Steven Jobs Leadership Analysis

9.8.2011

MG204: Leadership in Organizations

201025548360132361530359331

1. Executive SummaryOur group democratically decided to research and review steve jobs, and

he encompassed a significant amount our leadership course work.

According to social power theory, Job has the five powers: referent, legitimate, expert, reward and coercive. As personal leader trait we have considered Passion, focused communication and innovative as the most relevant. Finally, a change from an autocratic to a transformational leadership has been observed.

Our analysis that there are significant strengths but also weaknesses that we suggest require leadership input. He is a credible and ethical leader who has consistently met and exceeded expectations.

An interview with Jobs and direct communication with his subordinates would have been ideal. The nature of media and propaganda means that secondary sources may be biased.

2. Terms of Reference

This report has been produced by 201025548, 360132, 361530 due on 9th August 2011, in order to analyze the internal and external environment of Apple Inc. We subdivided this analysis into several parts, in order to perform a comprehensive leadership analysis of Steve Jobs, CEO of Apple.

The whole report is based on a comprehensive internet research and secondary material. These sources have been evaluated and analyzed and can be viewed in the bibliography.

Table of contents1

1. Executive Summary 12. Terms of Reference 13. Leadership Analysis

3.1 Brief History on the Leader 33.2 Leader Traits 53.3 Credibility 73.4 Charisma 83.5 Differentiation 93.6 Ethical Behaviour 103.7 Future Strategic Analysis 113.8 Conclusion and Future Perspectives 12

3. Bibliography 134. Appendices 16

1. Brief History on the LeaderSteve Jobs´ life is embossed by many successes and accomplishments and some failures.

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1955 Born in San Francisco, CA. Adopted by Paul and Clara Jobs

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1969 Jobs meets Steve Wozniak

1973 Jobs after one semester at Reed College, Oregon, he drops out.

1976 Apple Computer Inc. is incorporated by Jobs, Wozniak and R. Wayne

1977 Apple makes a huge sensation with the prototype Apple II.

1978 The Apple II becomes the first mass-market personal computer, a huge hit all around the US

1980 Apple launches the Apple III. A disastrous flop

1983 PepsiCo CEO John Sculley becomes Apple's CEO

1984 Macintosh is launched. The first small computer with a graphic interface

1985Bad business decision and fights with his CEO.Steve Jobs resigns from Apple.Apple announces it will sue Steve's future company, NeXT

1986 Jobs buys a division of George Lucas' ILM for $10 million and incorporates it as Pixar

Steve discovers his biological mother and sister1991 Steve Jobs marries Laurene Powell

1996 Apple buys NeXT for $400 million. Steve Jobs is named "informal adviser".

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1997 Steve Jobs is named interim CEO1998 Apple is profitable again

Jobs introduces Apple's revolutionary iMac.

2000 Jobs officially becomes Apple’s CEO

Jobs unveils the first iPod

2003 Jobs is diagnosed with pancreatic cancer

Apple opens the online iTunes Music Store in the US

2005 Jobs's commencement speech at Stanford University

2006 Disney Company acquires Pixar for $7.4 billion

2007 Jobs introduces the iPhone

2010 Jobs unveils iPad1

Steve Jobs is undeniably an extraordinary man by any standard. He has left his mark on no less than five industries: personal computers, music, phone, animation and film and portable computing.

3.2 Leader Traits

The approach to this topic has been made considering some of the concepts we have been lectured about and have discussed in class.

This is based on “The Bases of Social Power” (French and Raven, 1959). Steve Jobs has, to some extent, all five types of power.

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Legitimate: as Apple’s CEO

Expert : due to his deep knowledge of both technological issues and people’s needs.

Reward: as his economic wealth could allow him to use it.

Coercive: in fact he has been referred to be authoritarian,

Referent: due to his charisma, success and narcissistic leadership traits.

