Why Apple needs an heir apparent

Earlier this week, Apple started a firestorm by telling its shareholders that Steve Jobs' health is a private matter. I argued both here on The Digital Home and on CNBC's Closing Bell, that Steve Jobs' health does matter and with no heir apparent in sight, how can shareholders feel secure in their investment?

I won't rehash the argument here, but it does beg one question: where is that heir apparent and who is he or she?

Apple, unlike almost every other company in technology space is so tied to its CEO that whenever he appears on TV or says anything of substance, it becomes a major media event and has an impact on the company's stock price. Beyond that, I would argue that there hasn't been one CEO currently sitting atop a company that has had the kind of impact Steve Jobs has had.

Think of it this way: before he was ousted, Jobs was the most important element in Apple's strategy. Sure, he made mistakes and the company suffered, but his tenacity was what kept that company going.

After this ouster, Jobs watched on the sidelines as his company fell into a malaise. The company's executives presided over an extreme degradation in the Apple product and practically everyone was wondering how long it would last.

And then, Steve Jobs came back and, well, saved the day. He presided over the greatest gain in shareholder value the company had ever seen and restored his company to the position of one of the most feared, yet popular brands in the business. Along the way, he made countless investors multimillionaires.

But Jobs didn't do that with the help of "20,000 or 30,000 Apple employees" like my counterpart on CNBC said Wednesday. In reality, Jobs is the visionary behind every Apple product and the figurehead that keeps the company's stock price hovering well above $100 per share.

Not to mention, he's also the person the majority of Apple's shareholders have put their trust in and if something were to happen to him without an heir apparent in place, the company's share price would plummet.

Because of that, Apple needs to immediately establish an heir apparent and ensure that when Steve Jobs finally steps down, the person who will take his place has the requisite vision and notoriety expected from the CEO of Apple.

But Apple can't wait any longer. At the next Apple presentation or Stevenote, Jobs needs to take the stage and announce before the world his heir apparent. He doesn't necessarily need to say when he'll be leaving or even that he will, but he certainly needs to let this new person take the limelight.

From there, he needs to leave the stage and let this person take control of the Stevenote. Upon doing so, he solidifies this person's position as the new spiritual leader of the cult, but also allays shareholder fears over what the future may hold.

After that, Apple needs to make it abundantly clear that this person's vision is well in line with Jobs' and there's nothing to fear when he leaves. Apple should explain that Jobs hand-picked his successor and due to the indelible mark he has left on the company, the heir to his throne will stay the course going forward.

Of course, establishing a heir won't allay fears overnight and Apple will need to be active in ensuring that shareholder concerns are addressed before Jobs officially steps down. But if played correctly, Apple won't have anything to worry about: Steve Jobs will step aside (but stay in an advisory role) and the new leader will take over where Jobs left off.

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[elo888]

Good points - Dr. Tantillo ('the marketing doctor') did a recent post on his branding blog (blog.marketingdoctor.tv), asserting that Jobs and Apple are two separate brands--Jobs one that is irreplaceable but that can, at this juncture, help ensure Apple's longevity..

Here's a link to the full post: http://blog.marketingdoctor.tv/2008/07/24/brand-advisory.aspx

[TheAlpacaHerder]

I thought this idea came up in that book Dan Lyons wrote. Then again, Mr. Lyons posited a scenario that was not nearly as transparent as this. Thank you for the good points, Don.

[AppleSuxLeo]

Mr "Whipple" already looks dead. Time to sell Apple !

[Zimm2]

Yawn,,,,

[Vegaman_Dan]

This is a good point. In order to maintain continuity and consumer confidence, evidence of stability in the unfortunate case of Jobs leaving should be established. You don't have to make it look like he's leaving any time soon, but a clear and apparently second in command would help greatly.

[spineemike]

Phil Schiller... duh!

[cporpheus]

Uh, you do know this is Apple, right? How do they act towards rumors? How did they act towards the first generation iPhone? What is their corporate attitude? Closed doors. Apple is not exactly an open company.

[scweezil]

They learned from their mistakes...trusting Bill Gates & MS in the eighties being their biggest mistake.

[ejeon1989]

chances are, Phil Shiller or Bertrand Serlet might get the CEO job. More likely Phil Shiller.

[JCPayne]

Apple should look to snap u Adobe. The suite of software that they own if it was firmly in the Apple camp would propel Apple way ahead.

( http://www.adobe.com/ )

[bobdmac]

Why Don Reisinger needs to learn how to be a reporter:

I was under the impression that reporters, or journalists, if you will, were supposed to do research and find things out for us. Isn't that the rationale for us to read what they write? If you type "Apple succession plan" into Google search, the first result shown is an article about "Apple's confidential succession plan." Here's the link: http://www.macsimumnews.com/index.php/archive/donovans_views_confidential_succession_plan_for_apple/

The article actually refers to reporting done earlier by the New York Times on the subject. In other words THEY HAVE AN HEIR APPARENT! Hello, research much? The heir just isn't apparent outside the company, but why should it have to be? You certainly didn't make that argument.

Please stop insulting us with your lazy pontificating. Try to know what you're talking about next time.