A Critique of Apple’s PR Response To Steve Jobs’ Health Issues
Filed Under: Essays
Tags: Apple, Health of Steve Jobs, Public Relations
Let me start with full disclosure: This post is being written on a MacBook linked to a large Apple cinema display screen. The MacBook is the latest in a string of Apple computers I’ve owned over the last decade and a half. I also have an iPod and that little miracle, an iPhone. In fact, I have been using Apple products for so long that the other day, when writing a document on a PC using the Windows version of Word, I could not remember the keystrokes necessary to save the file.
While I am a fan of the elegant, intuitive, state-of-the-art products, I do not drink the corporate Kool-Aid; I have reservations about some of Apple’s anti-competitive corporate practices, and I am not a member of the Steve Jobs Cult of Personality, although I’m happy to acknowledge that he is clearly a brilliant and imaginative innovator.
What I am about to write may have Apple addicts shunning me the way the Amish community treats an apostate, but as a journalist and a media trainer, I have to say it: I can think of no better parallel to Apple’s opaque and evasive handling of the Steve Jobs health issue than the North Korean government’s communications about Kim Jong-Il’s August, 2008 stroke.
While the “Great Leader” was being worked on by teams of Chinese doctors the North Korean propaganda apparatus denied he had any health issues. Months went by before Kim made any public appearances at all. His most extensive (and totally controlled) exposure to the captive North Korean media came on April 5, nearly eight months after the stroke, when he attended the launch of a multi-stage rocket that crashed into the Pacific instead of achieving its announced goal of placing a satellite in orbit. (This parallel can be taken too far. Apple has acknowledged its CEO’s health problems — to a degree — while North Korea continues to deny Kim had any health issues. In our free and open society, Apple is subject to criticism — even unfounded and baseless criticism like the witless, pointless online screed the New York Times published about the iPhone — while the North Korean media is so totally controlled, it broadcast patriotic music and claimed it was “beamed from space” by the satellite it failed to launch.)
While Apple generally enjoys glowing praise for its products (well-deserved in my opinion), the company’s media relations are aggressive and controlling. It has sued bloggers who have had the temerity to report on Apple’s future product plans — threatening to take one of them all the way to the Supreme Court. At the same time it gains great traction by having its products in movies. Former Vice President Al Gore, a member of the Apple board of directors, ran his slideshow from an Apple laptop in the Oscar-winning documentary, “An Inconvenient Truth.” Apple products also show up on popular TV shows. The psychologist on HBO’s “In Treatment” uses a MacBook Pro; the widow of a 9/11 firefighter on “Rescue Me” accuses a teenager of stealing her iPhone; everyone on NBC’s “30 Rock” uses Apple computers and Tina Fey’s iPhone had a pivotal role in one plot turn — she left it in a cab and the driver held it for ransom because there was a nude picture of her in its photo library. In these media appearances, Apple products define cool and cutting-edge. Scientists and artists love Apple’s computers. I do a lot of media training for NASA and when workshop participants haul their laptops out of their briefcases, MacBooks generally outnumber PCs by a ratio of four-to-one.
Now on to the CEO: Jobs, one of Apple’s founding fathers, was forced out of his own company in 1985. This was akin to the Continental Congress forcing George Washington from the Presidency. Jobs spent 11 years in the wilderness — well, hardly the wilderness; he did start Pixar animation and NeXT computers. The Jobs legend has it that during his absence Apple nose-dived, but the real story is more nuanced. During those years Apple introduced the Powerbook, its first, groundbreaking laptop. It also brought out color computers, upgraded its operating system and adopted the RISC chip (Reduced Instruction Set Computing), a high-performance processor developed jointly by IBM, Motorola and Apple that gave Apple Power Macs impressive processing speed. Management also made a series of bad business decisions, yielding ever-increasing margins of the computer business to PC-based machines. Jobs returned in 1996 and under his guidance — actually, under his vision — the company enjoyed a sustained spurt of creativity and innovation, increased its market share and become quite profitable. It is no exaggeration to say that every other company in the computer and mobile phone business is playing catch-up. One indicator of that prodigious success: the announcement in April that iPhone customers had downloaded one billion applications from Apple’s Apps Store.
Since Jobs was seen as the Apple’s savior, it was a shock to investors when, in 2004, he underwent surgery to have a cancerous growth removed from his pancreas. Before the surgery Jobs tried several months of “holistic” treatment, but during that period no announcement was made about the cancer. Because the Jobs cult of personality had led the public — and stockholders — to think Jobs WAS Apple Computer, the stock price is tied tightly to his continued run as CEO.
During 2008, Jobs — a vegetarian who was never particularly chubby — lost 30 pounds, giving rise to rumors that his pancreatic cancer had returned. For months, the company vehemently denied that he was seriously ill. Then, Jobs cancelled his keynote address at the MacWorld conference in San Francisco. Initially Apple claimed there was no new product big enough to warrant his appearance. Then the story changed: Apple said Jobs was suffering a “hormonal imbalance.”
