When Companies Aren’t Led by Experts

When Companies Aren’t Led by Experts

Much was made of Apple’s chief designer Jony Ive stepping down last week. Rightfully so. What does it mean when companies aren’t led by domain experts?

“He’s not just a designer. That’s why he works directly for me. He has more operational power than anyone else at Apple except me. There’s no one who can tell him what to do, or to butt out. That’s the way I set it up.” – Steve Jobs talking about Jony Ive. Who will replace Jony Ive? The “who” is not as important as the “how”. Lead designers Alan Dye and Evans Hankey will replace Jony Ive but won’t enjoy the close working relationship that Ive had with Apple’s late founder and CEO Steve Jobs. Rather, Dye and Hankey will report to Apple Chief Operating Officer Jeff Williams. What does this portend for Apple, a company founded upon design principle, when the lead designers take a back seat to two “operations” types? (Tim Cook and Jeff Williams). Let’s try to answer the question by looking to similar examples.

Jony Ive on “focus” and Steve Jobs

Microsoft Swapped A Marketer CEO for A CEO Steeped in Technology to the Benefit of Employees and Shareholders

Microsoft – a Technology company – suffered through a decade-long period where it was late to tectonic shifts in computing (cloud for example), or missed them entirely (mobile phones). It was only when Satya Nadella – an engineer by training – ascended to the CEO chair that Microsoft aggressively pushed into cloud computing, artificial intelligence and mixed reality, a reality that may never have come to pass under former CEO Steve Ballmer, a Marketer by training. This isn’t to say that a Technology company is precluded from enjoying successful periods under a non-technical CEO. However, to maximize the probability of long-term success (however defined), it’s best to have an engineer, designer, developer, architect – some such person formally trained in these technical functional areas leading the company. Especially today given how fluid the Technology industry is.

MSFT stock performance under Ballmer and Nadella

Satya Nadella on Cloud and Edge Computing

Automotive Dark Ages and the Dawn of Designers and Engineers

GM CEO Mary Barra

The Automotive industry until recently was lorded over by CEOs who frequently made designers and engineers report to the Finance department. Consider the period from the 1970’s through the early 2000’s when automobile companies where led by Finance types like former GM CEO Rick Wagoner or by Sales-oriented CEOs who deferred to CFOs in product design matters. This period was marked as a time when automobiles had little design aesthetic and poor build quality. Engineers and designers had little to no voice and were regularly overshadowed by corporate finance executives. Talk about the tail wagging the dog! This corporate structure has started to change as engineers and designers wield far greater influence as compared to 15 years ago. Perhaps there is no better example than GM – led by CEO Mary Barra – an engineer by trade. The automotive industry has had a bit of a renaissance over the past decade as OEMs are more willing to invest in attributes that consumers care about with design and performance at the top of the list. Further, OEMs are willing to invest in new technologies such as electric powertrains and autonomous technology.

GM’s autonomous unit Cruise Automation

The Apple Lesson Is One for the Ages

We’ve watched Apple go from “innovation engine” under Steve Jobs (admittedly not a classically-trained designer or engineer but a CEO who obsessed over design and engineering), to a technology laggard under Tim Cook. We believe it will only get worse for Apple over the next 5-10 years and hope that this teachable moment isn’t wasted on other companies. Corporate Boards take notice!

Steve Jobs on the “cloud”. Prescient.

Cool car tech. Composer Hans Zimmer created this sound for BMW’s futuristic concept car.

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