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Finding this blogpost dated more than eight years ago gave an opportunity to look at Apple and its co-founder's remaining effects on the company since his death almost five years ago. I would contend that while the company's current CEO seems to be doing a good job according to press, it seems that the company had such a toxic culture led by one person that it could not be sustained by another leader thus leaving the company vulnerable in a quickly changing industry. Shortly after the co-founder's death, there had been many rumors of employees or even groups of them defecting for competitors or starting their own. Those rumors have been vague. What's clear is that Apple has been very actively buying back its stock over the last few years (as an aside, its insiders have been heavily selling) and that may be connected to stock options held by those employees that remain. Its co-founder had lauded stock options as "golden handcuffs." As a financial analyst, I'd guess that Apple today has no choice but to be generous with these stock options as well as having to continue buying back stock in order to sustain the share price for otherwise the handcuffs fall off. Though talent wars are common in the Valley, this may be an under-appreciated aspect of a cost to the company as a result of its prior leadership. Writer Malcolm Gladwell has stated that in decades from now the co-founder will be largely forgotten but Bill Gates will not be for, at least, the latter is attempting to cure malaria and benefit billions of poor people in the world. Who will care then about the marketing genius behind the iPhone? How many people can name the inventors of radio, television or even the Sony Walkman? As Al Dunlap's later career exemplified, jerk organizational leaders may be very effective for short-term results. They also leave behind a trail of costs from disaffection that may impair the enterprise once they're gone.
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Jul 15, 2016