One of the most powerful tech companies in the whole world, Apple does not need an introduction. In its 44 years of existence, the US-based company evolved from a start-up that assembled computers in Steve Jobs’ garage to an international powerhouse. The corporation is present on five continents and in 25 countries across the globe, and with owning around one-fifth of the smartphone market share, it reaps 87% of all international smartphone profits (“12 Apple statistics marketers should know in 2018,” 2018).
Investors put good faith in the company’s prospects, which explains that in the last 19 years, Apple’s stock price has grown by 15,000% and made the company worth over $1 trillion (“12 Apple statistics marketers should know in 2018,” 2018). Ever since its launch in 2007, Apple has sold over 1.3 billion iPhones (“12 Apple statistics marketers should know in 2018,” 2018). Not only did the company withhold the test of time, but it also defied buyers’ fatigue with information noise. Despite market oversaturation, iPhone releases remain big news and keep customers waiting impatiently for new models.
Today, Apple is not chasing trends: it is creating them, constantly raising the bar for other players on the market. One feature that stands out about Apple’s marketing strategy is its standardization. The decades-long debate around standardization vs. localization has so far been more supportive of the latter. Yet, Apple has taken a direction that others might have found somewhat counterintuitive and maintained a consistent brand across cultures. The duo behind the company’s standalone design decisions was Steve Jobs and Jonathan (Jony) Ive, who were not only colleagues but also “spiritual partners,” as per the late CEO’s words.
Originally, when Jobs returned to Apple in 1996, Ive was about to quit the design team. The motive for resigning was the employee’s dissatisfaction with the company’s chase after profits that ignored his attempts to refine consumer electronics designs. It was his camaraderie with Jobs and the latter’s company-wide presentation that convinced him to stay and become the new head of design. This paper explores the success factors behind this example of leadership and communication that remains relevant to this day.
Apple would not have been the same had Steve Jobs failed to retain an employee with a reasonable intention to quit. Indeed, retaining talent may be even more challenging than keeping it. According to data gathered by the world’s biggest professional social network LinkedIn (2018), technology is a sector with the highest turnover with an average rate of 13.4%. The turnover rate may reach 21.7% for certain positions, such as data analysts and designers.
There is a market shortage for this specific specialization, and professionals are constantly offered lucrative positions (LinkedIn, 2018). The data suggest that employee attrition has a detrimental impact on a company’s finances. The costs of losing one employee may run up to 250% of the annual salary (LinkedIn, 2018). However, the problem does not solely revolve around the money: it decreases staff’s morale, redistributes the workload unevenly during the dreaded hiring period, and adds tasks to the human resources department.
Recent scientific literature has plenty of insights on why turnover intention emerges in the first place. Kim, Tam, Kim, and Rhee (2016) point out the fragility of relationships between employees and organizations. On the surface level, such a relationship is based on an exchange; however, as time passes, people grow to appreciate organizational culture more and even prioritize it over remuneration (Kim et al., 2016). According to Kim et al. (2016), there are three predictors of employee turnover intention: organizational justice, supervisory justice, and authoritarian organizational culture.
Organizational justice can be defined as a person’s subjective perception of whether the organizational culture in the workplace is fair enough. Supervisory justice is a subset of organizational justice and refers to a person’s perception of their supervisors’ actions and decisions as just. While organizational and supervisory justice has a negative association with turnover intention, authoritarianism in organizational culture is a good predictor of employee attrition. It is now a well-established fact that a closed system that relies on top-down decisions with little to no regard for employees’ feelings and concerns creates an unhealthy environment.
To understand the case at hand, it is important to look at the causes of turnover in the tech industry. Harden, Boakye, and Ryan (2018) report that the tech market has seen a spike in the number of jobs in recent years. However, there are two concurrent trends that make companies struggle to hire and retain IT professionals. As pointed out by Harden et al. (2018), the millennial generation that replaced “baby boomers” is smaller in number and much more particular about working conditions. Because of their on-demand specializations, tech professionals also feel comfortable with “job hopping (Harden et al., 2018).” In other words, turnover may not only be an escape from a decisively bad environment but rather a search for an even better option.
