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Why Apple won't be around as long as IBM

Rob Enderle | May 6, 2013
IBM is 102 years old. At its height, it was almost a cult, with employees dressing alike, speaking a unique language and earning benefits that took care of them for life. Today's tech companies aren't built to last, as Apple's recent earnings report shows all too well.

Today's employees lack loyalty. In fact, company policies drive it out of them. CEOs are motivated to produce short-term returns that spike stock value, not to build a company that assures their (and their employees') pensions. On top of that, many must sell their company shares when they leave, removing any interest in assuring that the company survives and focusing them instead on spiking the stock price and leaving the company in a condition that prevents their successors from making them look bad.

Apple May Fail, Cook Will Be Rewarded and We'll All Move On

Jobs busted his hump turning Apple into a debt-free company with reserves that could take it through any catastrophe short of the sun going nova. By the end of the year, as I wrote last week, current Apple CEO Tim Cook will have eliminated the vast majority of that reserve, institutionalized charitable giving and dividends, removed massive amounts of income from his control, put the company billions of dollars in debt and eliminated most of the handpicked team that Jobs had built.

Clearly, Apple's board has no real problem with any of this-it should drive the stock price up, after all-but it will leave Apple far less able to last a decade, let alone a century. In fact, Cook might even get a bonus for doing this, like Mark Hurd did at Hewlett-Packard, and there's no reason to believe that someone else in his place wouldn't do the same things.

Unless we can get another Thomas Watson Jr. or Steve Jobs, it's unlikely we'll ever be able to build a company that can last a decade, let alone a century. Today we build companies to fail by design. That's sad.

 

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