How Tim Cook is changing Apple(tech.fortune.cnn.com)
tech.fortune.cnn.com
How Tim Cook is changing Apple
http://tech.fortune.cnn.com/2012/05/24/apple-tim-cook-ceo/
108 comments
"I've been told that any meeting of significance is now always populated by project management and global-supply management," he says. "When I was there, engineering decided what we wanted, and it was the job of product management and supply management to go get it. It shows a shift in priority."
As an engineer, I understand why you are scared that "global-supply management" is getting involved. But you forget that the volumes that Apple works at have changed in the last 10 years, to the point where new products need to be manufactured at launch, in quantity that no one else in the industry has ever heard off. Good old days where you could manufacture 1 million iPhones in the first quarter and be happy, those days are over.
So pay a bit of respect to global-supply management. Manufacturing is actually as respectable as engineering. Just different concepts, but both optimize under heavy constraints to achieve near-impossible goals (at least at Apple).
As an engineer, I understand why you are scared that "global-supply management" is getting involved. But you forget that the volumes that Apple works at have changed in the last 10 years, to the point where new products need to be manufactured at launch, in quantity that no one else in the industry has ever heard off. Good old days where you could manufacture 1 million iPhones in the first quarter and be happy, those days are over.
So pay a bit of respect to global-supply management. Manufacturing is actually as respectable as engineering. Just different concepts, but both optimize under heavy constraints to achieve near-impossible goals (at least at Apple).
I think that a lot of people that only have experience with software see "Supply Chain Management", and think a suit who's only there to be an impediment to creating stuff.
They're really not. They're easily as important to the successful design and production of hardware as any of the engineers. The engineers come up with the ideas and products. Supply chain management and manufacturing are the ones that make those products and get them out to the public.
The supply chain people are the ones who are going out and negotiating the contracts for parts, and are the ones who are responsible for making sure that everything is getting shipped at the proper time(and for the proper price). It's a lot of work, and good supply managers aren't there to order the engineers around. They're there to work with them, and make sure that everyone involved knows exactly what risks every change will have on the final product.
They're really not. They're easily as important to the successful design and production of hardware as any of the engineers. The engineers come up with the ideas and products. Supply chain management and manufacturing are the ones that make those products and get them out to the public.
The supply chain people are the ones who are going out and negotiating the contracts for parts, and are the ones who are responsible for making sure that everything is getting shipped at the proper time(and for the proper price). It's a lot of work, and good supply managers aren't there to order the engineers around. They're there to work with them, and make sure that everyone involved knows exactly what risks every change will have on the final product.
Manufacturing is actually as respectable as engineering
Small nit: manufacturing is engineering. Integrating manufacturing into the electrical/mechanical/software engineering process makes good sense.
Small nit: manufacturing is engineering. Integrating manufacturing into the electrical/mechanical/software engineering process makes good sense.
Apple's real innovation is in supply management (well that and iTunes)
Anyone can make a thin smooth aluminium laptop. Being in the position of making the premium priced top of the range product, while paying far less for your components than your big box competitors and having such a stranglehold hold on supplies of those components that you can keep competitors out is amazing.
It's as if Audi not only made great cars - but also had all the worlds supply of tires and engines and was paying half as much as chevy for them!
Anyone can make a thin smooth aluminium laptop. Being in the position of making the premium priced top of the range product, while paying far less for your components than your big box competitors and having such a stranglehold hold on supplies of those components that you can keep competitors out is amazing.
It's as if Audi not only made great cars - but also had all the worlds supply of tires and engines and was paying half as much as chevy for them!
I feel like this is ignoring the tough decisions Job's made when they didn't have the supply chain. The original iPod was priced at US$399 and US$499. It had very few features and most people called it lame.
When Job's decided to remove floppy disk drives and made iMacs that you couldn't upgrade the components from computers people called it lame. (This really upset people)
When the first iPad came out most people called it lame. (Has everyone already forgotten this? People were screaming it was going to fail, because it didn't run OSX).
To dismiss Apples success as only dependent on supply chain management is missing the mark in my opinion. Apples success in a large way hinged on Jobs ability to make decisions that in the immediate would piss people off but in the long term seem obvious.
When Job's decided to remove floppy disk drives and made iMacs that you couldn't upgrade the components from computers people called it lame. (This really upset people)
When the first iPad came out most people called it lame. (Has everyone already forgotten this? People were screaming it was going to fail, because it didn't run OSX).
To dismiss Apples success as only dependent on supply chain management is missing the mark in my opinion. Apples success in a large way hinged on Jobs ability to make decisions that in the immediate would piss people off but in the long term seem obvious.
Apple's CURRENT (and future) $$$$ success is now because of their supply chain.
Yes they have some very nice products - but what has moved them from a niche supplier of shiny toys for the 'money > sense' crowd to a gaziilion $$ market cap - is that their excellence in delivering on these products.
A lot of this feeds into the the products. They don't need cheesy Blah inside stickers because they don't need to earn that extra $0.50 They don't have to bend over to the demands of Walmart buyers or chase the latest fad because they are in a position to decide the fad.
But they don't have a unique technical skill. They have an Intel CPU, an NVidia card and a li-ion battery in an aluminium case with a Unix OS and a pretty gui. It's delivering this package at that price with that margin that now makes them special.
Yes they have some very nice products - but what has moved them from a niche supplier of shiny toys for the 'money > sense' crowd to a gaziilion $$ market cap - is that their excellence in delivering on these products.
A lot of this feeds into the the products. They don't need cheesy Blah inside stickers because they don't need to earn that extra $0.50 They don't have to bend over to the demands of Walmart buyers or chase the latest fad because they are in a position to decide the fad.
But they don't have a unique technical skill. They have an Intel CPU, an NVidia card and a li-ion battery in an aluminium case with a Unix OS and a pretty gui. It's delivering this package at that price with that margin that now makes them special.
