Steve Jobs Launches “iQuit”
“I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come. I hereby resign as CEO of Apple.” – Steve Jobs, ex-CEO of Apple [Aug 24, 2011]
Almost immediately, Apple’s Board of Directors announced that Tim Cook, previously Apple’s Chief Operating Officer, would be the company’s new CEO, and that he will join the Board immediately.
In his first email to Apple’s employee as the newly appointed CEO, Tim Cook stated that he was excited to pursue Steve Jobs' vision in bringing innovation to market, and will keep the magical component of the company intact.
“I want you to be confident that Apple is not going to change. I cherish and celebrate Apple's unique principles and values. Steve built a company and culture that is unlike any other in the world and we are going to stay true to that—it is in our DNA. We are going to continue to make the best products in the world that delight our customers and make our employees incredibly proud of what they do.” – Tim Cook, new Apple CEO [Aug 25, 2011]
Steve Jobs will continue on as the Chairman of Apple's Board.
Industry Reactions
Though long anticipated, the news still sent a shockwave to the entire media world. Twitter, the blogosphere and the online media outlets relayed the information for non-stop over several days.
2.5% of Twitter's worldwide traffic was about ‘Steve Jobs’
on August 25 according to Trendistic.com [Aug 25, 2011]
on August 25 according to Trendistic.com [Aug 25, 2011]
Praises, anecdotes, remembrances, company history and Thank you notes circulated on the digital planet at the speed of light. The formidable echo chamber around the world that followed the announcement was closer to an interplanetary rock star obituary than another American CEO entering pseudo-retirement. Once again Apple PR machine managed to acquire the attention of the whole world for few days.
The announcement should not come as a complete surprise. In January 2011, Steve Jobs took another medical leave of absence from the company, and while he remained as CEO, Tim Cook took on the day-to-day operations for Apple. Apparently Apple Board members have been discussing the potential next CEO for years, and have been talking secretly about a succession plan for many months independently.
It was time to pass the reign to the best possible successor: an insider, official number two in the Apple’s hierarchy and long time COO, Tim Cook.
Who is Tim Cook?
Tim Cook has been Apple’s acting Chief Executive since Steve Jobs went on medical leave early this January 2011. Often described as a “Southern Gentleman”, he is best depicted as a “tireless worker, a brilliant corporate strategist, and a fitness nut.” His analytical mind has been praised by many observers and his management style has been portrayed as less emotional than the one of Steve Jobs. The industry view of Tim Cook is as an intelligent and good leader and that under Tim Cook, Apple is in capable hands.
He joined Apple in 1998. During his early tenure as supply chain guru, he closed many of Apple’s production factories in California and outsourced manufacturing to suppliers in Asia. He later became COO in 2007. As COO, Tim Cook was responsible for all of the company’s worldwide sales and operations, including end-to-end management of Apple’s supply chain, sales activities, and service and support in all countries.
Before joining Apple, Tim Cook was VP of Corporate Materials for Compaq and was responsible for procuring and managing all Compaq product inventory. Previous to that, he was COO at the Reseller Division at Intelligent Electronics. He also spent 12 years with IBM, most recently as director of North American Fulfillment where he led manufacturing and distribution functions for IBM’s Personal Computer Company in North and Latin America.
As part of his nomination, Tim Cook was granted by Apple’s Board, 1 million restricted stock units, half vesting in August 2016, and half vesting five years later, in August 2021. At today’s valuation, the cash value of Cook's compensation would be above U$380 million. As COO, Tim Cook received in 2010 U$58 million in salary, bonus and other stock awards.
What Will Change?
Nothing.
It was quite clear for some time that COO Tim Cook was the guy in charge at Apple. During the medical leaves that Steve Jobs took in recent years, Tim Cook successfully stepped in, showing to the Board, the company and investors that he would be the natural candidate when Jobs' replacement was duly needed.
Apple’s stock price, one week since the announcement [Aug 31, 2011]
Investors have digested the message and the Apple Inc. stock was up by over 8% (see above graphic), a week after the announcement. Pros and Cons of the news are still being debated by the investment community, and no firm judgment has emerged since the departure of Steve Jobs, which is still good news for the Cupertino-based company.
In the long run, depending on the extent of Steve Jobs' involvement as Chairman, Apple might encounter some difficulties to maintain its phenomenal trajectory. Succession war (who will replace Tim Cook for COO, or the ‘visionary Steve’?), media coverage (who will replace the ‘icon Steve’?), patent wars (Steve Jobs is the key inventor for 313 of Apple's patents), and potential disengagement from Apple’s cult-like fan base could all be reasonable threats to the most innovative corporation in the world.
