For all the glitz, and glamour, there is one core element that Jobs reminded people not to forget…
Last week, I wrote about the greatest gift of all that Apple may well end up giving this year – job security.
The tech space is amidst a frenzy of mass lay-offs and redundancies currently, which is almost unprecedented. But, while others are releasing around 7%-10% of their workforces, Tim Cook, and Apple has managed to retain virtually all of theirs.
When others were greedily hiring through the early days of the pandemic, Apple took the softly-softly approach. And their caution is now paying both them, and their employees, back. Apart from a hiring freeze last fall, there have been no mass job losses announced by the board at Cupertino.
But, actually, for the ethos behind the companies human resources policies, we can track back over twenty-five years, and to a speech given by Steve Jobs.
The most important thing
When Jobs strutted out on to stage, full of purpose, to announce the iMac, he seemed to almost be bristling with pride, and energy.
His enthusiasm was justified. Having only recently returned in from the cold, he was now back at the company he co-founded after an unceremonious firing a dozen-or-so years earlier.
Already, although his tenure had been brief, he’d started to change the way Apple was perceived, and their image to the public. In no small part, this was down to the ‘Think Different’ campaign – a campaign still spoken about today.
And he was proud too of what they were offering to the paying public. Having binned around seventy percent of the line-up on his return, he was like a kid in a candy store, showing off his new, visionary array.
But, later that day, he went on to give a speech – a speech that gave away the details of where he thought that the company’s strength truly lay.
During his keynote that day, Jobs began his presentation, pointing out what he said showed that Apple was now accomplishing the ”most important” thing any company has to do if it wants to be among the true standard-bearers. “Find great people, and don’t lose them”, was his snapshot summing up.
He pointed out that you simply hire the best you possibly can, and reward them – add value to their role. Then, you look at the company’s annual attrition rate – what percentage of its employees are still with the company at the end of each year. If the percentage rate is lower, then you are doing something right.
The year before Jobs return to Apple, the attrition rate had been as high as 33% – one-third of the workforce leaving every year. Within a year of his return, that waste-rate had been slashed by over half, to losing only 15%.
Figures, though, mean little without context. That 15% figure was considerably lower than the Silicon Valley average, and much, much, lower than the national statistic of around 50% (not allowing for voluntary turnover).
It’s odd, that this part of his keynote, is the part remembered best. At that same event, don’t forget, the iMac was launched. It bought us a revolutionary design, amazing aesthetics, and, a desktop made with internet connectivity at it’s core. That was a first in its era, yet the part of the keynote many recall, is the part about people. Speaks to the man…
Today, that part of his speech, talking about retention, seems even more poignant and more visionary. Given those vast tech lay-offs, and the post-pandemic nature, and future of the workplace, for Apple to remain focused on employee retention, has to be applauded.
Lessons to be learned
The basic tenants behind running a successful business, are not overly complicated. Apple seems to adhere to these core values;
- continue to listen and innovate
- concentrate on keeping your hard-core customers satisfied – they matter more than the newer customers
- value the team around you, and engage with them
The historic financials reflect his beliefs as well. On the day that speech was given, Apple shares were trading at around 24 cents per share – today, they are roughly $145 a share. I guess they must be doing something right, then, huh?
From what I wrote last week, you’ll know that Apple is not all about Jobs, but equally, it would not have gone on to be the company it has become without him.
He was shrewd, smart, enigmatic, and altruistic. Yeah, sure he was wealthy, but in 1998, he didn’t even number in the top two-hundred of the world’s wealthiest people. Sharing wealth and growth was important to the man.
For all he was a hard-nosed businessman, he knew that sharing, and rewarding the successes with the team he’d built, would have long-lasting effects.
If Apple had continued to annually lose up to a third of the companies employees, do you really think they’d be the force they now are? Do you think I’d be sitting here, in a studio surround by Macs and Apple gear? Jobs vision was unnervingly perceptive, and on-the-money, and we are still speaking about him.
Rough waters ahead
For all that Apple has managed to avoid laying staff off, they are not impervious to the current, shrinking, global economy.
This week, Apple will post their next set of financial results. Wall Street is bracing itself, as Apple is expected to announce on Thursday, a drop in quarterly sales, for the first time in more than three years.
Wall Street not only has eyes on Apple, but on Amazon, Meta, and the world’s largest advertising platform, Alphabet – all are expected to post returns reflecting current economic woes.
Apple is expected to report sales of $121.6 billion for the last three months of 2022. According to a forecast compiled by Refinitiv, that will represent a 2% drop against the same period twelve months earlier. Net income could be down by as much as 10% – to $31.1 billion.
Apple’s problems were not helped by the disruptions to their supply chain, and industrial protests in China, during their most important quarter of the year. Those last three months of the year, are when iPhone sales should be at their highest, yet iPhone 14 Pros were next to impossible to come by in the run-up to the holiday season.
Although, not flying, worry-free above the perilous waters in which we all currently sail, Apple seems to be fairing better than most.
As advertisers slash budgets, and tighten their braces, Alphabet, which owns Google and YouTube, has seen its revenue slip, and net income could be down as much as 25% to $15.5 billion, which puts in to some context Apple’s expected results.
As Apple’s focus, very much shifts to this year’s release of their headset, we may not see many more new, revolutionary product releases for the rest of the year.
But, they will be working at retaining the genius brains they have at the company for those brighter days, that are surely ahead.
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