How Tim Cook made Apple his company

The site has already published The New-York Times article dedicated to Steve Jobs, telling how the iPhone launch looked like from the inside.

It seemed logical to me to publish a translation of a separate article about Tim Cook from the Wall Street Journal. If you regularly read Eldar’s spirits, or, perhaps, my issues of Echo about Apple, then you won’t learn anything fundamentally new from the article. We have admired (each in its own way) the financial, or, in the words of Eldar, accounting, Mr. Cook’s approach to Apple before. The material from WSJ tells the same story, but with a greater texture and tells a little about Tim Cook’s daily habits.

The original material is available at: How Tim Cook Made Apple His Own

How Tim Cook made Apple his company

After the death of Steve Jobs in Silicon Valley, there were rumors that Apple’s business would go to the bottom. Wall Street investors worried about financial performance, and Apple fans wondered if Apple could remain an innovative company.

Apple shares are at record highs today. The company’s value exceeded 1.9 trillion. dollars (more than 2 trillion as of August 19, 2020), which is more than the GDP of Canada, Russia or Spain. Apple remains the largest dominant smartphone company.

What happened is a living testament to how the man Bono (the musician) called a Zen master turned Steve Jobs’ creation into Tim Cook’s Apple, creating one of the most successful business stories by winning method over magic (attributed to Apple products).

While Mr. Jobs spearheaded innovation, creating new products that could revolutionize the industry, Mr. Cook has made Apple more of a reflection of himself. The 59-year-old CEO, like the company he heads, is cautious, cooperative, and tactful.

How Tim Cook made Apple his company

Tim Cook and Steve Jobs in 2010

The Tim Cook-era Apple is, as many former executives say, a corporate colossus trying to grow by creating an empire of goods and services based on the revolutionary inventions of the previous leader. The company’s success in attracting customers in China has boosted sales, and its drive to improve efficiency has kept costs in check.

The transition from dominant leader to successor is rarely successful. So Microsoft Corp. stumbled when Bill Gates relinquished the reins and General Electric began to sink after Jack Welch passed the baton to the next CEO.

“Roll back to October 2011 and you will see people saying ‘it’s over,’” says Mike Slade, a longtime advisor to Steve Jobs and a former Apple executive. Mr. Slide adds that when there is a replacement [of one leader for another], there is a great risk of ruining everything, since the new leader has a tendency to do according to the principle “I will show / prove to you all now!” Tim Cook has done an amazing job in this regard.

Apple, led by Tim Cook, joined but did not become a defining innovator in the smart home, television, and automotive industries. And yet the company is thriving.

Since the beginning of Tim Cook’s rule in 2011 after the death of Jobs, Apple’s revenue and profits have more than doubled, and the company’s market value has soared from 2 billion to 348 trillion dollars. The company has $ 1.9 billion on its balance sheet (excluding debt) and has already returned $ 81 billion to investors. And after the last quarterly report, stocks are up another 475.5% in one day.

After Mr. Cook made a declaration of his sexual orientation in 2014, the company intensified its processes aimed at improving user privacy, protecting human rights, and conducting responsible business. The new position has put Apple in jeopardy, as it has been criticized for running a business that does not live up to its stated values. Especially in China, where Apple has transferred the storage of personal information about users to a government company, Apple has also removed apps related to the Hong Kong protests, and has worked with vendors that the US government claims were using forced labor by Uyghurs (a bullied ethnic minority in China).

Apple defended its position, saying that it follows the laws of the countries in which it does business. Speaking of China, Apple notes that it retains control over the encryption keys that protect user data, and there is no evidence that the Uyghuru were forced to work.

Apple’s dependence on China, which has placed the company at the center of the US-China standoff, is making investors nervous.

While testifying in Congress with other technology leaders, Cook said he is “personally contributing” to increasing the number of women and black leaders in Apple’s senior management. During these hearings, he also defended the company’s attitude towards app developers, who complained about Apple’s monopoly power.

Steve Jobs chose Tim Cook as his successor, people around Jobs recall, in part because he was a COO and led a “non-dramatic” team focused on collaboration. Tim Cook’s candidacy surprised many because Cook was not a product person, but colleagues understood the choice because Apple needed a new approach to management because Jobs was irreplaceable.

Tim Cook was alien to Jobs’s creative endeavors, and after the death of the Apple founder, he changed little in these processes. Instead, he focused on the steps that were meant to build a fortress around the iPhone: watches, AirPods, music, video, and other subscription services.

