How Badly is Timothy Cook Effed?

by Chris Seibold Oct 18, 2011

Tim Cook is in the uncomfortable position of replacing Steve Jobs . You're thinking that Tim gets to run one of the coolest companies in the world, makes so much dough that his weekly paycheck has to be extra long to hold all the zeroes and sets his own hours. How could that possibly be uncomfortable? The discomfort is in the fact that Tim Cook is doomed to failure.

 

Saying Tim Cook is doomed to failure seems like an overly dark prognostication.  Mr. Cook did the keynote and by any appreciable measure Mr. Cook did as well as could be expected. Tim Cook is also a smart guy, the kind of guy that deserves to run a company. Not just an average company, Tim, by all accounts, is more than capable of running any company.

 

Now that it is noted that Tim is smart and capable it is the time to realize that Tim is effed when it comes to Apple. A quick digression, when "effed" is used in this article it means the word you say when you hit your thumb with a hammer if you don't scream "Jesus" or "Christ." For all his talents, Mr. Cook has a lot of things going against him, things that can't work out well, burdens that Steve Jobs didn't have.

 

Tim Cook's first burden is matching the success of Steve Jobs, That isn't going to happen. Steve came in, took a company that was on the verge of bankruptcy and made it not only profitable but incredibly profitable. Not just incredibly profitable but the most valuable company in the world if you measure these thing by stock market valuation.

 

 

Tim has to take an already successful company and replicate the success. It is one thing to save a dying company and get stellar returns it is another to take the largest company in the world and get the same stock performance.

 

If you follow the math, from the week Steve Jobs returned to the week Steve Jobs left investors in Apple saw a phenomenal return of 9,734.74%. To put it in dollars and cents $1,000 invested in Apple the week Steve Jobs became CEO was worth $98,344.77  the week he resigned as CEO.  All Tim Cook has to do to keep up with Steve is make sure Apple's stock is hovering around the 36307 mark in 14 years.

 

The argument will be that that return is impossible and no rational person would expect such a run. There is merit to this argument and, hopefully, Timothy Cook will be afforded a little bit of rationality when it comes to market value and return.

 

Even if Mr. Cook isn't held to the nearly impossible task of matching Mr. Jobs' performance as measured by return on investment he's got plenty of other problems to contend with, problems that mostly go with not being a clone of Steve Jobs.

 

Steve had something that Tim Cook doesn't. That something isn't a black turtleneck or marketing genius, Steve had a sycophantic board of directors. You'll recall that when Steve returned to Apple he managed to reshape the board into lapdogs for himself. This allowed Steve to make a lot of stupid decisions.

 

You ask the average person about a stupid Steve Jobs' decision and they'll tell you that there isn't one. Ask an Applephile and, the really obsessed ones, will cite the iPod Hi-Fi. Except they'll both be wrong, the stupidest decision Steve Jobs ever made was the Apple Store.

 

Apple stores a bad decision? That's right, the Apple Stores were a horrible decision. Recall when the idea was proposed the prevailing wisdom of the day was that physical retail stores would be fading into obscurity. Recall also that a retail store slices some profit out of every item sold in the store instead of ordered online. Further, when the Apple brick and mortar (or wood and glass) stores were introduced Apple was already doing really well. Why take the risk?

 

Any reasonably controlling board of directors would have hemmed and hawed and done everything in its collective power to nix the idea. The risk was large and the payoff seemed modest at best. But Steve had the freedom to be stupid, since the board was handpicked by him the members went along with the idea. And it paid off. Will Timothy Cook get the same freedom to be "stupid?" It seems doubtful.

 

With Steve gone the board is going to make the easy mistake, the board is going to think they were a large part of Apple's current successful. Members of the board are going to say "Hey, I recommended the scroll wheel to Steve" and so forth. They will imagine that their presence at the four board meetings Apple had in 2010 was more important than the 3,000 hours some VP put in that year.

 

You can't really blame the board members for this. They are on Apple's board and have huge egos. They know they are smarter than everyone else but since Steve Jobs picked them they were loyal to Steve. Steve could make a misstep and the board didn't care. At some point Timothy Cook is going to make a mistake, and it will be public, and it will be embarrassing for Apple.

 

When that mistake happens, and it will, the board is going to crank down on Tim.  Where Steve got multiple chances to be stupid Tim will get one. When the iPod Hi-Fi flopped it was a great product that just not enough people "got." When Tim makes a similar mistake people will blame Tim's lack of vision and opine it will do permanent harm to Apple's reputation.

 

Tim has two problems, both are possibly insurmountable. The first problem is that Tim won't just be competing against Steve Jobs, he'll be competing against Steve Jobs' ghost. People aren't going to remember all of Steve jobs' failures, they won't remember NeXT, the Cube, Ping or the original incarnation of the AppleTV. They'll remember the iPhone, Siri, and the iPod.

 

Tim also doesn't have his biggest fan around to cover his back. Tim's biggest was Steve Jobs, a man who vowed never to turn over "his" company to a bozo again. When the time came Steve didn't choose Jonathan Ives, the obvious choice if design was the key, he didn't choose Scott Forstall, the obvious choice if iOS was the only thing that mattered and he didn't choose Philip Schiller, the obvious choice if all that mattered was marketing. Tim Cook got the nod precisely because Steve wanted what was best for Apple. Sadly, Tim doesn't have Steve to champion him, a luxury he deserves. 

 

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  • This is really good to know “Now that it is noted that Tim is smart and capable it is the time to realize that Tim is effed when it comes to Apple. A quick digression, when “effed” is used in this article it means the word you say when you hit your thumb with a hammer if you don’t scream “Jesus” or “Christ.” For all his talents, Mr. Cook has a lot of things going against him, things that can’t work out well, burdens that Steve Jobs didn’t have.” more power…

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