Huge management shakeup at Apple today.
PR…
After the death of Steve Jobs last October, the concerns (from a shareholder perspective) of the immediate future were not great since he left the company with a solid management bench. Unsurprisingly, internal strifes would take place as those with bigger ambitions attempt to take advantage of the leadership vacuum that results from the passing of someone who literally had his finger in many parts of the company. CEO Tim Cook however has managed to keep a firm hold on the company, bringing it to even greater heights. Recently though, it seems that more and more cracks are beginning to form under his leadership. As a long term shareholder, such issues cannot be ignored.
SVP of Hardware Engineering Bob Mansfield originally announced his plans to retire back in June but changed his mind after CEO Tim Cook offered him an offer he couldn’t refuse (a huge payout of cash and stock). The reason behind this offer struck a chord in me though:
According to three people familiar with the sequence of events, several senior engineers on Mansfield’s team vociferously complained to Cook about reporting to his replacement, Dan Riccio, who they felt was unprepared for the magnitude of the role. In response, Cook approached Mansfield and offered him an exorbitant package of cash and stock worth around $2 million a month to stay on at Apple as an adviser and help manage the hardware engineering team.
Retiring from Apple as a high level executive isn’t unusual because these folks are essentially set for life given their executive compensation packages. They no longer really need the money and most stay in order to be able to contribute to bringing products to market. Working full time for Apple corporate can be extremely rewarding but also, very time consuming and demanding. Thus it isn’t surprising when some choose to depart in order to finally enjoy their financial success and have more time for themselves and their family.
As for the above though, it brings up the question of just how deep Apple’s bench really is when it took some senior engineers to get Cook to approach Mansfield with such an offer. Most of the key hardware and software executives are all relatively young and will eventually reach that stage where early retirement looks really good. Which leads to the question of whether or not the company is doing enough to foster the growth of those next in line and being able to identify those with the talent and skills to take on a more senior role, should one of their predecessors decides to depart. As the above Businessweek article mentions, Cook being more of an operational manager, has relied heavily on the expertise and knowledge of other executives. These executives themselves are also reliant on the expertise of the engineering teams that report to them.
On Monday (October 29), Apple announced that Scott Forstall (SVP for iOS) and John Browett (SVP of Retail) will be leaving the company. For Browett, his departure does not come as a surprise since there has been a number of miscues in retail under his short stewardship (the most critical being the one I posted about back in August). For Forstall, there were numerous articles which profiled him that came up shortly after Jobs death, including one by Businessweek which basically noted that he was an extremely polarizing individual with grander ambitions. There were already signs of internal strife when Apple’s key industrial designer Jony Ive said that he did not agree with some of the user interface decisions in iOS where some metaphors are overdone and extraneous (something I fully agree with). Forstall of course oversees iOS and has pushed for some of these skeuomorphic design decisions (some of which themselves, originated from Steve Jobs himself including the faux leather user interface in the Calendar app). Forstall was also responsible for the original Aqua interface in the first versions of Mac OS X. This is the brightly colored translucent gel controls which Apple has been scaling back on in each subsequent release to where it is mostly non-existent in Mountain Lion.
That abrasive personality however seems to have gotten worse over the past year though which caused the departure of some lower level executives who found working with him to be impossible. Back in 2008, one key casualty was Tony Fadell, the original engineer and executive who brought the idea of what eventually became the iPod to Apple. Word has it that Fadell and Forstall didn’t get along and that especially intensified when both were pitted against each other by Jobs in order to determine what software would end up powering Apple’s future mobile platform (what would eventually become the iPhone OS and latered rebranded to iOS). Forstall at one time was also considered the eventual heir apparent to the CEO slot. Jobs himself was close to Forstall and therefore, one of his biggest defenders. Forstall was also known to flaunt that relationship inside the company. Now that this umbrella is gone, consolidating power has been far more difficult especially in light that culturally, some things have been different under Cook (more sanity and rationality). Make no mistake, Forstall is a brilliant software engineer but sometimes, these folks are not leadership material when it comes to the overall decision making process or being able to work more collaboratively. Forstall’s biggest undoing was likely the Maps debacle in iOS 6. IMHO, the decision to ship something as half-baked as that when developer feedback throughout the testing cycle was fairly negative, is inexcusable (more so when it was revealed that Apple still had one year remaining in their contract with Google). The maps project was initiated by Jobs as a response to being able to rely less on Google for various web services in Apple’s products.
Unsurprisingly in the absence of someone like Jobs, there would be even more organizational infighting to consolidate power and according to those in the know, Forstall was even exhibiting this openly, by challenging Cook on several occasions. Forstall was known to say there was “no longer a decider”, implying that since Jobs death, there was no longer anyone to be the “yes” or “no” hatchet man that Jobs was known for when it came to approving or rejecting key ideas. Forstall was also known for taking the credit of others which I have to say, isn’t a unique trait reserved for Forstall. Such drama is typical in the executive ranks at many major corporations, but Apple can ill afford to have more executives leaving because one of them is being such a polarizing individual (even if some consider him to be like a mini-Steve Jobs). The fact that Cook was forced to publicly apologize for the Maps debacle doesn’t even cover what likely went down internally inside of corporate headquarters. The Wall Street Journal basically says that Forstall is being stripped of his responsibilities and asked to leave and that his refusal to sign a letter of apology regarding the Maps brouhaha, may have just been the straw that broke the camels back. In simpler terms, Forstall didn’t fit well with the rest of the management team (under Tim Cooks stewardship). With regards to Browett, he too likely never ended up fitting in and his own gaffs with the retail team cemented his fate (I am actually glad that he was cut loose). This unfortunately was Cooks first major hire so it will be interesting to see how his future choices end up panning out when it comes to executive hires.
Of interest in the shakeup is how Forstall’s previous responsibilities are being spread out. Eddy Cue (who oversees iTunes, the App Stores, and iCloud) will take over the online services; Siri and Maps. This should be interesting since both provide far more technical challenges. Craig Federighi will now head up both OS X and iOS which makes sense since both share the same underlying technologies. Probably the most exciting is that Jony Ive’s will assume some of Human Interface (user interface/experience) responsibilities which IMO, could bring back some sanity to some of the inane decisions in some of Apple’s software. This could also be what is needed to bring some new life into the user interface of iOS which I mentioned before, is getting a bit long in the tooth when compared to what Android and Windows 8/RT are bringing to the market. Mansfield was given a new title, SVP of Technologies, where he will still be in charge of hardware; mainly the wireless and semi-conductor technologies powering Apple’s mobile devices. Cook will temporarily oversee the retail arm until a replacement can be found.
So basically, Cook has made some key decisions to keep this solid bench intact for the moment. The dismissal of a key executive/smart engineer like Forstall also sends a clear signal; that no one person is above the team especially when the Apple brand is being tarnished in the process (Maps brought unwanted attention as was the falling customer service at Apple Stores). It is clear though that more needs to be done to get additional talent on the bench such that they can be elevated when the situation calls for it. One has to wonder why former retail SVP Ron Johnson did not have anyone groomed as a logical successor (which was one of the reasons Apple ended up going with an external hire). Like everything else though, that is one of the most challenging aspects in any large organization where often times, politics gets in the way. What remains to be seen though is the long term. Previously, I had a high level of confidence in Tim Cooks ability to lead the company over the long haul. His first big hire however did not pan out well which leads to questions about his ability to find people who will truly fit in to the culture of the company.
