Steve Jobs: 30 Billion a Year in Value?

Portfolio has an article estimating that Steve Jobs adds 30 billion a year to the economy. I agree that Jobs is enormously talented, but giving him 50% the credit for what Apple does and 50% of the credit for iPod and iPhone ecosystem strikes me as a classic case of the "romance of leadership;" there is a lot of evidence that leaders get too much credit and too much blame .  CEOs matter less than observers usually think --this well-documented  "overattribution" seems to be happening in this article too. In Apple's case, for example, much of the creative work is done by others in the company (including the magnificent Jonathan Ive, who leads design) and hardly anyone talks about how well they manage their supply chain and how brilliantly they control other costs -- that is a big part of their success. 

Yet, even though I talk about Jobs in my "Virtues of Assholes" chapter, I do love Apple products and experiences (the stores are wonderful and seem to be getting even better), believe Jobs is a genius, and wish him good health and would love to have him back in the saddle. Yet, regardless of what happens, it is clear that Jobs will go down in history with the likes of Thomas Edison.  The two are similar in that, their technical talents, marketing, creating excitement, and managing the business of innovation were perhaps their greatest skills. Edison had a quite an impressive "reality distortion field" himself. Indeed, one of the biggest differences is that Edison wasn't great technically, at least according the biography in the above link.  Edison's men joked openly about what a lousy inventor he was -- no one jokes about Jobs' technical skills, he understands the details, and even when he drives his people crazy, they respect his knowledge.

In any event, it is fun to read the article and argue about Jobs' value. For example, they could have added billions more if they had included Pixar in the count -- Jobs was CEO and sold to Disney for a fortune. If you read The Pixar Touch, you will see that although the leaders of the culture and technical focus are Ed Catmull and John Lasseter, the huge haul from the IPO was all Jobs. As I recall, everyone (including investment bankers) thought he was nuts when he started pushing for the IPO because Pixar had a pretty thin track record when they went public. It was IPO, making Jobs a  billionaire for the first time.

P.S. Dave, thanks for the tip!

Comments

[Murthy]

Hi Professor Sutton,

Great post - its interesting that you mention overattribution of value of leaders - does this play into executive compensation and is there a more effective way to measure the value of leadership? Kind of an interesting question.

On a related but sidenote, is there any actual evidence of what Steve Job has done at Apple? You have to admit, it just feels a bit unlikely that he singlehandedly masterminded the iMac, iPod, and iPhone. Is there some smoke and mirrors here? I don't disagree that he's an impressive guy, but I wonder what his actual contribution was relative to other 32,000 folks on the payroll?

[Wally Bock]

I hope you're right, Bob, because lots of good people work and an invest in Apple. BUT, I still disagree. I think there are functions around the development and marketing of new products that Jobs has taken to himself. Apple may be more robust than before, but I don't see them as using those muscles and I suspect they'll be atrophied when Jobs leaves. I say this without real firsthand knowledge, so I may have a bad set of datapoints. But it's what I've got.

As for the Journal story about Jobs checking in from home, I remain a cynic. I suspect he really is doing it because letting go is not something he's good at. But I suspect the story is more about letting the world know that Steve J is still on the job and the Empire is safe.

[Jeff Bulman]

Bob - Great article. Unfortunately CEO's do get to much attention. Jobs knows the details but very few do. Consumers care about their iphone/ipod and what it will do. No one buys Steve Jobs at the Apple Store.

[Bob Sutton]

Wally,

You have a point, and indeed, last time he left Apple, they suffered. But they are a more mature organization with more strong leaders and much more robust system. But if any leader of a big company makes a big difference in a positive direction, it is him. I noticed the Wall Street Journal today said he is still involved in major strategic decisions from the sidelines, working from home -- so he may be still working some magic.

[Wally Bock]

I think you're right about the "Cult of the CEO" but I think another point bears mentioning. First, I disagree with Sanjay. I think Apple will suffer big time when Jobs disappears. That's not because he's the world's greatest CEO, but he has been the force between the two products that drive profitability for Apple, the iPod and iphone and its iconic product, the Mac. He has a combination of vision, design sense, and founder's power is unique in my memory.

[Sanjay Basavaraju]

Steve Jobs is like a Male actor in a Bollywood flick. The female actors appear in few songs and vanish. The supporting actors get a few minutes of screen time.

The article in Portfolio seems to indicate that if Steve Jobs is no longer associated with Apple, then the company is going to suffer. Yes it is ridiculous. Similar story with Carlos Gohn too. CEOs being the face of their companies is so last decade.

Steve and Carlos are no doubt talented. Jonathan Ive has been credited for his work too. I am surprised to realize after you have mentioned it that I have never read anything about Apple's supply chain management.

Have a great day!