Sneaky Business

Apple earnings surge; Jobs in driving seat

Apple reported earnings Wednesday that were at the high end of wildly fluctuating analyst estimates. Disappointing reports of initial iPhone activations had depressed the stock during Tuesday. However, in typically ebullient fashion, Steve Jobs led the charge during today's call. He called particular attention to the iPhone's breakthrough design, jam resistant screen and its upcoming virtual finger technology (enabling users with large digits to superimpose avatar-fingers of varying sizes onto the screen).

Nevertheless, the results have led some to question the wisdom of placing so much of Apple's future in the hands of one man. Leeward Stochs, an investment bank, estimated that up to $50B of Apple's market value comes directly from Jobs. McBainsey consultant Eric Pfeiffer went one step further claiming that Apple's entire workforce could be reduced to just Jobs and a receptionist with little downside risk.

Sneaky Business recognizes the broader problem of the CEO-centric organization. During our work with some of Belgium's largest multinational corporations we have identified three important strategies to reduce the CEO value dependency:

• Create a dual CEO. As companies transition to a more effective 24x7 operation, the introduction of an alternative "night shift" CEO can have dramatic effects. Over time, as the world realizes that two individuals are actually in place, the second CEO can assume more prominent daytime activities.
• Introduce deliberate mistakes. Carefully planned errors, selected for minimal financial impact, can help to reduce the halo effect of a hyper-successful CEO. A minor overseas gaffe or ill-judged CEO product demo are good examples.
• Spread the persona. Encourage other executives and senior managers to adopt the persona of the CEO. By adopting an identical dress code, mimicking their management style and repeating often used phrases the value of the CEO can be seen to spread further down the organization.

We encourage the Apple board to consider such policies to help reduce its own dependency on Mr. Jobs.

Moving Towards a Perpetual Staffing Model

Analysis:

As organizations seek a global footprint many are hamstrung by local staffing rules that cramp their ability to straddle world markets. While customers demand goods and services 24x7, US-based corporations struggle to remain operational for more than ten hours of every global day. UC companies need to keep their lights on to maintain a leg up on more fleet-footed Asian competitors.  

Concept:

• Pursue an aggressive "insourcing" policy of recruitment from regional offices into US headquarters
• Encourage (or, if possible, contractually obligate) new overseas entrants to stay on their local time-zones
• Develop an extensive "job sharing" scheme between US employees ("day shifters") and enthusiastic overseas recruits ("nights shifters")

Key Benefits:

• Immediate organizational efficiencies, as corporate roles move towards continual productiveness
• Improved cost effectiveness of fixed costs associated with corporate infrastructure
• Dual-staffed CEO can maintain perpetual availability for immediate responses to crises

Key Risks:

• Prospect of massive population influx if model widely adopted across US
• Someone will eventually twig that the CEO looks different during the night

Bringing Back Bribes to Corporate America

Analysis:

In countries near the top of the annual Economist corruption index, corporate culture has moved away from the use of bribes. This represents the abandonment of centuries of tradition and the removal of an important lever for improving intra-organizational efficiency. We believe the practice should be re-introduced, and are willing to pay handsomely to make it happen. 

Concept:

• Encourage employees to settle differences / agree to recommendations using bribes.
• Official company bribe site tracks bribes, provides a formal mechanism for quid-pro-quos.
• Bribe site typically accessible from HR home page – with additional links to anger management, gambling addiction, short term loan providers.
• Company takes a 10% "processing fee" for bribes monitored, deducted directly from payroll.

Key Benefits:

• Efficient internal market sets pricing and provides additional revenue stream for the employer.
• Opportunity to "level the playing field" with respect to corporate hierarchy.
• Ideas that matter the most to individuals will get pushed hardest - built in incentive to have "skin in the game"
• Visibility into bribe site gives all employees window into "big bets" within the company.

Key Risks:

• Bribe site must maintain "Five 9s" reliability - quickly becomes mission critical IT infrastructure element.

Success Stories:

• "I got the corner office – what more can I say!" Jennifer Biggs, Receptionist, Contorso Corp.