Inside Apple

by Adam Lashinsky

  At the last Top 100 Steve Jobs attended, in November 2010, he showed off the iPad 2 and its colorful new magnetic cover—four months before the public got to see it. A highlight for attendees was an extended Q&A between Jobs and his executives. One asked why Jobs himself wasn’t more philanthropic. He responded that he thought giving away money was a waste of time. The San Francisco Giants won the World Series during a dinner session of that last Top 100—a distraction to the many Giants fans in the room, and an irritant to Jobs, who was completely uninterested in sports.

  The Top 100 was a mostly internal affair, though the rare external guest made an appearance. Intel chief executive Paul Otellini presented the year Apple and Intel began a partnership to place Intel chips in Macs. As Apple prepared to enter the phone business, its key contacts at AT&T, Glenn Lurie and Paul Roth, briefed the computer-industry executives on the wireless world and its history. Lurie remembered the meeting for having exposed him to Apple executives beyond the narrow group with whom he’d been dealing on the iPhone. “I walked away incredibly impressed with the individuals,” he said. (Lurie’s role with Apple is so important to him that his official AT&T bio states that he has “responsibilities for AT&T’s ongoing operations and relationship with Apple Inc., having led negotiations to bring the iPhone to AT&T.” It notes his brief career as a professional soccer player but doesn’t mention the name of any other AT&T partner.)

  Those left behind described excessive whispering and neck craning over empty offices and the absence of VIPs during the meeting, which didn’t officially exist on anyone’s agenda. “We weren’t supposed to know where they were. But we all knew where they were,” recalled someone who had not made it into Steve Jobs’s life raft. “They in turn weren’t supposed to be working while they were there, but they’d do emails and take phone breaks to avoid falling too far behind.”

  While versions of the Top 100 exist at other companies, these off-sites are usually more egalitarian in the guest list and contain some training component that suggests to attendees they are being considered to move up the organizational chart. Apple’s approach to career development is yet another way it runs contrary to the norms at other companies. The prevalent attitude for workers in the corporate world is to consider their growth trajectory. What’s my path up? How can I get to the next level? Companies, in turn, spend an inordinate amount of time and money grooming their people for new responsibilities. They labor to find just the right place for people. But what if it turns out that all that thinking is wrong? What if companies encouraged employees to be satisfied where they are, because they’re good at what they do, not to mention because that might be what’s best for shareholders?

  Instead of employees fretting that they were stuck in terminal jobs, what if they exalted in having found their perfect jobs? A certain amount of office politics might evaporate in a corporate culture where career growth is not considered tantamount to professional fulfillment. Shareholders, after all, don’t care about fiefdoms and egos. There are many professionals who would find it liberating to work at what they are good at, receive competitive killer compensation, and not have to worry about supervising others or jockeying for higher rungs on an org chart. If more companies did these things, it might work, and it might not. It might not even work so well at Apple after Steve Jobs hasn’t been CEO for a few years. But if more companies thought about such things, they’d most certainly be more like Apple.

  5

  Hire Disciples

  On January 21, 2009, exactly a week after Steve Jobs announced a six-month medical leave of absence, Tim Cook presided over a conference call with Wall Street analysts and investors following the release of Apple’s quarterly earnings. Predictably, the very first questioner wanted to know how Cook would run the company differently from Jobs. The analyst also asked the awkward question on everyone’s mind: Would Cook succeed Jobs if the CEO didn’t return?

  Cook didn’t brush off the question with the usual bromides that baseball players and executives are so fond of. “There is extraordinary breadth and depth and tenure among the Apple executive team,” he began, “and they lead 35,000 employees that I would call wicked smart. And that’s in all areas of the company, from engineering to marketing to operations and sales and all the rest. And the values of our company are extremely well entrenched.” Cook certainly could have stopped there. But his emotions were raw at the time, in part because he was genuinely concerned about Jobs’s health. He knew the “Apple community”—customers, developers, employees—was concerned, too. So he continued, as if reciting a creed he had learned as a child in Sunday school:

  We believe that we are on the face of the earth to make great products, and that’s not changing. We are constantly focusing on innovating.