While I don't disagree that Apple's technical skill isn't best of breed, where Apple has shined - both now and in the past - is their ruthless determination and focus on UX and HCI. Apple goes further than any company on the planet to make technology devices (computers, laptops, music players, tablets, etc) that delight their users and just work and make them happier and more productive.
Apple doesn't have "cheesy blah inside" stickers because that doesn't delight users and make the product better to use. They're stupid. Apple also doesn't chase fads because fads are just that, "a fad" and rarely do fads have long lasting staying power like a good product should.
Apple doesn't have "cheesy blah inside" stickers because that doesn't delight users and make the product better to use. They're stupid. Apple also doesn't chase fads because fads are just that, "a fad" and rarely do fads have long lasting staying power like a good product should.
I'm not sure that Apple's UX is that much better than Windows7/Gnome/Unity. They have done a very good job of making it easy for you to buy from them with the integration of iTunes but a single button mouse and a single menubar at the top doesn't necessarily make every app easier to use.
Where they do shine is in build quality and user experience which comes from owning the entire product - HW/OS/sales channel/support - and having enough margin to do it well. That's the difference between them and an equally specced Sony laptop running Windows.
It's the profit margin that really makes them special. Sony used to make products of this design and build quality but then to compete had to cut costs and so quality and had to accept the bloatware and stickers. Apple's brilliance has been in managing the process so that they can cut production costs while increasing quality and adding more stuff.
I give a huge amount of credit to Cook for this. Jobs demanding rounded corners on dialogs or sticking to a single button mouse whatever focus groups said was good technical leadership, Ive's produce design is great. But dominating the manufacture and supply network to the extent that Apple have done and with the effectiveness they have done is a major achievement and is not easy.
Look at Boeing having to delay the 7E7 because it couldn't get rivets - while Apple has 747 freighters booked ready to fly new products straight to the store the day they are released.
Where they do shine is in build quality and user experience which comes from owning the entire product - HW/OS/sales channel/support - and having enough margin to do it well. That's the difference between them and an equally specced Sony laptop running Windows.
It's the profit margin that really makes them special. Sony used to make products of this design and build quality but then to compete had to cut costs and so quality and had to accept the bloatware and stickers. Apple's brilliance has been in managing the process so that they can cut production costs while increasing quality and adding more stuff.
I give a huge amount of credit to Cook for this. Jobs demanding rounded corners on dialogs or sticking to a single button mouse whatever focus groups said was good technical leadership, Ive's produce design is great. But dominating the manufacture and supply network to the extent that Apple have done and with the effectiveness they have done is a major achievement and is not easy.
Look at Boeing having to delay the 7E7 because it couldn't get rivets - while Apple has 747 freighters booked ready to fly new products straight to the store the day they are released.
>I'm not sure that Apple's UX is that much better than Windows7/Gnome/Unity.
... this is insanity. These UXs you refer to are Apple copies that were released years after the Apple UX. Windows7 has a nice UX because Apple forced it to. People were abandoning Windows for OSX, so Microsoft invested in their UX.
Your comment is like saying, "Henry Ford's Model T was no big deal. It's hardly even better than my 1990 Honda Civic." No shit!!!!
... this is insanity. These UXs you refer to are Apple copies that were released years after the Apple UX. Windows7 has a nice UX because Apple forced it to. People were abandoning Windows for OSX, so Microsoft invested in their UX.
Your comment is like saying, "Henry Ford's Model T was no big deal. It's hardly even better than my 1990 Honda Civic." No shit!!!!
To a buyer today it doesn't matter who did what first in Guis.
It's like saying a BMW is unsafe because they copied seatbelts from Volvo.
It's like saying a BMW is unsafe because they copied seatbelts from Volvo.
That's a non-sequitor and you have now changed the goalposts of the discussion. The discussion is about what got Apple its marketshare in the first place.
And, importantly, it is because of Tim Cook that they have such a great supply chain.
I would argue that Apple's innovation is also in the operating systems and the applications they provide. iOS and Mac OS X is for my use far superior to any of the alternatives. Not everyone likes them, but everyone around me (90%-95% or so) have switched to Apple operating systems and hardware due to ease of use. This together with the fully integrated experience: OS, app store, media store (iTunes), hardware is why the competition is floundering. This stack is costly and hard to compete with.
"Anyone can make a thin smooth aluminium laptop. "
Wow, that's a false framing of reality. You also fail to acknowledge that apple won the product fight before they had a stranglehold on supplies.
Wow, that's a false framing of reality. You also fail to acknowledge that apple won the product fight before they had a stranglehold on supplies.
If I remember correctly, it was a breakthrough in Apple's materials research that enabled the aluminum frame for their particular laptop designs.
I mean, the biggest indicator of the shift in their priorities is that they took 100 billion dollars in cash and used it for stock buybacks and dividends. Can you imagine Google doing such a thing? They would never dream of this, because they are too busy re-investing their profits with their big-picture potentially world changing research projects.
Apple's executing a $45B buyback and dividend program that's expected to run over three years.
They made $6B in profit last quarter.
Thus, while they're losing $45B over three years, if they keep on track, they'll make far more than $72B during that same period of time. (That's assuming they never make more or less than $6B a quarter over the next three years... in Q1, they made $13B in profit.)
The buyback and dividends make investors happy and keep Apple's stock from being diluted by employee grants and options, and those programs can be done with the company still making solid profits. Seems like a win-win.
And don't think Apple's not reinvesting profits for future products and innovations. If anything, Apple's track record over the past 14 years should be a clear sign that they're always aggressively reinvesting profit in improving every part of their business, and are always quietly working on something new.
Finally, the person quoted was one point of view, and we have no perspective on how he left Apple. Your inner geek doesn't need to be that worried.
Apple's executing a $45B buyback and dividend program that's expected to run over three years.
They made $6B in profit last quarter.
Thus, while they're losing $45B over three years, if they keep on track, they'll make far more than $72B during that same period of time. (That's assuming they never make more or less than $6B a quarter over the next three years... in Q1, they made $13B in profit.)