Jobs himself has told us about his leadership principles and personal traits at different times:

Passionate: In his well know speech at the University of Stanford (Stanford, 2005) two sentences tell us about passion: "The only way to do great work is to love what you do" and "keep looking until you find it". Steve Jobs has a deep passion for his work and has always transmitted it enthusiastically. He inspires his subordinates and leads to changes.

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Focused: Jobs is very focused in what he does. When he returned to Apple he streamlined the product line of Apple (Linzmayer, 2004). This focus continues to be evident in the design of Apple products. Apple produces products that are simple, yet elegant in their design and function. Jobs explanation is: "Apple is a $30 billion company, yet we've got less than 30 major products [...] we tend to focus much more. [Focus] means saying no to the hundred other good ideas that there are. You have to pick carefully” (2008, Morris). Related to his work passion he thinks that "We don't get a chance to do that many things, and everyone should be really excellent” (Morris, 2008).

Communicative: Steve Jobs is famed for his speeches and captivating the audience's attention, internal and external (Kramer, 2010). He uses this ability to clearly communicate his emotions and his passion influencing people´s decisions. When he launched the iPod, he said: "In our own small way we're going to make the world a better place". So he is not actually selling products, he is selling dreams.

Innovative: While many companies think about money in innovation issues, Jobs thinks about people, what makes a great difference, as people come up with very innovative ideas (Kirkpatrick and Maroney, 1998).

During his first years he was labeled as autocratic. After his resignation he gained more leadership experience in other companies, encouraging a culture of collaboration and innovation. When he returned to Apple he had a more democratic and open-minded style, and developed his personal relationships with his family.

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3.3 Credibility

The former senior vice president of Apple Jay Elliot wrote in his book “The Steve Jobs way” (2011) that Steve Jobs “earned credibility without even noticing” (Elliot and Simon, 2011). This chapter is to examine Steve Jobs´ credibility and the factors it is built on.

An important factor contributing to his credibility is his honesty and integrity. Steve Jobs mentioned in one of apple’s press conferences concerning the IPhone 4 antenna problem “We are not perfect […] and phones are not perfect” (Jobs, 2010). As the leader of Apple he takes responsibility for mistakes committed by his company. This statement is publicly perceived as very credible for both, the company and Steve Jobs.

According to Forbes magazine Steve Jobs´ net worth is estimated to be $8.3 billion dollars (Forbes, 2011). And despite of being among the top 20 most powerful people in the world (Forbes, 2011) he has “taken a $1 salary for the past several years” (Cnet news, 2006). His decision not to work primarily for money shows his passionate approach towards his company and builds credibility.

His down-to-earth appearance and his competence are another two factors contributing to his credibility. The fact that Apple´s stock price increased by approximately 1000% (Appendix 1) since he regained power in 1997 impressively states his extraordinary competence (Yahoo Finance, 2011).

According to Friedrich Nietzsche “all credibility, all good conscience, all evidence of truth come only from the senses.” The way Steve Jobs appears in the news is mostly in connection with products like the iPhone or the Ipad, with companies people like (Apple, Pixar) or in connection with the company´s or his personal success. Being always associated and mentioned with positive things allocates referent power to him, grants admiration for his unique narcissistic style and strengthens his credibility.

3.4 Charisma8

From our discussions during the lectures we know that charismatic leaders have vision, they take risks and can motivate and manipulate others. These leaders embrace their followers’ needs and seek answers (products) to their needs. When we initially consulted the dictionary definition we could appreciate, that Jobs is a charismatic leader. His vision and perfectionism makes him an admired leader with referent power, with a cross-cultural appeal.

According to Dubrin’s book on leadership “charisma is a key aspect of leadership” and Steve Jobs proves that he possesses the ability to connect with people during his public speeches and attracts them to follow him (Dubrin, 2003). The way he communicates with people differs from other leaders. He presented the new “iPad” by sitting on a couch at home, creating a scenario that helped people to imagine using this product (Kramer, 2010).