Apple's Incredible Run Under Steve Jobs,
by Business Insider [Aug 25, 2011]
by Business Insider [Aug 25, 2011]
What we know for sure is that Apple will have a brand new headquarters, the authorized and recently updated biography ‘Steve Jobs’ will be out this November, and the next iPhone is scheduled for release just in time for the holiday season.
For the rest, the future will tell.
What Can We Learn From Apple?
Rather than looking forward, for once it could be interesting to investigate Steve Jobs’ legacy. Apple is a singular company in the business world. It would be too easy to summarize Apple's success story with few delightful facts, some sparkly quotes or through its founder's life story, but in reality Apple was built over 35 years as a phenomenal technology company. The technology world as a whole would have been very different without Steve Jobs as a CEO at Apple.
Few important lessons from the Apple success story can be drawn here.
- Second Chances. It is very rare, but a technology company can have a second chance. Steve Jobs who founded the company in 1976, retook the CEO position in 1996 after being fired in 1985. At the time Apple was on the brink of bankruptcy. After a difficult turn around Apple came back to profitability years later, and has prologue its extraordinary success story since then.
- Star-ification of Founder-CEO in the Tech World. Similarly to Bill Gates, Steve Jobs has been on the technology map for years as a a founding father of the digital revolution (Gates vs. Jobs video). After Bill Gates retired from Microsoft in January 2000, Steve Jobs was the last pioneer of that generation with worldwide profile. Since then many more names have erupted from the technology landscape such as Michael Dell (Dell Inc.), Jeff Bezos (Amazon), Larry Page and Sergey Brin (Google), and most recently Mark Zuckerberg (Facebook). Though no one in that short list garnered the media frenzy and adoration as Steve Jobs, surely someone else will step up.
- Technology For Everyone. Until recently, the technology world was defined, understood by and built for the gadget-loving, computing enthusiast community. The cutting edge products were more for the geeks,who were clearly a separate and distinct segment from the rest of the human beings. Steve Jobs, by designing elegant and intuitive objects, has proven that technology could be understood and used daily by people who do not come from a technological background. As long as the object in question was simple to use, designed with taste, and with high reliability and quality, a certain sizable niche of the population (the more affluent however) could understand what that machine can do for it.
- Importance of a Team of Experts. Although he was the most iconic person of the company, Steve Jobs could not have done it by himself. When he returned to Apple in 1997 after an absence of 12 years, Apple already had Jony Ive as Chief Designer, and Philip Schiller, who eventually became Senior VP of Product Marketing. Over the years Steve Jobs created a team of experts that worked well together. Today Apple’s management team is considered to be the world’s reference in the consumer electronic goods.
Apple's Core: Who does What, via Fortune [Aug 25, 2011]
- Think Big, Think Ecosystem. It was true for the iPod and the Music industry, the iPhone and the Telecommunication industry, the iPad and the Media industry and hopefully the iCloud and the Hardware industry. Today’s innovation has to make strategic sense from an entire ecosystem standpoint. A product, beautifully designed and fully integrated in Apple’s case, has to appeal to both consumers and industry at the same time. The “Build It and They Will Come” time has long faded away and countless of technology companies have and are still making the same mistake of not thinking through the end-to-end solution for buyers.
- Speed of Innovation. Despite its 46,600 full-time employees and 137 stores around the world in 2010, Apple is still managed like a startup with a lean management, small and flexible team and clear goals. To execute well and fast, Steve Jobs implemented a strong management style and micromanaged deadlines. Most importantly, by vigorously championing its “integrated” ecosystem (Hardware coupled with Software) against the “fragmented” environment, Steve Jobs established the first “closed” technology platform that could compete fiercely with the “open” Internet. So since Apple controls everything within their 'closed' world, development and go-to-market cycle time is significantly reduced. The Apple method has recently reached its maximum effectiveness and was rewarded by the financial market with a 52% innovation premium on the stock price.
- Reinvention of the CEO Role. Like no other, Steve Jobs has redefined the role and expectations of a modern CEO, becoming the ultimate spokesperson, salesperson and marketer for his company and products. Cries of "We love you, Steve!" are emitted at Apple events from fans, and they will surely miss the iconic presence and showmanship of Steve Jobs in the coming product launches. Perhaps he might be able to redefine the role of a modern Chairman of the Board, if his health will permit.
“One more thing”... there will be a before and an after Steve Jobs as CEO at Apple Inc, the same way there is a before and an after Bill Gates as CEO at Microsoft. But in creating beautiful, powerful and simple-to-use devices, Steve Jobs has managed to expand technology beyond the small technophile community and teach the world how to innovate across industries.
And we can all thank him for that.