Harden et al. (2018) apply the social exchange theory to explain employee retention and attrition. The theory states that “individuals engage in behaviors that are motivated by an expected reciprocal behavior (Harden et al., 2018, p. 292).” For instance, if an employee puts effort into a project, they expect the employer to show support and acknowledge their contribution. If such an interaction takes place, an employee feels the obligation to try even harder, sometimes due to an increased sense of importance. For tech professionals, the social exchange theory may be applied to creating a system that makes the specialized knowledge visible to others (Harden et al., 2018).
The acknowledgment is especially important because of the rising levels of what Harden et al. (2018) call technostress. Even successful organizations tend to tighten budgets and underwire, which may put too much workload on IT-staff. Tech professionals not only race toward the deadline but also keep up with the changes in the industry on the whole. However, when employees are not given a chance to update their skill set or unlock their full potential, they may also contemplate leaving. The phenomenon is called “perceived skill obsolescence” which refers to one’s subjective judgment that their skills are becoming obsolete. Skill obsolescence may be resisted and mitigated through the development of training programs and internal promotion tracks within the company.
The findings made by Harden et al. (2018) are consistent with what LinkedIn (2018) discovered when surveying tech professions. Forty-five percent of them lacked opportunities for advancement, and 41% were unhappy with leadership (LinkedIn, 2018). Thirty-six percent did not appreciate the work environment (36%), and the same share of the surveyed respondents longed for more challenging work (36%). Therefore, it is safe to conclude that voluntary turnover is a complex phenomenon that arises due to many factors.
As one of the ways to fight against turnover, internal promotion is often juxtaposed with external hiring and outsourcing. Krell (2015) writes that in today’s world, there is a trend toward creating internal career development tracks. Yet, external hiring still fills in more positions than internal promotion: 66% versus 26%. Both strategies have their own pros and cons that should be considered. Cultural fit is one of the decisive factors when hiring a person (Krell, 2015).
It is also something that is difficult to evaluate when meeting a potential external candidate for the first time and trying to assess their set of values and beliefs. In contrast, when people are promoted internally, there is no cultural gap that they have to bridge as they are already familiar with the environment (Krell, 2015). Internal hires know who to contact to complete a specific task; they have already built valuable relationships and gained the trust of the rest of the staff.
Krell (2015) points out that some companies are “very firm-specific places.” They have a unique culture and business operations, and a person who became successful in such an environment may actually underperform if their skills are transferred elsewhere. Numbers speak louder than words: 57% of externally hired executives admit that it took them around six months to start working in full capacity at a new palace (Krell, 2015).
Another argument for an internal promotion is employee retention by creating career development tracks within the organization. As mentioned earlier, around one-third of tech professionals contemplate resigning if they feel that they have reached their maximum capacity. Perhaps when offered a new growth opportunity at the same company, these employees may reconsider their decision and happily take up the new role.
At the same time, external hiring has its own advantages over internal promotion. DeVaro, Kauhanen, and Valmari (2019) report that statistically, external hires are more likely to have superior educational background compared to internally-promoted workers. Not only that but for external hires also typically have higher levels of experience than internally-promoted workers (DeVaro et al., 2019).
However, Krell (2015) argues that human resources managers often prioritize labels and formalities over soft skills that may be decisive in how successful an external hire is going to be. Specifically, Krell (2015) puts an emphasis on the importance of “intangibles” that are more easily observed in current employees than external candidates. Stellar educational background, work experience, and other accolades do not necessarily mean that the candidate will adapt easily to the new environment and start making a profit.
Krell (2015) generalizes findings regarding internal vs. external hiring and provides advice to companies. According to the researcher, every firm should assess its own needs when deciding on the right option. “Looking outside” may be a good decision when a company is at the turning point in its development (Krell, 2015). There are major corporate turnarounds or strategy shifts upcoming, and attracting talent from the outside may fit the new vision. Another motivation may be the inconsistency, absence, or inaccessibility of succession planning and performance information.