“This is what most people do not understand: the ability to increase sales is a revolutionary technology from Apple. Once Apple enters a category with its simple and elegant solution, the company can simply stay on course by owning the market. There is no need to break speed records, you just need to grow organically, ”says Chris Deaver, who spent 4 years in HR for Research and Business Development.

Since the beginning of Apple’s leadership in 2011, Tim Cook has followed the advice given to him by Steve Jobs: “Don’t ask what I would do. Do what you think is right. ” And Tim Cook continues to do what he thinks is right. He also gets up at 4am as before and checks the global sales reports. He introduced Friday meetings with teams in charge of operations and finance. Participants have nicknamed these meetings “an evening with Tim” because meetings are usually delayed until late at night. Tim Cook, as before, rarely goes to Apple’s design studio, the place where Steve Jobs used to visit every day.

In a 2017 interview with ESPN during a visit to his alma mater, Auburn University in Alabama, Tim Cook said: “I knew I shouldn’t be imitating Steve. I would have failed miserably if I did that. I think that this happens with most people who take over from those who were, as they say, more than life. [when this happens] you have to chart your own course and try to be the best version of yourself. “

Colleagues and acquaintances describe Tim Cook as a humble workaholic with an exceptional dedication to Apple. His past colleagues note that they rarely spoke with him, and assistants say that he does not put personal files on the calendar.

On the eve of Thanksgiving (a holiday in the United States, celebrated on the fourth Thursday in November), two years ago, visitors saw him dining alone at the secluded Amagiri Hotel, near Zion National Park. One of the hotel guests, who exchanged a few words with Tim Cook, said that Mr. Cook came to “recharge” after the next start of sales of the new iPhone. “They have the best massage here in the world,” the guest adds.

Apple declined to comment from Tim Cook or anyone from top management on this story. But the company gave contacts to four people who can talk about areas that are important to Cook – environmental protection, education and health. As it turned out, none of the fourth know Cook, as they say, well. One never met him, the other met in passing, the third talked for half an hour, and the fourth for several hours.

While current and former employees note that Tim Cook has created a more relaxed work environment than Jobs did, he is just as demanding and detail-oriented. It once pissed him off that the company had mistakenly sent 25 computers to South Korea and not Japan, a former colleague said, adding that it seemed like a minor mistake for a company that ships about 200 million iPhones a year. “We’re losing the pursuit of excellence,” snapped Cook.

Mr. Cook’s ability to go into detail makes subordinates come to meetings in awe. He conducts interrogation with precision that has changed the way Apple employees work and think.

Below is an example of a typical dialogue.

– First question: “Joe, how many units have we produced today?
– 10 000
– What was the development?
– 98%

And then Tim says: “Okay, so 98%, explain where the other 2% went?”

“Do not you know. This increases the level of detail, so everyone becomes like Cook, ”said Joe O’Sullivan, former Apple CEO. He said that Mr. Cook’s first meeting with staff on the day of his arrival in 1998 lasted 11 hours. [Note: here it should be clarified that a certain percentage of scrap is always included in the production plan, but here, apparently, Tim Cook wanted to know what specific problems happened. It is relatively logical that the top manager, seeing that according to the target indicators, the process normally did not fully delve into what exactly happened there]

How Tim Cook made Apple his company

Managers now test the knowledge of staff before letting them go to meetings with Cook. Beginners are advised to keep quiet. This is done in order to protect both the team and Cook. “You definitely don’t want to waste HIS time,” says one employee who has been with the company for many years. If Cook feels that a person is “swimming”, then he quickly loses his patience and says “next”, making it as simple and quick as turning a page in a book. “Many people left in tears after that,” adds the same employee.

In late 2012, when Apple executives gathered at the St. Regis Hotel in San Francisco to look at the first prototypes of the Apple Watch, the first new product since Jobs’s death, Cook did not attend. Such a lack of attention to a discussion about a new product would have been unthinkable on the part of Jobs. But as Apple saw record profits, Mr. Cook began to shift his focus to investors who wanted to know what he would do with the ever-growing pile of money.

Wall Street investors, including Carl Icahn, wanted Apple to return capital to investors, that is, to pay dividends. In 2013, Mr. Cook surprised counselors by agreeing to meet with Mr. Icahn for dinner at his New York City apartment.

