UMD BUSINESS FACULTY AVAILABLE TO DISCUSS APPLE’S FUTURE WITHOUT STEVE JOBS AT THE HELM

MEDIA ALERT: August 25, 2011

UMD BUSINESS FACULTY AVAILABLE TO DISCUSS APPLE’S FUTURE 
WITHOUT STEVE JOBS AT THE HELM

Management and leadership faculty experts at the University of Maryland’s Robert H. Smith School of Business weigh in on the effects industry giant Apple may feel with CEO Steve Jobs stepping down. They delve into the company’s succession plan, how things might be different for Apple without Jobs, and how the investors will react. *The Smith School has an in-house facility for live or taped interviews via fiber-optic line for television or multimedia content.

A test to Apple’s leadership succession plan

Gilad Chen, professor of management and organization: 
giladchen@rhsmith.umd.edu; office phone: 301-405-0923

“Many companies struggle with the need to develop and sustain an internal pipeline of talented leaders who could step up to replace leaders who either ‘move up’ or ‘move out.’ But this is an especially serious challenge for companies like Apple, who have extremely charismatic and successful CEOs who are tightly coupled with both the firm’s success and the firm’s reputation. The silver lining for Apple is that Jobs’ deteriorating health has led many within and outside Apple to anticipate and prepare for this succession. In this regard, Tim Cook, who will replace Jobs, has already developed very close relationship with Jobs, and has become quite influential within Apple as a result. Will Cook succeed in sustaining Apple’s success? Only time will tell. But the fact Apple has replaced Jobs from within, with Cook who has had the chance to play a major role in Apple’s success the past 5-6 years, probably puts Apple in a good starting point for successful CEO succession.” –Chen is an organizational behavior and human resource management expert and studies teams and leadership.

Apple without Jobs is still strong this time around

Rajshree Agarwal, chaired professor in entrepreneurship and strategy: 
rajshree@rhsmith.umd.edu; office phone: 301-405-2250

““The success of ‘Apple after Steve Jobs’ really depends on both how the external and internal constituents perceive the company. There is the issue of ‘image’ management and what consumers, analysts, etc. are going to focus on. More than any other company in the limelight, Apple is one that is most associated with its charismatic founder-CEO, and there is folklore around how Apple faltered when Steve Jobs was not at its helm around the turn of the last century. I actually think that those issues were more due to *lack* of vision and leadership by CEOs that succeeded Jobs. Also, Apple was in a very weak industry position, so both internal and external factors combined for Apple’s lackluster performance without Jobs. This time around, Apple is much better situated in the industries that it is in — it has a very strong presence across a diversified portfolio of products. Also, Tim Cook was one of the first people that Steve Jobs hired when he retook the helm, and has worked very closely with him. Thus, much of the strategies that Steve Jobs employed successfully may be sustained by Cook. The issue, however, is how much of the ‘pixie dust’ and aura that Jobs projected onto Apple may be lost, and here may be an instance where we are able to see whether Apple’s success is attributable more to Jobs’ marketing magic or the engineering marvels that back that marketing.” –Agarwal is a strategy expert who studies the implications of entrepreneurship and innovation for firm and industry evolution.

Expect volatility for Apple’s stock

Hugh Courtney, vice dean and professor of the practice of strategy: 
hcourtney@rhsmith.umd.edu; office phone: 301-405-9544

“Anticipate quite a bit of volatility in Apple's share price in the coming months. While it is true that the market knew that this day would likely come soon given Jobs' long-term health issues and this has given investors time to become comfortable with Tim Cook, it isn't clear yet exactly how important Jobs' persona was to the average consumer purchasing Apple products. Has Apple been fully successful in separating its own brand from Jobs' personal brand? Is it possible that Apple suddenly becomes less cool because its CEO is less cool? Is it possible that Apple suddenly becomes less innovative because its CEO is less innovative? These are questions that investors will be asking themselves and I imagine that even the most innocuous news coming out of Apple in the coming months -- positive and negative -- will be explained by many as directly attributable to Jobs' departure. I personally believe that Apple has established itself as a very strong company that is poised to thrive post-Jobs, and that in the long run both consumer and investor markets will continue to perceive the high value of the company's products and stock. But in the near term, consumers, investors and industry pundits are all likely to overreact to signals coming out of Apple, and I expect to see more volatility in both the share price and sales for awhile.” –Courtney is an expert on global strategy and leading through uncertainty. His is author of bestseller “20/20 Foresight: Crafting Strategy in an Uncertain World.”