerry Touch beyond saying you should for next year’s models with dual-core processors, you had to wonder where his head is at. Consider that loads of Android and iOS devices offer perfectly snappy interfaces without need of such powerful hardware. Isn’t a mobile OS designed to be efficient?
I expect even a Windows Phone 7 smartphone is fast enough.
But the real problem with Lazaridis is that he cannot convey a single coherent vision of the state of the mobile device industry and where he hopes to take RIM to remain relevant. He wasn’t able to comprehend the differences and similarities between a smartphone and a tablet. Worse, he had no compelling reason, not a one, to convince anyone to continue to buy RIM gadgets. Why bother?
In the real world, Android smartphones may be exceeding the iPhone in sales, but that’s for loads of models from different makers. When you compare the single product lines of two companies, Apple and RIM, the former is prospering, and RIM may be in danger of becoming an also-ran that will eventually find itself more and more irrelevant unless their executives can deliver a coherent vision for the future.
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You touch on a couple of things that should have greater explanation. Steve has taken credit for changes which Gil Amelio put into place, but was not around long enough to see come to fruition. He began treating Apple Computers, Inc. as a business, not a fun place to do whatever one wanted whether it benefited the company or not, and insisted that others do so as well. He began the process of rationalizing the product line and straightening out the supply line which frequently resulted in dealers without product and others with product they were unable to move before it became “dated”. He put a focus on making business decisions with a view to marketability and profitability. He was an adult in charge of an unruly mob of spoiled brats who did not like being told to “grow up” and work on the company’s business. Yes, Steve has made additional changes on top of what Gil started, but one should not forget his contributions.
You compare Apple’s iPhone sales to those of the Android market and then individual models from individual manufacturers. While interesting, this tends to overlook the simple fact that Android is a formidable competing OS which is gaining great acceptance. As Apple will not be licensing iOS it must stand alone against the mob of competitors who, by the way, have products for just about every imaginable cell service provider in the world. Apple does not. Plainly, Apple needs to have a broader mix of products for people who are using Verizon, T-Mobile and so on in the U.S. and around the world. The failure to do so has meant that potential sales, very substantial sales, have been lost and will continue to be lost until these shortcomings are addressed. The limited availability also limits the public’s perception of Apple’s products because, well, it does not matter…they are not available for them to purchase.
Steve, despite the many good things he has accomplished, has a long way to go in terms of “building the business”. When one compares his “vision” to that of other CEOs in the tech world, he is most assuredly different from most of them who specialize in the business and leave the task of deciding what “units” he will be selling to the gnomes. Some of them, at least in public, come across as someone you would not want to encounter in a dark alley.
You talk about “cheap” versus “usable value” which is always an interesting comparison. A product with a price which can reach more people has a different value than one which will never even be considered by a substantial segment of the other group. Each has its place, particularly in a market which is rapidly evolving and the product life cycle is a year (or less) and the typical purchaser’s expectations of the useful life of the product are not that great as there will be something “new and exciting” to catch their attention before long.
Seeing or predicting future trends or looking “over the horizon” is always a problematic. There are a lot of misses to go along with the hits even among the more successful seers. There is a bit of an advantage to those who are “first to market” in that they are, sometimes at least, able to shape the public perception of what the “next big thing” is or ought to be. Many of the rest of the businesses will simply be occupied copying whatever the “first to market” product might be…imitation being the sincerest form of flattery. I think it is in this area that Steve has been very fortunate, deciding when the technology to make the product has matured sufficiently and the costs of manufacturing the product have reached the point that it can be done profitably at a price point that the market will accept. It is here that Apple does have an advantage in that its customers are typically willing to pay something more than the customers of products which are brought to market only at the point where it is about to be “commoditized”. That allows Steve to set trends rather than merely follow them. That said there is a sense of what trends people will want to follow which sets Steve apart from most of the rest.
Cheers
[Edit] P.S. The new plug-in for the anti-spam test is much easier to use. Thank you!