Markets tend to love businesses run by larger-than-life founders or CEOs and ascribe a premium to them. Whilst we at Marcellus do recognise the rub off effects of a passionate leader on the rest of the organisation, being long term investors, we have explicit focus on succession planning that can underpin the sustainability of the business beyond the key man dependence. Therefore, Apple becomes an interesting case study – arguably the most iconic and original thinking founder and CEO, Steve Jobs succeeded by someone with a seemingly diagonally opposite personality, yet has taken the business to greater heights to become the world’s most valuable company under his tenure. This interview feature of Tim Cook, the current Apple CEO in the GQ magazine throws some light on how this transition was not just smooth but actually built on the strengths of the legendary predecessor.

The article begins by showing how normal Tim Cook is or tends to come across as, very much unlike Jobs:
“He is not a leader who is drawn to crisis or conflict, two climates his predecessor, Steve Jobs, seemed at times to thrive in. “I try not to let the urgent take over the day,” Cook says. Regular meetings, different standing engagements with different parts of the company…. The overall sensation he attempts to impart is one of normalcy, of proportion, despite the fact that most days, Apple, which employs about 165,000 people, is the most valuable company in the world. (At the time of writing, it’s worth more than £1.68 trillion; at one moment last year, that number was £2.5 trillion, a figure roughly equal to the gross domestic product of the UK.)

…Apple’s inventions – starting with 1976’s Apple I and 1977’s Apple II, and continuing through the iMac, the iPod, the iPhone, the iPad, the Apple Watch, and AirPods – have arguably done more to change the basic way that humans go through their day than those of any other company in the past 50 years. For these achievements, Jobs, who cofounded Apple and spearheaded the development of most of its signature products, is worshipped like a god, and Jonathan Ive, Apple’s erstwhile design head, is worshipped like a demigod. But it is Cook who has run the company since Jobs’s death, in 2011, Cook who has presided over the astronomical growth in the value of the stock, and Cook who is shaping the future of Apple today. It is his responsibility to protect what the company has already built while presiding over Apple’s next big thing.

….“He’s very hard to read,” says Eddy Cue, who has been at Apple since 1989 and now leads its services division. “If you’re looking to make your decision or your beliefs based on reading his facial expressions, you’re probably not going to be good at that. I always joke with him that he’d be a great poker player, because he’d have four aces and no one would know.”

…at the time Cook succeeded Jobs, much was made of their differences. Cook had already been with Apple for 13 years, but he’d worked in operations, where he’d been single-mindedly focused on the details of supply chains and factory management and procuring materials and squeezing every last ounce of efficiency out of the system that produced Apple’s inventions.

“Steve saw this – one of the things I loved about him was he didn’t expect innovation out of just one group in the company or creativity out of one group,” Cook says. “He expected it everywhere in the company.” Including in operations, where Cook worked: “When we were running operations, we tried to be innovative in operations and creative in operations, just like we were creative elsewhere. We fundamentally had to be in order to build the products that we were designing.”

Even as Cook has reshaped Apple’s business and grown the company into an even more fearsome juggernaut than it was in Jobs’s day, he is reluctant to supply his own list of creative achievements, which include overseeing not just a decade’s worth of improvements and refinements to the iPhone and the rest of Apple’s existing product line, but also the Apple Watch, designed under Ive and launched during Cook’s tenure, and the AirPods, a staple of pandemic and post-pandemic life. “We don’t really look back very much at all in history,” Cook says. “We’re always focused on the future and trying to feel like we’re very much sort of at that starting line where you can really dream and have big ideas that are not constrained by the past in some kind of way.”

Cook has developed his own way of dealing with comparisons and criticism:
“He takes pride in tuning out sceptical assessments of his creative acumen. “With my background, I am used to people being critical in some ways. I’m used to the attack. I try very hard not to take things personally that I don’t think are meant to be personal. Talking heads critiquing – this kind of stuff kind of goes through me. It has to, or I wouldn’t be able to function.”

…he genuinely doesn’t care how he might appear… Cook’s general lack of interest in the stories other people tell about him has not just made him unusually impervious to criticism; it has also, on occasion, allowed him to deal with whoever he needs to deal with to get his job done.”

Cook talks about how despite the transition, Apple has upheld the values. Especially around its stubbornness around privacy at a time when the much of the tech world’s existence depends on data invasion. However, much to our disappointment, he doesn’t reveal much about the next big thing from Apple – whether its augmented reality headset or the Apple Car.

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Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.

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