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Haunted Empire

The “Stupid manager theory of company failure” (and its corollary, the “Smart manager theory of company success”[1]) remains the most popular, perhaps even the most universally accepted theory of management. Book after book, thoughtful article after article alludes to this theory and whenever a company is perceived to be under-performing, all fingers point to the leadership with demands for blood letting.

This is not a new phenomenon. When catastrophe strikes, as a thoughtful species, we have always asked for leaders to be sacrificed. In Europe during the Iron age leaders were sacrificed when crops failed. In South and Central America leaders were ceremonially tortured for similar reasons.

Of course most crop failures were due to weather phenomena and the anointed leadership had nothing to do with these causes. Nevertheless ancient correlation analysis would have revealed the pattern that good leadership meant good weather and bad leadership meant bad weather.

There was a balance to the downside however. When times were good the leadership enjoyed luxuries and praise. This was the essential deal societies made: we’ll keep you in riches and allow you to be idle as long as times are good but ritualistically slaughter you when times are bad. We’ll declare you “chief magical officer” and place all our faith in you. But, of course, if you fail, we will will be vengeful.

And so it goes in today’s corporate world. I’ve often said that corporate governance is medieval, or pre-scientific in its approach to understanding causality. That may be too generous. As far as the reward/punishment system (also known as Human Resources) it’s probably pre-neolithic. The luxuries and extravagance which we heap upon the leader provide abundant evidence. Leaders insist on these ironic “pay packages” and boards approve them because they know they can and will be ritualistically sacrificed if and when the mobs turn against them.

A manager would be a fool to accept even generous pay given the risk, actually near certainty, of ritualistic slaughter. They demand and are unquestionably given absurd pay that has no relationship to performance. Such pay has no relationship to performance because it isn’t designed to reward performance but to account for the risk of arbitrary and very public sacrifice. Boards (and hence shareholders) are deliberately hiring a scapegoat for sins as yet unknown. Luxury and violence are thus finely balanced in what is called “Executive Search”.

What allowed civilized society (i.e. that outside of corporations and politics) to move beyond this has been an understanding that our destinies are not necessarily tied to individuals’ actions. We don’t need to adulate/prostrate/dismember/defenestrate someone if our car does or does not work. People have begun to understand that there are rules about nature beyond the control of known or unknown agents. Complex systems like factories, farm  irrigation and even air traffic can be made predictably reliable without magic.

Yet we are not willing to suggest that such rules apply to social systems. It’s not just laymen who abstain. Historians and social scientists are mortified at the notion that causal statements could ever be made about society.

Causal statements (beyond good/bad people => good/bad outcomes) are  considered non-credible in the very institutions which harness laws of nature in order to create value. Consider the recent instance of corporate defenestration  directed at Tim Cook. He was accused of failure of magic. I say this because he replaced a previous magician with many powers and the anger at his inability to match this power was at a fever pitch in 2012 and 2013. A book was even written about this failure and titled with the appropriate metaphor (See blog title).

I know what you’re saying: the sad fantasists which subscribe to these theories are wrong. Their theory is disproven almost every day. Even though we reward them as if they did, managers do not possess magical powers.

But the author of Haunted Empire was surely well rewarded for her accusations. We rewarded her because our search for answers is otherwise unmet. What alternatives do we have?

Think of it this way: What did ancient people have other than the Anointment/Sacrifice theory of good management? It persisted for millennia. The lack of alternatives means today we still believe as they did.

Notes:
  1. As well as the “Smart/Stupid leader theory of national success/failure” []
  • EW Parris

    Tech journalists have found a much better position than corporate leaders, a career that rewards success and never punishes anyone for inaccuracy. The publisher isn’t looking for a rebate for “Haunted Empire” and Yukari Iwatani Kane will have a long career of writing ahead of her… despite Apple’s ongoing health.

    • hannahjs

      Such writers deserve to be pilloried! But because they’ve somehow got a free pass, they grew increasingly reckless, abandoning the principles of journalism and becoming meme-spreaders instead, little better than space fillers for junk websites. Instead of medieval justice for these characters, we get postmodern indifference. It just ain’t right.

      • art hackett

        I suspect most of that crap is commissioned to manipulate markets. We know that stuff is toxic, ludicrous waste, but I continue to be appalled at how apparently intelligent people take whatever the latest Apple bashing that appears in the “news” as fact.
        Actually most stories in the “news” are just that, stories. You’ll find that virtually any item there is wrong or misleading if you’re aware of the facts (I’ve worked in broadcasting for over 30 years, a lot of it news related or unfortunately actually in news). It used to be that journos were just lazy or ignorant, but more and more it’s becoming manipulation by and for powerful people (I won’t use names, but you can probably guess).

