Hey, relax: Steve Jobs’ resignation won’t make Apple rotten

Short term, there will be little impact

The short-term selloff of Apple shares immediately after the announcement is driven by fears that Apple will not continue to perform as it has once Steve Jobs leaves the CEO role. However, these fears appear relatively unfounded at least in the short term.

Tim Cook, formerly COO and now CEO, has been in day-to-day charge of Apple not only since January but during two previous periods when Steve Jobs’ health prompted extended absences. On all three occasions, Steve Jobs was nevertheless involved in major decisions and continued to set strategy for the company. His new role as Chairman suggests this will continue to be the case even if he does not sit at a desk in Cupertino for eight hours every day.

In addition, Tim Cook has by all accounts managed the company well during these absences, and is considered by most to be a particularly strong operational leader. Since many of Apple’s current challenges revolve around producing sufficient inventory to satisfy demand, these talents will be in high demand and suit Cook well to lead the business.

Meanwhile, Steve Jobs will continue to provide the visionary leadership Apple is accustomed to. Lastly, it is very likely that at least the next iterations of major products such as the iPhone and iPad are already well underway, and that the broad strategic direction for future versions has also been set already, so that there is unlikely to be any impact in the next one to two years.

Longer term, there is a risk of a lessening of Apple’s pre-eminent position

Longer-term, however, if Steve Jobs’ health is indeed behind his resignation, as many have speculated, and his condition worsens to the point that he can no longer be involved in even occasional decision making at the company, there are reasons to fear that the company will struggle to emulate its recent success.

Steve Jobs has provided both strategic vision and personal leadership at the top of the company, as arguably the most visible and well-known CEO of any technology company today. Tim Cook will not step easily into either of these roles, as a safe pair of hands but hardly a visionary or a charismatic figure.

That visionary role now has no obvious owner among the second tier of management at Apple. Jony Ive is well known as the lead designer at Apple, responsible for the look of Apple’s iconic products, while Scott Forstall has a background in product leadership spanning NeXT, Mac OS X and latterly iOS. It is not clear who among these two (or other senior figures) will step into Jobs’ shoes as a visionary and leader, complementing Cook’s operational leadership.

As such, there may be either conflict among these senior leaders or a lack of clear vision for the company going forward, either of which would be damaging for the company. Cook’s challenge will be to harness and channel the creative energies of the team beneath him such that a single vision and strategy emerges, something that will be difficult to do on a bottom-up basis in contrast to the previous top-down strategic leadership of Jobs.