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There are very few things we know for certain about Apple's (Nasdaq: AAPL ) future. New products are closely guarded, and leaving observers to make their best guesses at what they might look like. But one thing we do know for certain is that someday Steve Job won't be running the company.
Hopefully that day is years and years away, but investors should be considering now what will happen when it does come. Should we jump ship when he officially steps down? A look at a few iconic CEOs stepping down from running their respective companies shows Apple could still have a bright future, even after Steve Jobs.
"Hire good people, and leave them alone." -- William McKnight
When discussing CEOs who cultivated innovation my first thought always goes to William McKnight, the man largely responsible for making 3M (NYSE: MMM ) the company it is today. His management style was a stark contrast to Steve Jobs, choosing to let innovation grow by giving engineers the freedom to work on projects of their choosing.
It was during McKnight's tenure that "15% time" was first incorporated into 3M's culture. This "free time" for engineers has created countless new products and has even expanded to "20% time" at the younger innovation leader, Google (Nasdaq: GOOG ) .
Success followed at 3M for years after McKnight stepped down as President in 1949. It wasn't until years after McKnight left that 3M came out with the iconic Post-It Note, and products like optical films that drive sales today are creations made long after his death.
Creating a culture was the legacy of the most important leaders of 3M's history -- and that same culture of innovation permeates from everything Apple creates.
"Capital isn't scarce; vision is" -- Sam Walton
Before Wal-Mart Stores (NYSE: WMT ) dominated our retail landscape it was an idea for a better retail chain in the head of Sam Walton. The founder of Wal-Mart saw incredible success during his lifetime, and Wal-Mart kept churning out retail innovations after he stepped down as CEO. In fact, it wasn't until after Walton stepped down that the Supercenters we know today started popping up around the country.
Wal-Mart did more than hold its own in the post-Sam Walton days, rewarding shareholders who hung around to see the company dominate retail worldwide. David Glass took over as CEO from Walton, and over the next 10 years Wal-Mart's stock price grew at a 19.8% compound rate. Not a bad return for a company after its iconic CEO left.
"Be nice to nerds. Chances are you'll end up working for one." -- Bill Gates
In a slightly less successful transition, Bill Gates handed over the CEO reins to Steve Ballmer in January 2000. In 14 years as a public company, Microsoft's (Nasdaq: MSFT ) stock had rewarded early shareholders with a 27,500% return since its IPO -- but Ballmer has seen little of Gates's success.
Ironically Apple can probably be blamed for some of Microsoft's troubles as Steve Jobs stayed one step ahead of Microsoft. Ballmer has also had less success knocking off competition than Gates, as we've seen with the battle for search dollars. Microsoft's failed bid for Yahoo!, and the partnership the two companies eventually developed afterward showed that, at best, Mr. Softy can only slowly chip away at Google's dominance in search, not a position Microsoft is used to.
The comparison for Ballmer is a little skewed due to the high stock values when Gates stepped down as CEO. Microsoft is still a dominant platform and the stock has made its way from a growth darling to a value stock.
A final thought ...
There is no question Steve Jobs is instrumental in the success of Apple and may be more instrumental to its success than any CEO we can compare him to. But the company will survive and likely thrive well after he decides to leave, and shareholders shouldn't panic when he does officially step down. As these companies show, Apple will go on and investors could be handsomely rewarded for sticking around.
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