The buyback and dividends make investors happy and keep Apple's stock from being diluted by employee grants and options, and those programs can be done with the company still making solid profits. Seems like a win-win.
And don't think Apple's not reinvesting profits for future products and innovations. If anything, Apple's track record over the past 14 years should be a clear sign that they're always aggressively reinvesting profit in improving every part of their business, and are always quietly working on something new.
Finally, the person quoted was one point of view, and we have no perspective on how he left Apple. Your inner geek doesn't need to be that worried.
>Thus, while they're losing $45B over three years, if they keep on track, they'll make far more than $72B during that same period of time. (That's assuming they never make more or less than $6B a quarter over the next three years... in Q1, they made $13B in profit.)
They're not really "losing" $45 billion with the buyback. They're spending $45 billion in cash(which they have) to get $45 billion in stock. The end result, since they don't need to get a loan to execute the buyback would be basically nothing on their books(unrealistically assuming the stock doesn't move at all).
They're not really "losing" $45 billion with the buyback. They're spending $45 billion in cash(which they have) to get $45 billion in stock. The end result, since they don't need to get a loan to execute the buyback would be basically nothing on their books(unrealistically assuming the stock doesn't move at all).
Fair point, thank you for the clarification
The overall point I was trying to make is even though they're giving up some cash, they're making more than enough each quarter to cover that loss of liquid capital. Apple's buyback and dividend programs should have zero impact on their ability to fund R&D or to invest in future products. (Assuming they continue their long trend of year-over-year revenue growth, of course.)
The overall point I was trying to make is even though they're giving up some cash, they're making more than enough each quarter to cover that loss of liquid capital. Apple's buyback and dividend programs should have zero impact on their ability to fund R&D or to invest in future products. (Assuming they continue their long trend of year-over-year revenue growth, of course.)
Imagine an engineer knowing there's less NAND flash available and it's getting more expensive. So they can focus on giving the software a smaller storage footprint. Now the product is the same, but because engineering and global-supply management worked together, the product is cheaper.
That's not innovation, that's incremental optimization.
I'm sorry, but this is a highly naive point of view. You could have had an iPhone in 2005 for an amount of money you probably wouldn't be able to part with. These products still have to be produced in quantity and therefore supply chain innovation is just as critical as the design and engineering itself. Apple doesn't market it that way, but the disparity in cost to sell price is one of the reasons they have been able to do so well and fund their next endeavors.
Apple doesn't design and build buildings, which are expensive, time consuming, and generally done in small quantities.
They design products meant to reach millions of people and as such design and engineering of that feat is innovative in its own right.
Your statement, taken more broadly, would dismiss the work of companies like Tesla and SpaceX. Their goals are to bring their unique products to a wider market providing a next generation experience.
I mean, I guess it would be cool if it was just Elon Musk rolling around in his single space ship or Tesla Roadster. But it's much more exciting that this can be the case for many people.
Apple doesn't design and build buildings, which are expensive, time consuming, and generally done in small quantities.
They design products meant to reach millions of people and as such design and engineering of that feat is innovative in its own right.
Your statement, taken more broadly, would dismiss the work of companies like Tesla and SpaceX. Their goals are to bring their unique products to a wider market providing a next generation experience.
I mean, I guess it would be cool if it was just Elon Musk rolling around in his single space ship or Tesla Roadster. But it's much more exciting that this can be the case for many people.
You think that innovation, whatever the hell that is, doesn't require a lot of incremental optimizations?
As has been endlessly observed, the Mac drew heavily on the innovative ideas at Xerox PARC, but it added many refinements, including affordability. Similarly, there were other mp3 players before the iPod, and other smartphones before the iPhone, but part of what set Apple apart was bringing all those capabilities together in a way that was greater than the sum of the parts. That doesn't mean that the parts are unimportant.
As has been endlessly observed, the Mac drew heavily on the innovative ideas at Xerox PARC, but it added many refinements, including affordability. Similarly, there were other mp3 players before the iPod, and other smartphones before the iPhone, but part of what set Apple apart was bringing all those capabilities together in a way that was greater than the sum of the parts. That doesn't mean that the parts are unimportant.
Well I said "the project is the same" but what if it wasn't? What if the engineers focus on building features that take less space instead of ones that requires multiple megs of new code? Or what if they can tell the global supply people years in advance what new hardware they'll need (more accelerometers, more accurate touch sensors, or different antennas for upcoming 5 GHz wifi support, etc.).
Either way, it's adding value.
Surprised to see so many responses without a fact check on this: "the biggest indicator of the shift in their priorities is that they took 100 billion dollars in cash and used it for stock buybacks and dividends."
The dividend and stock repurchase will be more than paid for out of operating cash flow. In other words, even with them the cash pile will increase.
Look at some of the analysis that Horace Dediu is doing to observe that Apple is actually investing a tremendous amount of capital ($7B this year) in as yet unknown equipment, maybe real estate. (http://www.asymco.com/2012/05/22/up-to-eleven/) That's not including the billions they spend on R&D. If that's not reinvesting profit in a big picture way, I don't know what is.
The dividend and stock repurchase will be more than paid for out of operating cash flow. In other words, even with them the cash pile will increase.
Look at some of the analysis that Horace Dediu is doing to observe that Apple is actually investing a tremendous amount of capital ($7B this year) in as yet unknown equipment, maybe real estate. (http://www.asymco.com/2012/05/22/up-to-eleven/) That's not including the billions they spend on R&D. If that's not reinvesting profit in a big picture way, I don't know what is.
>Yuck. The geek inside dies a little at reading this.
Is it possible to be as big and successful as Apple but also maintain some kind of startup pro-geek mentality? Was this mentality ever there in recent years? My understanding it was something of a Jobs-led dictatorship that worked because Jobs had good judgement and good taste. I suspect most meetings have global-supply management involved. Apple makes items on the scale of tens of millions. Input from the guys who make that happen past the finished prototype stage is going to be important.
