Tim Cook has succeeded as CEO of one of the most legendary leaders in the history of American business, Steve Jobs. Such a task is not an enviable one. The successors of legendary businessmen do not always start or finish well. Often, expectations of their performance are inflated and overly picky.
When Cook, who had a background as an operations specialist at IBM, moved to Apple from Compaq, shortly after Jobs returned to Apple as CEO, there was no reason to believe that the company would become one of the most expensive in the world or that Jobs would appoint Cook as his successor. Nevertheless, all of this had happened by the time Steve stepped down as CEO on August 24, 2011, due to illness, which later became the cause of his death.
Many analysts had little hope for Tim Cook. Steve was the genius who created the Apple personal computer, the iPhone, the iPad, iTunes, and Apple’s online stores, not to mention other innovative and breakthrough products and services. Tim, on the other hand, was a mild-mannered man and an expert in manufacturing and logistics. How could a man of such character and past lead Apple into the future?
However, the results speak for themselves. Under Tim’s leadership, in the nine-plus years since his appointment as CEO, Apple’s market value has grown from $359 billion to $1.4 trillion. Apple became the first company with an estimated market value of a trillion dollars, and today remains the most expensive private company in the world.
So why are all these observers so badly wrong?
To begin with, Apple was in good shape thanks to the leadership of Steve, who managed to rally many of the company’s top executives around him. But just as importantly, Tim Cook has proven to be a uniquely effective leader – thanks to the meticulous attention to detail, teamwork, and calm, consistent demeanor that has always been his calling card. Apple’s results since he took over have been so impressive that Tim has become one of the most respected and influential CEOs in the world.
To some extent, respect and influence is due to his decision not to try to become a second Steve Jobs – the inimitable creator, brilliant innovator, designer, master of surprise and the heart of Apple. Recognizing the uniqueness of Steve Jobs, Tim focused on what he knows best: organization, teamwork, efficiency, predictability, understated leadership. This has worked wonderfully, and under Tim Cook’s leadership, Apple’s value has tripled.
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This interview was conducted for the Peer to Peer program at Duke University in May 2018, right after the commencement address for graduates. As interviewer David Rubenstein tells us in his book Being a Leader, Tim’s humble demeanor is clearly evident during the interview. He would be the last person to take credit for Apple’s success. But he is keenly aware of the type of leadership needed by Apple, which occupies a unique place in the global business world – a focus on the company’s products, services and customers, rather than on himself.
Being a leader
On working at Apple, parents, and equality
David Rubenstein (DR). You took the helm at Apple in August 2011. In that time, the company’s profits have grown by some 80 per cent. Do you ever think you’re unlikely to have achieved more? Maybe you should just say to yourself, “I did a great job and now I’m going to do something else with my life”?
Tim Cook (TC). We see shareholder value, revenue and profits as a result of the right approach to innovation, creativity and a focus on relevant products. Treat customers like jewels and focus on the customer experience. To be honest, I wasn’t aware of the numbers you quoted as I pay attention to very different things.
DR (David Rubenstein). When you announce quarterly financial results, analysts always say, “Well they sold a lot less product than we thought.” Does that bother you?
TC. It did bother me at one time, but it doesn’t now. We run Apple with an eye on the long term. I always thought it was odd that somebody would count the number of units that were sold in ninety days, because we make decisions that are several years in the future. We’re very clear that we don’t make decisions for people who want to make a quick buck. We run the company from a long-term perspective.
DR. We recently learned that Warren Buffett has bought an additional 75 million shares in your company. Are you happy that he’s your shareholder?
TC. I’m not just delighted – I’m thrilled! Warren is focused on the long term. We look at things the same way – both the way we run the company and the way we invest.
Warren Buffett. You’ll find an interview with him in the book Being a Leader, too. Source: Nati Harnik/AP
DR. Did you know that Warren still uses an old flip phone?
TK. I know.
DR. BROWN: He doesn’t have a smartphone. Have you wondered how much your stock would rise if he did buy one?
TK. I’m working on it. And I told him I would personally come to Omaha to give him technical support. [In 2020, that effort seems to have succeeded, because Warren Buffett said he now uses an iPhone.]
DR. Let me ask you about what your path to such a high profile position was like. Did you grow up in Alabama?
TC. Yes. In a very, very small town between Pensacola and Mobile on the Gulf Coast.
DR. TK: You were a star athlete in high school? A star student? Or just a computer geek?
TK. I’m not sure I could call myself a star at anything. I did a lot of work in school. I had pretty good grades. I was very fortunate as a child because I grew up in a loving family and went to a good public school.
That’s a huge advantage that, alas, many children these days are deprived of.
DR. You got into Auburn University. How did things go for you there?
TC. Not bad. I really got serious about engineering and industrial engineering.
DR. Then you went to work for IBM.
TK. Yes. I started out as a process engineer, designing production lines. At that time, robotics was in its infancy, so we focused on automation. I wouldn’t say we were very successful, but I learned a lot in the process.
DR. You worked there for about twelve years, and then you went to a company called Compaq, which at the time was one of the largest manufacturers of personal computers.
TC. Compaq was number one at that time.
DR. You worked there for about six months, after which you got a call from Steve Jobs or one of his employees and asked: “Can you come here to join Apple?” Compared to Compaq, Apple was a more humble company. Why did you go for the interview and end up choosing Apple?
TC. Good question. Steve came back to the company and basically replaced the whole management team that was there at the time. I thought, “And this is an opportunity to talk to the man who started an entire industry!”
