Apple gambling on Papermaster's leadership skills
Mark Papermaster was chosen to lead a team developing future iPhones, even though the company worried about his lack of direct consumer electronics experience.
(Credit: Apple)Apple knew full well that Mark Papermaster would have to learn his new role as iPod and iPhone chief "on the job" when it hired him.
Papermaster's former employer, IBM, filed a lawsuit against him last week, claiming that he broke the terms of a noncompete contract with IBM in accepting a high-profile job with Apple. InformationWeek spotted Papermaster's formal response Friday morning, in which he declares that the two companies are not competitors and that his experience at IBM is not the primary reason why Apple sought his services.
The court filings reveal the interesting process Apple used to hire Papermaster to replace Tony Fadell, a longtime executive in charge of Apple's iPod group. And contrary to speculation, it appears that Papermaster--a well-respected chip executive--will have nothing to do with chip design at Apple on Day 1.
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Apple began searching within the consumer electronics industry in October 2007 for a lieutenant and eventual successor to Fadell, but it couldn't find anyone it liked, according to the court filing. Instead, the company decided to search for an executive with strong overall technology skills who would be a good fit inside Apple, modeling the search on the process used to find current Mac hardware leader Bob Mansfield.
Mansfield was the one who suggested Papermaster as a candidate, though he didn't exactly roll out the welcome mat for his college buddy. On a list of potential candidates sent to Vice President of Human Resources Danielle Lambert (who is married to Fadell), Mansfield described Papermaster: "Mark fits the bill wrt (with respect to) systems and semiconductor understanding, but in every other way is a long shot."
Nonetheless, he was brought into Cupertino in February 2008 to interview with CEO Steve Jobs and Fadell. Apple liked Papermaster in many ways, but it wasn't sure that his experience in server development was the proper background for the role--especially in light of the fact that in February, Apple was working hard on getting the iPhone 3G out the door, and it wanted someone who could hit the ground running.
However, as Lambert said in a statement attached to Papermaster's response, "nobody questioned Mark's ability to lead a development team." The company offered him a role designing laptops, and while Papermaster was intrigued by the possibility of working at Apple, he wasn't all that crazy about that particular role.
But after Apple got this year's crop of iPods out the door in September, the search for Fadell's replacement intensified. Papermaster was offered that role, and he jumped at what he called "the opportunity of a lifetime."
As Papermaster sees it, his role is fairly narrow: he's tasked with overseeing the development of iPod and iPhone hardware. He won't be working on personal computers, he won't be working on servers, and perhaps most surprisingly, he won't be working on microprocesors.
Papermaster's court filing says the P.A. Semi team acquired by Apple earlier this year is part of the group managed by Mansfield, not part of the iPod and iPhone group. That's a surprising organizational decision, given that Jobs has said publicly that P.A. Semi was brought into the fold to work on chips for the iPhone and iPod Touch.
Despite a career spent developing chips at IBM, Papermaster supposedly won't have anything to do with Apple's budding chip team.
(Credit: CNET)The filing notes that Apple currently acquires iPhone microprocessors from an outside vendor, widely believed to be Samsung. Unsurprisingly, it stops short of mentioning whether or not Apple plans to eventually design and develop its own microprocessors for that product, as seems evident.
In a declaration accompanying the formal court response, Papermaster notes that "it is also my understanding that I will not be responsible for developing the microprocessors that are used in the iPod and iPhone products, but rather those will be procured from sources outside my group." Whether those sources are outside Papermaster's group but inside Apple is left unstated, but Papermaster also says, "I will be acting solely as a product manager--I am not being hired to develop technology across product lines."
An Apple representative declined to comment on Apple's organizational structure or the court filings, only to say, "We think IBM will see that the iPod and iPhone are not competitive with their business." IBM likewise declined to comment on Papermaster's response beyond the statements they have already made regarding their intention to "vigorously" pursue the case against Papermaster.
Papermaster's argument against the lawsuit is that since Apple and IBM aren't true competitors, and since he isn't working on the small slice of Apple's business--servers--that does overlap with IBM's business, the noncompete should not apply. Likewise, he believes that he's not in a position to divulge any IBM trade secrets because "Mr. Papermaster's position at Apple will involve a completely different product using different technology that Mr. Papermaster will have to learn on the job."
It's quite possible that Papermaster's lawyers are deliberately downplaying his connections to Apple's budding chip design team in order to make this lawsuit go away, since the chip angle is IBM's only real argument. Even if Papermaster isn't directly involved on a day-to-day basis with the P.A. Semi team, he will be in charge of specifying the hardware requirements for the iPhone, and part of that includes the chips that go into that system.
