A few days ago Steve Jobs announced that he was taking another leave of absence from Apple to focus on his health.  See a story on his announcement here. Of course, we all wish him the best and a safe recovery. However, this situation raises some interesting leadership questions and highlights some of the dangers of executive hubris.

The Danger for Apple

In fact, I would argue that Steve Jobs is putting Apple in a very dangerous position. Uncertainty around executive leadership is always difficult for large public firms, but is particularly precarious for an innovation-driven company in a highly chaotic consumer market. Apple faces highly tumultuous markets with nearly all of its products. Research has shown that temporary changes in leadership lead to inhibited steward-type behaviors in which the interim leader is less likely to enact significant changes as they lack the credibility and power to carry out any real change. Given the importance of fast action in the markets where Apple competes, this could be a real threat to the company. Depending on the length of the absence, constrained leadership could lead to innovation stagnation, which could also seriously hurt the Apple brand.

A Solution

The most important issue for Apple at this point is to create a long-term plan for succession to ease market anxiety over the loss of the brand’s most important face. Given Steve Jobs’ centrality to the Apple brand and culture, it is likely that he will continue to hold significant sway over the organization for the long term regardless of his official title at the firm.  Since the confusion associated with his frequent coming and going over the last few years has been so disruptive, it might be in Apple’s best interest to shift him out of day-to-day leadership role into a more stable advisory role, such as continuing his board chairmanship but moving him out of the CEO role.

Root Cause Analysis:  Executive Hubris

It would be easy for Apple to let Steve Jobs push them around on these issues, since he is so important to the firm, is a founder, and is the public face of the company. In fact, top executives are often subject to narcissism biases and hubris that can lead them to become so focused on their own legacy that they inadvertently choose paths that are in their own best interest rather than the organization’s best interest. It is not clear that such leaders always recognize that this is happening, making the problem even more difficult to solve.

What Steve Jobs Could Learn From Bill Gates

There is precedent for founders moving out of CEO roles but continuing to hold significant sway in the firms they created. Bill Gates is one example, as he has continued to stay involved in the big decisions at Microsoft as board chairman, while giving up his full-time job as CEO of the company he founded to pursue other interests. In this case, Steve Jobs could potentially save the company a lot of ongoing uncertainty by transitioning out of his official role as CEO to deal with other important issues in his life.

Although the issues are challenging, it may be time for Apple to stand up to Steve Jobs. Whether or not they will is another story.

For more, also see the press release Notre Dame put together about my comments:  ND Expert.

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