We met with Steve on Saturday. And literally after a few minutes of talking, I decided: “I want to do this.” I was in shock myself. But Steve’s eyes lit up in a way that I had never seen in any CEO before. Plus, it was like he was turning left when everyone else was turning right. Everything he said was unusually different from conventional wisdom.
Many top executives were leaving the consumer market because there was carnage there. Steve was doing the exact opposite. He literally put everything into the consumer market. In general, his way of communicating and asking questions was also very peculiar. Even before the conversation was over, I caught myself thinking, “I hope he offers me this job because I really want to do it.”
DR. Did friends tell you it was a bad idea?
TK. They thought I was out of my mind. The popular opinion was, “You work for the leading personal computer manufacturer in the world. Why should you quit? You have a great career ahead of you.” But such a decision could not be made on the basis of technical analysis, writing on one side of the paper the pros and on the other side the cons. Such an analysis could end up with one thing: “Stay where you are.” In my case, the voice in my head was, “Go west, young man. Go west.”
DR. Looking back, I suppose that was the best professional decision you ever made.
TK. Yeah, probably the best. But I’m not sure the term professional applies here.
DR. How did you feel when you joined Apple and started working for Steve? Was it better or worse than you thought? Harder than you thought it would be?
TK. I would describe it as liberating. You could talk to Steve about a serious issue, and if it resonated with him, he would just say, “Okay,” and then you would move on. It was a real revelation to me that a big company could work like that. I was used to endless bureaucracy and analysis of the issue – the usual paralysis that constrains a company. Apple worked in a completely different way. It became clear that if something wasn’t working for me, I could walk over to the nearest mirror and see the cause in it.
DR. Steve’s health was deteriorating and he couldn’t stay on as CEO. He told the board and you were appointed CEO around August 2011. Did you feel in taking over the company that Steve would say, “I would do this and that, and you would carry on my business”, or did you feel you had to have your own way of looking at things? How did you manage to balance those two aspects? After all, you came to replace a legendary figure.
TK. It doesn’t really work that way. We have a really open company. Most of us can finish sentences for the person we’re talking to, even if we don’t agree with them. It’s not that Steve had a secret file or anything like that. He was always sharing his ideas.
At the time, I thought he would be chairman and stay in that position forever, and how our relationship would work out would be something we would figure out later. Unfortunately, that didn’t happen.
DR. You have the most successful consumer product in the history of humanity and that is the iPhone.
TC. There was a sense that it was a basic game-changing product. If you go back and watch the presentation where Steve announced it, you can sense his passion in the way he describes it. I still remember it like it was yesterday.
DR. How many iPhones have been sold so far?
TC. Over a billion.
iPhones. Source
DR. Let’s talk about some of the values you support. One of them is privacy.
TC. We see privacy as a basic human right. For us, it belongs among the civil liberties that make Americans who they are. It defines us as a nation. We see this issue becoming more and more serious for people. We collect a minimum amount of customer data – only the data we need to provide quality services. In addition, we are working very hard to protect that data through encryption and other means.
DR. You also talked about the importance of equality. Why is that important to you?
TC. Looking at our world, I realize that a lot of the problems come down to a lack of equality. The fact is that a child born in a place with a certain zip code is not going to get a good education precisely because he or she was born here. Someone from the LGBT community gets fired from their job because of orientation. Someone of faith who practices a different religion than the majority is ostracized in some way. It’s very simple: I think if by magic everyone in the world started treating each other with dignity and respect, a lot of the problems would just disappear.
DR. You’ve disclosed some details about your private life, giving up the privacy that you consider to be the inalienable right of other people. Why did you do that?
TC. I did it for a higher purpose. I realized that many children had been mistreated, including in their own families, and that they needed someone to say, “Oh, they’re gay, but they’re doing well in life! So it’s not a life sentence by any means.” We used to get notes like that from kids, and it touched my heart deeply. It got to the point where I thought, “I’m doing it wrong by trying to act in a way that is comfortable for me, which is to keep it private. I should have done something for the common good.
DR. Did you never once regret it?
TK. Not once.
DR. Did your parents live to see you succeed?
TK. My mother died three years ago. But my father is still alive.
DR. Did your mother live to see you become the CEO of Apple?
TK. Yes.
DR. She used to say something like, “I always knew you were going to succeed. By the way, can you help me with my iPhone?”
TK. I bought them both an iPad and finally convinced my dad to start using an iPhone. He treats me the same way he did twenty, forty, and sixty years ago.
DR. Does he call you and give you advice or tell you what not to do?
TK. If, from his point of view, I’m doing a bad thing, he lets me know.
DR. You’re clearly a public figure. Have you ever thought that you might be able to run for president of the United States? I mean, you’ve seen the president up close.
TK. I’m not a politician, but I enjoy dealing with political issues. Given the communication breakdown in Washington between the legislative branch and everybody else, I think I could make a difference in the world by staying in my job.
DR. Of all the CEOs of big companies I know, you are the most unassuming and humble. Have you ever noticed that you are different from other CEOs? How do you manage to maintain this demeanor while running the largest company in the world?
TK. If you work at Apple, you are expected to perform at a high level and contribute substantially. Because the bar is high, you will always try to live up to it, and that’s true for the CEO as well as for any employee. That’s why I’ve never had that feeling for a long time, assuming I’ve ever had one at all.
From the book Being a Leader.
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