Tim Cooks Leadership and Management Style: Building his Own Legacy at Apple

Abstract
In March 2015, Tim Cook (Cook), the CEO (Chief Executive Officer) of technology giant, Apple
Inc. (Apple), was named as the worlds greatest leader by Fortune magazine. The case study is
about Cook and his leadership at Apple.
Cook spent the early years of his career at IBM and Compaq Computer before joining Apple in
1998. The case describes how Cook transformed himself from a soft-spoken operations manager
into a high-profile leader at Apple.
Introduction
In March 2015, Tim Cook (Cook), the CEO of technology giant, Apple Inc. (Apple), was named as
the worlds greatest leader by Fortune magazine. Apple, a US-based company, designed,
manufactured, and marketed mobile communication and media devices, personal computers, and
portable digital music players, and sold a variety of related software, services, peripherals,
networking solutions, and third-party digital content and applications.
Despite being regularly compared with the legendary founder CEO, Steve Jobs (Jobs), Cook had
his own strengths. Since becoming the CEO, Cook had transformed himself from a soft-spoken
operations manager to a high-profile leader at Apple.
Background Note
The history of Apple can be traced back to the mid-1970s, when three friends Steve Jobs (Jobs),
Ronald Wayne (Wayne), and Steve Wozniak (Wozniak) decided to start a business of making
personal computers (PC). At that time, Jobs and Wayne worked for Atari and Wozniak was working
at HP .
On April 1, 1976, Apple Computers was founded. Initially they assembled fifty personal computers
(PC) in the garage of Jobs father. The PCs were custom-built for a local computer store, and were
sold at US$ 666.66 per system. They named the system Apple I, and built another 200 PCs before
working on the next version. On January 03, 1977, Apple was incorporated and you know the
history ;)
TIM COOK: THE JOURNEY AT APPLE
Cook was born in 1960 in Mobile, Alabama. His father was a shipyard worker and his mother
worked in a drug store. He had two siblings. Tim Cook graduated from Auburn University in 1982
with a bachelor's degree in industrial engineering.
He went on to earn an M.B.A. from Duke University's Fuqua School of Business in 1988. Talking
about his childhood days, Cook reminisced, Growing up in Alabama in the 1960s I saw the
devastating impact of discrimination. Remarkable people were denied opportunity and were
treated without basic human dignity solely because of the color of their skin. .
STEVE JOBSS SHADOW
Analysts felt that Cooks challenges as a CEO were compounded by the fact that he was
succeeding Jobs, whose name was inextricably associated with Apple. Alan Deutschman, in his
book, The Second Coming of Steve Jobs, wrote, No one denied that Apples rise was aided
immeasurably by his [Steve Jobs] astonishing energy and persuasiveness and charisma and
chutzpah (a word that he loved). And it was his personality that created the companys culture and
mystique..
COOKS LEADERSHIP AND MANAGEMENT STYLE
As the CEO of the technology giant Apple, Cook chose a democratic management approach.
Instead of being a complete contrast to Jobs, Cook adopted some of the legendary founders
existing practices and created a unique leadership style. Industry experts observed that the fact
that Cook had filled in for Jobs thrice during his medical leave of absence proved that Jobs had a
lot of faith in him. Jobs had told Cook that while leading Apple, he should never ask himself What
would Steve Jobs do? Instead, he should take decisions thinking of Apple as his own company.
In an internal email, Cook declared that he would stay true to the unique culture of Apple. I want
you to be confident that Apple is not going to change.
CHALLENGES
Cook had to face his share of criticism too. He was criticized for not preparing himself to face the
media glare and the analysis that came with succeeding a legend. He himself agreed with that
criticism. While commenting on the criticisms, he said, I have thick skin, but it got thicker. What I
learned after Steve passed away, what I had known only at a theoretical level; an academic level
maybe, was that he was an incredible heat shield for us, his executive team.
LOOKING AHEAD
In 2014, Apple launched the large-screen iPhone 6 and the even bigger iPhone 6 Plus. The
company also introduced a new payment system, Apple Pay, and Apple Watch. The new iPhones
sales were impressive with 74.5 million of them being sold in the last quarter of 2014, and the
company generating US$18 billion in profits. Between October 2011 and March 2015, the stock
price of Apple increased from US$54 to US$126 and the market capitalization touched US$700
billion. Moreover, since 2010, under Cooks leadership, Apples cash hoarding had tripled to more
than US$150 billion despite the fact that the company had spent a total of US$92.6 billion in
dividends and buybacks, something which was not encouraged during Jobss era.

Apple CEO Tim Cook has a managerial style could be broadly defined as democratic.

Rather than standing in complete contrast to former Apple CEO Steve Jobs, Cook
appears to have adopted some of the legendary entrepreneur's existing practices and
developed a uniquely blended leadership mantra.

Many were concerned that Cook lacked the bold visionary style of Jobs, but he has
strengths of his own. He's oftend described as charismatic and thoughtful by Apple
employees. So far, his tenure has been characterized by a greater focus on existing
products and fostering of business as well as employee relationships.

Instead of simply continuing the legacy of Jobs' autocratic leadership style, Cook has
played to his strengths and placed emphasis on advancing cooperation among Apple's
arsenal of talent. This is extremely indicative of the democratic style of management,
which encourages consensus building, particularly among high-level employees prior
to mutually consented decision making.

The role of hands-on participation of the CEO in developing Apple products has
significantly reduced since Cook took over in 2011. The iWatch is an example of this
shift in structure as Cook chose to be less involved in the details of product
engineering. Instead, he delegated those duties to members of his executive cabinet.
His notably subtle style of leadership has enhanced industry and employee goodwill.
When compared to Jobs' brusque and often dictatorial manner, Cook's style has also
resulted in slower decision-making and a clear loss of innovative drive.

In a blatant shift from Jobs' "innovation first" approach, Cook asserts that one "can
only do a few things great." However, Tim Cook can make tough decisions. Ultimately,
his focus on existing strengths of the organization, the importance given to accord
between senior executives and lack of micromanagement clearly indicates a
democratic managerial style.
What stock factors should you
consider when a company
makes a CEO change?
There are many reasons for public companies to make a change in CEO. The
reason the current CEO is leaving may have an effect on the price of a stock.
The performance of a company leading up to a CEO change may be a indication
of the true meaning behind a change. A CEO change after a string of
unexpected losses may sound warning bells for investors, while a CEO change
with a well-performing company may actually be a sign of strong management.

Sometimes the exiting CEO may be ill, have been offered a new position with
another firm or be retiring. There are other instances where CEOs have been
replaced due to fiduciary negligence or poor performance. Additionally, the
experience, track record and qualifications of the new CEO may also have an
impact on the price of a stock.

An example of change due to illness is Steve Jobs, CEO of Apple, who stepped-
down due to his fight with pancreatic cancer in 2011. He was replaced by then
COO Tim Cook. This change had almost no impact on the price of Apple stock,
which continued to climb afterwards. Tim Cook was qualified, familiar with
Apple's business, had an excellent track record and had already been working
with Jobs on a day-to-day basis when the change took place.

An example of a CEO change because of negligence occurred with Enron,

when Jeffrey Skilling replaced Kenneth Lay in February 2001 and then stepped
down with Lay replacing him in August of the same year. Though both were
qualified and familiar with Enron's business, each had a track record of
negligence, which was unknown publicly. Over the next few months a massive
fraud was uncovered, which resulted in Enron filing for bankruptcy protection
and its stock becoming worthless. These changes could have alerted astute
investors to sell as soon as the first news of accounting irregularities at Enron
surfaced.

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company-makes-ceo-change.asp