When asked to comment on his reported death in a newspaper, Mark Twain snapped back with a quick, one-liner that would forever be remembered, “Rumors of my death have been greatly exaggerated.”
The same quote was posted on a screen behind Steve Jobs, the CEO of Apple, when he recently presided over product rollouts for the holiday season. Job’s physical appearance, where the executive seemed noticeably thinner, seemed to suggest he is in ill health.
With the lingering question of health hanging overhead at Apple and Bill Gates’ recent retirement at Microsoft, many are beginning to wonder how companies can afford to lose leaders such as Jobs and Gates. To help understand this situation, Hideki Takei, assistant professor in business, accounting, and economics, lends some insight.
What is the job of a CEO?
As a CEO, you talk about destination, and you see things three steps ahead. They are visionary leaders. The function is not about controlling everything, but to show the company the overall direction, and lead them to get there. A lot of people think that a CEO makes the strategy, but really, that is for top management.
When is it a good idea for a CEO to step down?
You can determine a certain age to do so, or you can determine when based on knowledge. If your knowledge cannot keep up with the technology, or if your body cannot take it due to ill health, you should retire. In addition, a company and the public needs to know who is second in line. Soichiro Honda, the founder of Honda Motor Co., was a good example. Honda noticed he could not physically, or mentally, keep up with technology. He proceeded to introduce the man that would be replacing him. They maintained the image of the company and of the CEO position. This helped to maintain the company’s image and keep up the stock price.
Do rumors of Steve Jobs’ health have any affect on Apple?
We first caught wind of his declining health in June, and the stock price dropped in July. That is overreacting, because afterward, the stock recovered. Most believe, however, is that there will be someone else in line as CEO. The eventual end of his life does not mean the end of Apple. If I were an investor, I would be more concerned with who is next in position, and how he/she will handle the company, and whether or not they will be charismatic, because Jobs led by his charisma.
How would the loss of Steve Jobs affect a company like Apple?
I expect a slight drop in Apple’s value, but in the long term, it should gradually increase in value as long as they introduce newer products.
What is the best way for a company to make the transition from leader to leader?
First you have to make a succession plan, including qualifications and leadership style, as well as a timetable. Second, you need a governing structure, monitoring the steps of the plan. And finally, every move should be easy understandable; otherwise, the stock market will react negatively, and you will damage the image of the corporation.
Christopher Bender ’10 – Juniata Online Journalist