I'm never sure what to think about these articles. They come out every so often for every big company. A few months ago it was how Google is getting too corporate. Or how Facebook is working its employees too hard. The inner gossip of how companies are run, especially by bitter ex-employees, isn't usually useful information.
Is it possible to be as big and successful as Apple but also maintain some kind of startup pro-geek mentality? Was this mentality ever there in recent years? My understanding it was something of a Jobs-led dictatorship that worked because Jobs had good judgement and good taste. I suspect most meetings have global-supply management involved. Apple makes items on the scale of tens of millions. Input from the guys who make that happen past the finished prototype stage is going to be important.
I'm never sure what to think about these articles. They come out every so often for every big company. A few months ago it was how Google is getting too corporate. Or how Facebook is working its employees too hard. The inner gossip of how companies are run, especially by bitter ex-employees, isn't usually useful information.
Jonathan Ive still works there. Don't start freaking out just yet.
Don't forget that Jobs picked Cook.
He also picked Sculley. I hope he learnt from his mistake. Anyway I guess it will be very difficult to find someone with a vision for new products as good as he had.
Yes
But when Jobs picked Sculley, he was young and inexperienced. He probably had never worked with 'an MBA' so he didn't know what to watch for
Also, the relationship with Sculley went downside fast. When things don't match, this is usually what happens.
But when Jobs picked Sculley, he was young and inexperienced. He probably had never worked with 'an MBA' so he didn't know what to watch for
Also, the relationship with Sculley went downside fast. When things don't match, this is usually what happens.
Sculley actually had a great 'product guy' for a while in JL Gassee. The Mac II and Powerbook lines were excellent, and the profits were huge. It was only later on when things started going off the rails.
Jobs also picked the G4 Cube. He made mistakes, and Cook may have been one. Certainly it could end up being an excellent move, but only time will tell.
I'm always amazed that more people don't recognize the Cube as one of the most successful design manifestos in corporate history. Unlike the successful-in-their-time Candy iMacs, the Cube introduced a hardware design DNA that permiated virtually everything that followed it. Those traces remain clearly visible today - more than a decade later - in what could be fairly described as the world's most valuable product line.
For Jobs, a private or merely theoretical manifesto wouldn't have been enough. Apple designs everything from the concept to the manufacturing process to the unboxing and initial startup experience. For a something to be a true design reference, it had to cover all these bases. That means it needed to be a real product that actually shipped. Which it did.
If you measure the return using everything that followed its lead - which includes the flagship store - it has recovered its investment a bazillion times over. Whatever else the Cube may have been, it was not a mistake. The one-button hockey puck mouse with the too-short cable? That was a mistake.
For Jobs, a private or merely theoretical manifesto wouldn't have been enough. Apple designs everything from the concept to the manufacturing process to the unboxing and initial startup experience. For a something to be a true design reference, it had to cover all these bases. That means it needed to be a real product that actually shipped. Which it did.
If you measure the return using everything that followed its lead - which includes the flagship store - it has recovered its investment a bazillion times over. Whatever else the Cube may have been, it was not a mistake. The one-button hockey puck mouse with the too-short cable? That was a mistake.
Yes. The Mac Mini is a smaller Cube. The iMac is a squished-out Cube with a screen on the side. Like the Cube, they (and other Apple products) are personal computers that are more consumer appliance/device than the traditional tower or rack.
Another way of looking at the Cube (and its successors) is that it's a `desktop laptop'.
Another way of looking at the Cube (and its successors) is that it's a `desktop laptop'.
It's more than conceptual lineage - geometrically, the Mac Pro was a 1st gen. mini flipped on its side then amended with handles and vents. And the precise curve of the corresponding corners is repeated on the MacBook Pros. And the iPhone. And the iPad.
Now, identify one - just one - computer that shared those trademark corners when the Cube came out. Nothing else looked even remotely like it, including Apple's earlier products. Now, there's little - if anything - done by Apple that doesn't mesh with the Cube beautifully. Even the individual keys on the current wireless keyboard (which I'm using to type this) and the trackpad off to the side are clearly post-Cube, and entierly consistant with the direction it set...a decade ago.
In terms of towering achievements in industrial design, the Cube is to computing what the 1927 Yankees are to baseball.
Now, identify one - just one - computer that shared those trademark corners when the Cube came out. Nothing else looked even remotely like it, including Apple's earlier products. Now, there's little - if anything - done by Apple that doesn't mesh with the Cube beautifully. Even the individual keys on the current wireless keyboard (which I'm using to type this) and the trackpad off to the side are clearly post-Cube, and entierly consistant with the direction it set...a decade ago.
In terms of towering achievements in industrial design, the Cube is to computing what the 1927 Yankees are to baseball.
Well bowled. See also: the original Macbook Air.
I think Cooks leadership will turn out fine. And the real test will be whom he chooses. These big companies remind me of the roman empire. When the Principate put capable man to power the results were exceptional. When the barracks emperors came to power only to be repeatedly murdered again (cough Yahoo cough) it all crumbled.
Indeed, the vibe, in the words of a former employee, is of an Apple that is becoming "far more traditional," meaning more MBAs, more process, and more structure.
This doesn't sound like a positive development to me. This kind of structure almost always seems to lead to less accountability and more business-speak bullshit.
This doesn't sound like a positive development to me. This kind of structure almost always seems to lead to less accountability and more business-speak bullshit.
An influx of MBAs after the original Jobs ousting was the hallmark, if not the actual cause of, the death spiral that Apple was in until Jobs returned. I worked there for a stint during those stagnant MBA-life-sucking days.
Another one from the article:
> investors now have the CEO's ear for the first time in years
To that, I say, "Oh crap".
Jobs took Apple to greatness because he obsessed over making incredible products. Build incredible products and the money and investors will follow. Change your focus to investors, operations, or accounting and watch as the products suffer.
CNN's breathless and laudatory tone in describing all these responsive changes from Apple just serves as a reminder that reporters should just keep their views to themselves. You can tell that this CNN reporter/editor has a tingle up his leg over Cook's touchy-feely professionalism... as though that's going to improve Apple in any way that matters to those of us who use their products.