Sometimes specific skills are needed, but no-one in the organization can cover this need or educate themselves fast enough to reach the required level of competency. External hiring may be beneficial if a company welcomes multiple perspectives and has training programs in place that would allow for fast and full integration. Conversely, internal promotion, or “looking within,” may be beneficial for thriving organizations with consistent and transparent succession planning and performance reviews. Internal hiring should be considered when there is an abundance of the firm- or industry-specific skills necessary for the job. Lastly, a unique and strong organizational culture may suggest that only existing employees will be the right cultural fit.
The success of the hire or promotion is largely contingent on the quality of interpersonal relationships within an organization. The selected case demonstrates that the friendship between Jobs and Ivy was a decisive factor in the latter’s intention to stay and continue to work for the company. The phenomenon is fairly common: a Gallup research that surveyed around 15 million people showed that one-third of respondents had a friend at work (Morrison & Cooper-Thomas, 2016). Morrison and Cooper-Thomas (2016) argue that friendship between coworkers is different from just friendly work relationships.
In particular, Morrison and Cooper-Thomas (2016) name two characteristics of workplace friendship: it is voluntary and holistic. When coworkers are friends, their interactions go beyond what is required according to their work responsibilities. Regarding the second characteristic, friends see each other as people, not functions; they have a “personalistic view of each other (Morrison and Cooper-Thomas, 2016).” In addition, friendships have aspects such as liking (affection) and reciprocity (mutuality). To sum up, workplace friends genuinely and mutually care for each other and see each other not as another cog in the wheel but unique and irreplaceable.
A work environment is a secluded social microcosm and because the number of people with whom one comes into contact is fairly limited. According to Morrison and Cooper-Thomas (2016), there are a lot of motives to start a workplace friendship.
It could be the similarity of interests and values or just proximity when a friendship flourishes because people work on the same project or toward a mutual goal. It is not uncommon to encounter instrumentality in workplace friendships when a close relationship may lead to promotion or advancement. Some friendships tend to those seeking work safety and trust. Lastly, motivation for friendship may run deep and have psychological antecedents. Morrison and Cooper-Thomas (2016) explain that a coworker may fill in a “missing role,” such as having a maternal or paternal figure or an intimate partner. Friendship may also be used for a sanity check or as a source of validation.
Close interpersonal relationships in the workplace have been a subject of debate, and researchers and practitioners remain torn about this matter. Research shows that having a best friend at work increases work engagement sevenfold. In addition to that, friendships promote cooperation and better customer service. Employees who have friends in the workplace report higher well-being and better productivity; they also enjoy better safety and protection because friends have each other’s backs. It is the friendship that often gives access to internal information about upcoming events and opportunities (Morrison & Cooper-Thomas, 2016).
On the other hand, friendly relationships can be a breeding ground for a conflict of interests and a role strain when a person has to make tough decisions that may affect someone about whom they care deeply. Morrison & Cooper-Thomas (2016) also explain that, like any kind of friendships, workplace friendships can deteriorate and make former friends hostile toward each other. In this case, one may expect a decrease in productivity and engagement and a lack of collaboration.
The perspective on workplace friendship may shift when corporate relationships between friends are not horizontal but vertical. The question arises as to whether leaders should be friends with coworkers or a more personal relationship will challenge their leadership. As mentioned before, the friendship between coworkers often gives access to opportunities and a source of competitive advantages (Unsworth & Kragt, 2018). Such a dynamic may be even more pronounced when it comes to a friendly relationship between a leader and a follower. In this case, favoritism may emerge, and the subordinate may exploit the leader to gain a special status within the organization.
Balancing friendship and power is especially challenging for new leaders. Those who have just assumed a leadership position often struggle with the new role because, more often than not, they have to manage the people with whom they used to be on the same level. It is not surprising that a promotion to a higher-level role was one of the five leading causes of friendship deterioration in the workplace (Unsworth & Kragt, 2018). New leaders’ identities are unstable, shifting, and often dependent on external validation and feedback (Unsworth and Kragt, 2018). They may attempt to be liked by everyone because of the role strain.
However, Unsworth and Kragt (2018) argue that an effective friendship dyad is built on equality while a leadership-follower dyad is inherently unequal. Gaining and maintaining power may not be as contingent on dyadic friendships but rather on networking and wider group-based relationships.