      • vincent_rice

        After 30 years of ‘news-junkydom’ I find the disconnect between News and actuality of the present era extremely disturbing – it is however entirely possible that we are simply becoming more aware of a disconnect that has existed since the beginning of civilisation.

  • http://www.robgrady.com robgrady

    The Halo Effect by Phil Rosenweig http://www.amazon.com/The-Halo-Effect-Business-Delusions/dp/1476784035 does a great job of walking the reader/listener through the inaccurate attributions of company performance.

    • Ray

      And this is why “smart” managers and executives look for high-growth companies, or even better, high-growth industries (where even mediocre companies do well). They know in the eyes of others they will appear somewhat responsible for the company’s success, even if they have nothing to do with it.

  • mieswall

    Perhaps the issue with Apple (just now starting to fade) could precisely be that Jobs was perceived beyond this paradigm. Not as a disposable leader, but, following the analogy, almost like a god in the company’s domain. In that sense, the state of mind of analysts regarding Apple is even more atavic than the suggestions of your smart text.

  • airmanchairman

    Our destinies are not necessarily tied to the actions of individuals?

    If this were true, then the innovations and breakthrough processes of the last century, particularly in technology, would have come from the Departments (or Ministries) of Science and Technology, with their thousands of highly-paid government functionaries running around measuring shadows and doing just enough to justify their fat salaries, and not from some geeky visionaries in a garage like Gates and Allen, Jobs and Wozniak, Ellison and his compadres, Hewlett and Packard, the list is endless of people with minimal or no state aid have defied the odds and shaped our lives and societal trajectories.

    The aura of a leader radiates downwards on his/her followers and functionaries, be it a nation or a corporation FOR WEAL OR WOE, and ever shall it be so. This, for me at least, is why leadership is the single critical factor occupying the thoughts of societies far and near. It is the reason why even democracy has rarely ever succeeded in putting any nations’ most enlightened or capable individuals in deserved leadership positions.

    Until such a time as the “secret sauce” that makes one person visionary and the other an utter fool is isolated and is applied to bringing an end to the feudalistic system of privilege and presumption we call “modern civilisation”, I say long live the cult of the enlightened individuals, with their time-proven faculties of compassion and vision, qualities the rest of the human herd have collectively and repeatedly failed to emulate.

    • http://www.asymco.com Horace Dediu

      All hail the radiant leader!

      • airmanchairman

        🙂

        “Great machines will make big decisions, programmed by fellers with compassion and vision. We’ll be clean when their work is done, we’ll be eternally free yes and eternally young” – Donald Fagan, in his 80’s pop hit “International Geophysical Year 3000”

    • Sacto_Joe

      Yeah. Except Hitler was one as well. It’s very much a two-edged sword. Bottom line: There’s no substitute for an enlightened and empowered population.

      • airmanchairman

        FOR WEAL OR WOE… The aura of the enlightened enabler radiates downwards harmoniously (for the most part) while that of the monstrous leader pulverises down mercilessly and ultimately, destructively.

        And Hitler is not alone in this, oh no, not in the current corporate, religious and political climate…

    • http://beautyandthesoftware.blogspot.com/ Adrian Constantin

      Well… Some of the most important discoveries of the 20th century came from state financed research done in European and US universities. Quantum mechanics, for examples is a field with contributors from all around the world, spread over several generations. Nuclear power is another example where heavy financing from the state during the war helped enormously in the development of the field. While you have the occasional Newtons, Ramon y Cajals or Einsteins, whose contributions to science are exceptionally high, innovation and discoveries owe to the successes and failures of many individuals, some more famous than others.

      The obsession with efficiency, the impulse to filter out failure, without understanding that failure is a major part of success, leads to impressive cost reductions, but not to innovations. I can only imagine the early hunter-gatherers making fun of the first agriculture attempts, because you have to work and tend to the crop for several months before harvesting anything you can eat. Yet we seem to have learned nothing and still cry that all the work done before harvesting is a waste of money.

      From a more recent historical perspective, I think it was in one of Horace’s Perspective presentations where I have seen that the amount of money that the state invested in Silicon Valley, through DARPA, dwarfs all the private investment. Yet we continue to believe that the Silicon Valley magic has nothing to do with state funding.

      Btw, the fastest supercomputer today is in China, built with, you guessed it, state money. It may be true what they say: at some point quantity becomes quality.

      • berult

        A distillate. A context, utter systemic complexity, reduced to its very essence through the sweeping transparency of a lone cephalic iteration. A distillate incarnate.

        From Socrates, on to Shakespeare, on to Mozart, on to Einstein, onward to Jobs, on to…

        …may you…, …may I…, …Mayday…?

  • Hubert Yu

    Jobs handpicked Cook to be his successor, if we believe his judgment about products, why do we doubt him about Cook?