Cook may not be a disaster on the level of John Sculley, but his focus on the corporation of Apple rather than on the coolness of its products would worry me if I was long on AAPL.
Another one from the article:
> investors now have the CEO's ear for the first time in years
To that, I say, "Oh crap".
Jobs took Apple to greatness because he obsessed over making incredible products. Build incredible products and the money and investors will follow. Change your focus to investors, operations, or accounting and watch as the products suffer.
CNN's breathless and laudatory tone in describing all these responsive changes from Apple just serves as a reminder that reporters should just keep their views to themselves. You can tell that this CNN reporter/editor has a tingle up his leg over Cook's touchy-feely professionalism... as though that's going to improve Apple in any way that matters to those of us who use their products.
Cook may not be a disaster on the level of John Sculley, but his focus on the corporation of Apple rather than on the coolness of its products would worry me if I was long on AAPL.
Investors have always had Tim Cook's ear--that was part of his leadership role at Apple for many years. Now that he is CEO I don't see why that would change.
Tim Cook is a very talented business and operational manager. I don't think he should try to become a "product guy" CEO just because Steve Jobs was a product guy CEO. He should stick to spending his personal time on doing what he does best--operations.
Yeah, product development at Apple is going to suffer because Steve Jobs is gone. There's nothing anyone can do about that, including Tim Cook. The thing that Cook has to do is protect what remains of the great creative processes that are still going. If we hear that investors have Ives' ear, that's when it's time to panic.
Tim Cook is a very talented business and operational manager. I don't think he should try to become a "product guy" CEO just because Steve Jobs was a product guy CEO. He should stick to spending his personal time on doing what he does best--operations.
Yeah, product development at Apple is going to suffer because Steve Jobs is gone. There's nothing anyone can do about that, including Tim Cook. The thing that Cook has to do is protect what remains of the great creative processes that are still going. If we hear that investors have Ives' ear, that's when it's time to panic.
Indeed. A company that is taking in $26 billion a year in profit that is still being led around by investors is doing something very wrong.
> Cook may not be a disaster on the level of John Sculley, but his focus on the corporation of Apple rather than on the coolness of its products would worry me if I was long on AAPL.
It would worry me even as a just a user of Apple's products. It should worry all men because it could mean a slower progress of humanity in technology.
If it were not for the Jobs' obsession, would we even have an iPad in the year 2012? Given his absence, when are we going to have the next such a thing?
The world needs people like Steve. Apple, or not.
It would worry me even as a just a user of Apple's products. It should worry all men because it could mean a slower progress of humanity in technology.
If it were not for the Jobs' obsession, would we even have an iPad in the year 2012? Given his absence, when are we going to have the next such a thing?
The world needs people like Steve. Apple, or not.
"Apple under Tim Cook will embrace efficiency to an even greater degree" - I've never seen a company that starts adding project managers to a process that is deemed "inefficient" but profitable that has led to a long-term improvement. In the short-term things look better with all the new "documentation" of process, but it devolves into managers meeting for the meetings themselves, and the HiPPO syndrome (Highest Paid Person's Opinion).
Documentation... shudder. I used to, sadly, enjoying documenting my work, but now I am in a multinational and have to document for regulators and risk management, as opposed to future users or replacement developers.
Not to sound to biased, but project management-style documentation is all completely horrific, obfuscating bloat.
Not to sound to biased, but project management-style documentation is all completely horrific, obfuscating bloat.
I've been forced into a Six Sigma committee at work. It's horrible.
We've spent the last half year basically establishing what we knew before the whole thing started. Documentation like that seems to be 100% bloat that is designed to make people feel like they're doing something to earn the upper management title.
We've spent the last half year basically establishing what we knew before the whole thing started. Documentation like that seems to be 100% bloat that is designed to make people feel like they're doing something to earn the upper management title.
A lot of those descriptions reminded me an an awful lot of doomsday descriptions I've read of Google and Facebook over the years, though. Granted the circumstances were different - they're much newer companies and they needed experienced executives to grow - but it shows that sometimes these things make sense.
The growing M&A team Lashinsky describes is a good case in point. Cook handled that when they had a fraction of the $110 Billion they have today. They started adding specialists when Google swooped in and acquired AdMob, and have done well since (Siri, Anobit, Chomp). Considering how much more competitive the talent market has become, this strikes me as perfectly logical.
The growing M&A team Lashinsky describes is a good case in point. Cook handled that when they had a fraction of the $110 Billion they have today. They started adding specialists when Google swooped in and acquired AdMob, and have done well since (Siri, Anobit, Chomp). Considering how much more competitive the talent market has become, this strikes me as perfectly logical.
2000 MBAs in a non-retail workforce of 28000 is still not a lot. When a startup with 15 employees starts getting middle managers, that's a bad thing, but a large enterprise like apple probably does actually have some need for business development folk.
And that's the key. If these are bizdev people, it could mean a much more vibrant Apple ecosystem[1]. If they are project managers, Apple is screwed.
1. As an example, gaming on OS X has traditionally sucked (it has gotten better in spite of Apple). The primary reason: Jobs didn't care about gaming. Put some bizdev people who are analyzing it for what the users want and what will grow OS X adoption, and there could be a very different outcome, including more M&A activity.
1. As an example, gaming on OS X has traditionally sucked (it has gotten better in spite of Apple). The primary reason: Jobs didn't care about gaming. Put some bizdev people who are analyzing it for what the users want and what will grow OS X adoption, and there could be a very different outcome, including more M&A activity.
unemployed entrepreneurs with little or no business experience second guessing the CEO of the worlds most innovative company. priceless.
You mean the CEO that had nearly nothing to do with turning it into an innovative company?
Apple has innovated not just in hardware and software, but also in supply channel management, and the latter was definitely Tim Cook's doing.
If you compare the Jobs 2.0 Apple to the 1990s Apple, improved operational execution (supply channel management, demand forecasting, etc) made a huge impact on the bottom line.
