Assessing Apple’s Future with Tim Cook as CEO

| Hidden Dimensions

“Do not follow where the path may lead. Go instead where there is no path and leave a trail.” — H.R. McAlindon, Emerson, others

It is said that investors only have two emotions: Fear and greed. Right now, everyone is in a fearful mode about Steve Jobs’s retirement as CEO. But assessing the future is more complicated than simply recapping Steve’s glorious past and then fretting about how Apple will do without him as CEO. There’s much more to think about as Tim Cook assumes the CEO role.

First of all, let’s get a few things straight. We don’t currently know a lot about Mr. Jobs’s current health in detail. All we know is some history with his cancer and liver transplant. That’s got to be a serious personal challenge. To guess at more details would be insanely rude. All we can do is take Mr. Jobs at his word: he doesn’t feel up to the day to day duties of CEO that meet his high standards.

We have to assume, for now, that Mr. Jobs will remain a force at Apple as Chairman of the Board of Directors and that a very powerful, intelligent team remains in place. Some of the tweets I saw on Wednesday sounded like obituaries, and that’s just out of line.

Next, I’m not going to go into the considerable body of knowledge about what Mr. Jobs has done. That’s too easy — because we all lived through it. Instead, I want to suggest how to think about Apple’s future.

Essentials

The first thing I believe is that a proper assessment of Apple’s future cannot depend on comparing Tim Cook to Steve Jobs and drawing negative conclusions. Back in January, 2011 in a Hidden Dimensions entitled “Apple’s Secret Weapon if Mr. Jobs Retires.”, I said:

Will these talented people suddenly take flight when Mr. Jobs retires? I think not. They are the emerging face of Apple, and while they may not have that special, charismatic personality of Steve Jobs — yet — it would be wrong to underestimate how they will blossom and emerge to shape and reshape Apple based on their years of study under the master.

Every executive officer of a ship is nervous when he takes over on that first day. Can he measure up? Will he make the same superb decisions? Can he think things through in stressful situations? But there comes a day when that second in command takes over and starts to earn his keep. He’ll bring his own unique personality, skills and temperament to the job. He won’t be an exact clone of the previous, beloved skipper. But the confidence the Navy has in him deems him ready to take command and lead.

The question we have before us is not whether anyone can ever duplicate Steve Jobs. That’s impossible. The real question is whether a seasoned team who trained under him for over a decade can assume command, bring their own unique skills to bear, and work as a functional team that carries on the tradition and excellence of Apple.

I believe they can and will, if and when the day comes when Mr. Jobs needs to retire.”

Tim Cook

Mr. Cook’s Challenges

What Mr. Cook must do now is assess his talents and project the idea that his experience and strengths, while different than Mr. Jobs’s, are equal to the task. As I said, in the quote above, everyone is skeptical of the ship’s new captain on day one, even the captain. Learning how to leverage the strengths of others will earn respect.

For example, Mr. Cook understands Apple very well. His presentations during the Apple earnings reports demonstrate that understanding. In January 2009, also when Steve Jobs was also on medical leave, Mr. Cook told the analysts:

We believe that we’re on the face of the earth to make great products and that’s not changing. We’re constantly focusing on innovating. We believe in the simple, not the complex. We believe that we need to own and control the primary technologies behind the products that we make. And participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us.

We believe in deep collaboration and cross-pollenization of our groups which allow us to innovate in ways that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company — and we have the self honesty to admit when we’re wrong and the courage to change.

And I think regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well.”

That’s an impressive statement by Mr. Cook that encapsulates his understanding of what makes Apple, well, Apple. I have met and talked with Mr. Cook myself, and I can tell you he’s a tough fellow. And as any CEO must be, he can be a cast iron son-of-a-bitch when necessary. He also knows how to say “no” and he knows how to put the fear of God into other executives. I should add that during that time when Mr. Cook was acting CEO, Apple stock rose to new heights. This man has been tested by Mr. Jobs and passed every test — including special projects with AT&T and China. The competition would be unwise to underestimate this man.

On the other hand, Mr. Cook isn’t a great public speaker. He doesn’t have that magic charisma, and his gravelly voice is not indicative of a great orator. I suspect that if Mr. Cook were to arrogantly assume that he can become the new, beloved face and voice of Apple, he would find himself vastly mistaken.

I believe, if he’s wise, he’ll work on being a great semi-behind-the-scenes CEO while others with more flair as presenters take on the public face of Apple for product rollouts and demos. Mr. Cook handles the financial statements beautifully. SVP Phil Schiller is particularly good at product demos. Setting egos aside for the good of the company will be the make or break deal for Messrs. Cook and Schiller.

