One day after Apple CEO Steve Jobs announced his third medical leave in five years, the markets are aflutter with uncertainty for one of America’s most valuable companies. With a market capitalization north of $300 billion, Apple is a global icon for innovation and for America’s economic might. But what does that mean without Jobs in the equation?
Sifting through the reams of news coverage from the past 24 hours, I found an interesting quote in Investors Business Daily from Mike Abramsky , analyst for RBC Capital Markets . Abramsky referred to Jobs as “Apple’s biggest asset – and its biggest risk. ”
Jobs’ reputation for ground-breaking technologies and artistry in design is the very core of Apple’s success as a brand. Over the past four years, Jobs carried Apple over the $100, $200 and $300 billion thresholds, propelled by masterpieces like the iPhone4 and theiPad . At every turn of the road for Apple, Jobs is the front man. His black turtleneck and dungarees are almost as recognizable as the company’s silver corporate logo. Even the self-proclaimed King of All Media, Howard Stern, took time to comment this morning, comparing Jobs to a modern-day Michelangelo. I could not agree more.
So when does such a strong reputation asset like Jobs become a reputation risk? Answer: when that one asset pervades nearly every positive attribute of a brand.
I fancy myself an avid “Apple-phile” and yet I cannot think of another single human being associated with the brand. It’s just Jobs. I know that thousands of brilliant people work at Apple, but the problem lies in the fact that we see only Steve.
It’s the classic all-eggs-in-one-basket image problem. When the basket falls, the image fails and panic ensues. Henry Ford’s brand was tied to him, too; the question is how the brand/company manages the change. This morning’s panic culminated with a nearly six percent drop in Apple’s opening stock price.
Bill Gates of Microsoft – another visionary technology genius – took a different approach, slowly handing-off the reins of his company and introducing a new generation of leadership for Microsoft.Robert Cyran of Reuters BreakingViews chimed this theme in a post on Monday . With the right approach, Apple could enjoy the best of both worlds: the reputational value of Jobs, but without the risk of losing all its eggs.
The Street thrives on two things: progress and predictability. With a healthy Jobs, Apple enjoyed both. However, yesterday’s abrupt announcement of Jobs’ open-ended medical leave tossed predictability out the window. To mitigate this significant reputation risk, Apple needs to take action in developing a thoughtful, transparent approach to the transition of power. In the meantime, we all send our best wishes to Mr. Jobs for a speedy recovery.