Friday, October 03, 2008

Another ridiculous Apple rumor, and how to stop them

Today, someone spread a rumor that Steve Jobs had a heart attack, and the price of Apple's stock briefly tanked until the company made a statement that Jobs is fine. Spreading false rumors is a time-tested way for short-sellers to drop the price of a stock without actually selling it. I don't know if Apple is on the "no short sales" list, but if it is, this may have been someone's way to get around the SEC rule.

The problem is the belief that if anything happens to Jobs, Apple is doomed. That's silly, of course--Apple has thousands of very talented people, and the product design, development and marketing process will continue. However, what Apple doesn't have in place is a visible line of succession, which makes the company vulnerable to rumors and manipulation. To squelch these rumors, Apple needs either to appoint a President as a clear successor to Steve Jobs, or to make Tim Cook, Apple's COO, a lot more visible. I don't know Cook, but from his background, he's an operations guy (which is what makes him a good COO). It would help Apple to make him more visible, or to promote someone from inside the organization to the President position. The key is to make it clear that Apple's design, engineering and marketing, as well as its future product planning, is in safe hands.

The one thing that's going to be very difficult to replace under any circumstances is Steve Jobs's ability to present, and sell, his products. There is virtually no one on the planet who is as good as him at making a presentation. (The ones who are couldn't run a major corporation.) Whether it's Tim Cook or a new President, they need to share stage time with Jobs at new product introductions, to show that they share his vision and have his confidence.

Any CEO can get hit by a bus--s**t happens. One of GE's great strengths over the years has been its ability to develop managers and deal with succession. When Jack Welch was preparing to retire, he had several highly-qualified and highly-visible candidates to replace him. (The highly-visible part can be a drawback; after Welch chose Jeff Immelt to replace him, most of the other candidates left GE to run other companies.) I think that it's time for Apple to deal with these recurring rumors by making its line of succession clear and visible.

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