  We believe in the simple not the complex.

  We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us.

  We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.

  And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well. And … I strongly believe that Apple is doing the best work in its history.

  The apparently extemporaneous statement was extraordinary on a number of levels. For starters, Cook was emphatically hitting all the notes of an oft-played Steve Jobs symphony. He evoked Apple’s values. He cited Apple’s messianic mission. He ticked off the boxes of simplicity, focus, and relentlessness, all Jobs hallmarks.

  More than that, Cook was introducing himself to a slice of the public that barely knew him. True, Cook had been at Apple for more than a decade and had run the company when Jobs first was treated for pancreatic cancer in 2004. Yet he remained a cipher to almost everyone other than a handful of top Apple executives and some of the company’s important suppliers and business partners. The basic rap on Cook was that he was the drab automaton who ran all the unglamorous parts of the business Jobs abhorred: supply-chain logistics, product fulfillment, customer support, inventory management, channel sales, hardware manufacturing. And even if he did run the company in Jobs’s absence, many believed he’d never be CEO. Right before Jobs stepped down for his 2009 medical leave, a prominent Silicon Valley investor who was unwilling to be quoted by name called the likelihood that Cook would become CEO “laughable,” adding that “they don’t need a guy who merely gets stuff done. They need a brilliant product guy, and Tim is not that guy. He is an ops guy—at a company where ops is outsourced.”

  What the investing public, at least, learned from Cook during that earnings call was that there was something of a spark to this fellow, and more than a little ambition. He also revealed himself to be just a bit poetic—or at least someone who can parrot back the poetry learned during time spent inside a prestigious organization. His We believes turned out to have been at least a subconscious echo of the “Auburn Creed,” an earnest statement of I believes recited at Auburn University, Cook’s alma mater in his native Alabama:

  I believe that this is a practical world and that I can count only on what I earn. Therefore, I believe in work, hard work.

  I believe in education, which gives me the knowledge to work wisely and trains my mind and my hands to work skillfully.

  I believe in honesty and truthfulness, without which I cannot win the respect and confidence of my fellow men.

  I believe in a sound mind, in a sound body and a spirit that is not afraid, and in clean sports that develop these qualities.

  I believe in obedience to law because it protects the rights of all.

  I
believe in the human touch, which cultivates sympathy with my fellow men and mutual helpfulness and brings happiness for all.

  I believe in my Country, because it is a land of freedom and because it is my own home, and that I can best serve that country by “doing justly, loving mercy, and walking humbly with my God.”

  And because Auburn men and women believe in these things, I believe in Auburn and love it.

  Unbeknownst to his listeners, Cook had simultaneously just offered his own version of the “Apple Creed,” a wordier version of the long-ago promise by Jobs that Apple would make “insanely great” products. He also cheekily answered the critics who believed that Apple would crumble when Jobs stepped down. (In his authorized biography of Steve Jobs, released just after Jobs’s death, Walter Isaacson reported that Jobs was “rankled and deeply depressed” by Cook’s comment that “regardless of who is in what job” Apple would continue to do well.) Mr. Back Office just might have more of the Vision Thing than folks had given him credit for.

  Cook and each of Jobs’s other key lieutenants embody different elements of what it takes to survive and thrive in the Apple ecosystem. Jobs was smart in surrounding himself with a crew who could function as extensions of himself yet had their own superpowers. He did not hire CEOs-in-training. He let people’s talent define their jobs, not the jobs define the people. Cook was a ruthless systems guy but one who grew to understand that logistics had to serve some higher mission. Jonathan Ive was a talented designer who long before he came to Apple obsessed over making technology beautiful. Since he had no designs on running the company, he enjoyed some of the greatest freedom of any Apple employee. Scott Forstall, an empathic engineer who could channel Jobs, was able to keep his ambition in check long enough to gain control of the two hottest product groups—iPhones and iPads. Whether Forstall will happily remain a supporting player will be one of the great internal dramas of Cook’s tenure.