If you compare the Jobs 2.0 Apple to the 1990s Apple, improved operational execution (supply channel management, demand forecasting, etc) made a huge impact on the bottom line.
This is actually a really good point. One of the things that distinguishes the Apple of today vs. the one in 1985 (which also had a dominant industry position and fantastic products) is that they're also competing on price. The iPhone 4 is available with contract at $99, the same price charged for very similar (often somewhat inferior) hardware from mass market asian manufacturers like LG or HTC. (The 3GS is actually available free with contract, though IMHO it competes poorly with the competing Android phones.)
That's pretty impressive for an R&D focused company.
That's pretty impressive for an R&D focused company.
> The iPhone 4 is available with contract at $99
That's subsidized, for what it's worth.
That's subsidized, for what it's worth.
This. There is a video out there where Steve jobs is describing how he built and transforms apple and manufacturing, supply chain, and retail were all part of it.
I think Tim has convinced Jobs that operation and execution is all part of the product experience.
I think Tim has convinced Jobs that operation and execution is all part of the product experience.
You mean the guy that completely changed Apple by moving it out of the manufacturing business? Remember, Steve Jobs built factories, Tim Cook unbuilt them (and put Apple's profits through the roof in the process).
Assuming you're in your thirties: A man that has worked at Apple since you were a late teenager, in several leadership positions, has far more to do with what the company is today than your pithy comment.
Assuming you're in your thirties: A man that has worked at Apple since you were a late teenager, in several leadership positions, has far more to do with what the company is today than your pithy comment.
Funny that you have to create a throw away account just to say that :P
This is my first account, I just had to create one to respond to what was probably one of the most moronic things I've ever read in my short existence on this earth.
I point to 3 stories of CEO succession that worked. Not every company will turn into HP or Yahoo. A couple co's that had visionary founders have been able to survive for a century or more:
Bob Iger taking over from Michael Eisner: Forbes has a nice write up about his time at Disney which reads very much like the profile of Cook. Iger is a quiet delegator, but has had a tremendous amount of success.
http://management.fortune.cnn.com/2012/05/09/500-disney-iger...
Michael Eisner taking over from Walt Disney: He didn't directly follow Walt, but Eisner reinvigorated an iconic company that was rudderless after Walt died. Paints a picture of what Apple might have looked like if people asked "What Would Steve Do" at every turn.
http://www.nytimes.com/2005/03/20/books/review/020LEONAR.htm...
Jack Welch taking over from Thomas Edison: Again, not directly, but GE was on the ropes when Jack rose to the top and employed a strategy very different from the founder to get 20 years of solid growth.
http://www.businessweek.com/managing/content/apr2008/ca20080...
Ultimately, you want someone with a vision at the top, even if it's not the same vision as the founder. Cook seems to have a plan and can execute on it well. Give the guy a chance!
Bob Iger taking over from Michael Eisner: Forbes has a nice write up about his time at Disney which reads very much like the profile of Cook. Iger is a quiet delegator, but has had a tremendous amount of success.
http://management.fortune.cnn.com/2012/05/09/500-disney-iger...
Michael Eisner taking over from Walt Disney: He didn't directly follow Walt, but Eisner reinvigorated an iconic company that was rudderless after Walt died. Paints a picture of what Apple might have looked like if people asked "What Would Steve Do" at every turn.
http://www.nytimes.com/2005/03/20/books/review/020LEONAR.htm...
Jack Welch taking over from Thomas Edison: Again, not directly, but GE was on the ropes when Jack rose to the top and employed a strategy very different from the founder to get 20 years of solid growth.
http://www.businessweek.com/managing/content/apr2008/ca20080...
Ultimately, you want someone with a vision at the top, even if it's not the same vision as the founder. Cook seems to have a plan and can execute on it well. Give the guy a chance!
I don't know the story of all of these, but I know that Iger was at Disney for years before becoming CEO. He was promoted up, and not some outside former CEO that was brought in. Same with Cook, and I believe this same is true of Welch.
Maybe there is something to promoting from within vs hiring some former CEO?
Maybe there is something to promoting from within vs hiring some former CEO?
Funny you mention it, that is exactly the subject of a new Economist story[1][2]
[1] http://www.economist.com/blogs/graphicdetail/2012/05/daily-c...
[2] link from within the charts page above: http://www.economist.com/node/21555895
[1] http://www.economist.com/blogs/graphicdetail/2012/05/daily-c...
[2] link from within the charts page above: http://www.economist.com/node/21555895
Jobs did a good job of grooming his replacement(s). Promoting an insider means strategic continuity and established trust.
Yes, Welch started at GE after receiving his PhD. in Chemical Engineering from University of Illinois UC [1]. He joined GE in 1960, and became CEO in 1981.
[1]http://en.wikipedia.org/wiki/Jack_Welch
[1]http://en.wikipedia.org/wiki/Jack_Welch
I have been thinking of hiring CEOs from non-traditional sources for a while now. Look at how Reddit hired Yishan for example.
Another classic one is Gerstner saving IBM and turning the company around. Then his successor successfully kept the company on the same track until he hit retirement age.
The more I read about Cook the more I think he was the right choice for the role. Trying to replace Jobs with another Jobs-lite CEO wouldn't have worked, because they wouldn't have been Steve.
It's clear Cook cares about the company and wants to drive it forward, and it's clear that things aren't as focused on letting the engineers rule the roost, but we'll judge him over the next 5 years rather than when he's barely had chance to settle into the seat.
It's clear Cook cares about the company and wants to drive it forward, and it's clear that things aren't as focused on letting the engineers rule the roost, but we'll judge him over the next 5 years rather than when he's barely had chance to settle into the seat.
Were the engineers ruling the roost in Steve Jobs' years? The story has seemed to be that the designers/visionaries steered/put the engineers in their place.
From what the article says it was the engineers, but I think you're right on the money on that.