    • http://www.isophist.com/ Emilio Orione

      Jobs was not a wizard, he thought Cook was the best joice for apple at the time but times change so his judgement is not in question.
      The absurd doubt was about Cook results not Jobs decision in that precise moment.

      • airmanchairman

        [Allegedly] the late Phillip Don Estridge, like Cook an IBM’er (tragically lost in an air crash while on IBM business) was Steve Jobs’ early choice for Apple CEO ahead of Jon Scully, but he turned down the job for an IBM role that saw him lead the development of the all-conquering IBM PC. Jobs felt he had the requisite balance of industry know-how and management chops.

        In successfully head-hunting Cook, Jobs must have felt he’d come closest to hiring a reincarnated Estridge. He was wrong, apparently, Cook’s probably even better. Time will tell…

      • art hackett

        Hasn’t time already shown (18 years) that Cook is one of the pillars of Apple? His amazing organisational, and probably negotiating skills combined with the other vp’s (past and current) have grown Apple to its present stature. Jobs was accused of and credited with many things, but the choice of management must be one of his greatest achievements.
        This is somewhat contrary to Horace’s piece, but Apple still appears to be an exceptional entity, especially compared to the rest.

      • Walt French

        There’s not a whisper of evidence that Cook is anything short of the best.

        But along the lines of what Horace has said, there are essentially zero dummies that make it to the top. And nobody is saying Cook has a genius-level IQ, or exceptional training that few others get. He has the good fortune to be the front man for an exceptionally well-tuned organization, one that apparently his personal beliefs, interests and skills are a fine match for.

        Yes, he has helped create the current form of this organization, bears most of the responsibility/credit for the hires and fires, etc. But there’s an innovation process here, with Apple Inc as its sole SKU; in turn, Apple is an innovation engine that creates a few products—like an iceberg, those few products peeking out of the water belie the bulk of machinery that transforms inventive ideas into innovative products.

        Obviously, other companies have bright and talented people, oftentimes very well-led. I take it that the MOST important difference is the Jobsian focus on getting a few things exactly right, rather than having a few thousand SKUs so carrier X gets a proprietary messaging app replacing the standard one in Territory X. Better insights, below the level of the CEO, would be very welcome.

      • art hackett

        Responsibility for hires/fires…..that reminds me of the john Browett episode. We all suspected that would be a train wreck and watched it unfold. I have no idea how that could happen, but it was very scary and a bad, bad sign. Hopefully those advisers are gone and they are on a saner path.
        Maybe there are better insights below Tim, but aren’t the guys reporting to him setting the agenda? Tim never claimed to be the visionary, just the guy who gets stuff done and enables the future, all without the narcissism and histrionics of many “leaders”.

      • DesDizzy

        Bro wet was a good example of what is right with Apple. They hired a bright guy with international experience and an excellent cv. It didn’t work out they parted company quickly and hired somebody even better with international experience and a stellar cv

      • Walt French

        “He was wrong, apparently: Cook’s probably even better.”

        FTFY.

        And your contrast nicely expands a previous Horacular pronouncement: knowing a company’s resources, values and processes lets you understand a company’s success, more than understanding its individuals (unless knowing those individuals helps you better understand those aspects of a company).

      • rational2

        It’s fair to say “Time already told…”. What Cook achieved the last two years will go down in history as a perfect follow up to Steve Jobs’ performance.

      • Hubert Yu

        I actually thought Jobs was a “wizard” in the sense that he foresee the “Cook results” we are now witnessing in Apple’s earnings.

      • http://www.isophist.com/ Emilio Orione

        My point is that there are not superheroes and that nobody con foresee the future of complex systems. Jobs rightly thought the Cook had the Apple culture and gave Ive the design control to balance Cook’s industrial view, but that is just an hopeful start only practice can prove right.
        Jobs made many mistakes, Scully but also mobile me etc…, and Cook made mistakes, but he and Cook have proved to be good leaders and to be able to recover, that’s the best you can do.

  • http://www.isophist.com/ Emilio Orione

    Facts first: 1) complex systems can be managed -> good or bad management exist.
    2) We are a social species that follow leaders -> alpha element are in every group of people and chemical modifications in our metabolism are related with our role in the group, being leaders or followers cause different levels of hormones.
    So leadership and management are clue to the success of a complex system and since no book of rule to follow is sufficient to guarantee to be a leader, since it is a complex system in itself, it is a form of art to really be a good leader.
    The process of try and fail is required to summon good artists, good leaders that’s the only way, but when you find a leader you should stay with him in good and bad times.

    • Walt French

      Another: a football team has about 50% chance of winning if it’s cohesively organized and led. But a leaderless team, where every player tries to exploit his own skill or impose it on everybody else, would collapse near-instantly.

      My leader, right or wrong. Still, my leader.

