Assessing Apple’s Future with Tim Cook as CEO

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.”

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.