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The Greatest Threat to Steve Jobs’s Legacy

October 29, 2011

With thanks to Walter Isaacson, Steve Jobs got the last word on his remarkable life. But will Apple’s founder be as fortunate extending his enterprise legacy? Apple’s leadership — the Tim Cooks and Jonathan Ives — will step up to realize the vision of their late leader. But that’s this year and next. What about in three years? Or five?

The greatest threat to Steve Jobs’s legacy isn’t competition from Google, Amazon, Facebook, or some young hippie from Yangshuo; it’s his board of directors.

Jobs himself feared this. “Hewlett and Packard built a great company, and they thought they had left it in good hands,” Jobs told Isaacson. “But now it’s being dismembered and destroyed. I hope I’ve left a stronger legacy so that will never happen at Apple.”

Leaving a charismatic legacy is one thing; leaving behind a board with wisdom, judgment, and entrepreneurial courage is quite another. Hiring insanely great executives is not like bringing on supremely perceptive directors. Stubbornly mercurial founders are not famous for building strong boards. They chafe at oversight. History suggests that well-governed, publicly-traded firms that have been run by their founders encounter profound problems after the founder dies. Organizational stresses, strains, and cracks concealed by reality distortion fields intensify with the founder’s passing. Board competence — as much or more than successor CEO capabilities — determine how well cultural values and leadership legacies endure or ebb away.

HP’s unhappy governance example requires little review. The firm’s boardroom antics have contributed little positivity to shareholder, employee, or customer confidence. David Packard and William Hewlett — more modest and circumspect than the Jobs who admired them — would likely be displeased to see how the company they cofounded succeeded more in spite of its board than because of it.

The eponymous Walt Disney Company faced comparable challenges when its founding genius died. So did Edwin Land’s (who Jobs also admired) Polaroid. Founders are a special breed. So are their boards. They may contain a constellation of all-stars, but all too frequently, the whole proves significantly and shockingly less than the sum of its parts. The death of a strong founder betrays the weakness of a supine board.

This is a hard leadership challenge. Steve Jobs’s choice was, for the first time in his professional life, to make himself as openly, authentically, and honestly transparent as possible. He was revealing to the point of viciousness in his characterizations of colleagues and rivals. No one reading Jobs’s quotes and comments could doubt where Apple’s creator — and re-creator — stands as a business leader and technological visionary.

Apple’s board should emulate his example. They should openly, authentically, and honestly be transparent about what aspects of Jobs’s vision and values they will enshrine in their oversight and which ones they may downplay as Apple moves on without its founder. As fiduciaries responsible to shareholders and stakeholders alike, they should publicly disclose how they will hold themselves accountable for these efforts. Indeed, does Apple’s board see its role as simply assuring the company and its management complies with the law? Or does this board recognize that a great deal of the firm’s economic value derived from product, service, talent, and innovation ecosystem emphases that go beyond 10-Qs and 10-Ks?

Jobs’s Apple — like Hewlett and Packard’s HP, Disney’s Disney, and Land’s Polaroid — is a company where operational excellence unmoored from world-class governance can swiftly drift into the mediocrity of B+ innovation that briefly wins market share but never hearts and minds. It is no small irony that Disney itself acquired Jobs’s Pixar — and put Steve on its board — in no small part to invigorate the company’s creative energies, technologies, and insights. Who will be doing that for Apple’s board?

Executive succession is always a challenge. Some companies — IBM after Akers, ExxonMobil, and DuPont — handle it particularly well. But Apple is undeniably a special case, and its board undeniably has a special challenge. Apple’s board should have the courage and integrity to both acknowledge that and publicly articulate how it plans to rise to meet it. After all, they’re overseeing the sequel to their founder’s book.

Michael SchrageMichael Schrage

Michael Schrage, a research fellow at MIT Sloan School’s Center for Digital Business, is the author of Serious Play and the forthcoming Getting Beyond Ideas.

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