  • http://www.isophist.com/ Emilio Orione

    Horace, great article, you are so right and yet the first glimpse of declining growth for Apple will start the same based on fried air judgments all over again.

  • http://www.magpi.com/ Joel Selanikio

    This would make sense if literally being physically tortured or killed back in the day was similar to the “ritualistic slaughter” of a CEO today (ie, enduring some bad meetings and press, then leaving his/her position with their millions in the bank, and relaxing on the golf course until the next gig).

    • Sacto_Joe

      To me it’s clear that this is a metaphor and not the real point, which is that leadership, while important, isn’t everything. IMHO, that’s especially true with Apple. I think far more important to Apple’s success has been what might be called the culture. When Steve Jobs came back, the culture was still alive, albeit in great need of nurture. Steve was eminently well suited to both recognize it and nurture it back to full health. And the present leadership have been steeped in it as well.

      Indeed, it is that unique Apple culture which is so hard for other companies to emulate, and the reason Apple continues to eat their lunch. I believe that is what Horace is alluding to with his excellent metaphor.

      • http://twitter.com/matthewwanderer Matthew

        When contemplating the appeal of Apple’s products, and therefore its success, I come back to Jobs’s passion for ensuring that good design is applied to all aspects of an Apple product, even to aspects of a product that few people ever see.

        This permeation of excellence and consideration might be the distillation of Apple’s culture.

      • art hackett

        Have you looked inside the laptops or desktops? Even the circuit boards are pretty, not to mention the shells and boards of iOS thingies, especially compared to most other tech products.

      • marcoselmalo

        Pretty circuit boards? You sir, are a nerd! Haha! Reminds me of the story about Steve Jobs wanting pretty board layouts. Go look at folklore.org if you want to know the story.

  • MattF

    One approach to delving into the mysteries of corporate leadership is to look at what corporate leaders actually do. They make ritual incantations, they enforce the rules of a particular corporate culture, they worship (or, sometimes, curse) their ancestors, they seek to appease Wall Street. They are clearly a priestly caste.

    • Sacto_Joe

      The magic word is “culture”. The present leadership is steeped in the Apple culture. Hence, they don’t so much enforce it as protect and nurture it. Which is in itself part of the culture.

      • Eric Gen

        Apple’s competitors:

        “But what do we have to do to have our culture appear to be like Apple’s?”

        “Isn’t there some place we can buy some of this ‘culture’ stuff and put a nice layer of it on our company?”

  • DesDizzy

    Interesting article. However, I agree with Emilio, good and bad leaders exist. History suggests that the purpose of the leader is to make the big calls i.e. strategy, see Moses, Churchill, Queen Elizabeth, Abraham Lincoln, Robert Kennedy, Hitler, Stalin etc. The rewards for success and failure are large, should they not be?

    The purpose of management is execution. The purpose of organisations is deliver. Success is delivered when all deliver and conversely failure is delivered when delivery is sub-optimal.

    To suggest that leadership does not matter is clearly stupid and presumably not what is intended. However, the tenor of the article, other than being thought provoking, does not clearly suggest what the intention of the article is.

    • http://www.isophist.com/ Emilio Orione

      There are good and bad leaders but there are not superheroes.
      A good leader can fail sometime, a bad leader fails more often.
      I think Horace wanted to say that we don’t take the time to evaluate the leadership, we just victimize a single failure or even the lack of greater success.
      You should stick with good leaders even when they fail since leaders are a scarce resource, and leadership in a group can not be easily obtained.

      • DesDizzy

        I hear what you’re saying and don’t get me wrong, I am a big fan of HD. However, I thought the tone of the piece was a bit “fuzzy” for want of a better term. From the insights gained from many of the contributors on this blog I would imagine that many have worked at respectable levels in large companies. I would therefore imagine that more “concrete” observations re some of the benefits/dis-benefits of management theory/practice could be garnered.

        Now whether managers are “super-hero” or “super-villain”, is a bit of a silly discussion. Human beings and most other species in the animal kingdom respond to/want/need leadership. That’s our nature, as suggested by history. Is that going to change any time soon? Probably not. Should it change any time soon? Probably not.

        Should leaders be vilified when they get it wrong, maybe they should, but this would depend upon the reason, I believe. A proper debate should be looking at the parameters where praise/villification are appropriate, this I feel should be the aim of management science. The same goes for executive pay. Executives at Apple are probably underpaid and executives at Oracle, overpaid. However, management science should be asking the questions, why is this so and what are the appropriate parameters.

        As a risk professional at group functions level, I always feel that executives should be paid less when the economy is doing well and more when the economy is doing badly. But this flies in the face of conventional wisdom. But logical analysis suggests if achievement and not luck is being rewarded this should be the case.

