Should companies be managed by sales-driven leaders or production-oriented ones?
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In a 1995 TV appearance, Steve Jobs gives a speech on how major tech companies that prioritize sales and marketing activities over developing disruptive technologies lose their spirit of innovation.
In 1995, the year Steve Jobs gave this speech, he did not hold a seat at Apple. Jobs had lost a power struggle with the company's CEO, John Sculley, and had resigned from the board of directors of Apple, the company he founded. Taking a few Apple engineers with him, he had left Apple with the aim of founding a software company called NeXT. John Sculley, who played a leading role in Jobs losing his position, had started his career in Pepsi's marketing department and rose to the chairmanship of the board during his 15-year adventure at Pepsi. Steve Jobs's rhetoric that marketers would push innovation into the background and threaten the future of tech companies perhaps stemmed from his animosity towards Sculley, a former marketer.
Even 16 years after this speech, Jobs had not changed his mind, stating in his biography written by Walter Isaacson that he had an idea about why tech companies like IBM and Microsoft declined. According to Jobs's assertion, such companies first create a magnificent product and become almost monopolies in their fields. Afterward, entering a race to increase their revenues, these companies begin to prioritize sales personnel who will boost profits rather than engineers. Eventually, as companies pass under the management of sales-oriented individuals, product-developing engineers are pushed away from decision-making bodies, and ultimately the company forgets what it means to create innovative products.
On the other side of the story, while under the management of Sculley—who sold 'sugar water,' in Jobs's words—Apple had increased its revenue from $800,000 to $8 billion. According to some circles, the true hero behind Apple's success was not Steve Jobs, but John Sculley.
There is someone else through whom we can analyze Jobs's perspective: Steve Ballmer. Steve Ballmer started working at Microsoft in 1980 as a business development manager when the company had fewer than 30 employees, and he took over the CEO position from Bill Gates in 2000. What do you suppose was Ballmer's legacy at Microsoft during his 14-year tenure as CEO, following a sales background? Tripling sales and doubling profitability... And what did he lose? The market leadership title that Gates had earned for the company through disruptive technology... Not to mention missing out on the smartphone craze, the technology trend of the 21st century.
The perspective of the Leonard de Vinci Graduate School of Engineering (ESILV) in Paris supports Jobs. In their article explaining why the world's most successful CEOs consist of engineers, they state that every business model is built on solving a specific problem, and that engineering science exists precisely for the purpose of solving problems. In other words, the philosophies underlying business models and engineering are one and the same.
The view of Yasser Alsaleh, a researcher at INSEAD—ranked among the top 5 business schools in Europe—is in the exact opposite direction. He argues that while engineers are generally good at attention to detail, problem solving, risk management, and analysis, many of them may lack emotional intelligence, the necessary leadership, and people management and communication skills.
In fact, there is a statistic that can put an end to all these debates: 'the list of the world's richest people.' Among the top 10 individuals on this list, there is only one person who is not a university graduate: Bill Gates. As for the remaining 9 people, 6 of them are engineering graduates...
An article in Forbes states that 63% of audiences can easily remember stories told, but only 5% remember the statistics provided. Although he did not view himself as a salesperson, it is indisputable that Steve Jobs—who said, 'If you need a presentation, you don't know your subject'—and Elon Musk, an engineer, are both highly successful storytellers. It is also undeniable that their storytelling abilities have played a significant role in their fame and success. Indeed, the same article emphasizes that believing even revolutionary products will achieve commercial success without a story is merely an illusion.
The examples given so far lead us to these realities: product and its story, innovation and revenue. While the product is developed by engineers, its story is written and spread by salespeople. While innovation is driven by engineers, revenue and growth are brought by salespeople. Engineers and salespeople seem to complement one another.
Should companies be managed by sales-driven leaders or production-oriented ones? It seems the answer depends on where you want to go...
Note: In the photograph, Steve Wozniak is on the right, John Sculley is in the middle, and Steve Jobs is on the left.
References
[1]Walter Isaacson. Steve Jobs. 2011
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