Jobs did not believe in “giving money back to investors,” preferring to reinvest free cash in Apple’s development and new products. Tim Cook turned out to be less dogmatic. He sat out with Mr. Icahn for a three-hour meal, culminating in a sugar cookie shaped like the Apple logo.

As a result of the meeting, Mr. Icahn, an avid poker player, said that he had a feeling that Tim Cook was absolutely not opposed to a meeting devoted to such a delicate topic. The result of the dinner was that Apple spent an additional $ 30 billion, increasing the total to 360 billion, to buy back its own shares, thus increasing their value. The decision attracted new investors, including Warren Buffett.

How Tim Cook made Apple his company

Tim Cook at the opening of the Apple store in Washington

Mr. Cook expanded Apple’s social agenda. One of the first steps as CEO was the decision to introduce a corporate program for charitable donations to relevant organizations.

According to former colleagues, in 2014, Mr. Cook met with senior Apple executives and told them he was gay. He planned to publicly disclose his sexual orientation and raised the issue of the risks that such an ad could pose in some markets. At that time, Apple was doing great: sales of the recently released iPhone 6 were on the rise.

Colleagues say it was “vintage Tim Cook”: an example of a conscience balanced by a methodical understanding of the pros and cons. Mr. Cook said that he ultimately wanted to be a role model for young people who are bullied or worried that their families will not approve of their sexual orientation.

“A small circle of people knew about my sexual orientation, and then I began to think that at the current stage it is very selfish. I need to be above that. I have to do something for others, show that you can be gay and still have a successful career, ”Tim Cook told CNN in 2018.

Cook changed the composition of Apple’s board of directors, replacing product and marketing-focused directors with finance-focused directors.

In the absence of Steve Jobs, the product ideologist, Tim Cook has developed a close collaboration between the departments responsible for software, hardware and design. This approach showed his penchant for deliberation and caution, allowing ideas to develop with less oversight than was the case under Jobs.

An example is the story when Dan Riccio presented the idea of ​​a smart speaker, Tim Cook bombarded him with questions and sent him to work on the topic. Riccio decided that the idea did not come through and curtailed the work. However, after a while, he received a letter from Cook in which he gave a link to a smart column from Amazon and asked how Apple is progressing in this direction. Riccio immediately stepped up the work. The fact is that under Jobs, employees were accustomed to receiving clear instructions, but here Cook gave a yellow light, “which Riccio, by inertia, interpreted as red. Tim Cook is not like Jobs. He loves to listen. Time and patience are his main supporters. Note: Mr Riccio declined to comment on this article.

According to one senior engineer, Mr. Cook tends to be cautious in evaluating new product ideas, believing that there is no need to release a product that sells poorly and undermines the company’s reputation.

As John Burkey, a former software engineer at Apple and founder of Brighten.ai, a virtual assistant company, said, it might seem like Apple is running at full capacity, but beyond the hardware team pushing for new performance gains, the rest is stagnation and incrementalism. current sales) “. He added that Apple’s strong influence on customers who continue to buy new iPhones masks weaknesses and risks skipping the next phase of technology. “Ask yourself, what iPhone feature are you using that you didn’t use five years ago? Are you really using Animoji? ”

Instead of new product categories, Tim Cook found success in creating products around the iPhone, releasing watches, headphones, music and TV subscriptions.

According to Counterpoint Research, these products “blew up” the markets: the watch surpassed the entire Swiss watch industry in unit sales, and AirPods accounted for almost half of all headphones sold worldwide at the end of 2019. But their combined revenue in fiscal 2019 of $ 24,5 billion was less than Apple’s peak annual revenue of the iPad of $ 32 billion, Mr. Jobs’s latest product.

Mr. Cook questioned Hollywood producers like Brian Grazer trying to learn more about show business before approving a $ 1 billion budget for Apple’s streaming platform, people familiar with the situation said.

Initially, the company’s services faced criticism. So Apple Music was revamped after its first year, while Apple TV + was criticized for launching just nine shows. In response, Apple started adding films such as Tom Hanks’ World War II Greyhound.

Former AppleTV + employees say that Tim Cook is not raging, he believes that over time, Apple will gain a subscriber base. He is confident that if people are given good content that is initially on their phone, then people will accept [and subscribe].

Despite the fact that Cook has delegated responsibility for product development, he prefers to solve political issues himself, maneuvering between the United States and China.