Discussion of the Success Factors
For years, Apple’s late visionary cofounder Steve Jobs and designer Jony Ive were the most important people in the company. Ive was the mind behind Apple’s most recognizable and iconic products, such as iMac, iPod, iPhone, and iPad. His first encounter with Apple was during his student years at Newcastle Polytechnic when he was designing on a Macintosh. Ive said that he instantly felt a connection with Apple electronics and had a clear vision of the direction that their design strategy should take. Though initially exploring the London startup scene as an entrepreneur, soon after graduation Ivy landed a job in Apple’s design department.
Four years after joining the company, he was promoted to the head of the department, and yet, he was still dissatisfied with his role in the company. Jobs’ biographer provides the following account of Ive’s experience at the time: “All they wanted from us designers was a model of what something was supposed to look like on the outside, and then engineers would make it as cheap as possible (Smith, 2019).”
Everything changed in 1997 when Steve Jobs convinced Apple’s board to oust its CEO, Gil Amelio. Jobs returned to the company that he once founded and became first an interim and then an actual CEO. Their first encounter happened when Jobs was walking around the design department and asked Ivy whether he thinks he has been effective lately. The question was blunt, and as told by Ive himself, Jobs even used a swear word to gain his attention. In fact, the question was not a criticism on the CEO’s part but rather a compliment. Steve Jobs acknowledged that Ive’s talent has not been used properly and that the designer was not given enough tools to unlock his full potential.
Ive’s motivation to quit is in line with the research covered in the literature review. Consistent with Kim et al. (2017), the designer’s turnover intention was caused by the perceived organizational injustice. Apple’s environment at the time was disregarding designers’ ideas because they did not fit their pursuit of higher profits. Similarly, the case may be explained by the social exchange theory: Ive’s efforts to revolutionize Apple’s electronics design were not met with an acknowledgment (Harden et al., 2018). Besides, Ivy was experiencing skills obsolescence as he could not find an application for his expertise at the current plays of employment and had to create within the strict constraints. These problems had to be tackled to prevent turnover and retain a valuable employee.
When Jobs met Ive and convinced him to stay, he showed exemplary leadership qualities and behaviors. DuBrin (2018) explains that one such behavior is the ability to ask tough questions rather than providing answers. According to Dubrin (2018), asking questions is important because, more often than not, group members are well-aware of the difficulties that their organizations are facing. Besides, Jobs had the right attitude that allowed him to gain Ive’s trust immediately.
Dubrin (2018) names openness to worker opinions a significant part of relationship-oriented leadership. It is part of the consideration dimension that is critical for participative leadership. If previously Ive felt dismissed at work, Jobs put faith in his ideas and encouraged him to unleash his creativity. Apple’s late CEO concentrated on the strengths of the group members, which, as pointed out by Dubrin (2018), is an axiom of effective leadership. In particular, Jobs appealed to Ive’s higher needs that went beyond remuneration and offered him an internal career development track that would bring him more moral gratification.
Ive’s retention and promotion is a successful case of internal promotion. In line with Krell’s findings (2015), this example of internal hiring went well due to Apple’s unique and specific work culture. Even before joining Apple, Ive felt a strong connection to the brand. As a founder of Tangerine, a design startup, he once won a contract with Apple, which allowed him to become more familiar with the company’s values.
Besides, between 1992 and 1997, Ive had been promoted several times, which allowed him to meet people at multiple levels of the organization and build connections (Smith, 2019). What was even more important though is that the designer genuinely cared about the product and was upset with engineers’ reluctance to make it more attractive and user-friendly. His motivation was not only career progress and remuneration but actually creating value and making a contribution. Therefore, the designer was superior to many external candidates due to his familiarity with the company and active participation in its advancement.
Jobs’ created an organizational structure that supported innovation. Dubrin (2018) writes that if a company wants to enhance creativity, it should introduce a cross-organizational reward system that would provide both recognition and financial incentives. Leadership research suggests that information exchange and collaboration increase employees’ intrinsic motivation (Dubrin, 2018). In contrast, excessive politics make people more reluctant to share ideas for fear of being shunned or rejected. Ive’s first hit as a designer was the iMac, to which he added a handle, even though the computer was not supposed to be carried around.