Steve Jobs addresses people by intimately relating to them. In our perception he is the self-confident and down-to-earth leader instead of a billionaire with attitude. His gestures and quotations, with his consistent appearance (rounded glasses, black turtleneck polo, blue jeans) creates a unique and charismatic picture.

Furthermore, he is not afraid of expressing his personal feelings, experiences and failures, which confirms his self-confidence and charisma (Jobs, 2010).

3.5 Differentiation

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Jobs differentiates himself by consistently innovating and being a “Category Creator” giving people what they want, before they even acknowledge what they need (Goldberg, 2011.) Although he seems distant he understands people and natural progression and confirms this with his perfect timing for product release. He tends to be secretive and thereby generating public anticipation for his next product.

Jobs is non-conformist and wants young graduates to view the world with a unique perspective even if it does mean breaking the rules (Jobs, 2005). Kahney (2008) attributes Apple’s success to the leadership of Steve Jobs rule breaking characteristics. The article entitled, “How Apple Got Everything Right By Doing Everything Wrong” summarizes this (Kahney, 2008).

Furthermore Jobs has applied and transferred his knowledge across diverse industries, whilst taking what was regarded by business analysts as massive risks. This combined with a relentless, obsession over details, from Marketing, PR and most importantly product design and aesthetic (Goldberg, 2011).

All the above may be the result of Jobs adventurous nature. He hitch-hiked through India and Tibet which along with being an adventure was attributed to increasing his personal, business and spiritual horizons (Young, Simon, 2005)

Jobs has learnt from his mistakes and rebounded from these failures with tenacity. After early massive success in the 1970’s, he was forced out of his company, and started up NeXT. This experience had provided him with a unique perspective of the opposite polarities of business (Young, Simon 2005). It was not easy when he was not the “golden boy” yet he has re-claimed his position as the most admired CEO (Hansen, Ibarra, Pever, 2010).

3.6 Ethical Behaviour

In many articles, relating to earlier years of Jobs´ career, his name was mentioned in connection with boorish and dishonest behaviour. He is shown

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as the one who found MacIntosh computers but actually Steve Wozniak was the driving founder. He is so closely related to Apple that nobody mentions Apple´s success in connection with any other names than his own one.

On the other hand, when Apple faced problems about their applications related to pornographic content, Jobs’ answer to this was that “We believe that we have a moral responsibility to keep porn off the iPhone. Porn is a place where we don’t want to go- so we’re not going to go there” (Jobs, 2010). So as a CEO, he insisted on being ethical when creating new formats and applications for the iPhone.

Jobs visited Apple´s contract manufacturer in China (Foxconn) when the scandal , with many suicides and deaths, came to the world´s attention. He tried to ensure a pleasant working environment (Wilson, 2010). However, the reports of the workers have shown that "they had been forced to work very long hours and were not allowed to take breaks (Wilson, 2010). The salaries had been increased. Steve Jobs as an ethical person, took a personal interest and played a participative leadership role in taking corrective measures.

Whilst his peer, Bill Gates is often mentioned as a "philanthropist", Jobs is regarded as a "capitalist", although we may not be aware of all his charitable activities.

In the end we can say, that Steve Jobs in an “ice cold capitalist”. He is very good in what he does and keen to establish an ethical environment. As mentioned it is still a long way to go, but he already tackles some important ethical issues.

3.7 Future Strategic Analysis

This chapter is to examine Steve Job´s strengths and weaknesses in order to find out possible future opportunities and threats.

Steve Jobs is definitely a person with many strengths. Here is to mention that he is able to guide a multibillion company towards “category creator” products “giving people what they want before they know they want

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it” (Goldberg, 2011). Apple and Steve Jobs are both mentioned in Goldberg´s symposium “Consumer culture in global perspective” (2011). His vision, wisdom and all-round leadership qualities make it possible to be ahead of the market.