  To succeed in a company where there is obsessive focus on detail and paranoid guarding of secrets, and where employees are asked to work in a state of permanent start-up, you must be willing to mesh your personal ambitions with those of the corporation. You have to forgo your desire to be acknowledged by the outside world and instead derive satisfaction from being a cell in an organism that is changing the world. It is not for everyone. Like the officer candidate who can’t endure the abuse of the drill sergeant, some don’t make it. Even Apple’s board of directors—made up of voluble heavyweights, including former vice president Al Gore, former Genentech CEO Art Levinson, and J.Crew CEO Millard “Mickey” Drexler—toe the line when it comes to Apple. All played a supporting role to Jobs.

  If the business consultant Michael Maccoby’s description of a “productive narcissist” perfectly captures the personality of an ascendant Steve Jobs and his profound impact on Apple, his analysis also sheds considerable light on the rise of Tim Cook. Maccoby writes:

  Many narcissists can develop a close relationship with one person, a sidekick who acts as an anchor, keeping the narcissistic partner grounded. However, given that narcissistic leaders trust only their own insights and view of reality, the sidekick has to understand the narcissistic leader and what he is trying to achieve. The narcissist must feel that this person, or in some cases persons, is practically an extension of himself. The sidekick must also be sensitive enough to manage the relationship.

  Business history is full of such sidekicks. Frank Wells famously played second banana to Michael Eisner at Disney, so much so that Disney-watchers trace Eisner’s decline in the job to Wells’s untimely death in a 1994 helicopter crash. Donald Keough played the same role to the legendary Roberto Goizueta at Coca-Cola. Sheryl Sandberg, a former top Google executive and Treasury Department chief of staff for Larry Summers, has made herself indispensable to Facebook CEO Mark Zuckerberg by running all the aspects of the company that don’t interest the young founder—while not challenging her boss on the areas that do.

  For his part, Timothy Donald Cook, who is fifty-one, played the trusted aide to Steve Jobs for nearly fifteen years. He was the perfect casting for Apple’s long-running buddy movie. Where Jobs was mercurial, Cook was calm. When Jobs cajoled, Cook implored. Jobs eviscerated volubly; Cook did so with so little emotion that one observer likened the experience to a dressing-down by a seethingly quiet parent: “You wished he’d scream instead and just get it over with.” Jobs was larger than life; Cook faded into the woodwork. Jobs was the epitome of right-brain vision, Cook the embodiment of left-brain efficiency. Jobs bore the exotic Middle Eastern hues of his biological father and a kinetic aura that excited those around him. Cook is the prototypical Southerner: square-jawed, broad-shouldered, pale-skinned, with graying hair and an overall blandness to his appearance and demeanor. Jobs wore distinctive round spectacles. Cook wears barely noticeable clear, rimless glasses.

  Critically, Cook wasn’t threatening to Jobs, there being no question who was the rock star and who was the bloke on bass guitar. Jobs’s ego could tolerate Cook’s rise because Cook’s ego was impossible to discern.

  Yet while Apple’s visionary was busy changing the world, its taskmaster quietly was accumulating a tremendous amount of power inside Apple. Cook grabbed responsibility after responsibility so gradually that almost until he became CEO no one seemed to notice. An Apple outsider—worse, he was a longtime PC man who bled IBM blue—Cook was the last member to join Jobs’s post-1997 executive team. He had grown up in Roberts-dale, Alabama, a small town “on the way to the beach” in southern Alabama, and attended Auburn, where he studied industrial engineering. After college he took a job at IBM, where he stayed sixteen years, working in the division in Research Triangle Park, North Carolina, that manufactured PCs. While at IBM, he picked up a night school MBA at Duke. In 1997, after a stint as the operations chief of a computer distributor, Cook took a logistics job at Compaq, then a hot PC maker with an expertise in just-in-time manufacturing methods.