      • Mark

        I would say a good leader takes advantage of the circumstances afforded by the time and place, and a bad leader doesn’t. But it isn’t clear a good leader could make a company prosper when there are few circumstances to take advantage of for his company.

        Have you ever though about what would happen if Jobs stayed at Apple? Yeah, I know he learned beaucoup at Next and it was key, and he learned from failure and that was key. But if we can put that aside, what revolutionary thing could he have done at Apple between the mid 80’s and mid 90’s? At best if he could have done the same thing as at Next within Apple, I think extremely unlikely, but even if so we’re talking about a period of stagnation. The silicon simply wasn’t there to make revolutionary products. Only incrementally better ones against the MS juggernaut. When he was gone Moore’s law had a decade to ramp, and processors got smaller and more power efficient.

        So at the end of the day, Jobs just saw the opportunities and possibilities available to him that other leaders would not have. Without these opportunities that advancing tech had afforded him, and without the tailwind of the stupidity of his competitors, Jobs isn’t a hero at Apple the second time around and he probably doesn’t even give it a try. From the beginning of his return he talk about the opportunities out there that Apple could exploit. And he had the doggedness and energy to bring these plans to fruition in the face of a massive wall of skeptics that didn’t believe any of it was possible.

        So I’m in agreement with Horace’s analysis as I understand it. Leadership matters, but the truth is that most of the time it doesn’t matter nearly as much as people think. And in cases of failure, often the best of leaders could not have avoided the pitfalls of having been dealt a bad set of cards. The opposite view is that a leader could make bricks out of straw. The reality is something different.

      • http://www.isophist.com/ Emilio Orione

        “Jobs just saw the opportunities and possibilities available to him that other leaders would not have. Without these opportunities that advancing tech had afforded him, and without the tailwind of the stupidity of his competitors”
        So there are not super hero but there indeed super stupid: other leaders would not have??? stupidity of hid competitors?????????
        The success of Apple is not due to stupidity of the rest of the world, that’s nonsense.
        Take the iPod, the second success of Jobs. It was not a novelty, there were plenty of mp3 players in the market.
        The first version was way limited, it required a Mac for everything. And yet the Apple’s mp3 player has been executed so well that it is a market leader still today.
        This was not stupidity of the others or exploiting a possibility no one else saw, everyone was making mp3 players but the other teams were not inspired by a great purpose they just wanted to make money selling something.
        It is a matter of leadership to give purpose and inspiration to your group whatever you are doing, money is the result nothing more.
        Leadership is motivation, is inspiration, is the difference between great products and something.

  • http://twitter.com/matthewwanderer Matthew

    There is a profound irony in much of the Tim Cook leadership witch hunt. TC was – and remains – the operational “magic” behind Apple’s success, long before he took the position of CEO.

    Where’s the magic now?

    Apple is trending very close to sourcing, manufacturing, distributing, selling, and finally, supporting one million iPhones per day. Scoreboard, “law of large numbers” critics.

  • stefnagel

    René Girard worked this idea of scapegoating into his comprehensive idea: mimetic desire.

    Wiki: Girard calls desire “metaphysical” in the measure that, as soon as a desire is something more than a simple need or appetite, “all desire is a desire to be,” it is an aspiration, the dream of a fullness attributed to the mediator.

    This struggle toward authenticity, our “meta” aspirations, and our use of mediating figures leads to violence and victims: scapegoating. Says much about our irrationale attitudes regarding companies, stocks, and managers, the irrationality that Horace has been observing.

    • Mark

      Sweet reference. I think Girard’s most fundamental idea was that desire was mimetic, in other words imitative. I think he is certainly right, and the fundamental desire for us to be autonomous accounts for the denial that desire is in any way caused by others in our social world.

      But also, think about how today’s CEO’s are celebrities too, whether they wish to be or not. This too intensifies the tendency to scapegoating that Horace mentions and you highlight by way of Girard. It’s a whole lot of pressure. I think one of Job’s contributions to Apple was to steel their managers and board from paying attention to anyone but their customers actual needs as demonstrated in reality, as opposed to anyone’s (including customers) idealistic abstract wishes. The latter is the subject of techno-journalists and busybodies more interested in the politics of business and tech than in actually using products to do something.

      • stefnagel

        Nicely said.

      • Mark

        Well, continuing on the Gerard theme, Jobs, and Apple’s history of continuous criticism itself from the foolish and their return from the brink to world prominence, exposed the folly of trying to please others. 98% of the time it would have ruined the company. Once you realize that isn’t the goal the battle is pretty much won. Once you realize it is part of the business goal itself to ignore uninformed opinion, it no longer takes the strength it does for those who think they’re supposed to listen even if they can see 98% is foolish advice. It probably does take a few friends and colleagues though, and the Apple management team and board serves that function nicely.