To him, it was a nice touch because the device looked more approachable and encouraged customers to play and interact with it. Ive said that at the old Apple, he would have lost the argument, but Jobs immediately recognized his idea as “cool (Smith, 2019).” The designer felt validated and gave back to the environment that fostered his creativity.
Furthermore, Apple’s former CEO capitalized on Ive’s personal interest in the company’s success. In a 2018 interview for Vogue, Ive said that one of the defining characteristics of the workflow at Apple was the involvement in everything they were doing. Luckily, Jobs agreed with him that outsourcing design when one only has an abstract idea of what they want was not the right solution. Interestingly enough, Ive compared his profession to that of a fashion designer who had to take a hands-on approach with everything they did. For instance, when experimenting with different materials, Jobs and Ive encountered anodized aluminum.
The metal had to be immersed in acid and electrified to oxidize its surface and change it to any color. Since in the United States the CEO could not find the right amount of anodized aluminum, he flew Ive out to China to supervise the process at a factory (Smith, 2019). Today, Apple uses colorized metal for almost all its electronics, and its palette is one of the most recognizable design features.
As a good leader, Steve Jobs took accountability for his decisions and did not put the blame for the company’s failures on his employees. While Ive was a brilliant designer, not all his ideas were exactly viable. Sometimes he preferred to ignore the practicality and focus on the aesthetics. For iPhone 4, the duo insisted on using a solid piece of stainless steel to make the thinnest smartphone in the world (Smith, 2019). It soon became clear that the design solution negatively affected reception, which led to the infamous “AntennaGate.” When buyers held the new model in a way that closed the seams in the gap between the two antennas, they had low signal and could not make phone calls (Smith, 2019). Even though “AntennaGate” was one of Apple’s biggest scandals, Ive remained Jobs’ key employee and partner.
As much as Jobs and Ive were aligned in their vision, the designer often had to deal with the CEO’s fiery temperament. As Ive recounts, he had to be extremely careful with his pitches because Jobs could immediately reject any idea he did not like at first glance. Moreover, it was not uncommon for the CEO to intervene and make the design department redo key features on short notice. For instance, Ive’s team had to change the first iPhone’s design right before its launch (Smith, 2019). While the task was tedious, the world saw what has now become a milestone achievement in the world of consumer electronics. As per DuBrin’s (2018) research, this way of conflict resolution focuses on interests rather than positions. Jobs and Ive were united by the shared goal and could work past frustration to achieve it.
One interesting finding from this case analysis is that contrary to existing evidence, the friendship dyad of Jobs and Ive did not compromise the former’s leadership. The CEO removed the key factor that renders friendships between leaders and followers impossible, which is inequality. At Apple, Ive was second only to Jobs; while many people in Jobs’ life were replaceable, Ive was not. In other words, the CEO saw the lead designer holistically: not only as a function but as a human with a unique personality (Morrison & Cooper-Thomas, 2016). In Dubrin’s terms, their friendship started when Jobs exercised his leadership through the display of consideration. He had lunches with the employee and invited him to family dinners. According to Dubrin, it is the small favors that can make a big difference in a relationship between a leader and a follower.
There is no doubt that Apple owes its success to Steve Jobs’ strategic leadership that still remains a focus of interest for business researchers. In 1997, after his return to Apple, Jobs insisted that the head designer Jony Ive stays despite his clear desire to quit. The CEO prevented the turnover of a valuable employee by addressing all the issues that frustrated Ive and impeded his creative flow. The designer had the CEO’s trust and support when it came to innovation and could meet his higher-order needs for validation and career fulfillment. The case of Jony Ive is an example of a successful internal promotion.
Even though at the time, Apple was at the turning point in its development trajectory, the interim CEO did not look outside for cadres but recognized the potential in the existing staff. The partnership between Jobs and Ive was not perfect, but their conflicts were always resolved to respect the interests of both sides and the company. Contrary to existing research, their friendship did not compromise the status of either person but rather empowered them to move forward.
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