  He didn’t last long at Compaq, though, because shortly after he started Steve Jobs came calling. Jobs recognized that Apple’s manufacturing was a shambles. It owned factories and warehouses spread out around the world, from Sacramento, California, to Cork, Ireland. By 1998, when Cook joined Apple, the company was in the process of pruning everything—from its product roster to its executive ranks. Jobs knew enough about operations to know that first, Apple’s were badly broken, and second, overseeing their repair didn’t interest him.

  In Cook, Jobs found someone with whom he had little in common other than musical tastes: They shared a fondness for the rock-and-roll greats of the 1960s. Yet he knew Cook could help him slim down the company. The new recruit quickly closed all of Apple’s factories, opting instead to mimic industry leader Dell by outsourcing manufacturing. The goal was to strengthen Apple’s balance sheet by cutting down on the wasteful practice of carrying on its books more parts than were needed. Inventory, Cook would later explain, “is fundamentally evil. You want to manage it like you’re in the dairy business: If it gets past its freshness date, you have a problem.”

  Cook quickly developed a fearsome reputation at Apple as a Mr. Fix-it who blended in but didn’t take no for an answer. Recalled a senior colleague from that era: “Tim Cook is the kind of guy who just doesn’t get flustered.” His meetings were legendary for their length and the breadth of detail he’d require from his staff, many of whom he recruited from IBM. Cook’s palette was a spreadsheet, and he’d study each line before meetings with his vice presidents. “They’re nervous going into that meeting,” said an employee who knew Cook’s group. “He’ll say, ‘What’s this variance on column D, line 514? What’s the root cause of that?’ And if someone doesn’t know the details, they get flayed right there in the meeting.” Unlike Jobs, though, Cook was even-keeled. “I don’t recall his once raising his voice,” said Mike Janes, who worked for Cook. “His ability to go from forty thousand feet to nose-against-the-windshield is amazing.”

  Like Jobs, Cook accepted no excuses. Early
in his tenure, Cook remarked at a meeting with his team that a certain situation in Asia was a real problem and that one of his executives ought to be in China dealing with it. The meeting continued for another half hour or so, when Cook stopped abruptly, looked up at one of his executives, and asked in all seriousness: “Why are you still here?” The executive stood up, drove to the airport without a change of clothes, and flew to China.

  Cook was known for his prodigious memory and command of the facts. “The man can process an insane amount of data and know it down to the technical level,” said Steve Doil, who also worked for Cook. “Other CEOs and COOs will tell you ‘I have people who can tell you that.’ Not Tim. He knows. He can walk around campus and know in great detail enough to ask something like: ‘How are iPod repairs going in China?’ ”

  Over time, Cook picked up one after another of the responsibilities from the original members of the Apple management team, consolidating his authority over every operational aspect of the company that wasn’t considered “creative.”

  First he took over sales, which before Apple opened its retail locations primarily meant selling through retailers and other resellers. Next he took on customer support and later Macintosh hardware, already a maturing business by the time the iPod surged in popularity. When the iPhone came out, Cook spearheaded negotiations with wireless carriers around the world.

  He had his first taste of running the company when he filled in for two months in 2004 after Jobs had surgery to remove a cancerous tumor from his pancreas. He again covered for Jobs during the six months in 2009 when he received a liver transplant, and again in early 2011, when Jobs stepped aside for his final medical leave. It was a popular parlor game in Silicon Valley during 2011 to wonder if Cook would succeed Jobs, but insiders knew he already was running the company—even as Jobs continued to weigh in on important decisions and to nurture major initiatives. Six weeks before Steve Jobs died, Apple’s board of directors named Cook CEO as well as a member of the board.