His main weakness is his state of health. During the seven years, since he has been diagnosed with cancer, there has been many rumours of him not being able to further lead the company (CNN tech, 2010). Other weaknesses occur due to his narcissistic personality type. There is to mention that he is sometimes mentioned in the news aggressively pursuing his goals without listening to others (Customerthink, 2010).

His opportunities are to work on his weaknesses in future. It is against narcissist´s habits to buy self-improvement books, but this might be a real opportunity for him in order to understand his personality type´s characteristics. To establish a mentor trainee program in order to “create” his successor might be a very profitable consideration.

Steve Jobs´ health is going to be a risk and a threat in future. Past has shown that apple´s stock price reacts very sensibly towards public announcements concerning his health (Appendix 2). His departure has pushed down the share price by 2.25% which is equivalent to approximately 8 billion dollars market capitalization. He might also drift away from customer needs by not listening to what they want (Customerthink, 2010).

3.8 Conclusion and Perspectives

Steve Jobs seems to have synthesized a unique leadership style by drawing together many leadership traits from sociological leadership, business management (academic) viewpoint including a ‘hands-on’ entrepreneurial perspective with personal experience. These are very relevant to the current economic climate but furthermore he seems to be the embodiment of a good leader and business person. However his diligence, drive and perfectionistic traits may have had a negative influence on his health.

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His company sells premium expensive products and has made a massive profit, whilst almost 80% of all other consumer companies have made losses. The key point is that he does not dominate market share, but extracts substantial profits. (Wired magazine, 2011)

Jobs has proposed a massive new-age headquarters for his company (Dembosky, 2011), which would cement his legacy in the Cupertino landscape. Secondly, Job chose Walter Isaacson to author his official autobiography call “iSteve, The Book of Jobs”, (Italie, 2011) with lofty similarity to the Hebrew Bible, ‘Book of Job’. This innovative leader has found a posthumous way to leave his mark on the world.

4. Bibliography

Bauer T., Erdogan B., 2010. Organizational Behaviour - Creative Commons. [online] http://www.flatworldknowledge.com/pub/organizational-behavior-v1.1/141354#web-141354 (Accessed 05.08.2011)

Berglas, 1999. What You Can Learn from Steve Jobs. [online] http://www.inc.com/magazine/19991001/13575.html (Accessed 2.8.2011)

Cnet news, 2006. Apple again pays Jobs $1 salary. [online] http://news.cnet.com/2100-1047_3-6049166.html. (Accessed 3.8.2011)

CNN tech, 2011. Speculation continues about Apple CEO's health. [online] http://articles.cnn.com/2011-02-17/tech/jobs.health.rumors_1_apple-event-apple-spokesman-energy-independence?_s=PM:TECH. (Accessed 2.8.2011)

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Customersthink, 2010. Why Steve Jobs doesn’t listen to customers. [online] http://www.customerthink.com/blog/why_steve_jobs_doesnt_listen_to_customers. (Accessed 3.8.2011)

Dembosky,A., 2011. Apple unveils plan for new headquarters [online] Financial Times http://www.mercurynews.com/breaking-news/ci_18236676 (Accessed 2.8.2011)

Discover Magazine, 2009. Modern Bedfellows: LSD Inventor Wrote To Steve Jobs, Asked For Support. [online] http://blogs.discovermagazine.com/discoblog/2009/07/09/modern-bedfellows-lsd-inventor-wrote-to-steve-jobs-asked-for-support/ (Accessed 3.8.2011)

Dubrin, Andrew. 1998. Leadership: Research Findings, Practice and Skills. 2nd Ed. Boston, Houghton Mifflin Co.

Elliot, J. Simon, W.L.,2011. The Steve Jobs Way: iLeadership for a New Generation. 1st Ed. New York: Vanguard Press.