      • stefnagel

        I thought I was moving into Girard’s thinking, in his Violence and the Sacred. Wiki: “He becomes sacred, that is to say the bearer of the prodigious power of defusing the crisis and bringing peace back. Girard believes this to be the genesis of archaic religion…” What’s more archaic spiritually than business … unless politics?

      • Mark

        I can’t say I really have digested or understood Girard fully, and maybe never will since at some point I become distrustful of speculation. So I always go back to the most general things. At the highest level of generality, I take it that a true religion would have as its goal the destruction of the sacred/secular distinction in the minds of its best adherents. At least if God created the world and it was good. But I wouldn’t look at this destruction as “less Lord and less flies”. It could just as well be “more Lord and more flies” for a given individual if the goal of life isn’t tranquility. So I would say it was always a mistake to see business as foreign to religion. It is easier to see that in the modern world (except for Marxist and romantic zealots), but it was always a mistake.

        But certainly yes, Cook is moving Apple out of mythos. What Jobs created and Apple has done, and Cook now leads, isn’t really that mysterious. I’ve been following Apple since learning and selling their products in the late 80’s. Jobs was a genius in a sense, but much of that genius, as always, was simply sticking doggedly to some simple truths that wise people know throughout the world that run their own businesses.

        I think I could name the generic principles that have made Apple great, that I could see clear back in the 80’s, and most people would nod their heads as if I’d said something obvious. The genius of Jobs as was in ignoring the “things are different now” and you have to run Apple like every other business now mantra. You know, the other businesses that on their way to failing. Probably also the idea that when computers are involved the normal rules don’t apply as if we’re dealing with magic. Apple is run more like a startup, as Jobs himself said, and the key to their success is to be able to do what works instead of becoming corrupted by MBAs who have been taught that quality doesn’t matter and common sense rules don’t apply to corporations. Apple is a management revolution. Horace has said this and I think books have been written about it. People don’t see it because they believe the myth. It will be interesting to see what happens after the myth erodes over time. As an investor I wonder what it will do to the stock. Or maybe another myth will take its place. Perhaps the truth is too boring. It will be interesting to watch.

      • stefnagel

        All good. “Less Lord. Less flies.” My reference was Golding’s Lord of the Flies, not religion generally. It’s an exemplary story about scapegoating and the archaic mentality.

        Apple is in stage 3: Stage 1 orgs are stuck in gladiatorial games involving scapegoating and empty aspirations. In stage 2, Apple transcends this mess ‘cus its leader Jobs is also its reborn hero, unassailable in pursuing his mission. It’s a stage most orgs can only dream of. Stage 3 is all about Cook transcending the whole victim/hero mythos in favor of an ethos based on a worthy and durable mission. Only Apple is stage 3 among big orgs.

      • Mark

        All great insights. True enough that Cook is at the forefront of defining what a corporation should be. As it was with GM & IBM. A controversialist might say what is good for Apple is good for the country. 🙂

      • stefnagel

        Hope that’s so.

  • Chaitanya

    There’s a problem with your reasoning. A CEO is not paid big bucks because of the risks involved; it is for the individual’s (real or perceived) abilities. We are not all equal. A Tim Cook or a Bill Gates or a Elon Musk brings something to the table that is extremely rare, special, and irreplacable. There individuals are thus rewarded accordingly. And, this is why your equaling modern CEOs with medieval leaders also falls apart. Those ancient leaders had no control over the weather. Tim Cook’s decisions do control Apple’s fate. Steve Jobs wasn’t the Chief Magician, he made informed decisions, using his intellect and abilities.

    It is only fair that these extremely capable individuals are rewarded extemely well; and suffer extreme consequences when they fail.

    • Kizedek

      And it could be said that there is a problem with your reasoning, too. Qualitative vs Quantitative.

      Horace can make a qualitative comparison between leaders over the ages. Qualitatively, a leader has responsibility for his people and their direction, whether he can quantitatively control various random factors or not, whatever they may be, then or now. The “job to be done” by a leader is still basically the same universal job.

      There are always factors outside a leader’s control. Could have been forces of nature then, could be market forces now. Sure, we know more things now, quantitatively, including things about the weather. But Horace is pointing out the similarity of the qualitative “scapegoat factor”. Before: literally sacrificed. Today: let go with several hundred millions. Horace points out this absurd contrast in outcome for a very similar, common state of affairs: “something” went wrong, whether the leader could “do something” about it or not.

      • DesDizzy

        Well put

  • JohnDoey

    Business-wise, this is very true. And Haunted Empire was always a crock. But product-wise, the non-Jobs products have been an enormous disappointment to me.

