This is one of those cases where I really hope I’m right. I, like everyone else in the technology industry, was surprised to hear Apple CEO Steve Jobs would be taking a leave of absence. In his absence Apple COO Tim Cook will take the reigns (as he did during Jobs’ previous two medical leaves in 2004 and 2009). Here’s Mr. Jobs’ letter…
At my request, the board of directors has granted me a medical leave of absence so I can focus on my health. I will continue as CEO and be involved in major strategic decisions for the company.
I have asked Tim Cook to be responsible for all of Apple’s day to day operations. I have great confidence that Tim and the rest of the executive management team will do a terrific job executing the exciting plans we have in place for 2011.
I love Apple so much and hope to be back as soon as I can. In the meantime, my family and I would deeply appreciate respect for our privacy.
Before I go into my theory let me get the obvious fear out of the way…Has Steve Jobs’ Cancer Returned?
Answer: I sincerely doubt it. You don’t continue on as CEO if you’re battling a resurgent cancer. Further you don’t hide cancer because the treatment has some obvious side effects (note the normally secretive Jobs was open about being diagnosed in 2004).
That out of the way I have another theory here. And it revolves around something that everyone else (save ZDNet’s Larry Dignan) seems to be forgetting. From the ZDNet Article…
Earlier this month, a pension fund proposed that Apple become more forthcoming about its succession planing for Jobs, who is a pancreatic cancer survivor. Details of Jobs’ latest medical leave were disclosed.
In that proposal, which was detailed in Apple’s proxy statement, the Central Laborers Pension Fund in Jacksonville, Ill. argued that Apple do the following:
Apple’s board will review the succession plan each year;
Develop criteria for the CEO position and a process to evaluate candidates;
Identify internal candidates;
Begin a “non-emergency CEO succession planning” process, three years before a transition;
Report the succession plan to shareholders each year.
Apple urged a vote against the proposal.
So there’s recently been talk on creating a succession plan. Now I’ve been watching Steve Jobs my entire life and one thing I’m absolutely sure of is this: Steve Jobs is going to hand pick his own successor (in fact I think he already has).
But there are a lot of financial interests in Apple now (like this pension fund) and they’ll pressure Apple into building “criteria for the CEO position” (and probably even conducting a CEO search). It’s telling that Jobs himself had to insist on Tim Cook getting a big bonus for running the company in 2009.
So the finance guys want a succession plan and Jobs is smart enough to know he can’t let a plan be devised lest it derail his hand picked successor.
That in mind I want you to consider something. This is the first time Jobs’ absence has been open ended (as brought to my attention by Jonathan Geller of BGR) . Here’s Mr. Jobs’ 2004 letter…
I will be recuperating during the month of August, and expect to return to work in September. While I'm out, I've asked Tim Cook to be responsible for Apple's day to day operations, so we shouldn't miss a beat. I'm sure I'll be calling some of you way too much in August, and I look forward to seeing you in September.
And here’s the text from his 2009 letter…
In order to take myself out of the limelight and focus on my health, and to allow everyone at Apple to focus on delivering extraordinary products, I have decided to take a medical leave of absence until the end of June.
In both cases he gave a specific date when he’d be back. This time he didn’t. Important when you realize this is also the first time he made a specific point of saying he’d stay on as CEO.
Having laid all that out let us look at the position Steve Jobs has built for himself…
- He’s still CEO so he can come and go as he pleases but he’s on leave so he can get out of any task he doesn’t specifically want to do
- His apparent hand picked successor is now running the company for an indefinite period of time and establishing himself as the norm (e.g. years from now Jobs could step down as CEO and it wouldn’t cause a blip because Cook had already been running the company)
- No one’s going to build a succession plan while Jobs is on medical leave (some journalists are bringing it up but Apple would be committing Stock Market Suicide if they started writing up a succession plan at a time when Jobs won’t detail his health issues)
To me this seems like the perfect scenario. Jobs gets to be the spiritual guide for the company while not having to maintain a busy CEO’s schedule (which probably is putting a legitimate strain on his health). While Cook gets to prove himself once and for all. Everyone wins.
(and it goes without saying that I wish Mr. Jobs all the best and hope whatever health issues he has, major or minor, resolve themselves as quickly and painlessly as possible)
Edit: One last point I should have made. From CNN's MoneyBlog...
On Tuesday, Apple will report financial results that are almost certain to shatter its past records. Wall Street analysts estimate that the company raked in sales of more than $24 billion in sales during the last quarter, driven by strong iPad demand during the holiday season.
The rest of 2011 is filled with bright spots. Apple is scheduled to introduce the iPhone 4 on the Verizon Wireless network on Feb. 10. The iPad 2 is on the horizon for this spring, and the new Mac OS X "Lion" operating system is expected to go on sale later this year as well.
When you add to that the successful launch of the Mac App Store and Apple TV's positive sales numbers (still not a blockbuster but selling better than any previous version) you get a company that's in remarkably good shape. There's never been a better time for Steve Jobs to pull back.
Addendum (10/5/2011): Steve Jobs died today (less than a year after I posted this). But I'd like to say I'm still proud of this piece for two reasons.
1. Because it does lay out a masterful plan on Steve Jobs' part. Even if he was sicker than I thought that doesn't take away from the brilliance he showed in acting at the perfect time throughout the attempts to subvert his chosen successor.
2. Because I believed in the Magic. If my faith in Jobs' amazing abilites made me overlook how sick he was I could think of no better reason to be foolish.
R.I.P. Mr Jobs.