Forbes, 2011. Steve Jobs. [online] http://www.forbes.com/profile/steve-jobs. (Accessed 2.8.2011)

French, J., Raven, B. 1959. The Basis of Social Power. [online book] Cartwright (Eds). Studies of Social Power, (Ann Arbor MI: Institute of Social Research, pp. 150-167)

Forbes, 2010. Capitalism Has Made Steve Jobs Happy. [online] http://blogs.forbes.com/velocity/2010/06/01/capitalism-has-made-steve-jobs-happy/?boxes=techchannellighttop (Accessed 2.8.2011)

Goldberg, 2011. [Publication] Giving people what they want before they know they want it. Springer Science Publication: Symposium “Consumer culture …”. http://www.springerlink.com/content/k37l1047h2665q20/fulltext.pdf. (Accessed 3.8.2011)

Gustacci, D. 2011. Steve Jobs, [online] http://gustacci.com/steve-jobs/introduction/ (Accessed 04.08.2011)

Hansen TM, Ibarra H, Pever U., 2010, The Best-Performing CEOs in the World, HBR Magazine [online] http://hbr.org/web/extras/100ceos/1-jobs. (Accessed 1.8.2011)

Italie, H.,2011, Steve Jobs Authorized Biography Coming in 2012. New York: Associated Press National Writer

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Jobs, 2005. Commencement address delivered by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, on June 12, 2005. [video] www.youtube.com/watch?v=D1R-jKKp3NA. (Accessed 2.8.2011)

Khaney L., 2008. How Apple Got Everything Right By Doing Everything Wrong http://www.wired.com/techbiz/it/magazine/16-04/bz_apple?currentPage=2 (Accessed 5.8.11)

Kirkpatrick D., Maroney T., 1998. The Second Coming of Apple. [online] Fortune http://money.cnn.com/magazines/fortune/fortune_archive/1998/11/09/250834/index.htm (Accessed 05.08.2011)

Kramer D., 2010. Leadership Behaviors and Attitudes of Steve Jobs [online] http://davidkramer.wordpress.com/2010/02/15/leadership-behaviours-and-attitudes-of-steve-jobs/ (Accessed 3.8.2011)

Linzmayer, O. W. 2004. Apple confidential 2.0: The definitive history of the world’s most colorful company. [book] San Francisco: Vanguard Press.

Macworld, 2010. Steve Jobs: Apple wrong over iPhone app rejection, get Google Android if you want porn. [online] http://www.macworld.co.uk/mac/news/index.cfm?newsid=3221040 (Accessed 3.8.2011)

Mobile Computing News, 2010. Foxconn Scandal continues for Apple: Students forced to work. [online] http://www.mobile-computing-news.co.uk/industry- news/5452/foxconn-scandal-continues-for-apple-students-forced-to-work.html (Accessed 3.8.2011)

Morris, B. 2008. Steve Jobs speaks out [online] http://money.cnn.com/galleries/2008/fortune/0803/gallery.jobsqna.fortune/ (Accessed 04.08.2011)

Steve Jobs, 2010. Steve Jobs - iPhone 4 Problem. [online video]. http://www.youtube.com/watch?v=c2wvLlbyHcs (Accessed 3.8.2011).

The Times, 2009. Leadership is more about than charisma. [online] http://business.timesonline.co.uk/tol/business/management/article5600542.ece (Accessed 2.8.2011)

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Tuaw, 2006. Steve Jobs: Capitalist, Bill Gates: Philanthropist. [online] http://www.tuaw.com/2006/01/25/steve-jobs-capitalist-bill-gates-philanthropist/ (Accessed 3.8.2011)

Yahoo Finance, 2011. Apple Inc. (AAPL). [online] http://finance.yahoo.com/q?s=AAPL. (Accessed 2.8.2011)

Young, S., William L. 2005. iCon: Steve Jobs The Greatest Second Act in the history of Business. New York: Vanguard Press.

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5. Appendices

Appendix 1: Apple´s stock price from 1985-2011 (Yahoo Finance, 2011)

Appendix 2: The Steve Jobs effect (CNN Money, 2011)

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