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How will two of the powerhouses of American’s IT sector deal with the absence of their leaders
 

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The Success in Succession

How will 2 of the powerhouses of American’s IT sector deal with the absence of their leaders, whose talent and drive have been so instrumental in their sector dominance.

* After this article was written, Apple's CEO Steve Jobs passed away on October 6, 2011. With his passing, the World has lost a visionary and a creative genius and we wish that he Rests in Peace.

This spring, two of the world’s most powerful brands  experienced a defining change in leadership. On April 4th, Google replaced amenable CEO Eric Schmidt for idiosyncratic co-founder Larry Page, who promises to renew the company’s focus on product development. Page’s move mimics the approach of Apple’s CEO and guru Steve Jobs, who famously resuscitated the company with an obsessive focus on design and product innovation. Yet Apple also faces a transition, recently announcing Jobs’s resignation as CEO of the most valuable company in the World, causing a technology news firestorm. A subsequent meeting of shareholders was set to challenge the succession-planning of the era-defining tech company.

As these two IT giants face off over market share, possibly deciding the fundamental structure of the internet in the process, their complementary transitions reveal a shared struggle: the tightrope walk of balancing brand consistency against the star power of a charismatic leader. Since founding Google as an internet search platform in 1998, Sergey Brin and Larry Page have chosen to lead as visionaries, not managers, bringing Eric Schmidt on board in 2001 to handle day-to-day operations as CEO.

Their troika style of leadership, while certainly unconventional, has allowed Brin and Page to maintain an anti-corporate image, as they promote small, agile teams, open source software, and “Innovation Time Off” for employees. Their founding mission, “to organise the world’s information and make it universally accessible and useful,” has provided a noble motive for its ruthless expansion, while the leaders have also clung to their unofficial motto, “don’t be evil,” as evidence of their grassroots purity in the face of accusations of monopolization and data privacy concerns. While this separation of church and state has worked thus far, recent times have been tough for Google.

Facebook has poached several highranking employees in the past couple of years, while some of those who have remained have slung complaints of corporate bloat and insufficient benefits at the management. China launched a cyber attack last January in response to Google’s cessation of search censorship, forcing Google to lose market share in its swiftly growing search market. Apple threatens to eradicate Google ads – where 99 per cent of Google’s revenue is earned – on their increasingly popular proprietary platforms. Now that Google has grown to a current market capitalisation of $195 billion, according to Yahoo Finance, “don’t be evil” no longer carries the same anti-Wall Street weight. Page’s recovery of the throne marks a dramatic stab at refreshing Google’s brand, and a return to the founder-as-CEO model of leadership currently ruling Silicon Valley. Yet his success critically hinges on his ability to navigate the managerial slog. By many accounts, Schmidt has played responsible father at Google, not only coaxing cohesive decisions from the two boy geniuses, but presiding over a loose, innovation-centred and very flat management structure that focuses on the ends, not the means.

“Google is run by its culture and not by me,” Schmidt told the Washington Post’s Steven Pearlstein in the summer of 2009. “We operate under the assumption that everyone including me is extremely dispensable, because ultimately Google is bigger than the individuals who make it. Google is about a mission… Part of the job of being a CEO in a company like Google is to have an environment where people are constantly throwing you their best ideas as opposed to being afraid to talk to you.”

Conversely, Page can be shy, single-minded, egomaniacal and occasionally rude. No longer will Google’s founder be able to stare at his Android phone in public forums and pooh-pooh time with journalists, analysts, and governments, warns Ken Auletta, author of Googled: The End of the World As We Know It, in the New Yorker. Page may promise a return to product innovation, but he must skirt the pitfall of having a narrow vision translate into company-wide tunnel vision.

Does the apple fall from the tree? Yet if any leader serves as an example that obsessive focus and temperamental social style won’t hold a CEO back in the tech world, it’s Steve Jobs. Initially one of Apple’s co-founders in 1977, Jobs’s fan-boy status derives in part from his singular focus on sleek, user-oriented design, which has become the company’s calling card – and key market differntiator. The tale of his journey at Apple has become a legend; after being ousted from Apple in 1984 precisely for his erratic mood and failures as a manager, Jobs returned to Apple in 1996 when Apple purchased his company NeXT. By 1997, he had risen to CEO.

His products have revolutionised the way that developers conceive user experience, and fundamentally shifted the way users access the internet, as Apple’s closed mobile platforms, the iPad, iPod, and iPhone, are increasingly popular worldwide.

Not only has Jobs become synonymous with Apple’s brand, he has been almost entirely responsible for shaping each and every product decision. Fast Company’s Farhad Manjoo shed some light on this in an otherwise laudatory 2000 piece on the company. “Apple’s engineers spend 100 per cent of their time making products planned by a small club of senior managers – and sometimes entirely by Jobs himself,” he wrote. “The CEO appoints himself the de facto product manager for every important release; Jobs usually meets with the teams working on these new gadgets and apps once a week, and he puts their creations through the paces.”

As Apple surpassed Microsoft in 2010 to become the most valued tech company – with Google ranked a more distant third – it was clear the primary threat to its momentum would be losing its leader. No one knows for sure when Apple will lose Jobs permanently; his January 17th announcement of a leave of absence did not define the period of time. Although the announcement barely caused a dent in Apple’s stock price, given Apple’s next-day announcement of record-setting Q4 2010 earnings, history does not predict continued good fortune for Apple on this front.

During Jobs’s last leave of absence in 2009, Apple’s stock dropped by 50 per cent, only to recover after his return. The question is critical for Apple: can it maintain its position as a pioneer and lead the computer industry’s transition to mobile without Jobs? As both Google and Apple face dramatic transitions, perhaps they can take consolation from the example of their kid brother, social media site Twitter. After being lead by both of its co-founders in succession until 2010, Twitter has handed the reigns to its third CEO in three years, COO Dick Costolo, to develop the site’s new interface. Quick turnover of CEOs has only helped Twitter’s explosive growth, proving the timeless truth that, especially in Silicon Valley, product is king. If Page can deliver on his promise to reignite small-scale innovation at Google, he may retain users’ perception that Google is on their side. If Apple can infuse Steve Jobs’s vision into the core of its iteration process, with steady product rollouts continuing even in his absence, as planned- it may survive the departure of the man himself. Ultimately, a company leader- whether guru or tyrant- is only as powerful as his ability to ensure that the customer rules.

 
  Copyright 2011, Aramex International