Taking Stock / Steve Jobs, for Better or Worse

Should this extraordinary manager but flawed man be a model for emulation?

Last month Apple shares rose to an all-time high of $447 per share, bringing their gain over 12 months to 30%. Over the last 10 years, Apple stock gained 4,000%. Thus the company achieved a market cap of $417 billion, regaining its status as the biggest firm in the world, in terms of value.

The timing of this record is intriguing.

Steve Jobs - Bloomberg - 09022012

First of all, it occurred four months after the death of Steve Jobs, the company's fabled founder and chief executive. Second of all, it came three months after his approved biography by one Walter Isaacson hit the bookstores: for the first time, Apple's managers and customers alike learned intimate details about the life and character of this man, who many feel was the best manager in the history of mankind.

Thirdly, Apple stock hit its peak some days before The New York Times ran an expose about the working conditions in Apple's plants in China, and how Apple management disregarded internal reports warning, time and again, that these operations were flouting rules the company set for its suppliers.

Apple's remarkable success story, the hero-like esteem in which Jobs was worshiped by the business community and by the company's millions upon millions of customers - and the hard, cold, aggressive and alienated side of the same man revealed in Isaacson's book and in the New York Times report - raise many questions. To what degree can companies and their leaders successfully compete in the global markets while adhering to principles of social responsibility, humanity and other such values?

Alongside the usual descriptions of Jobs' genius and creativity, both Isaacson's book and "Inside Apple" by Adam Lashinsky describe the Apple manager as an aggressive, frightening, manipulative boss who could be cold as ice. The Times investigation depicts Apple as a company that squeezes its suppliers relentlessly and brutally, making sure that any profits margins, at Apple's expense, remain low.

Without Steve

Reading the biography and the investigations about Apple's corporate conduct, one wonders if that is the flip side of the company's remarkable success; would the company have reached such heights without this sort of conduct?

Make no mistake. Apple's success is due first and foremost to Jobs' own maddened obsessive nature and compulsiveness regarding design, the user experience, marketing and advertising. He may have roundly abused many an employee, but he also fostered an atmosphere, culture and brand that led some of the best and most creative people in the world to want to work for Apple. But these days, social responsibility is on the ascendancy and leaders are expected to look at the bigger picture, not only their company's profits. One has to ask whether success of Apple's kind can be achieved while still heeding issues and interests other than the company's immediate greater good.

The issue of stakeholder capitalism versus shareholder capitalism is being increasingly debated in business circles and academia alike. But the gap between the discourse, the theory, the rhetoric - and the reality - is immense.

It isn't only because managers are greedy and mean. Making the transition from stakeholder to shareholder capitalism - maximizing profit versus maximizing social usefulness - is complicated. Issues that might seem simple at first glance are usually difficult. Apple, for instance, created tremendous value for its shareholders, customers, and an entire ecosystem of manufacturers and consumers of applications. It did not, on the other hand, create many jobs in the United States. While 60,000 Apple employees in the U.S., work under good conditions, hundreds of thousands in China toil under terrible conditions.

No hypocrite Apple

To whom is Apple's primary responsibility? To its shareholders? To its American workers and the American taxpayer? Perhaps to consumers, or to all interested parties, which would include all those hundreds of thousands of people working for its suppliers in China?

One could point out that in contrast to quite a lot of other companies, Apple never did try to paint itself as socially responsible or a dewy-eyed do-gooder. It has openly focused on profit alone. Apple has not tried to sell a fuzzy image to go with its beloved products.

But today, when the talk is of alternative leadership, one has to wonder again about the fabled and charismatic Steve Jobs.

Should Steve Jobs, creative genius but also alienated, brutal and narcissistic chief executive, be the model for emulation by all managers and businessmen? He did create a whole industry from scratch. He did change the world of computing. But if we say we want a kinder, gentler leadership with other values, if we want capitalism to change its spots, are we saying: We don't want Steve Jobses? Is that even possible? Or is business, after all, just business?

One could add that on Wednesday, shortly before Nasdaq wound down for the day, Apple was up 1.4% to $475 per share and change. The company's market cap had reached $442.4 billion.