Tim Cook

24 08 2014

“The only thing that Steve cared about was creating great products. The company, the employees were only there to facilitate that goal,” said a former Apple employee. “Tim is much more worried about everything at the company.”

Four years after the iPad – the most recent of Jobs’s great trilogy of mobile products that began with the iPod in 2001, followed by the iPhone in 2007 and the iPad in 2010 – Apple’s product lineup has changed little. But meanwhile, the competition is much more challenging. Time goes by and the growth in smartphone sales is slowing, the iPhone is losing market share to competitors running Google’s Android operating system, and a new product category was initiated by Nike (btw, Tim wears a Nike fuelband), Google and others, the wearables. The iPad remains the dominant brand of tablet computers, but the overall surge in tablet sales is a waning moon in the Milky Way of mobile technology.

The arrival …

After graduating from Auburn University, Cook spent 12 years in IBM’s personal computer business, ultimately serving as the director of North American Fulfillment. Later, he served as chief operating officer (COO) of the computer reseller division of Intelligent Electronics and was Vice President (VP) for Corporate Materials at Compaq for six months.

Cook was asked by Steve Jobs to join Apple in 1998. In a commencement speech at his alma mater Auburn University, Cook said he decided to join Apple after meeting Jobs for the first time:

Any purely rational consideration of cost and benefits lined up in Compaq’s favor, and the people who knew me best advised me to stay at Compaq…
On that day in early 1998 I listened to my intuition, not the left side of my brain or for that matter even the people who knew me best… no more than five minutes into my initial interview with Steve, I wanted to throw caution and logic to the wind and join Apple. My intuition already knew that joining Apple was a once in a lifetime opportunity to work for the creative genius, and to be on the executive team that could resurrect a great American company.

His first assignment was Senior Vice President (SVP) for worldwide operations. Cook closed factories and warehouses, replacing them with contract manufacturers, causing the company’s inventory to fall from months to days, following the ‘Just in time’ philosophy.

This was the key to Apple’s recovery.

Predicting demand and delivering product on time is crucial in the technology industry where new products could cannibalize existing offerings, yet Apple “routinely pulls off the miraculous: unveiling revolutionary products that have been kept completely secret until they magically appear on stage and in stores all over the world.”

Cook was credited with keeping costs under control, and combined with the company’s design and marketing savvy that allows them to charge premiums generating huge profits.

In January 2011, Apple’s Board of Directors approved a third medical leave of absence requested by Jobs. During that time, Cook was responsible for most of Apple’s day-to-day operations while Jobs still made the major decisions.

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After Jobs resigned as CEO and became chairman of the board, Cook was named CEO of Apple on August 24, 2011. On October 5, 2011 Steve Jobs died, one day after Apple’s Keynote on October 4. On that keynote iOS 5, iPhone 4S, Siri, and iCloud were announced.

Apple’s DNA …

People on stage are always seen as the one who impersonate Apple’s DNA, Steve Jobs, Sir Jonathan Ive, Craig Federighi, and others. But since 1998 another top influencer and friend of Steve built his career as a behind-the-scenes expert of operations. Subtle changes were stringently required and Tim now is pushing Apple to be more collaborative as it faces new challenges, particularly from Google and its Android mobile operating system. At the same time, he appears to be broadening the company’s legendary laser-like focus.

In a fascinating interview with Calcalist radio, the largest economic newspaper in Israel, Horace Dediu gives us a scintillating insight into how Apple works. Horace Dediu is a well-respected analyst who knows a thing or two about Apple.

“I studied their DNA,” Dediu explains. “But Apple cannot possibly be perceived as normal or average, but is analyzed as such. This is a company that breaks all categories, as based on the growth front and on the value or dynamic versus static. It just works differently. ”

Dediu posits that Apple uses the same strategy as an army. ”You have to look at Apple as adopted by the pattern of military activity,” said Dediu. ”The army has no obligation to produce profits, but it has a deep commitment to achieving goals. Everyone focused and training for a specific task, and then another mission.”

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Apple is no longer the underdog that Jobs rescued from the brink of bankruptcy. The company is the most valuable brand in the world, and the most profitable in the technology industry. Its profit for the fiscal year ended September 28 2013 was triple Google’s 2013 earnings and $9 billion more than its nearest competitor, Samsung Electronics. Disruptive technology initiated by a genius is just one side of a coin, the other side is an optimized worldwide operating infrastructure. So the credit belongs to both, the visionary and the businessman.