The whole point is that the engineers did not rule. Jobs and the other "humanities" types ruled. A Zen meditator ruled and the engineers and supply chain nerds had to sing to the tune of the "artists".
Lots of engineers run companies and most of them have terrible taste and product ugly, non-innovative stuff that is anti-human. Then they hire some designers to spray perfume on their steaming turd. This is what every non-Apple computer company did and most of them are still doing it, just now they have updated Apple products to rip-off.
Lots of engineers run companies and most of them have terrible taste and product ugly, non-innovative stuff that is anti-human. Then they hire some designers to spray perfume on their steaming turd. This is what every non-Apple computer company did and most of them are still doing it, just now they have updated Apple products to rip-off.
I didn't draw the same conclusions that others seem to be drawing from this article. Having been in the tech industry for over 20 years now, I can tell you that a company's CEO having a firm grasp on the business side is nothing but win.
This doesn't mean that Apple will become Microsoft, or that all the technical innovation will end, it simply means that they are taking the steps they need to take to ensure that the techies will be ABLE to keep innovating.
But, don't let me get in the way of a good hand wringing session :)
This doesn't mean that Apple will become Microsoft, or that all the technical innovation will end, it simply means that they are taking the steps they need to take to ensure that the techies will be ABLE to keep innovating.
But, don't let me get in the way of a good hand wringing session :)
Cook is running Apple well and should be applauded for implementing changes that make Apple a modern company with social responsibility. But in the end he will be judged on whether he can come up with new, innovative products and lead them to success. All products released during his tenure have been iterations as the article mentions.
You mean whether Apple can come up with new, innovative products. Cook should be able to recognise good from bad and keep an eye on quality, but not be expected to come up with The Next Big Thing.
Read some of Ive's infrequent interviews, he uses the word "we" never "I" to discuss the design process. That is what makes Apple so successful.
Read some of Ive's infrequent interviews, he uses the word "we" never "I" to discuss the design process. That is what makes Apple so successful.
Absolutely. I'd also be shocked if Jobs had left his post without leaving some handover notes and a couple of potential ideas for the future. Jobs seemed to have a good relationship with some of his employees and I'm sure that there is a lot left in Apple for the next five-to-ten years.
Or because he's British and uses the royal "we" https://en.wikipedia.org/wiki/Royal_we :)
I can't speak to Ive's personality in particular, but many product designers view their work as inherently collaborative.
Yeah and in the mean time he'll be paid 60 mil a year to ride Steve Jobs' coattails.
Mark Andreessen, paraphrased: "Salespeople can be very good at optimizing a company over a 2-4 year period. The [Andreessen-Horowitz] fake hedge fund trade is: when a sales guy replaces a product guy as CEO, go long 2 years, then short."
Source: http://blakemasters.tumblr.com/post/22660214207/peter-thiels...
Source: http://blakemasters.tumblr.com/post/22660214207/peter-thiels...
Just for fun I went through a small sample of US companies who changed from technologist-led to MBA-led; this trade is garbage. Sometimes facts make inconvenient clever quips.
I don't doubt you, but I'd love to see your small sample. The quip feels right to me, but I'm biased and would like some facts.
Same here, though I am more interested in how one could quickly collect a list of companies that have undergone that specific leadership change. Proprietary or public database? Google? Old-fashioned human memory?
Bloomberg (8K(date of change in executive management) + bios(presence of "MBA" after exec without and at least a B.S.; finance, accounting, marketing, etc. excluded) | Jensen's alpha over IWM and sector SPDR over [0,2) versus [2,5)) -> R. Russell 2000 members 2006-2012. Bias may be introduced from these all being large, public companies - I don't know if VC-backed companies led by engineers v ops guys have a different story. I didn't dig very deep to try and see if I could remove noise, but TL;DR too much noise and drawdown at the outset.
Disclaimer: I'm not an MBA and don't intend on getting one. That being said, I've noticed Silicon Valley discounts solid operations knowledge as much as Wall Street tends to discount the difference between a hacker and an okay coder. Andreesen is a smart man and was probably making a rallying cry/culture call rather than an analytic one with this line.
Disclaimer: I'm not an MBA and don't intend on getting one. That being said, I've noticed Silicon Valley discounts solid operations knowledge as much as Wall Street tends to discount the difference between a hacker and an okay coder. Andreesen is a smart man and was probably making a rallying cry/culture call rather than an analytic one with this line.
On this board "an MBA" is used generally and pejoratively.
Why did you change from Sales to MBA, which isya very different things. Fiorina is a salesperson. Cook is not.
Interesting but Tim Cook is not a "sales guy"
From Apple's website: "Before being named CEO in August 2011, Tim was Apple's Chief Operating Officer and was responsible for all of the company’s worldwide sales and operations..."
How does being responsible for all of the company's worldwide sales make Tim Cook not a sales guy?
How does being responsible for all of the company's worldwide sales make Tim Cook not a sales guy?
"Chief Operating Officer" goes far beyond sales. Creation of the Apple supply-management strategies is one example of a domain that was far beyond sales.
Phil Schiller is the "sales guy" at Apple, titled SVP of global marketing.
Funnily enough, Steve Jobs himself is many times referred to, derogatorily, a master salesman even to this day.
Funnily enough, Steve Jobs himself is many times referred to, derogatorily, a master salesman even to this day.
His attitude toward the competition (Amazon and Samsung) strikes me as similar to Jobs' decidedly friendlier attitude toward Microsoft when he returned to Apple. I think this bodes well for Apple. The only way for Apple to stay where they are in the technology landscape is to continuously disrupt their most successful products - in other words, they need to have products so good in the pipeline that they take the present day competition in stride.
>>>In a February appearance at an investor conference hosted by Goldman Sachs, for example, he mentioned that he had worked at a paper mill in Alabama and an aluminum plant in Virginia
The most incredible people always have the least predictable life stories.
The most incredible people always have the least predictable life stories.
Heh, this is actually a predictable path. He has a BS in industrial engineering, and typically that means you do work in plants in the middle of nowhere where labor is cheap.