As a result, Apple will look and operate a little differently. This will annoy and dismay some who feel that Apple can’t be Apple unless it is the way it always was. At least since Steve Jobs returned in 1997.

On top of all that, who’s to say that Mr. Cook’s talents and leadership are preordained? Great generals and leaders have in times of stress often been followed by different, but similarly great hand picked leaders. My take is that when we look back, ten years from now, we’ll have a very different perspective once Mr. Cook’s own accomplishments have been cataloged.

The new captain of the ship can also be a hero — if we get behind him and believe in him and the mission. Mr. Jobs does.

Comments

geoduck

Most important is that he’s been hand picked by SJ, learned from him, has been doing the job for eight months and for the moment has SJ behind the scenes. Compare this to the current CEO of HP.

I think Apple will do just fine under mr Cook.

Gareth Harris

Apple is not Steve Jobs only. Others also have vision. Others also render the abstract vision concrete. Maybe Gil did get Apple headed in the right direction, but Steve patched the hole in the bottom before she sank. If Steve did a good job, and I feel he did, Apple is now a solid ship that will not founder in a storm because a different hand takes the helm.

We come. We go. All of us. Each of us is a colony of cells living in a skin bag careening through space at a million miles per hour. If that’s not hanging by a thread, I don’t know what is. Death give us an urgency. If you are going to do any living, you better do it now. You may not be here tomorrow.

daemon

No one else ever owned the products Apple put out the way Steve Jobs did.

The Newton, who took personal control and direction of the product?

Remember the Twentieth Anniversary Macintosh? Who owned that product in Apple?

When the iMac came out, you knew who owned that project, who loved it, who drove it. Who made it the best thing he would want. It may not have been what I wanted, but it definitely was something he did. And that spoke to consumers.

The Apple iPod, first gen was a ridiculous product hamstrung by it’s inabilities to play nice with PC’s. But Steve owned the iPod project, he reiterated, came out with a third gen in two years that had USB, was able to be used on Windows machines, and introduced the only legal way to buy music in digital format at the time, iTunes, the single biggest spring board for a mp3 player, and iTunes music files only worked with Apple’s iPod.

Steve Jobs owned the products that Apple put out the way no other manufacturer does. In the TV show business they have a name for a person who does that: Showrunner.

I don’t doubt Apple will be very successful in the coming years, but without a showrunner, just how different are they from HP or Dell?

Nemo

John:  Your points are well taken, and I fully concur.  But I would like Steve to do one last product intro, the iPhone 5, and then we can hand future product intros to the capable hands of Messrs. Forstall and Schiller.

Ronin

One of the most important duties of a CEO is to prepare a team to replace him.

mhikl

Apple is the showrunner. Steve has seen to that.

Your sensibilities rule, John.

mhikl

One of the most important duties of a CEO is to prepare a team to replace him.

You are so right, Ronin. But from what I have read, those days have largely passed with the rise of obscene rewards to successful CEOs in charge of mining quarterly profits at the expense of the future beyond their and their shareholders’ immediate best interests. It’s a complex subject someone on TMO could add to his/her arsenal of articles.

In this regard, Steve is the past, which is why his company is the present and the future.

Jamie

Only in the age of Twitter and Google+ would anyone give a rat’s ass about a CEO’s sex appeal. It is not and has never been the duty of a superior businessman or leader to placate (and in fact, Mr. Jobs epitomized this notion). Any organization’s success (and I’m speaking to longevity here, not a quick cash grab) is or has been the result of a collective pursuance and realization of a shared vision, and the opposite is frequently the catalyst in the entropy of those that have or are imploding (*cough* Microsoft *cough* I don’t recall the emotional tsunami that ensued when Mr. Gates resigned. Is it because of the high elevation where I live?). I don’t see why it would be any different with Apple. I wish Mr. Jobs peace and contentment in his final years, and Mr. Cook the most wonderful colleagues imaginable.

czander

Many professional managers would never step into the founder?s shoes. Especially founders who were idealized and had a powerful winning record. In sports history it is impossible for a new coach to succeed or replace a so-called mythical coach. Consider John Wooden at UCLA or Bear Bryant at Alabama. Their replacements could have a good season but they were fired, no one could fill their shoes. It often takes several years and firings before a new coach can settle in and in the meantime coaches who enter too soon are destroyed. Wooden is a prime example, his heir Gene Bartow had 28 wins and 5 losses and won 85.2 percent of his games compared to Wooden?s 80.8 percent, yet he received death threats from UCLA fans. Four coaches left UCLA in the nine years following Wooden. This is why most professional managers avoid these situations.

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