Tim Cook plays an essential role when looking at the company’s DNA. Here are his essential beliefs fully consistent with those of Steve Jobs and with an overall impact on the development of products and their advertisment.

Let Tim Cook talk …

Innovation
Some people see innovation as change, but we have never really seen it like that. It’s making things better. iOS 7 is a great example of that. It’s significantly better than 6 or any of those that came before it, and obviously significantly better than the other OS out there.

Mobile market
For smartphones, I think it’s even more a two-operating-system world today than it was before. Maybe that changes. Maybe it doesn’t, but that is the state of things today. I think that Android is more fragmented than ever and, as a result, when you look at things like customer satisfaction and usage, you see the gap between Android and iOS being huge.

There is a huge difference between market share of units and usage share. And it shouldn’t surprise anybody that it’s like that. Anybody that’s used both should not be surprised that that is the natural result. And that’s really important to us because we have never been about selling the most. We’re about selling the best and having the best experience and having the happiest customers.

Android’s market share
I don’t think of Android as one thing. Most people do. I mean, from a consumer point of view, if you look at what Amazon does with Android, forget the name Android for a minute. If you’re coming down from a different planet and you were going to name it, you wouldn’t name it the same thing as what another company does. If you compared that to what Samsung does, I’m not sure you would name that the same thing either.

The fragmentation
It’s a growing problem. It’s a compounding problem. And think about all these people that they’re leaving behind from a customer point of view. People do hold on. Most people hold on to their phones a couple of years. They enter a contract and honor that contract and then upgrade after that two-year period. So in essence, by the time they buy the phone, many of these operating systems are old. They’re not the latest ones by the time people buy. And so by the time they exit, they’re using an operating system that’s three or four years old. That would be like me right now having in my pocket iOS 3. I can’t imagine it.

Software and Hardware
We’re not looking for external validation of our strategy, but I think it does suggest that there’s a lot of copying, kind of, on the strategy, and that people have recognized that importance.

Now, we’re well beyond just the surface level of design of hardware and software. We’re deep in the guts. This week you saw the A7. You saw our new M chip. Well, these are only possible because many years ago we elected to start building our own silicon team, and now we have many, many people designing silicon.

And you saw us go to 64-bit. Well, why are we able to do that first? It’s because we’re at that level of being vertical. Does anybody—do these other three companies have silicon expertise? You can answer that. Maybe they have something that I’m not aware of, but in terms of the depth of it ….

You look at innovation like the iPhone’s camera and the detail that went into the camera. Most people hear the word camera, and they think of hardware. And hardware is really important to it, you know? With the stuff we did with the flash on this. But it’s software, and it’s the silicon—I mean, it’s everything.

So the way I think about Apple is that the magic of this place really comes up at its best when hardware, software, and services come together.

And it’s sort of the intersection of those things is where things get incredibly magical. So facilitating that to happen and getting the collaboration level for that to happen is the magic here.

And one of my proudest moments is when other people see that. They don’t know that they’re seeing that, and that’s also the beauty. They don’t have to do it. But look at these (gesturing to iPhones). These are perfect examples where the hardware and the software and the service begin to blend.
Excerpts (Businessweek, 2013-08-20)

See this mind map summarizing some essentials of Tim’s beliefs revealing Apple’s DNA.

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Feel free to download this map from my Box account.

The alternative file formats have been created with iThoughts for iOS (.ITMZ file format). Compatibility to other tools is limited. The DOCX file format is suggested for those who don’t use a mind mapping tool. The file contains the image as well as a detailed outline of all topics.

Application File format
Adobe Reader PDF
Apple iWork/Microsoft Office DOCX
iThoughts ITMZ
MindManager MMAP
XMind XMIND

Steve and Tim …

Tim Cook says he doesn’t ask What Would Jobs Do. He says that Steve told him before he died to never ask this question. Can there be more evidence that Steve totally trusted in Tim and his beliefs?

As time goes by …

Last year, Apple CEO Tim Cook spent a lot of time answering questions about how Apple would be different from what it was under Steve Jobs, and just how he would continue Jobs’s incredible legacy.

There are a lot of questions to answer. The Apple CEO finds himself defending the company’s tax policy, fighting a declining stock price, dealing with a number of antitrust issues and facing questions about just how Apple will stay ahead of always-intense competition.
And, of course, one thing hasn’t changed. Tech watchers still hang on Cook’s every word, and scrounge for any tidbits that might indicate just what phone, computer, TV or watch might be coming next from Cupertino.