    Yes, The Shiny is better than ever (even better tolerances, even smaller, even faster, even better displays) but the software — which in my opinion is 90% of the value of the product — has become Windows/Android with better security. That is still better than Windows/Android, but it’s not exactly fulfilling The Dream is it? Steve Jobs said he came back to Apple because he didn’t want to run Windows for the rest of his life, and I don’t think that meant that once he died, we should then all have to run Windows. And by that I mean really poorly designed software interfaces with really poorly executed engineering, endless bugs, constant workarounds and restarts, and to top it all off, it is ugly with a capital UG. They even included the dirty-shower-door-glass look of Windows Vista. Or maybe it is wet cardboard. Sometimes I try to wipe some smudge off the screen and it turns out that the software itself is smudged.

    If you run down the list of highly academic design goals of the iOS 7 redesign, they were not achieved. The grid did not make the icons match each other better, it made them match worse. Even just the Apple apps don’t match, let alone 3rd party apps. The lack of clear delineation between the chrome and content did not defer to the content, it cluttered it up (e.g. white chrome and system bar in a Web browser when 80% of Web pages are also white.) And the hidden buttons are a plague. They slow me down constantly, and I have actually had colleagues and friends show me their iPhone or iPad and ask me what they are supposed to do next, and I have to show them, “see how this text is blue and the other text is black? The blue text is a hidden button,” and the worst part is, they blame themselves, like Windows users. They think their iPhone must be perfectly designed and if they can’t work it anymore, that is because they “don’t know enough about computers.” Like Windows users.

    So although I am very enthusiastic about the job that Tim Cook has done running a giant company as it scales to even larger sizes every quarter, I am very unenthusiastic about the job that has been done by the product people who are in charge of the software, and I want them to be demoted and/or fired. I want the reboot to be completely rebooted again by a different team. If Apple Maps 6 was a reason to fire Scott Forestall, I don’t see how iOS 8 means people get to keep their jobs. There was an easy workaround of “use Google Maps” for Apple Maps 6 if it didn’t work for you, and as Apple’s first mapping software release, the failures were somewhat understandable. But if you take the world’s most usable and stable consumer operating system that is at version 6, not version 1, and you make it much less usable and much less stable in just one release (7) and then that lack of usability and stability gets even worse in the next version (8) then that is massive failure. In less than 2 years, Apple software has gone from the very best to just the least worst. That is so far below my expectations it is not funny.

    The thing is, Steve Jobs was not the typical CEO. I think we can see that in many ways, Tim Cook was always doing much of what is expected from a CEO, and Steve Jobs was Chief Product Officer. Or Editor-in-Chief. That is what is really missing from Apple today. That is why even if you only look at the built-in iOS 7/8 apps, there are a number of different ways the interface presents “New Document” — sometimes it is a little quill on paper, sometimes it is a plus sign, sometimes it is the text “New Document.” There is no editorial voice to pick the one best way. That is why the software design is made to please other designers, not to please users. That is why the software engineering is being done in a way that pleases other engineers, not to please users — e.g. new programming language, but no stability.

    So I do think there is an empty chair still at Apple since the untimely death of Steve Jobs. But it is not the CEO position. It is the Editor-in-Chief, who represents the needs of the user by wrangling the various disciplines into one united voice. Who makes sure that designers design for the user, not for each other. Who makes sure that engineers engineer for the user, not for each other. And who blow his or her top when the quality of the product isn’t up to standards.

    • rant

      Having trouble seeing the point of a handful of people posting these very long subjective rants about software quality everywhere.

    • Walt French

      Just to the single point about relative stability of iOS7 v 6:

      Innovation is to tech companies as the line has swimming is to sharks: if you stop, you die; you can’t get oxygen. There are no laurels to rest on when hundreds of competitors, tens of thousands of developer companies and multiple nations are looking to control the world’s, or their countrypeople’s, dollars and thoughts.

      The standard meme is that as the handset market matures, everything becomes commoditized and interchangeable. That’s as it should be: if you’re just selling the same thing as you did a few years back, others have found a way to copy the functionality, and they will only succeed by selling it at a lower price. (This goes on until there are no profits available to attract more xeroxers.)

      iOS7 and iOS8 are of course far from perfect. But they embody some very nice features of synchronization and communication that are the likely foundations for a more peer-to-peer world, where censors and miscreants have less chance of reading your passwords and emails. They, and thanks to the developing APIs for HealthKit, HomeKit and CarPlay, will allow users more natural interfaces to their Real World environments. Obviously it can’t be both shaped by Apple and totally under user control, but as long as the controls are the minimal ones necessary to make hacking VERY hard, it’ll be very close. Any two people might differ about the level of security/control necessary, but the haters’ blustering notwithstanding, the results so far are pretty encouraging.

