What do Apple and Google CEO changes reveal about their corporate cultures?


This week Apple and Google disclosed holiday quarter earnings and made unexpected management changes. The executive shuffles and how they were announced is opportunity to compare and contrast the management styles and corporate cultures of these two hugely successful technology companies.

The basic similarities are interesting: Both companies announced better-than-expected fourth calendar quarter earnings. Both companies made CEO announcements affecting who runs day-to-day operations. Both companies assumed some risk that Wall Street would negatively respond to management changes. But they chose different approaches to announcing these changes.

On Monday, Apple CEO Steve Jobs took indefinite medical leave, technically remaining chief executive but turning over day-to-day operations to COO Tim Cook. In an official statement, Jobs assured that he would still "be involved in major strategic decisions for the company." Yesterday, Google announced that in April, Eric Schmidt will turn over the chief executive's chair to cofounder Larry Page. Schmidt will continue in a more customer facing, public role but as executive chairman, while Page will take over day-to-day operations.

Both companies had good news in their earnings, by beating Wall Street consensus. Apple separated the Jobs' medical leave announcement by making it a day earlier, during a US holiday when stock markets were closed. Google announced management changes concurrent with earnings. The question: Why didn't Apple make both announcements around the same time? Concurrent announcement worked for Google, or at least didn't hurt. Shares opened at $639.62 today, up from yesterday's $626.77 close.

Contrasting Management Styles

Differences in corporate culture is an answer -- and by no means the only one -- that I'll highlight. Google's corporate culture is more open, while Apple's is more secret, controlling. I'm not the first person to make such observation. But this week's events reveal just how extreme are the differences between the two companies' cultures. To be clear: I don't intend to make a value judgement about which is better. Both companies are hugely successful doing business in their different ways.

Apple's penchant for secrecy is legendary -- at least among the community of people closely observing the company. Apple tightly controls product design, manufacturing and distribution (granted, the latter two are outsourced) and information about them. The company protects against any mention of new products until they're ready to be announced, usually by Jobs. Meanwhile Apple maximizes the marketing benefits of rumors about future products, through occasional leaks but more from event invitations that generate a frenzy of blog posts and news stories with rumors and speculation about what to expect. Secrecy and control are among the defining corporate cultural attributes.

Google by comparison quickly discloses information about products, even before they're ready for release. Google betas are legendary for their length of time before products ever reach v1 status. Google licenses its major operating system, Android, which also was released to the open-source community. Google leads Android development, but doesn't completely control it. Google operates by so-called "Open" principles, which the company explained in December 2009 post "The meaning of open." Google also advocates the use of open standards as opposed to proprietary ones. For example, Google plans to drop H.264 video support in Chrome for open-source WebM.

With respect to technology there is no absolute regarding Apple and Google's approaches. Google doesn't disclose the secret sauce behind its search algorithm. Apple's open-source WebKit has been adopted my most major browser developers other than Microsoft. Google is among them. Apple advocates use of open technologies, too. I use open technologies more as example of corporate cultural attitudes -- about being open and public rather than secretive and controlling.

Public Google, Private Apple

The differences in how Apple and Google share information is striking. Steve Jobs doesn't blog or Tweet. Apple employees don't actively blog about their products or anything else related to the company. Apple's YouTube account prohibits comments. By comparison, Schmidt has a Twitter account, and he blogs. Google disseminates most of its announcements and other information via blog posts. Nine Google blog posts ranked in Techmeme's Top-50 tech news stories of 2010 -- four in the top 10!

Schmidt blogged and Tweeted -- "Day-to-day adult supervision no longer needed!" -- about Google executive changes, and he welcomed Wall Street analysts to ask about them (by joining the earnings conference call). Jobs did neither. Granted, he is sick, which is reason enough, but the approach also reflects the corporate culture he has fostered since returning as chief executive in 1997 (with "interim" title during the early days). During Apple's earnings conference call on Tuesday, not one analyst asked about Jobs, which is surprising given the medical leave was sudden and open-ended and that Apple has offered no plan for succession should Jobs not return. By separating the Jobs' medical leave announcement from earnings and the CEO's written request to respect his privacy, Apple communicated to Wall Street analysts that they shouldn't ask. Don't ask, don't tell.

By comparison, top Googlers preempted their own earnings conference call to accomodate questions about other news of the day. Schmidt and Page briefly joined at the call's beginning, before any numbers discussion, to let people ask questions about the executive management changes. Google has a plan for succession, which is underway leading up to the April 4th change that brings Page back as CEO -- a position he gave up to Schmidt 10 years ago.

Apple and Google are both hugely successful companies, and their different corporate cultures and policies work well for them. Is one approach better than the other? You tell me, please, in comments.

I feel compelled to close with a preemptive response to commenters here or blogging elsewhere. Some Mac fans will flame and accuse me of not understanding Apple or showing disrespect to cancer survivor and liver transplant recipient Steve Jobs, who may now be fighting for his life. They'll assert his illness is the only reason why Apple chose to separate the medical leave and earnings announcements, or that they never belonged together. However, as Andy Zacky pointed out, Apple typically announces earnings at the end of the month but uncustomarily moved the date up by about two weeks. "Apple chose to release its earnings right after a 3-day weekend in order to give investors time to soak in the news of Jobs' indefinite departure," he writes, also noting plans were in place as early as mid December. How respectful to Jobs and his illness is that?

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