Steve Jobs has taken a leave from Apple for his health. New York Times Story today by Miguel Helft and Clair Cain Miller lays out some details: “The sudden decision by the company’s chief executive to take a medical leave for the third time in less than a decade raises anxieties about the leadership of the company he helped found more than three decades ago. It also puts the spotlight again on several senior executives who have been helping Mr. Jobs run the company, in particular Timothy D. Cook, the chief operating officer, who will take over day-to-day operations during Mr. Jobs’ leave.”
Whether Mr. Jobs returns, as he has said he hopes to, or not, as some investors fear, most experts believe that he will be hard to replace despite Apple’s strong executive team.
“The company could not thrive if Steve didn’t have an extremely talented team around him,” said David B. Yoffie, a professor at Harvard Business School who has studied the technology industry for decades. “But you can’t replace Steve on some levels.”
In spite of Jobs’ seeming resilience, he will have to be replaced at some point. Facing this fact is traumatic for the public because of the remarkable comeback and powerful repositioning of the great company that he represents. Apple’s delivery of one new product after another, each completely embraced by consumers, is record breaking.
Despite our the inevitability of a founder’s replacement, somehow it always seems like a surprise. Many of these transitions are not successful. In fact, founder transition can be the greatest challenge that a company faces. Another recent transition in the news occurred when Jeffery Hollender was fired from Seventh Generation, the company he founded.
Most founder transitions have trouble for three reasons. Underlying all three of these reasons is the universal condition by which a company becomes connected to the personality of the founder.
First, most business do not understand the Core Purpose of the company that the founder represents.They likely will not have spent time asking the question about what it is the founder saw and created that makes it so unique. For example, Steve Jobs and Apple are about “elegant intuitive functionality.” Because we associate this quality that is at the core of Apple directly with Jobs, it seems a valid worry that if Jobs were to leave Apple, that it will be lost.
The second reason that transitions are difficult is because businesses fail to build understanding of their Core Purpose and the capability to pursue it into other people in the company. Does Tim Cook have it? Most of us fear, and in fact assume, that it is not learnable or transferrable. The truth is that it is–I have seen it happen many times. What is required is an understanding of the need to make transferring this capability a part of everyone’s work. Pravin Jain, founder of Synergen, a solar technology company, knew from the beginning that he had to build understanding of the company’s core purpose–what made the business what it was, what made it unique–into everything so that the company was not personality driven but core purpose driven. Synergen’s core purpose was about “non-chip tech solutions.” Everyone learned to look for this essential way of seeing their business activities, even though at the beginning Pravin was the only one who saw that as being core.
The third reason for difficult transitions is that business leaders or founders do not overtly lead the handoff and develop the transition over several years by working to connect everyone and everything to the business’ core purpose. If companies are personality and ego driven, they will have rough founder transitions. It they make their core purpose clear and use it to guide the transition, the transition will be smoother and more successful.
This is the most basic act of The Responsible Business: to take good care of the business’ investors and employees as well as the communities and suppliers. All of these stakeholders suffer when a business does not commit to this nature of planning.
Planning from core purpose makes for a better ability to run the business outside the concern of transition. It builds a core story about the identity of the business into leading and managing all decisions. It can also guide decisions on acquisitions and divestitures. Understanding of core purpose stays with the buisness forever and guides each succeeding leader if it is made overt.
To understand core purpose, Chad Holliday went back to the founding of DuPont over 200 years ago. The founder E. I. DuPont was building a company around “managing risks” for people and other businesses. This core purpose applied to gun powder originally, and chemicals in the present. DuPont’s core purpose is to ensure that chemicals are developed, transported and used in a way that they cause no harm. It makes the move of the new CEO, Ellen Killman, into “food safety” seem much more logical. It provides a basis for consistency through the next transition.
Using core purpose to guide transitions makes them more successful.