Apple’s corporate omerta and share price growth

Updated on November 2, 2011

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At lunchtime, I was reading “Steve Jobs: The man who polished Apple,” a most excellent feature about Steve Jobs and Apple written by Times journalist Bryan Appleyard and published in the Times Online (and probably in the newspaper itself as well).

While there’s copious biographical, anecdotal and other information about Steve Jobs and Apple almost anywhere you care to look, to me Appleyard’s feature presents some absorbing information in a way that’s new to me, and makes for compelling reading.

And while it’s a fascinating picture of the narcissistic Jobs, what really focused my attention were a few explicit paragraphs about Apple itself:

[…] Apple Inc is worth around $140 billion. But is it worth anything without Jobs? It is a company formed around his personality and inspiration. It is also the most watched, envied, admired and adored company in the world. So how, you may wonder, was it possible for Jobs to put out such a statement four months before a liver transplant? And how was it possible for consumer capitalism’s greatest hero to pull off the Memphis Liver Caper in absolute secrecy?

The answer is that, along with computers, iPhones and iPods, secrecy is one of Apple’s signature products. A cult of corporate omerta – the mafia code of silence – is ruthlessly enforced, with employees sacked for leaks and careless talk. Executives feed deliberate misinformation into one part of the company so that any leak can be traced back to its source. Workers on sensitive projects have to pass through many layers of security. Once at their desks or benches, they are monitored by cameras and they must cover up devices with black cloaks and turn on red warning lights when they are uncovered. “The secrecy is beyond fastidious and is in fact insultingly petty and political,” says one employee on the anonymous corporate reporting site Glassdoor.com, “and often is an impediment to actually getting one’s work done.”

Here’s a chart showing Apple’s share price over the year to date:

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If I were an investor in Apple, I wouldn’t be too unhappy. For the moment.

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Neville Hobson

Social Strategist, Communicator, Writer, and Podcaster with a curiosity for tech and how people use it. Believer in an Internet for everyone. Early adopter (and leaver) and experimenter with social media. Occasional test pilot of shiny new objects. Avid tea drinker.

  1. Paul Seaman

    Apple is an example of why most of the social media commentators get it wrong. There’s not much substance to long tails, wisdom of crowds, the end of old-fashioned business models (dead tree press is dead) or statements like the new world is bottom up – or flat – rather than top down. Apple’s success provides a counter-intuitive reality check. Google is in the same category. Both companies highlight that success on the internet resembles the business success and methods that obtained similar glory in the commercial world long before the internet was invented. (Apple is in fact a very old-fashioned company. That is the secret of its business success).

    • neville

      What Apple illustrates is simply that it’s an organization wholly unsuited to social media usage in ways that other technology businesses have embraced it, eg, IBM or Dell.

      I don’t see their behaviour as a ‘counter-intuitive reality check.’

      Apple may well be an old-fashioned company in terms of how it goes about its business. But making any kind of concrete connection between their business success and not using social media is absurd – unless you have equally-concrete evidence.

      More likely it’s that they make products that the world is beating a path to their door to acquire. That’s all that matters to many people, it seems, whatever Apple’s corporate behaviour and as long as the share price performs.

  2. brunoamaral

    Allow me to attempt to turn the table: taking into account that information is kept so secure, how can we trust that glassdoor.com is not in fact a vehicle for misinformation?

    It’s easy to broadcast information with today’s technology and I feel we are taking all information for granted and losing perspective.

    • neville

      I don’t think you can. Given that glassdoor.com permits (indeed, encourages) anonymity, how can you trust anything you read there?

      What it does do, however, is give you a sense of sentiment, of feeling, about what employees think of an organizations and what it’s like behind the scenes, backed up with a lot of data.

      If you read lots of, say, negative comments from employees, that might suggest there really are issues in a particular company. Equally, lots of positive commants may suggest good things. You’d likely connect such commentary with whatever else you pay attention to about an organization.

      But trust what you read on glassdoor.com? No.

  3. Paul Seaman

    Neville, you don’t get a part of my point. My comment above did not put Apple’s business success down to it “not using social media” as you say, and had I said that, it would have been, as you say, “absurd”. Let me be clear: online networking is here to stay and it is a positive development.

    My point was that so called social media does not change the rules of old world business. Most of the talk about long tails, wisdom of crowds, the end of old-fashioned business models (dead tree press is dead) or statements like the new world is bottom up – or flat – rather than top down is meaningless. Apple highlights how the rules online – and the route to success their – looks very old worldish, as does the success of IBM, Dell, Google, Microsoft and Amazon.com (all old-style companies exploiting new trends).

    The internet seems to favour – monopolistic, or more precisely centralized, focused businesses that are geared toward making the best of a ruthless competitive market driven by meeting – shaping – customer needs in order to maximize profits (how old world is that?).

    Meanwhile, purely social networking sites are becoming very centralized (large) but have no business model (Xing and Linked-in are niche exceptions). It remains to be seen how that challenge will play out – but purely social media companies have no future unless they become old worldish.

    In short, I maintain that the old world is defining the new world and not vice versa (as talk of long tails, wisdom of crowds, the end of organizational structures, etc, mistakenly suggest). Of course, in practice we are undergoing change, but that was always and always will be the case.

    • neville

      Thanks for the clarification, Paul.

      I’d have to state my entirely contrarian view to yours: my belief is that social media can change the rules of old-world business. But I’m not going to get into a discussion until we agree a consistent definition on what those rules are.

      So, if you’re up for a debate, let’s start with those rules. What are you defining as “the rules of old-world business”?

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