Apple appears to be making a bit of a gamble with this hire, entrusting the care of what has become its most important product to an executive who, though well-regarded, has no experience working inside the fast-paced consumer electronics industry. And the most relevant part of his IBM experience doesn't appear to be part of his marching orders at Apple.
But the company believes that his leadership skills will serve him well at Apple, according to one of the court filings: "Apple has hired Mark Papermaster because he has strong general engineering skills, is an outstanding leader, and because we believe he will be a good cultural match at Apple."
Tom Krazit writes about the ever-expanding world of Internet search, including Google, Yahoo, online advertising, and portals, as well as the evolution of mobile computing. He has written about traditional PC companies, chip manufacturers, and mobile computers, spending the last three years covering Apple. E-mail Tom. 
When it comes to employment...I'm with you 100%. They are nothing more than a way to take something from an employee and not reimburse them fairly (like full salary while the clause expires and they can't work...)
I had to deal with signing a non-compete exactly once. I refused to sign it in the form they presented, and basically turned down the job offer based on it . They called back later that week, and we negotiated a new offer without the non-compete being included. Apparently it was mere boilerplate, and they had no real explanation as to why they thought it so vital that I sign one.
Most companies are okay with such negotiating, though you have to make it clear (before you sign anything!) that you do not wish to fall under such policies. You can also amend the terms right there in front of them (cross out the offending parts, write in your changes, etc... and have both parties initial those changes or draft a new one). Thing is, they won't go out of their way to let you know that, since its not in their best interests. If a company refuses to budge, you can always turn down the job.
Note that non-competes are not NDA's. An NDA I have no problems with (depending on how it is written), since proprietary information and work product should stay with the employer.
I don't think I've had to bother with a non-compete clause or document for at least nine years now...
/P
- You should know better than to sign them. Non-competes are only enforceable in court if they were signed after you have received "consideration" for them, like a considerable bonus or stock options, etc... So, if you are receiveing just an employment offer that's not really consideration or you can argue so...
- If you do sign a non-compete and fight it later on, what does that say about your honesty or intelliegence or realism?
- Despite the law's interpretation of what "consideration" is, non-competes should be fair game only If you are are receiving a ridiculous amount of money. Noone who is trying to make an honest and humble living should have to sign one or fight one. The law should be more leniant if you have signed one under these circumstances because generally speaking you may not have had money to hire a lawyer to take a look at the agreement. What I am saying is that non-competes are for the CxOs who generally have negotiation power and lawyers/agents and are not employees at will, but have 1-2-3 year guranteed contracts with severence agreements. *** for tat: that's what "consideration" is for...
- Whether it is fair game or not anybody can sue anybody and even if you recover your legal costs later on, you will still have to pony up potentially 100K+ out of your own pocket (if you have it) to fight it if you ex-employer claims you viloated your non-compete. Unfair but reality...
For moral, legal and financial reasons don't sign a non-compete even if you think there is less than a 1% chance you will violate it later on. The odds are not worth it (of course it depends a little bit on what type of personality you are)
Hey Tom, I am a certified Holistic Health Practitioner. I am no longer practicing, it was mid-life crisis thing and a long story about a quick decision.
Usually there is a general non-compete clause which is overly broad and unenforceable in all of the 50 states.
Then there's additional clauses which prohibit employment in specifically named companies. This is usually enforceable in most of the states. In California, a right to work state, most of these clauses are unenforceable, however, if hired by a competitor in a role similar to his prior role, the clause may be enforceable.
Since his role has been defined as a product manager for a consumer product, he's probably in the clear and the lawsuit will go away.
The non-competes exist for a reason and as long as it doesn't interfere with the "right to work", its a good thing because it helps to protect IP.
In my opinion this will hurt IBM more than Apple. What bright talent in their right mind would work for a company that would put their money into their legal department RATHER than pay them if they contribute. This shows how far the once-great computer giant has fallen -- The old incentive for never leaving the company was that you could leave, but you'll never get back in. The fact that one was leaving the IBM family was once enough to keep the best and brightest there. Now the company will shift the jobs to whatever country offers the best for the least -- this week.
- by LeaderSkills July 3, 2009 8:01 AM PDT
- I also agree with Mariner's comment that people want to work somewhere where the leadership pays them to contribute to they company and their own personal success. I thnk it just comes down to bad management and leadership that lets the best and brightest get away without thinking how they could have kept him - instead they try and claim personal ownership over training and ideas.
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(16 Comments)As the writer of a leadership info site, I applaud Apple for choosing someone because of the skills they bring, the talent to know how to lead and manage others without the direct experience. If you read my article on leadership skills (shameless plug here: http://www.leaderskillstraining.com/categories_developing_leadership_skills_article.htm) you may see that Apple just check-marked the qualities that they wanted in their leadership and took the plunge. It's too bad that IBM can't do the same.