Apple's Hiring Spree Has Potential Pitfalls

Apple has traditionally relied heavily on homegrown talent for its senior executive position. But over the past few years, the company has been on a hiring spree, picking up high-profile professionals for senior management positions. As an Apple shareholder, I'm concerned about the potential pitfalls of this new hiring strategy. 

Apple's been on a hiring spree
This year, Apple has been snapping up high-profile executives. Angela Ahrendts stepped down as CEO of Burberry to lead Apple's retail operations. Paul Deneve, former CEO of Yves Saint Laurent, has joined Apple to head the somewhat mysterious "special projects" group. Lisa Jackson, former head of the Environmental Protection Agency, was hired to head environmental initiatives at Apple. Kevin Lynch, former chief technology officer of Adobe, is now Apple's VP of technology. Luca Maestri, Apple's new corporate controller, was hired away from Xerox, where he was the chief financial officer. Those are just some of the higher-profile hires in 2013.

If you look back a few years, the list of high-profile outside hires continues to grow. Apple has added an iTunes Europe marketing executive from Microsoft, an iAd operations lead from Adobe, a VP of sales from United Continental, a Latin American operations chief from Sony Ericsson, a channel sales director from Hewlett-Packard, a cloud expert from Yahoo!, and a lead tax accountant from Symantec.

Potential pitfalls
Even with their gold-plated resumes, it's unclear whether these new high-level executives will succeed at Apple. Fancy credentials don't guarantee job performance, especially in a new organization. Outside hires may find it difficult to adapt to Apple's culture, and it takes time to develop an internal network at the new companies. Academic tudies point out that new hires often struggle, especially in their first few years on the job. Apple's recent track record with big-time outsiders carries a few black marks. John Browert and Mark Papermaster, for exaple. both came with sterling credentials, and neither lasted very long at Apple.

Obviously, time will tell if Apple's cadre of senior executives hired over the past several years will succeed. But the more important question is: Why does Apple need to bring in so many outside managers? According to studies by Jim Collins and Jerry Porras, authors of Built to Last: "Visionary companies have shown, time and again, that they do not need to hire top management from the outside in order to get change and fresh ideas."

Foolish takeaway
Going forward, I'll be rooting for Angela Ahrendts, Paul Deneve, Lisa Jackson, Kevin Lynch, and all of Apple's other new hires. But I'll also be keeping an eye on Apple's hiring activity -- hopefully the pace of high-profile outside hires will slow down significantly. I'd like to see the company focus more on developing talent internally. 

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Brendan Mathews owns shares of Apple. The Motley Fool recommends Adobe Systems, Apple, and Yahoo! and owns shares of Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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