From wiki:
"Cook [was born in 1960 and] grew up in Robertsdale, Alabama, near Mobile. His father was a shipyard worker, while his mother was a homemaker. Cook graduated from high school at Robertsdale High School, earned a B.S. degree in industrial engineering from Auburn University in 1982, and his M.B.A. from Duke University's Fuqua School of Business in 1988."
His family might have been blue-collar, but you seem to be right in that after graduation in 1982 he would have been 22, and presumably taken a regular white-collar job and later entered business school. Pretty standard trajectory.
"Cook [was born in 1960 and] grew up in Robertsdale, Alabama, near Mobile. His father was a shipyard worker, while his mother was a homemaker. Cook graduated from high school at Robertsdale High School, earned a B.S. degree in industrial engineering from Auburn University in 1982, and his M.B.A. from Duke University's Fuqua School of Business in 1988."
His family might have been blue-collar, but you seem to be right in that after graduation in 1982 he would have been 22, and presumably taken a regular white-collar job and later entered business school. Pretty standard trajectory.
Ah I suppose I'm guilty of romanticizing it a bit -- I rather imagined him to be working on an assembly line.
Well, it is true that it is more of a blue collar job than many others, even if you are in management or doing engineering work on the line. I had a friend who worked at a paper products factory in rural Pennsylvania as an IE as his first job out of school, and he didn't care for it. The kind of area where everyone young just wants to leave, and you are coming in as a 21 year old. Not fun. And I particularly remember he had to buy a 4WD Jeep because the plant was always open but they didn't do a good job plowing roads.
I think we all saw this coming. I remember when Cook was first chosen, CNBC kept referring to him as the "logistics guy." That's good news for just about any company but Apple.
Sculley was a "logistics guy" and it worked for Pepsi. By 1995 Apple was a bureaucratic, MBA-filled, artist-less mess. Apple isn't HP or Samsung or one of a dozen other bland electronics companies for a reason.
Sculley was a "logistics guy" and it worked for Pepsi. By 1995 Apple was a bureaucratic, MBA-filled, artist-less mess. Apple isn't HP or Samsung or one of a dozen other bland electronics companies for a reason.
Completely tough job to follow in the foot steps of big figure like Jobs. You wish Cook all the best in the new role. If he succeeds, Jobs will get the credit for leaving a strong legacy. If he fails, he can only be g forgiven for not being Steve Jobs.
Nevertheless what a fantastic opportunity to be involved with a leading company.
Nevertheless what a fantastic opportunity to be involved with a leading company.
I think what's going to happen eventually is that the A-level engineers are all going to leave Apple and start their own company, when they start getting frusterated with the new Apple. I don't think Tim Cook understands the arguably 25:1 dynamic range that exists in software the way Steve Jobs did.
Just heard a podcast with Adam Lashinsky. He is the Senior Editor at Fortunate magazine and author of a book on Apple. In the podcast:
"[Lashinsky] shares an insider look at Apple, one of the world's most iconic and secretive companies. Based on his research into the technology giant's internal processes and approaches to leadership and building products, Lashinsky offers insights and surprises from his book, Inside Apple: How America's Most Admired--and Secretive--Company Really Works."
Cook was the supply chain guru Jobs employed to turn Apple's supply chain model into one like Dell's. No surprise with this knowledge Cook is now CEO of Apple.
[1] http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2931
"[Lashinsky] shares an insider look at Apple, one of the world's most iconic and secretive companies. Based on his research into the technology giant's internal processes and approaches to leadership and building products, Lashinsky offers insights and surprises from his book, Inside Apple: How America's Most Admired--and Secretive--Company Really Works."
Cook was the supply chain guru Jobs employed to turn Apple's supply chain model into one like Dell's. No surprise with this knowledge Cook is now CEO of Apple.
[1] http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2931
And he is taking Michael Dell's advice to give money back to the shareholders.
> If anything, Apple under Tim Cook will embrace efficiency to an even greater degree, especially as the company grows bigger and more complex -- to the dismay of those who think techies should rule the roost.
I don't understand this line of logic. Tim has an engineering degree, and optimizations are a core of 'techies.'
I don't understand this line of logic. Tim has an engineering degree, and optimizations are a core of 'techies.'
The bit about praising his competitors shows "The Benjamin Franklin Effect" in action: http://youarenotsosmart.com/2011/10/05/the-benjamin-franklin...
so Jobs has been gone 6 months and the previous #1 company in the world is still number one and didn't collape? I think we need to wait at least a couple years before any statement can be made about the CEO's leadership abilities... just saying
As long as they release great products and make existing products better, I'm happy.
If not, I have to look for other things and I don't really see something which could hold a candle to Apple.
If not, I have to look for other things and I don't really see something which could hold a candle to Apple.
This is what's referred to by reporters as a "snow job".
Apple has gone from the disruptive upstart to the elephant in the room that everyone will be trying to take down in the future.
"Steve Jobs' successor is making his mark and trying to keep the Apple magic going."
I think that says it all.
I think that says it all.
So much of the article seemed to point out the Tim Cook was friendlier in terms of investor relationships, but who cares about that (from a technologist point of view)? I mean, the biggest indicator of the shift in their priorities is that they took 100 billion dollars in cash and used it for stock buybacks and dividends. Can you imagine Google doing such a thing? They would never dream of this, because they are too busy re-investing their profits with their big-picture potentially world changing research projects.
But hey, kudos for Tim Cook for not trying to be someone he is not, he's a money and operations guy. So money and operations will get looked at at the expensive of innovation. But this is not good for those who are used to miracles from Apple:
"It looks like it has become a more conservative execution engine rather than a pushing-the-envelope engineering engine," says Max Paley, a former engineering vice president who worked at Apple for 14 years until late 2011.
"I've been told that any meeting of significance is now always populated by project management and global-supply management," he says. "When I was there, engineering decided what we wanted, and it was the job of product management and supply management to go get it. It shows a shift in priority."
Yuck. The geek inside dies a little at reading this.