Tim Cook first opened up the Chinese market for Apple when he moved production to local factories in 2000. He used this manufacturing presence, which created more than three million jobs in Apple’s supply chain, as leverage to expand sales, signing an agreement in 2014 with China Mobile that boosted iPhone sales, bringing in 700 million new users. The deal helped turn China into Apple’s second largest market.

How Tim Cook made Apple his company

Tim Cook with Chinese software developers

In the US, Apple is faced with a potential tax imposition on products manufactured in China. A threat that could have provoked retaliatory measures from China too. Cook succeeded in solving the problem by appeasing both sides. So speaking at the Chinese Economic Forum in 2018 after the Trump administration proposed tariffs, he advocated free trade. And in the US, through the president’s daughter and son-in-law, he established personal contact with Trump. He also met with US Trade Representative Robert Lighthizer and Economic Advisor Larry Kudlow. The presidential administration exempted Apple products from tariffs. And in 2019, after The Wall Street Journal reported that Apple was planning to relocate production of its only US product, the Mac Pro, to China, Mr. Cook took steps to ensure that tariffs were lifted and production continued in Austin, Texas. He later invited Trump to a press conference at the Texas plant, where the president took over the opening of the plant, although Apple had been manufacturing in Austin since 2013. For the fact that Cook did not correct Trump, he received a portion of criticism. At one of the other meetings, Donald Trump called Cook his friend, referring to him as “Tim Apple”. When the story began to gain traction on social networks, Cook turned it into a joke, changing his name on his twitter profile, replacing his last name with the Apple logo.

How Tim Cook made Apple his company

In January, Mr. Cook attended the Golden Globes with Jennifer Aniston and Reese Witherspoon from Apple’s Morning Show. He stood up when ceremony host Ricky Gervais joked that Apple was joining the “streaming battle with the great drama about the importance of dignity and doing the right thing, created by the company that runs sweatshops in China.”

The joke pointed to a mismatch between Apple’s portrayal of Cook as a “force for good,” and Apple, which some critics see as a profit-maximizing corporation. But Tim Cook is engaged in supply chain audits to eradicate child labor, and is also promoting education courses in Chinese factories. But along the way, Apple is pressing suppliers to work with razor-thin profitability.

Tim Cook is at ease when he returns to his alma mater, Auburn University in Alabama, according to university officials. He prefers not to attract attention, often arrives without informing the university representatives. He can be found in a coffee shop in the city where he works and talks to students who recognize him. Tim Cook also goes to local football matches, while buying tickets on his own. [Note: here it should be clarified that only since 2020 it has become possible to buy a ticket online, before that they bought in the old fashioned way at the box office “located on the side of the university”]

University President Jay Gogh says that Tim Cook shares the opinion of Colin Powell (politician, diplomat and retired 4-star general), who said that management is engaged in redeploying the army from point A to point B, while the leader leads the army. where no one would believe that you can walk. And Tim Cook understands that there are times when you need to be a good manager, and there are times when you are a leader.

Original material: How Tim Cook Made Apple His Own

Conclusion

This is the image of Tim Cook, as in the article, I had. The WSJ material, as they say, added textures. And it was previously known that Tim Cook, for example, did not visit Johnny Ive’s design studio, which frustrated the latter. But touches like the absence from an important Apple Watch meeting, board replacements, and collaboration between the software, hardware, and design departments completed the picture and made many events more logical. Come to think of it, earlier Johnny Ive only coordinated the design with one person, who also acted as a battering ram, so that other departments obey. Everything was fast and clear. And you can imagine how he began to get annoyed with typical meetings between departments, where everyone tries to insert their own five kopecks. It is logical and why Phil Schiller decided to leave the position of chief marketer. It is exhausting to do marketing when only financiers are around.

The article ends with an absolutely correct thought. Tim Cook is a great manager, and he clearly leads the company from point A to point B, using 100% of the resources at his disposal. The only potential problem is that any company needs both genius leaders and genius managers to be successful.

In any case, the company has a large margin of safety and a large army of fans. But now Apple is in its most perilous position. The company has grown to an incredible $ 2 trillion. This is such a peak that it is difficult to climb even higher, and the company still needs to present phenomenal successes every quarter, since a good result will be perceived as a failure. On the other hand, I said this thought when Apple became worth 1 trillion and a penny. And it seemed that it was no longer possible to continue. But Tim Cook has a method that works better than any innovation and marketing magic.

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