Corporate Culture and Steve Jobs
Company valuation should include valuing the impact of corporate culture.
Ever wondered what's at the heart of a company's success? Is it solely the financials, leadership, and market conditions, or could there be a hidden gem that plays a crucial role? Today, I present a gem from my archives - an article dated August 28, 2011, when the tech world was abuzz with Apple's iconic Steve Jobs stepping down as CEO. This piece is more than a historical reflection; it serves as a revelation into an often-overlooked yet vital component of corporations - corporate culture. It issues a clear call for the transparency and valuation of corporate culture, which I firmly believe significantly influences the fortunes of a company. Interestingly, Apple, valued at $356B at that time, now boasts a staggering $2.91T market capitalization. As a long-term shareholder of Apple, I find this not only fascinating but speaks volumes about the power of culture. Here I talked about the corporate culture of its employees. Let’s travel back in time and rediscover why corporate culture should be more transparent to help us as investors and employees evaluate which companies have the keys to unlocking a company's true potential for innovation and value creation.
Steve Jobs announced his resignation and CEO replacement this week. The market flurried on the news, articles, and cable segments were plentiful on Job’s revolution of the world, his greatness, his attention to detail, how round two leadership differed from round one, and whether Tim Cook could sustain the innovation and therefore the stock profitability. Because of the news, and the market’s speculation about the future, the stock price fluctuated.
While the SEC, the Accounting Standards Board, and the public expect greater transparency on the financials, this is a perfect example of where further modernization of transparent data is needed. The data I am talking about is Corporate Culture. What is the real corporate culture of a company? Behind the curtains in the offices, cubicles, conference rooms, and break rooms, what do we see and feel if we were employed? Does the executive leadership down to middle managers think about creating unanticipated needs? Do employees each feel their job has meaning, and they are curators for society creating imaginative and innovative items that will simplify people’s lives? Are people rewarded because of not only successes but also the advice/counsel of failures through offering lessons learned? Has leadership not only established its values but lived them every day?
We are talking about simple yet life-altering values that make sense to everyone on the team; the words/phrases that are heartfelt and have a real connection to the team (exclusion of canned/stock words). Corporate Culture includes leadership that shares his/her intelligence and understands its greatest creation is the team that can then imagine, create, care for, and gives back. The daily belief is that teams that work and play together stay together. Moreover, the practice of creating and sustaining relationships is key both inside and outside the company.
The stock market this week speculated whether the rein of Apple was coming to an end. Sure, they have items in the pipeline so they still have the tail they could ride for a while. The question that writers and business news broadcasters were asking indirectly and some directly…Was Steve Jobs the only creative sustaining genius in the room? Were others mere followers of his vision? I sure hope not. That would mean the weight of the company rested solely on him. Given the depth and breadth of Apple’s presence in the world, that would be awfully herculean of Steve Jobs and would have been an unsustainable tenure. To ask such a question would underestimate the power of team…the Apple team.
Instead, the question the market should be asking is what is the culture of Apple? How deeply ingrained is the culture? How deep is their bench of employees technically, creatively, and aesthetically on and off the court? Is Tim Cook the right person to nurture the culture to not only sustain it but also grow it to a better version of itself?
The biggest question of all we should be asking ourselves is why do we not know the answer to these questions. Why have we not broken into the thick steel vault of Corporate Culture? Why do we not include in company and market valuation the corporate culture aspect more directly? We look at current leaders, financials, pipeline, past performance, changes in market conditions, ratios, strategy, etc for valuation. I would propose that these elements are important in valuation; however, corporate culture is the thread that runs through them all. It is hard to measure because it is enigmatic…hard to define and for many hard to create, grow and transform.
When people figure out Corporate Culture is the only transformative value creator, then valuing a company will come down to those that have a good culture versus those that do not. When looking at good cultures, then it will be which ones shareholders believe in and more align with their values. After all, shareholders are a part of the team. Their contribution is not time, energy, or creativity…they are contributing their hard-earned dollars and trust to the team and the culture.
Want to value a company whether as a shareholder, partner, or sole owner for buying or selling purposes? Top of mind in your valuation calculation…corporate culture. Companies that develop an amazing culture and then proudly let others know about it will create, hold and grow more value.
As for Apple, I don’t have firsthand knowledge of their culture but I can think of $356 Billion reasons why we should know in great detail.
Related articles from the original post in 2011. Several of these articles may be archived.
Harvard Business: Why Apple Doesn’t Need Steve Jobs (blogs.hbr.org)
Cook may find it hard to sustain Apple culture (msnbc.msn.com)
Life After Jobs: Why Apple Isn’t Doomed (pcworld.com)
Steve Jobs’ imprint deep within Apple (sfgate.com)
Steve Wozniak Calls Jobs ‘Best Business Leader of Our Time’ (techland.time.com)
Tim Cook’s First Memo To Apple Staff: “Our Culture Is In Our DNA” (paidcontent.org)
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