The changes are larger than the numbers. For more than a decade, the company revolved around Jobs’s unique and mercurial talents. Cook, who is as measured and accessible as Jobs was volatile and intimidating, is more a manager than a visionary, and won’t be forgiven in the same way for ignoring shareholders or belittling subordinates. In short, he runs Apple more like most other companies.

One challenge facing Tim Cook is what Wall Street calls the law of large numbers: even a successful new product may barely move the needle for Apple, which generated $171 billion in revenue in the fiscal year ended last September. A flop could underscore that Apple’s product heydays are tied to the late Steve Jobs.

It was Steve’s job to say no. In many ways Tim is not as comfortable doing that.

I think Steve would have been saying yes to more things if he were still running the company. Steve was an intuitive decision maker, knowing what he liked and didn’t like immediately, his snap decisions sometimes led to errors in judgment.

Tim Cook seems to be more thoughtful and will take extra time to minimize mistakes.

Tim is also more willing to delegate to deputies. He has given greater control over product development to Jonathan Ive, Apple’s design chief. Sir Jonathan Ive, who oversaw Apple’s hardware designs under Steve Jobs, also is responsible for the look and feel of its software. Other executives gaining authority include Craig Federighi, the software engineering boss; Phil Schiller, the company’s marketing head; and Eddy Cue, its Internet services lead, current and former employees said. He has turned over Apple’s executive leadership team. Five of the nine members were promoted or hired by Tim Cook.

While Steve Jobs dominated the spotlight, Tim Cook has shown a willingness to let others share the attention.

At the developer conference, for example, Craig Federighi dominated the stage. Cook also hasn’t shied away from bringing in high-profile outsiders, such as Angela Ahrendts and Beats co-founders Jimmy Iovine and Dr. Dre.

We’re not going to go out and buy something for the purposes of just being big. Something that makes more fantastic products, something that’s very strategic, all these things are of interest and we’re always looking regardless of size.

Tim about innovation …

Tim said

Some people see innovation as change, but we have never really seen it like that. It’s making things better.

Ken Segall, author of the bestselling book – Insanely Simple: The Obsession That Drives Apple’s Success, suggests that Apple and Samsung have differing philosophies when it comes to innovation.

“Innovation comes in many flavors,” Ken Segall said. “Sometimes it’s about creating revolutions, other times it’s about adding features. Sometimes it’s about creating things that people fall in love with, other times it’s simply about creating things.”

According to Segall, Samsung’s approach to innovation is more about adding features and in most cases, at the expense of customers’ satisfaction:

Less than six months after launching the Galaxy Gear watch, Samsung replaced that device in February 2014 with two models, the Gear 2 and the Gear 2 Neo. These aren’t just upgrades — they’re new watches, running a completely different OS. Android has been replaced by Samsung’s home-grown Tizen OS.

So what happens to the people who just months ago bought into Samsung’s last “next big thing”? Well, they get stuck with a Galaxy Gear, which will be quickly forgotten. They also become living proof that Samsung values innovation over customers.

On the other hand, Segall posits that

“Apple’s innovation philosophy is quite different. Its highest priority is creating a product that people can fall in love with – a product that will improve customers’ lives without frustrating them in the process.”

“Of course, Apple loves features too.. The difference is, when Apple innovates, it’s innovating in the most user-centric way. That’s consistent with one thing I heard Steve Jobs say often: Apple’s highest priority is earning the love of its customers,” he explains.

In concluding, Ken Segall emphasizes that it is impossible to judge who’s leading in innovation by tallying products and features.

Meaningful innovation will forever be about quality, not quantity.

Publishing/Punishing media all over the world call for innovation and unsurprisingly it’s always Apple standing in the focus and criticized for not being innovative since Jobs trilogy of disruptive technology. Innovation takes time and to be fair some newspapers and websites should take a close look at the innovative power of Apple’s competitors.

Tim Cook’s message …

In August 2014 Tim Cook published a letter picturing his basic beliefs about Apple’s future philosophy.

A Message from Tim Cook.

At Apple, our 98,000 employees share a passion for products that change people’s lives, and from the very earliest days we have known that diversity is critical to our success. We believe deeply that inclusion inspires innovation.

