In Part 1 of this series, we discussed some of the lessons that small businesses and entrepreneurs can learn from the career of former Apple CEO Steve Jobs. His career illustrates many important examples that any small business owner can benefit from.
Three More Lessons for Small Business
Save for a rainy day. Although Steve Jobs is known as a brilliant, forward-thinking innovator who challenges the status quo, he is relentlessly conservative as a manager of money. Apple has more cash on hand than the U.S. government. Like his rival Bill Gates, who when he was CEO of Microsoft always wanted to keep enough cash on hand to be able to make payroll for a full year, Steve Jobs hasn’t gotten his company overleveraged. This gives Apple the freedom to make new investments, or just stand pat. An ample cash cushion represents freedom for you and your business: it gives you the true independence that comes from being able to pursue only the most exciting opportunities, and say “No” more often than you say “Yes.” Maybe you’ll never have $76.2 billion in cash reserves like Apple, but you can still build up enough reserves to have peace of mind.
Market to your biggest fans first. This is also hard to believe, now that Apple is one of the world’s most profitable companies, but back in 1997 when Steve Jobs took over as interim CEO, Apple was “a basket case on the brink of bankruptcy” as the Economist says. Apple fans were looked upon as, well, fanatics – “true believers” and diehards who foolishly refused to accept that Apple would always be a distant #2 to Microsoft. Apple became a mass-market hit not by buying more ads and appealing to the mainstream – instead, they became a cult favorite. They appealed first to their biggest fans, the Mac users and Apple lovers who had stood by them in good times and bad. By focusing their marketing efforts on their biggest fans, Apple created an army of evangelists who went out and trumpeted the word about Apple’s products. Over time, as the early adopters and tech geeks spread the buzz about Apple’s products, the mainstream media and mass market consumers started to follow. Who are your business’s “biggest fans?” Instead of cold-calling and doing the hard work of selling to people who don’t know anything about your business, why not pay more attention to the people who already love to buy from you? This is the new world of marketing, that Steve Jobs seemed to understand sooner than almost anyone else: when you reward your biggest fans, they will market your brand for you.
Pay attention to succession planning. Even as valuable as Steve Jobs has been to Apple, smartly run companies operate in a way so that no employee is irreplaceable. Many small companies need to pay more attention to succession planning – what happens at your company if the CEO were to step down, or have to unexpectedly retire due to illness or an accident? Would the company be able to continue, or would it have to shut down or be sold at a discount – taking the jobs of all the employees and the wealth of the owners with it? To protect your wealth as a business owner, succession planning is especially important. Having a clear line of succession is not only important to protect against disaster, but it also preserves the value of the company for a potential sale. Fortunately for Steve Jobs and Apple’s shareholders, it appears that Apple is in good hands with its new CEO Tim Cook, who has already served as longtime COO and occasional CEO during Steve Jobs’ various leaves of absence over the years. Can your small business say the same? No one, not even the CEO, is irreplaceable. You need to run your company in a way that allows for new leadership to step in if needed and run the company in a way that reflects the enduring culture and company values that you’ve created. Although Steve Jobs is no longer CEO of Apple, the company is likely to continue in his image, reflecting the legacy of innovation that he has left behind. That is the highest praise that any CEO can ask for.