The late Steve Jobs was an extraordinary innovator, but he wasn’t a great CEO – he succeeded in spite of himself. Jobs may be unparalleled at developing new technology products, but running companies wasn’t his strength. His successor, Tim Cook, has proved himself to be superior in the role and has arguably become the best of the six chief executives that Apple has had.
The proof is in the numbers: Apple is the world’s first trillion-dollar company, a milestone reached under Cook’s watch. Apple reached this landmark valuation on August 2, 2018, when Apple’s stock hit $207.05. By comparison, when Jobs passed away on October 5, 2011, Apple’s stock was $50.53 (split adjusted), which valued the company at about two-thirds less: $300 billion.
During his tenure, Cook has almost tripled Apple’s revenue. In 2018 Apple earned $265.6 billion, the highest annual revenue in the company's history. In 2011, the company made $108 billion. When he was appointed, industry analysts worried that Cook wouldn’t be able to increase revenue significantly because of the so-called ‘law of large numbers’, meaning that it’s one thing to add a few million to Apple’s bottom line, but billions would be near impossible. Over the past eight years he’s proven them wrong.
Apple is thriving in every arena in which it competes – although demand for iPhones is slowing, 2018 sales were still an all-time record of 216 million units. The same year, it sold 43.5 million iPads and 18 million Macs.
The Apple Watch is a big sleeper hit. Although the company doesn’t reveal unit sales, it’s estimated to have sold more than 50 million to date which, according to market research firm Canalys, means that its unit sales are greater than the entire Swiss watch industry combined. And it will only become more dominant as Apple increases the number of health features. Apple’s services business – which, as hardware sales decrease, will prove to be the future of the company – is already bigger than many Fortune 500 companies.
And, in terms of brand value, Cook is transforming Apple into a company with progressive values around inclusion, diversity and privacy, and is championing the company’s environmental initiative. In 2011, when Jobs died, Greenpeace’s Greener Electronics Guide scored the company at just under five out of ten in its commitment to the environment. Since Cook took over, Apple has invested billions in green power and is now running on 100 per cent renewable energy worldwide. It is also the only technology company to commit making its supply chain 100 per cent sustainable; according to the former head of the US Environmental Protection Agency, Lisa Perez Jackson, who now leads Apple’s environmental initiatives, it’s reached around 30 per cent of its commitment.
Since his death, something of a cult has developed around Jobs – and rightly so; one of history’s greatest innovators deserves significant praise. But not everything he touched turned to gold. Consider that Jobs was quit/fired from Apple the first time round for behavioural reasons, and his following company, NeXT, was largely a failure. It floundered for years, and eventually exited the hardware business only to be bought by Apple at a fire sale price of $400 million based on its operating system (with the unexpected side effect of bringing Jobs back to Apple). His other company, Pixar, was spectacularly successful, but it was primarily run by John Lasseter and Ed Catmull.
When Jobs returned to Apple, he achieved great things, but the company was much smaller, and he operated in crisis mode. Yes, Jobs engineered perhaps the greatest corporate turnaround in history, but when it settled down, he largely turned over the running of the company to Cook, who was chief operating officer at the time, so that he could concentrate on doing what he loved best – creating new products with designer Jony Ive. Cook ran Apple behind the scenes and is the main architect of the giant manufacturing and logistical operation that has made Apple so successful today.
Jobs was a unique CEO. But, as much as he held the role of CEO, he operated primarily as Apple’s chief product officer. Cook hasn’t taken on that role. “Lots of people expected Cook to fail because he wasn’t a product guy,” says Horace Dediu, founder of analysis firm Asymco. “But that’s not what he should be.”
Apple continues to innovate with unique products long after his death suggesting that, while Ive and Jobs were close collaborators, the former is able to continue to innovate without the person he has described as his “teacher”. The Apple Watch, for example, is the first major product without any input from Jobs and has been a significant consumer success with consumers.
And then there are AirPods; FaceID, perhaps the most secure and seamless user recognition system (although potentially creepy); Apple Pay, the dominant contactless payment system across the globe, with an estimated 252 million users in 2018, according to analyst Gene Munster; its A12 Bionic mobile system-on-a-chip, which reaches levels only shared by desktops; and arguably the best iPhones, iPads and smart speakers that Apple has ever made.
Of course, Cook’s reign isn’t perfect. There are legitimate criticisms that Apple is neglecting the Mac; delaying products; shipping dodgy keyboards; embarrassing itself by cancelling the AirPower charging mat; ever-more expensive iPhones; and accusations of nefarious corporate tax dodging.
But what matters most at a mature company like Apple is not the products but rather the logistics – an efficient supply chain, distribution, finance, and marketing aren’t sexy, but they shape success. And Cook has proven his talents for all of these. Cook was, in fact, the primary architect of the manufacturing operation that made Apple such a giant, and the de facto CEO of Apple for several years before Jobs died. Since taking over the role, Cook has aggressively expanded Apple into new markets, especially China. This wouldn’t be possible without a big, efficient supply chain to feed the massive growth, with attendant services like marketing to drive demand.
Apple is a big and vastly complex company, with interests in a wide variety of products, services and markets. Cook is well suited to running Apple in ways that Jobs was not. “When you become a giant company with a lot of people in operations and multifaceted business model, you need a much more generalist CEO,” Dediu says. “And that’s what Tim Cook always was: the right guy for the job.”
Leander Kahney is the author of Tim Cook: The Genius Who Took Apple to the Next Level (Penguin)
This article was originally published by WIRED UK
