Leadership

Apple's boss proves that leadership results in performance

During a difficult environment, can strong leadership still create great results? Or is the smarter move to cut expenses until sales come back? Executive coach John M. McKee says the answer can be found in Apple's recent numbers.

Apple's Q3 operating results, up 47%, far exceeded Wall Street's expectations.  For comparison's sake: the most recent numbers for Dell showed it down 23%, HP was down 2%, RIM (BlackBerry) dropped 4%, and Microsoft was down 17%.

What's behind Apple's surprising results? Although industry analysts had expected it to do better than competitors, even they were blown away. Further, this performance comes during a retail environment where many big name retailers are flailing around, just trying to survive.  Additionally, all reports about consumer spending say that it's way down year over year, too.

Many would say the answer for Apple's continued success lies in their usage of the  classic marketing matrix.  Developed back in the 60s, it remains the backbone of many advertising and marketing plans created today. In summary, it states that all marketing decisions fall into one of four categories:

  • Product
  • Price
  • Place (distribution)
  • Promotion

Let's consider it in this case: Arguably, Apple's product have a cachet among many of its fans - to them, it's much cooler than many of its rivals. But most techies would note that the hardware is not the best available.  Price-wise, Apple is not inexpensive. Many competitors offer more for less. So what about distribution?  Well today, that means a combination of online sales and retail, and Apple is good at both. But is it better than Blackberry, Dell, or HP?  Hard to argue that it's highly superior to them on this element. Promotion, which is usually considered to be, "off pricing, discounting, enhanced offers, etc." is rarely used by Apple.  However, it does spend a lot on brand development - like those ads with the guy from Mac and the guy from Microsoft.  But if you want to watch really big money spending on brand development, watch Microsoft's launch of Windows 7: I expect they'll buy any possible opportunity to ensure that every human being in the world knows about it.

So, what's behind Apple having their single best quarter in history?

I think it has everything to do with their leader, Steve Jobs. As most people will know, he has created a culture that is very different from the others cited in this article.  Some say it's great. Others contend it's too demanding.  A few say it's too dependent upon the boss himself. Regardless of where you stand regarding him and his style however - his results are hard to debate.

As an executive and leadership coach, I'm often involved in discussions regarding the ultimate power of an individual leader. It's worth noting that, in defense of themselves, or their lack of performance:

1. Many leaders will tell me that they are hamstrung by the need to show certain quarterly results. These people contend that they'd like to do things differently, but don't have the autonomy.

2. Some leaders simply don't buy into the concept that any single person can have that great an impact on performance overall.  They've probably never seen, or had, a great boss who accomplished things others could not.

3. Fiscal responsibility stops them, I hear. These bosses whine that - while they believe it's possible to get better results by investing in culture, team performance, or even individuals - "now" is not the right time to do that.  ("Now" is always when they say it is.)

4. Worse still, many leaders actually still equate investing in people as merely increasing expenses. Such thinking doesn't even consider the ROI that can be generated.  (Good leadership coaching has a quantifiable return in the range of 500% according to independent studies.)

If you don't know already, Steve Jobs has many detractors. Many people have left Apple because they couldn't work for him. But ultimately, Apple's results can be directly linked back to his strong leadership.

When leadership causes - and expects - strong performances from every person in the company; the payoff is always improved results.

john

Leadership Coach

About

John M. McKee is the founder and CEO of BusinessSuccessCoach.net, an international consulting and coaching practice with subscribers in 43 countries. One of the founding senior executives of DIRECTV, his hands-on experience includes leading billion d...

7 comments
Techtoo
Techtoo

Hate to say this, but the news about Steve Job's health has been keeping Apple in news through out the year. That, in my view, has played a positive role. The "My way or highway" attitude is working wonders in Apple, but that is not necessarily a one-size-fits-all approach. Does anyone remember NEXT computer?

dean
dean

Jobs leadership has certainly played a big role in Apple's continued success; but when you flesh out your marketing matrix with some details it's clear that certain parts of Apple's approach to marketing are winning them both new and return customers. * Product Apple's hardware is rarely the top of the line, but they're as good as any builder out there at matching their parts to the system's and the users' practical needs. * Price When you compare systems fully-configured as the buyer actually uses them, the actual cost difference shrinks -- often to a dead heat. And when customer support after the sale is counted in, Apple may not always be better; but they consistently look better from the customer's viewpoint. This isn't just about marketing hardware and software; it's about promoting customer experience. Keeping the customer on their side greatly helps Apple's sales. And their leaders have built that into Apple's corporate culture. * Place (distribution) Apple Stores are a lot more than stores; Apple has been leveraging them for all they're worth. They are the focus of Apple's promotion for all aspects of their marketing: the Stores are big, expensive, and quite effective working billboards that not only demonstrate the products, but also the customer service Apple sells. * Promotion Between the Stores, the print ads, the TV spots, and the web... And it helps a lot that Steve Jobs makes himself visible to Apple's customers and developers, and presents a clear message to his market.

BRolfe
BRolfe

This "article" lacks content. It raises an interesting question, but provides no insight. What, for example, does the author see in Job's leadership methodology that may have contributed to Apple's success? What "culture" has Job's created?

robin
robin

In my Making You a Leader seminar, I use the Apple situation back in 1995 when the company started a decline that nearly drove them under. Nobody exercised the leadership needed to deal effectively with release of Windows 95, which technologically was viewed as Macintosh 89. Steve Jobs had departed and was replaced by a series of supposedly more capable professional managers who continually failed to lead Apple to have more competitive products or positioning. Apple didn?t revive until Jobs returned and led the introduction of shiny colored outer shells for their computers.

Systems Guy
Systems Guy

Could it be that Jobs has a vested interest in a company he (jointly) created? Plus he probably owns most of the stock and can pretty much tell people, who work for him, what to do. As the saying goes, "It's good to be King." Least not forget his ego. From everything I've read about Jobs, "it's my way or the highway" type attitude. Few other CEO's can do this, because a) they are hamstrung, b) they are only there to make money to retire, they have no real interest in the product being sold, c) they have no real knowledge of the product(s) they are selling or to whom them are selling. Job's is a techy guy, he knows his product, plus he has a good imagination regarding products to bring to market. Take the iPod, it's little more than a backup device that can play music, videos, etc. How simple, wish I would have put all of that together.

anicesteak
anicesteak

The thing about Apple's products is that they work. The philosophy that quality is non-negotiable has to come from the top. Unfortunately, my experience has been that quality almost always plays second fiddle to schedule. One company I worked for was developing a major product. The schedule was "challenging", so the VP in charge of the product told everyone that certain required activities (to ensure product quality) could be done after the delivery date. Needless to say, the product had very significant problems in trial, which led to any other potential sales drying up. And now the company no longer exists.

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