If this statement was supposed to quiet investor concerns about his cancer, it is likely Apple’s publicists slept through high school biology, missing the lesson about how the pancreas makes hormones, including insulin. Insulin regulates metabolism and an insulin imbalance can result in radical weight change. If someone who has had cancer of the pancreas has a hormonal imbalance, alarm bells should ring. At very least journalists should ask which hormone or hormones were out of balance. Business reporters appear to have slept through high school biology, too, and that vital question was either unasked or, if asked, unanswered. Very few stories on Jobs’ health made the direct connection between the pancreas, insulin and weight change.
Shortly after Jobs’’ non-appearance at MacWorld, there came an even more stunning announcement. Posting an online message, Jobs wrote the “hormonal imbalance” was “more complex” than first thought and he would take a six-month leave of absence from the company to concentrate on battling the problem. The company said Jobs would be actively involved in new product development during that time. That announcement resulted in an immediate seven percent plunge in Apple’s stock price.
Apple’s often contradictory and opaque handling of Jobs’ health issues finally forced journalists to do real reporting. Some of them actually read last week’s Apple Q-10 filing with the SEC, instead of just reprinting the company’s press release. Their big discovery? Apple had paid Jobs nothing in the first quarter of 2009 for use of his Gulfsteam V jet and only $4,000 for corporate travel on the plane in the last quarter of 2008. Compare that to $891,000 the firm paid him for the jet in Apple’s last corporate year. Business reporters took this to be an indication of how complete the leave of absence was and how uninvolved Jobs was with the company during the quarter. (Apple’s press release about the filing contains no reference whatsoever to Jobs.)
Which brings us to today — Is there light at the end of the tunnel? I dusted off my old reporter’s hat and read the same 10-Q filing. In it Apple lists risks to its business plans. One of the risks: “Much of the company’s future success depends on the continued service and availability of skilled personnel, including its CEO, its executive team and key employees in technical, marketing and staff positions… The company’s CEO has taken a medical leave of absence until the end of June and has been involved in major strategic decisions during his leave. There can be no assurance that the company will continue to successfully retain key personnel.”
During an April 22nd earnings conference call, Apple CFO Peter Oppenheimer was asked if Jobs was returning at the end of June. His answer, opaque as always, is more instructive for what he didn’t say than what he did say: “We look forward to Steve returning to Apple at the end of June.” Anyone see the word, “Yes” in that answer? I thought not.
Excellent Article. I totally agree with opinions. You have it to a tee!
paul
You must have not have anyone in your family become seriously ill. There are doctors that sometimes mis-diagnosis patients. They don’t know everything. It may take months to locate a particular problem. You should watch some shows on the medical channel. If Steve had gone to a doctor and he was told that the condition wasn’t that serious, and was prescribed medical treatment. If a month or two later Steve’s health didn’t improve, they would run more tests and maybe find some deeper cause. Doctors are not infallible.
I just don’t understand why everyone thinks that Apple or Steve is deliberately lying or conceal the truth to investors. The doctors could be the cause of that. I have a fair amount of money invested in Apple and I still think people are making too big an issue out of this health thing. Yes, Steve could die tomorrow just like anyone could that is even in supposedly good health. I still don’t see how the company would be undervalued for this reason. Steve does not do everything in the company. The company has billions of reserve cash. The iPhone has plenty of deferred revenue coming in. The retail stores will continue to make money when the economy improves. Apple makes darn good products and they have high satisfaction ratings.
This whole health issue is being caused by competitor shills trying to drive Apple’s share price down. If old Warren Buffet gets prostate cancer, will Berkshire Hathaway’s A share price take a nosedive? Probably not.
You say that Oppenheimer was being vague. OK. Should he have said, “To the best of my knowledge, he should be returning.” Or maybe he should have said, “Absolutely, positively, 100%, he is returning as the CEO in June.” And then if Steve didn’t return because his health hadn’t improved as much as it should have, you’d say that Oppenheimer was deliberately lying in order to fool investors. Why don’t you just wait until June comes to find out?
When people make wedding vows and say they will love each other for all eternity and six months later they’re looking for divorce, it’s not because they were necessarily lying. Mostly the future isn’t all that clear and there are some promises that can’t be kept due to forces beyond our control. Get it. Just don’t say people are lying or concealing the truth unless you absolutely know that to be a fact. Ignorance can also seem to be like a lie.
I probably feel much less secure if Steve was in perfect health, but had a hobby of auto-racing or snowboarding. I have not dumped any of my stock during all this health scare because I believe the company is bigger than Steve Jobs at this point. Whether there will be someone more charismatic to replace him, I don’t know. But the company looks fundamentally sound at this point and that should be enough. Steve does not have to be CEO of Apple. Even as a product consultant, he could supply Apple with ideas and guidance as long as he is alive.
