Tag Archives: CEO

Can Weber’s concept of charismatic authority predict a decline for Apple?

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One analyst suggests that Apple without Steve Jobs will decline because as sociologist Max Weber suggested, organizations change after their charismatic leader is gone:

Weber described three essential business categories: Legal/bureaucratic, traditional, and charismatic, with the latter companies typically helmed by individuals with the “gift of grace.”…
“Followers and disciples have absolute trust in the leader, fed by that leader’s access to nearly magical powers. Charismatic authority repudiates the past, and is in this sense a specifically revolutionary force.”

According to Colony, Apple chose a “proven and competent executive” – Tim Cook – to succeed Jobs. Nevertheless, the analyst believes the new CEO’s “legal/bureaucratic approach” will prove to be a mismatch for an organization that feeds off the gift of grace…

“Apple’s momentum will carry it for 24-48 months. But without the arrival of a new charismatic leader it will move from being a great company to being a good company, with a commensurate step down in revenue growth and product innovation,” the analyst predicted.

I guess we can wait and see if Weber’s ideas apply to this situation. Weber described this transition after the loss of a charismatic leader as a process of routinization where the group bureaucratizes this charisma.

A few things make this process more messy:

1. At one point, Steve Jobs didn’t have this “magic” either such as before he was inventing things or when he stepped down from Apple. This suggests that context matters: certain ideas are produced or take off based on a variety of other circumstances.

2. Judging by the recent stock price, investors don’t seem too worried about Apple’s future. At what point will they and other start publicly suggesting that the loss of Jobs is a really big hurdle to overcome? Is this an “acceptable” reason for a company to plateau?

3. Shouldn’t one measure of a good leader be the ability to empower others to take over and do well (or even better?) in the future when that leader is gone? If so, perhaps we should be asking whether Jobs was equipping others at Apple to succeed after him or not.

4. Is this an inevitable process for groups that lose a charismatic authority?

Why add this line in interview about Netflix in Canada: “Americans are somewhat self-absorbed”

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In an interview with The Hollywood Reporter, the Netflix CEO (and co-founder) discussed the company’s new foray into the Canadian market. Netflix prices in Canada will be one dollar cheaper: $7.99 vs. $8.99 in the United States. But the CEO added another line that seems superfluous to the discussion and may not be helpful to his company’s efforts in the American market:

THR: American services when they enter the Canadian market typically charge the locals more than they charge stateside. Why the discount for Canadians?

Hastings: We want to provide an incredible value for Canadians, and it’s the lowest price we have anywhere in the world for unlimited screenings. And anyone can try it for free for a month. It’s pretty addictive.

THR: Are you concerned that American Netflix subscribers will look north and ask for the same discount Canadians get at $7.99?

Hastings: How much has it been your experience that Americans follow what happens in the world? It’s something we’ll monitor, but Americans are somewhat self-absorbed.

I’m guessing more Americans will pay attention now to this than would have before. Whether he is right or wrong about Americans being self-absorbed, why potentially hurt a large market when he didn’t have to?