Our definition of diversity goes far beyond the traditional categories of race, gender, and ethnicity. It includes personal qualities that usually go unmeasured, like sexual orientation, veteran status, and disabilities. Who we are, where we come from, and what we’ve experienced influence the way we perceive issues and solve problems. We believe in celebrating that diversity and investing in it.

Apple is committed to transparency, which is why we are publishing statistics about the race and gender makeup of our company. Let me say up front:

As CEO, I’m not satisfied with the numbers on this page. They’re not new to us, and we’ve been working hard for quite some time to improve them. We are making progress, and we’re committed to being as innovative in advancing diversity as we are in developing our products.

Inclusion and diversity have been a focus for me throughout my time at Apple, and they’re among my top priorities as CEO.

I’m proud to work alongside the many senior executives we’ve hired and promoted in the past few years, including Eddy Cue and Angela Ahrendts, Lisa Jackson and Denise Young-Smith. The talented leaders on my staff come from around the world, and they each bring a unique point of view based on their experience and heritage. And our board of directors is stronger than ever with the addition of Sue Wagner, who was elected in July.

I receive emails from customers around the world, and a name that comes up often is Kim Paulk. She’s a Specialist at the Apple Store on West 14th Street in Manhattan. Kim has a medical condition that has impaired her vision and hearing since she was a child. Our customers rave about Kim’s service, and they say she embodies the best characteristics of Apple. Her guide dog, Gemma, is affectionately known around the store as the “seeing iDog.”

When we think of diversity, we think of individuals like Kim. She inspires her coworkers and her customers as well.
We also think of Walter Freeman, who leads a procurement team here in Cupertino and was recently recognized by the National Minority Supplier Development Council. Last year, Walter’s team provided over $3 billion in business opportunities with Apple to more than 7,000 small businesses in the western United States.
Both Walter and Kim exemplify what we value in diversity. Not only do they enrich the experience of their coworkers and make our business stronger, but they extend the benefits of Apple’s diversity to our customers, into our supply chain and the broader economy. And there are many more people at Apple doing the same.

Above all, when we think of the diversity of our team, we think of the values and ideas they bring with them as individuals. Ideas drive the innovation that makes Apple unique, and they deliver the level of excellence our customers have come to expect.

Beyond the work we do creating innovative tools for our customers, improving education is one of the best ways in which Apple can have a meaningful impact on society. We recently pledged $100 million to President Obama’s ConnectED initiative to bring cutting-edge technologies to economically disadvantaged schools. Eighty percent of the student population in the schools we will equip and support are from groups currently underrepresented in our industry.

Apple is also a sponsor of the Human Rights Campaign, the country’s largest LGBT rights organization, as well as the National Center for Women + Information Technology, which is encouraging young women to get involved in technology and the sciences. The work we do with these groups is meaningful and inspiring. We know we can do more, and we will.
This summer marks the anniversary of the U.S. Civil Rights Act of 1964 — an opportunity to reflect on the progress of the past half-century and acknowledge the work that remains to be done. When he introduced the bill in June 1963, President Kennedy urged Congress to pass it “for the one plain, proud and priceless quality that unites us all as Americans: a sense of justice.”

All around the world, our team at Apple is united in the belief that being different makes us better. We know that each generation has a responsibility to build upon the gains of the past, expanding the rights and freedoms we enjoy to the many who are still striving for justice.

Together, we are committed to diversity within our company and the advancement of equality and human rights everywhere.

Tim

(Source Apple on Diversity)

Apple’s strong efforts regarding environment, supplier responsibility and inclusion simply can be summarized by a maxim published on the company’s website

We want to leave the world better than we found it.

This reminds me of a newspaper advertisement where Apple indirectly mocks its rival Samsung. It was published after launching a website and video detailing the environmental efforts.

At the top of the page, the company has placed a huge headline that reads:

There are some ideas we want every company to copy.

Sad to say that there are vanishingly low chances that Asian companies will start their photocopiers.

Summary …

Tim Cook is opening Apple, optimizing the infrastructure, forcing internal and external collaboration, and trying to develop the responsibilities of the company regarding fair labor, environment, and inclusion.

So there is one question left.

Is Tim the better CEO?

In some way we must say YES although it remains untold which way Steve would have gone in times of massive changes in the mobile market which is still the most important market and area of innovation and disruptive technology for Apple.

Related links …

Apple’s Strategy and Ad

Apple’s Key Events

About Innovation

Going Apple

The Hidden Price

Apple’s Supplier Responsibility

Tim Cook about tax loophole

Thanks for surfing by.


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