Apple’s Problem: It Can’t Handle the Truth

    Apple and the Book

    What is fascinating is that the attacks on the book initially just said it was bad. Now they have moved to attacking the author, and saying specific recollections didn’t happen (Jobs throwing a pen), but not yet disagreeing with major events. People are going to remember things differently and mix up the details, but if the overall event was accurate, who cares? I have to admit this is an impressive effort to kill this book, but I think it is overplayed. The related publicity may be causing more of us to write about it than avoid it. Just saying.

    If you’re interested in the topic, here is a list of attack fallacies used to discredit folks you disagree with. They work, but have nothing to do with the validity of the argument. Note that Apple appears to be using many of them. I’m seeing Appeal to Ridicule, Attack the Person, Poisoning the Well and Strawman. Most seem to fall into the general category of Ad hominem.

    One of the things I’ve been asked to do over the years is to look at a troubled company and identify the core problem. Often, you can get hung up with the symptoms of a problem – lagging sales, falling image, low morale, etc. –  and not see the cause. And if you just focus on the symptoms, it is kind of like “Whack a Mole” on steroids. For every symptom you try to whack, several more problems will pop up until you have so many problems you are lost. In reading the book, “Haunted Empire: Apple After Steve Jobs,” released this week, one problem became very evident. From Steve Jobs to Tim Cook, institutionally, Apple couldn’t handle the truth. This led to a series of decisions that caused its recent decline. (Apple CEO Tim Cook is calling the book nonsense.)

    Skeptical? If you are an Apple fan, you likely think I’m insane. But if you know anything of Apple, you know how unique Jobs was and that he was a micromanager. How could anyone fill those shoes, let alone the guy hired to do everything Jobs hated doing? Wouldn’t he be the polar opposite of what you needed?

    We Hate Bad News

    I ran into this with Windows Vista. It was pretty evident outside of Microsoft that Vista was going to be a train wreck, but when any of us raised this to Microsoft, they looked at us like we were literally insane. If you haven’t been through an experience like this before, you have no concept of how frustrating it is. Once influential people take a position, it is incredibly hard to change their minds. Folks particularly don’t like information that adversely impacts their personal plans or income.

    The Haunted Empire book describes that it was clear early on to those close to Jobs that he was avoiding and concealing what was a very bad health issue that later took his life. It was also clear that he believed strongly that Apple should collapse if he ever left it. Both things would have suggested that the board not only not take his recommendation for a replacement but should have started a search for that replacement far earlier than they did.

    The board clearly knew it had a problem. Jerry York, in particular, was upset that they weren’t disclosing the illness issue properly. Regardless of the disclosure, they clearly knew Jobs was in deeper trouble than he was personally admitting and could see that he was in denial. I can certainly understand not confronting Jobs, but why wouldn’t you analyze what you needed in a CEO and have a plan to replace the guy with someone who could take the company forward?

    In addition, it is clear that Jobs didn’t want to admit that Apple had become too large and complex to micro-manage. That didn’t make the problem go away. It was clear that Jobs couldn’t manage a complex corporation, and he knew it. That would have suggested simplifying Apple, or spinning out subsidiaries, each of which could be more easily managed. Instead, Apple grew too complex to micro-manage.

    Cook could manage the complexity better than Jobs. But Apple was designed to be micro-managed, which would have suggested massive changes in the company that have yet to occur, with managers who could take delegation and a structure that better allowed it. Granted, the result would likely not be as successful as Jobs’ Apple, but then, without Jobs or a Jobs clone, that Apple was dead anyway. In effect, Jobs’ Apple died with Jobs and Apple is in denial.

    So What Do You Do?

    I’ve been down this road a number of times and have never found a successful path to correcting a problem that is sourced in an unwillingness to see that problem. If you have, I’d appreciate it if you told me what worked because I’m at a loss here. I’d anticipated this problem with Steve Ballmer, but every strategy I used either failed or backfired and Ballmer still lost his job. (I’d have been personally much better off had I instead focused on other firms.)

    If you try to fight the belief, you’ll be shot, and if you try to ride it through, the ride will be incredibly painful. If you are an employee in a company like this, it is best to move on (the book indicates that Apple employees call this G2G or Go to Google) because the problem will not be corrected until a related catastrophe is big enough to force a large enough change in executive staff to drive the needed change in behavior. At IBM, that meant changing the board and then firing both the CEO and CFO, filling the slots with folks from outside the industry that didn’t have blinders on. Had we not, IBM would be gone now. But IBM was in far worse shape (basically on death watch) when that happened. Apple was in the same condition before it recovered. Trust me when I say you don’t want to ride a company down that far.

    As a customer, you don’t necessarily have to cut and run immediately, but you should likely look at alternative firms and technologies until and unless the firm with the delusions goes through a reset. Both Apple and IBM did come back, but the smart money was on the firms that stepped away until the recoveries were clearly evident. Riding a company down either as an investor or a customer is never a happy path.

    Wrapping Up: Lessons Learned

    The lesson I’d like to leave you with has nothing to do with IBM or Apple. It has to do with how we look at things. None of us want to be stupid, but all of us do stupid things we could have avoided. We fool ourselves in decisions, purchases and relationships to only see what we want to see and not what is actually there. The warning signs: Getting upset when someone challenges you, avoiding information that contradicts something you believe is true, and passionately refusing to admit you might be wrong. In those instances, I’d say it’s likely that you are wrong. While it hurts the ego to admit it, if it is something critical to your job, your family, or your survival, admitting you are wrong is far less painful than doing the wrong thing.

    At the core of Haunted Empire is a practice of ignoring information that executives needed to make the right decisions, and how the wrong decisions were killing what had been the most successful company in the world. If Apple fails, it won’t be because of China, Amazon, Microsoft or Google. It will be because of its own executive team and board. And that is a fixable problem.

    Rob Enderle
    Rob Enderle
    As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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