Who is the greatest business mind of the past 50 years? Walt Disney? Warren Buffett? Perhaps Sergey Brin or Larry Page of
But is Jobs a great leader? In my recent column "What Sets Great Leaders Apart," I defined true leadership as measured by bettering the lives of the people around you. Does Jobs do that? No, by that measure he has a long way to go.
In the drive for ever fatter margins and lower product prices, Steve Jobs and Apple have forgotten to protect the quality of life of workers at Foxconn, the Taiwanese company that manufactures products for them and other companies like
Every month, it seems, more horror stories emerge from Foxconn's factories. Although it is Foxconn and not Apple itself whose behavior is troubling, Steve Jobs and Apple have a moral imperative to address these concerns. Not only as a true leader should Jobs do so but also as a smart businessman. Although Apple's stock continues to soar, the public relations black eye the company gets whenever a Foxconn employee dies under tragic circumstances or someone is bludgeoned is serious. Online chat rooms in China are abuzz with these problems.
Just in terms of recruiting and retaining employees in China, something has to change. Fewer and fewer young Chinese are willing to labor for low wages in subhuman conditions far from their families. (See my article "China's Growing Labor Shortage.") Job opportunities for young Chinese continue to improve as the country's economy shifts toward services and consumption. Apple runs a huge supply chain risk if Foxconn's reputation grows so bad it can no longer recruit and retain assembly workers. Just 10 years ago there were few employment choices for uneducated and low-skilled workers in China; today they have many opportunities. Even people willing to work in factories may not want to take the risks of employment at Foxconn. Why should they, when other manufacturers offer better conditions? Apple needs to make sure it doesn't lose its ability to keep supplying the world with its products.
We all can learn a lot from Apple's Foxconn problems. Executives in charge of supply chain management can no longer concern themselves with low prices and high quality alone. They absolutely must make sure their partners take care of their employees and protect the environment.
Doing so will not hurt the bottom line. It will most likely increase it, since more ethical companies tend to be better able to retain good workers.
How can companies ensure that the factories that make their products are acceptable? First, they need to keep people on the ground in those partners' work areas, regularly or even daily, overseeing the situation. Prescheduled visits are not enough, as they let things be hidden. Second, they need to help formulate regulations for their partners and even for their partners' partners, since things like security are often outsourced, and they need to enforce those regulations. Third, they have to offer better incentives for meeting employee satisfaction and retention goals, not just production and pricing goals.
Steve Jobs is one of the world's great business minds, but he should spend some time becoming a great leader, too. Here is my personal challenge to him: I challenge you to revolutionize the quality of life of the factory workers who put together your products as much as you've revolutionized anything else. Workers at Foxconn will benefit greatly and, ultimately, so will Apple's bottom line.
Shaun Rein is the founder and managing director of the China Market Research Group, a strategic market intelligence firm. He writes for Forbes on leadership, marketing and China. Follow him on Twitter @shaunrein.