Count me among those who doubt Apple will continue to shine in the years ahead. But my concern is less about CEO Steve Jobs' departure so much as it is about the culture he helped create. I'm not sure Apple's way is well-suited for the 21st century.
A Fortune story from a few months ago shed rare light on the inner workings of Apple under Jobs. On the positive side, it revealed a narrow product focus, tight teamwork among top execs and an extreme commitment to accountability.
But it also showed three major warning signs in Apple's culture. First is a top-down dictatorship style. This is encapsulated in an annual top-secret gathering of the company's "Top 100", employees who have been, in effect, "anointed" by Jobs. Plenty of evidence suggests a more democratic, bottom-up method is the management ethos of the future. In particular, Apple is at odds with the civic, participatory attitudes of millennials.
The second related red flag is Apple's arrogance toward employees. As one Fortune source noted, Apple views employees with a degree of disdain: "Shut up and do your job, and you might get to stay." Once Jobs leaves, and with it his cult of personality, will employees continue to give their all for managers with mean streaks?
Third, and perhaps most troubling, is the company's obsession with secrecy. Yes, the mystery around its next product has gained it free publicity. And Apple in recent years has published reports that admit problems in its supply chain. But earlier this year, a coalition of Chinese environmental groups accused Apple of having the least transparency about pollution issues in its supply chain among 29 technology companies. Shrouding shortcomings in supply chains is increasingly unacceptable to consumers, workers and investors.
More generally, by keeping its doors shut so tightly to the outside world, Apple is missing opportunities to tap the wisdom of the crowds, all the feedback Google and other firms get from the "extended enterprise" of customers and partners. One disturbing sign for Apple: phones with Google's Android system have overtaken iPhones in terms of market share.
Then there's the effect of Apple's secrecy on its own workforce. Consider the hush-hush off-site retreats of the 100 employees that Jobs considers most important at the company. These events are magical for most of the employees picked, Fortune reports. But the opaque nature of that selection runs against worker demands for a transparent, fair workplace. Employees not picked for the event have sulked with a "Bottom 100" lunch.
Apple under Jobs has projected the ultimate image of cool. But the underside of cool is cold, heartless. And in the wake of the recession, warmth and kindness are in. "Kindness," literally, is the brand trait that has grown most in importance to Americans in recent years, according to research by marketing firm Young & Rubicam. Apple ads have mocked rival Microsoft as nerdy. But the public rates Microsoft higher than Apple on reputation measures, thanks largely to the generous giving of Bill Gates, according to Young & Rubicam executive John Gerzema. Gates "gives Microsoft a human face and, more important, his philanthropy gives the company a heart," Gerzema and journalist Michael D'Antonio wrote in strategy + business earlier this year.
Microsoft also outscored Apple in the Good Company Index that my co-authors and I created in our book Good Company: Business Success in the Worthiness Era. The index measures Fortune 100 firms on their records as employers, sellers and stewards of communities and the planet. Apple earned a B-minus, tied for 18th. Not bad, but not great. And our research shows that companies that have behaved better consistently have outperformed their peers in the stock market. We predict that, increasingly, only thoroughly worthy firms will thrive. Apple isn't headed in that direction with a sense of urgency.
So yes, Jobs was a master CEO for three decades. And Apple has gleamed like few other companies in recent years. But as perhaps the last great leader in the 20th century command-and-control style, Jobs may have been a man of his times as opposed to a timeless genius.
His legacy at Apple, rather than safeguard its future, may be what causes the company to lose its luster in the years ahead.