Very much enjoyed the article George, your points are dead on.
I found this article very interesting even though apple is not my thing. Thanks for the insights.
Wonderfully informative article! I suppose the risk statement in the 10-Q is true of many companies. How much of a companies ongoing and continued success is contingent on that of its founder?
I suspect, in the case of Apple, there’s enough corporate culture to maintain their momentum for a time, but… only time will tell.
Peace,
Steve
The real question here is not so much will he come back but more, will it make any difference if he doesn’t.
If Steve hasn’t had much to do with the company recently as you indicate then life has gone on and the sky hasn’t fallen.
Perhaps in June we should expect a token appearance and then he retire gracefully to live out his remaining years privately in whatever health he has.
Constable Odo’s comment deserves some attention because he obviously took the time and trouble to read my commentary carefully and give it a lot of thought.
First, I am no stranger to serious illnesses, no one my age is. I watched a number of family members succumb to long, lingering and cruel diseases and do not treat such trials lightly. Moreover — which Odo could not have possibly known — I come from a medical family and was exposed early and often to mystery ailments which my physician father labored to identify.
That said, Jobs’ illness was sufficiently severe early on to inspire great rumor-mongering. How do rumors serve the interests of stockholders and employees of the company? Better to be transparent: we have health issues. We are unsure what they are. These are the steps being taken to address them. It is instructive that during his months of “holistic” treatment of the cancer, there were no announcements; it was only when the surgery was performed that Apple had to address the disease.
As to the current hormonal disorder: the specific diagnosis was less important than revealing the fact that the CEO of this major company had some sort of serious ailment. Apple stakeholders were entitled to that information.
Over the decades, the issues of health and privacy have evolved. When I began work as a print reporter in the 1960s, obituaries customarily indicated someone had died “after a long illness.” That was code for cancer because back then there was a stigma attached to the disease.
On a larger scale, health was generally an individual secret, even where presidents were concerned. When Woodrow Wilson was president he suffered a debilitating stroke and, in effect, his wife and cabinet served as a collective chief executive of the nation. The people learned of this after the fact.
When Franklin Roosevelt ran for President, newspapers and newsreels never showed him in a wheelchair or on crutches — a tacit agreement to keep key, relevant health information from the American public. By the time he ran for his fourth term, his health was in critical decline, yet the public was kept in the dark. He died less than a year into that fourth term.
The first president I recall being candid about health issues was Eisenhower — who had surgery for a bout of ileitis and heart trouble while he was chief executive. Secrecy returned with John F. Kennedy who suffered from Addisson’s disease — which was kept from the public until after he was assassinated — as well as chronic back pain so severe his brother, Bobby said of him, “at least one half of the days that he spent on this earth were days of intense physical pain.”
Lyndon Johnson, on the other hand treated — if that’s the word for it — us all to a showing of his gall bladder surgery scar. (You can see the photo at: http://3.bp.blogspot.com/_vSDqZSkjH7I/RykNSumt5EI/AAAAAAAAAKo/Fq4rNpapTsw/s320/lbj+gall+bladder.jpg
Since Johnson, presidents’ and presidential candidates’ health has been fair game for the media because the health of a chief executive is a legitimate concern for voters. Similarly, the health of a CEO — especially one of Jobs’ hands-on, inspirational stripe — is fair game for the media because that individual’s health is a legitimate concern of shareholders.
Odo writes, “I just don’t understand why everyone thinks that Apple or Steve is deliberately lying or conceal [sic] the truth to investors.” I never used the word lying. I don’t know if lying was involved; if false information was given out. Certainly contradictory information was (especially vis a vis Jobs’ nonappearance at the Mac World conclave.) But there can be little doubt the company was being evasive. Evasive public relations does not serve the interests of the shareholders and other stakeholders in a company, any more than evasion serves the interests of the public regarding a national leader’s health.
Steve Jobs return to Apple in ‘96 saved the company; there can be no doubt about that. He also redefined the popular music business (saving it from near certain doom) and rewrote the book on animated films. His visionary and inspirational leadership has been game-changing. He dared go into a supposedly mature field — mobile phones — and managed to totally redefine the entire business. When I worked at ABC many years ago, the company had a “Key Executives” program which rewarded vice president-and-above executives who supposedly excelled at their jobs by giving them stock options and other benefits. There was so many people “on the key,” as they called it, the honor was totally diluted. At Apple, there are likely many key executives, but the master key is Jobs because all the others appear to be fulfilling his forward-thinking visions.
If he were Steve Jobs, president of the Jobs Building Supply Company, the state of his health would be the business of his family, his employees and his doctors. But Jobs is not merely the head guy at a publicly-traded corporation; he is one of a tiny handful of executives who have attained mythic status. For the very reason that Apple has fostered the Steve Jobs = Apple, Apple = Steve Jobs legend, the company owes its shareholders — and even its customers- clarity when dealing with the CEO’s health issues.
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