Mini-Case Can You Follow an Icon and Succeed? Apple and Tim Cook After Steve Jobs

Steve Jobs was Apple's co-founder and iconic CEO. A number of observers feel that much of Apple's phenomenal success, especially after 2000, is a product of his "genius" and leadership. Because of this and a leadership style that varies significantly from his predecessor's, some have questioned Tim Cook's ability to succeed Jobs as Apple's CEO. Yet, in 2014, several years after assuming the CEO position, Apple had what Tim Cook referred to as an "unbelievable year" given that the firm sold 200 million iPhones and generated $200 billion in revenue. Apple's stock price increased by 65 percent, and the company's market value reached more than $700 billion, the largest ever of any U.S. firm. At the time, Apple's market value more than doubled that of Microsoft. Prior to assuming the CEO position, Cook's primary experience had been as manager of operations; his success in this domain led to his appointment as COO prior to assuming the CEO role. Interestingly, a significant percentage of Apple's sales flow from products developed and introduced to the market under Jobs' leadership. As such, the jury is still out on Cook, especially with regard to developing marketplace successes in the form of new products, tasks at which Jobs excelled. Jobs and Cook have different leadership styles. Some thought Jobs was ruthless, impulsive, and almost maniacal in developing new products and finding paths through which they became marketplace successes. Cook's knowledge and skills do not make him an expert in product development, design, or marketing. Because of this, he delegates those responsibilities. As the firm's key strategic leader, Cook tries to buffer and maintain Apple's corporate culture that developed largely during Jobs' tenure. Thus, the emphasis remains on innovation that is valued in the marketplace. To support this emphasis and to nurture the firm's all-important culture, Cook hires talented individuals to join the top management team who blend well with the culture. He has made some very good hires, such as Angela Ahrendts who now heads Apple's very important retail stores. As a leader, Cook is less emotional in his style and actions compared to Jobs. Some refer to this aspect of Cook's style as a "measured emotional approach to leadership." He empowers his top management team members in ways that allow each of them to manage the functional area for which they have responsibility. He also encourages each team member to adopt a long-run perspective while leading. Observers have been able to highlight other differences between Cook's and Jobs' strategic leadership approaches. Compared to Jobs, Cook more regularly shares the limelight with his leadership team, spotlighting their contributions while doing so. One analyst suggested that Cook is a good leader who builds an effective team around him. With respect to strategic choices, Cook's decisions have resulted in major acquisitions (e.g., an audio company for $3 billion) and developing enterprise solutions for corporate IT units; Jobs opposed actions of these types. Under Cook, Apple formed an alliance with IBM to develop enterprise applications with a focus on the iPad, especially the new and larger versions. During Cook's early tenure as CEO, Apple introduced several innovations including the Apple watch, which entered the market in April 2015. This product's marketplace success is yet to be determined; initial reports suggested that demand exceeded supply, causing Apple to increase production. In addition, hints provided by Cook suggest that Apple may be planning to enter the television market. Most importantly, Cook claims that Apple's goal is to change the way people work. The firm intends to focus research and development efforts to develop products to achieve this objective. In mid-2018, some analysts were questioning the delays Apple was encountering when introducing products to the marketplace. Of three major product launches under Cook since becoming the firm's CEO in 2011, AirPods earbuds and the HomePod speaker missed publicly announced shipping dates. The Apple Watch, mentioned above, entered the market later than the firm desired, initially causing customers to experience long wait times to buy the product. The Apple Pencil and Smart Keyboard, two critical accessories for the iPad Pro, also entered the market later than announced initially. On the other hand, Apple's first quarter 2018 results yielded all-time highs in both revenue and earnings. In an overall sense, only the march of time will yield insights needed to determine if as CEO, Tim Cook was a success as Steve Jobs' successor. With a market value of over $900 billion in early 2018, it seems that as Apple's key strategic leader, Cook's effect on the firm he was leading was positive. Sources: 2018, Transcript: Apple CEO Tim Cook on the company's 2018 Q1 earnings, iMore, www.imore.com, February 1; T. Mickle, 2018, Tim Cook stumbles at his specialty, shipping Apple products on time, Wall Street Journal, www.wsj.com, January 6; R. Safian, 2018, Why Apple is the world's most innovative company, Fast Company, www.fastcompany.com, February 21; T. Loftus, 2015, The morning download: Apple will 'change the way people work,' CEO Tim Cook says, CIO Journal, blogs.wsj.com, January 28: 2015, Apple's Tim Cook cites record sales and 'unbelievable' year, New York Times, www.nytimes.com, March 10; A. Chang, 2015, Apple CEO Tim Cook is forging an unusual path as a social activist, Los Angeles Times, www.latimes.com, March 31; A. Lashinsky, 2015, Becoming Tim Cook, Fortune, April 1, 60-72; T. Higgins, 2015, Apple iPhones sales in China outsell the U.S. for first time, BloombergBusiness, www.bloomberg.com, April 27; J. Lewis, 2015, Tim Cook: A courageous innovator, Time, April 27, 26; J. D'Onfro, 2015, Tim Cook dropped a major clue about Apple's next big product, Yahoo Finance, finance.yahoo.com, April 28.

Case Discussion Questions

1. What is the effect of strategic leadership on determining the firm's strategic direction?

2. What must strategic leaders do to develop and sustain an effective organizational culture?

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