      Keep up the heat; Apple’s software quality and suitability has ALWAYS been an issue with them, thanks in part to their fascination with what they will do tomorrow, rather than guaranteeing a steady platform as Microsoft is expert at. But bear in mind that the distraction from a long bug list is what has allowed Apple to leapfrog Microsoft in sales, and the result has been Microsoft cutting back R&D and innovative projects because they are not well equipped to bring new consumer-product initiatives.

    • berult

      Should engineers optimally engineer, designers optimally design for a platform to be infused with inbred, evolutionary stickiness? Or, should they defy the somewhat comforting law of gravity…platform stickiness…and reap added degrees of freedom from accessing relative weightlessness?

      The latter offers transient instability, …and passage hiccups. As it must. Feet not required, …foot-soldiers be damned. The former offers diligent death by seven billion-plus anesthetized, gravitational pulls. With swing-wing forays footing the bill.

      Gravity has, by definition, an adversarial relationship with self-determining platforms. Especially self-professed en-lightened ones. Thrust required, …trust be dammed.

    • stefnagel

      The job of an EIC (I was one for decades) is to bring the author to the audience; it’s the job of marketing to bring the audience to the author.

    • art hackett

      Never mind the infuriating “wipe your device and reinstall” whenever you complain to the geniuses about a poorly performing device. “You have a software problem” – no Sh** Sherlock. Did I accidentally buy Windows? Wipe it and start as new. Seriously? Why the hell are all these background processes running wild, killing the battery or melting the cpu?
      I’ll resist the would Steve comments but many of the issues are not surprising given the rate of development required to accomodate the Watch limitations at this stage, but it’s unfortunate that so much compromise was required. I’m just hanging out for the next Snow Leopard.

    • DesDizzy

      You seem to have very strong views about the Mac software which is generally regarded as good as or better than the alternative general purpose desktop packages out there. However, perhaps you could enlighten us with the “exemplar” of software that you actually do rate.

  • peto1

    ” … managers do not possess magical powers.”

    Quite right! What good managers do seem to possess is transcendentally uncommon common sense …

    • airmanchairman

      Compassion (the ability to “walk a mile in someone else’s shoes”) as opposed to philistinism (inability or refusal to identify with lives that differ from ours, and vision,that rare ability to anticipate trends and changes years, decades or maybe even centuries before they become apparent to the rest of us.

      I strongly suspect that the latter trait is genetic, and has been largely excised from the human gene pool by targeted witch-hunts and inquisitions over countless millennia orchestrated by, guess who, the almighty alpha-apes!

  • obarthelemy

    High top management pay exists mainly because it is decided by other top managers and boards (who are usually top managers somewhere else, or ex-top mngrs). Basically, they are implementing their own pay rises.

  • jerome

    I think there is a very important lesson: We’re no longer roaming the forests in tribes. We live in an extremely complex world, and have developed sciences to create and understand complexity.

    But for some strange reason, when it comes to such important issues as to how businesses or even countries are run – we’re still stuck in blind trust in magical thinking and the cult of alpha-apes. When your sick, I assume you go to a doctor and would not accept powerpoint slides and chest-thumping, would you?

    To deal with the complexity of running a business, we need a new paradigm. The cult of the alpha-ape won’t do us any good. Modern leadership can no longer be about dominance, pecking order and status. This creates a toxic, dysfunctional environment where the potential of the employees is not leveraged. This might have worked in the past, when everybody followed that paradigm.

    I guess that Apple has a structural, organisational advantage over its competitors. It is amazing what they churn out in short time, and working at a company that competes with Apple, I must say: we never could do that. Albeit having more experience and similar manpower (in the area we compete in), Apple seems to move three times faster.

    I’m not that surprised, as in my environment, teams work against each other, have hidden agendas, withhold information or openly sabotage even within the own team. It’s a culture of fight, distrust, open hostility. Fostered by a group of alpha-apes, who fight tooth and nail to climb up the ladder. It is not surprising that nothing awesome is created that way, and I can only imagine what impact a culture change would have: all that talent working WITH each other, instead of fighting!

    Given the scary effectivity of some companies, including Apple, I assume that they have resolved the alpha-ape challenge and removed the friction that alpha-apes bring to an organisation. I know that Appel doesn’t have the usual silo-structure, but that’s not enough to explain this.

    • airmanchairman

      You, sir, have hit the proverbial nail on the head with your laser-accurate description of 99.9% of corporate workplaces, infested to the hilt with information-hiding, openly-sabotaging, infighting alpha-apes, completely devoid of the twin qualities of compassion and vision required for effective leadership from the front, yet still hell-bent on assuming the hallowed mantle. And the fate of these hapless companies is sealed from the get-go…

  • Sander van der Wal

    Maybe people were killed in the early days by their subordinates, but that has stopped for a long time. The perks of being a leader outweights the downside, by a lot.

    Obviously, the management team isn’t going to change that.