When I read this story about Tim Cook’s pay cut reported by MarketWatch:
According to a regulatory filing on Friday, Apple said its annual sales of $215.6 billion were 3.7% below its target of $223.6 billion, and its operating income of $60 billion was 0.5% short of the $60.3 billion target.
As a result, company executives got 89.5% of their targeted annual cash incentive. In 2015, the executives got 100%. In all, Mr. Cook received $8.75 million in total 2016 compensation, down from $10.28 million in 2015. Other executives also received lower pay.
Apple last year faced declining revenue as it grappled with the first prolonged slump in iPhone sales.
it reminded me that Apple was forced to drag Steve Jobs back, twelve years after it had fired him. Apple isn’t just a company; it’s a cult—a combination of innovation and aesthetics that’s darned hard to sustain. An Apple CEO doesn’t just have to manage. He or she must inspire, drive, insist on the highest of standards and push the envelope. It’s hard to get that in one package.
Long ago when I was pushing a vacuum for a living I used to listen to Bruce Williams, a libertarian, on the radio. (This is before iPods, back in the dark days of portable radios.) A small point he made often was that there is a big difference between an entrepreneur and a manager. Steve Jobs was the former, Tim Cook the latter.
Jobs’ great insights were that style mattered, and that most folks were no more interested in knowing how a computer works than they were in knowing how their car works. People didn’t want to learn code or memorize F keys, they wanted to open the box and fire it up and have it work. And if it didn’t work they wanted a place to take it – the Apple store, which Microsoft is now trying to mimic. Jobs took computers away from geeks and gave them to the public, and he made them objects of desire – just like cars.
Tim Cook is obviously capable, but he is not the obsessive, ruthless, creative person Jobs was. Geniuses are not grown in MBA programs. Apple has let a lot of things slip – iBooks is a joke, Mac mail ditto, their native word processing program is a mess, their move to the cloud was confusing and not user-friendly, and each new update to iOS makes iTunes less functional. Jobs did not tolerate things that did not work because he came at it with an artist’s perfectionism; Cook let’s things drift because his motive is increasing share price.
He or she must inspire, drive, insist on the highest of standards and push the envelope.
In Apple’s case he mustn’t just have the highest standards, but must have an aesthetic sense for the preferences of people who enjoy the smell of their own farts.
Different people have different expectations of computers, smartphones, or cars. For some they are, as you put it, “objects of desire”. For others they are tools like ordinary telephones.
Apple isn’t Sears. It’s more like Playboy. Nobody has ever aspired to the Sears lifestyle but they did to the Playboy lifestyle.
Of course, nowadays Sears isn’t even Sears but that’s another subject.
John Scully and now, I think, Tim Cook were fine if all Apple had to do was commodify their products. But Apple’s users expect a lot more than that. Not all users. Apple’s users.
Tim Cook is obviously capable…. [ then lists many important things Tim Cook has fucked up, demonstrating a distinct lack of capability].
It’s come to this: Apple customers scared to say what they mean because the boss of Apple is gay. No one wants to get Eiched in that crowd, lolz!
I’ve actually been waiting for the first complaints that Cook is being maltreated due to homophobia. So far, so good.
Eventually the institutional investors will start making waves if performance doesn’t improve. They’ll get accused too, but it’s hard to make those kinds of accusations stick to money that big. Big Green gives exactly zero fucks, as the kids are wont to say.
You’d think that would happen but it never seems to. Look at Hollywood’s run of message pictures, the most recent being Miss Sloane. They’ve all flopped. They keep making them nonetheless.
Literally no one that I have heard or read has ever said we had to take it easy on Cook because he’s gay. But hey, fantasy is fun.
Yes, because creative industries are not just industries, they are also creative. Creative people are not robots. Smart executives in Hollywood (and may I say, in New York publishing,) understand this. A director who has earned for you is due some support for more personal projects, it’s the quid pro quo if you’re going to hire artists. A studio that violates that understanding faces a brain-drain which will benefit their competitors.
That might be true in the abstract but not in the concrete. Whose project was Miss Sloane? Certainly not the writer’s—it was his first-ever screenplay. He’s a newcomer without a track record.
And the director has never had a top box office movie so they weren’t trying to keep him happy, either. The stars are all good, workmanlike performers but not top box office—not the sort (like, say, George Clooney or Ben Affleck) who can get movies they want to make made.
It might explain the flopped Ghostbusters reboot on the basis of Paul Feig’s success with Bridesmaids. But not Miss Sloane. I think it got the green light because the non-creative end of the business approved of its message.
“No one wants to get Eiched in that crowd, lolz!”
Why would he get Eiched? Does Apple have a bunch of talent working for them for free?
Steve
If you look at Miss Sloane you find that among the producers are two Tunisians known for backing large quantities of crap. Presumably they are the money. The star is Jessica Chastain, who is a moderately big deal. The director did Shakespeare in Love and Marigold Hotel, he favors small films and does some high-end TV work as well, so he’s definitely a serious guy. This was probably his pet project.
I know nothing about this movie, but thinking it represents the studios or even the kinda/sorta studios is I believe a mistake. If I were guessing I’d say Madden got Chastain attached on Oscar hopes, rounded up some money guys, everyone had a gap in their schedule, and like Mickey and Judy they decided to put on a show.
A creative individual or community (and everything in Hollywood is a community project) that does nothing but chase the dollar, dies. I say this as an unabashedly money-motivated creative. But even I have gone to my publisher and said, ‘I have this idea that’s probably going to lose money, but I love the idea.’ And they pay me to do it. If they don’t, someone else will, looking to sign me for something more commercial.
From my perspective, beliefs such as managers vs entrepreneurs are simplistic, and further, the two are not mutually exclusive. I think Dave’s point hits it on the head. But I would, as I have previously made the point that anyone managing a company or considering an investment must be able to answer the question “why do people buy.”
I own an iPhone, but not because of the cult following or exotic features. I’d be happy with any number of competitors phones. Some people are happy with 10 years old beaters that simply can be driven from a to b. Some like Toyota Camrys. Others like Porsches. Others have to have the sex appeal of Ferrari.
Some are happy with a Timex watch. Others Patek Phillipe. Some tap water. Som tap filtered water. Some Perrier. Call me crazy, but I think only price and service differentiate steel rebar. Better just go for low cost production there. And so it goes. You’d better be damned sure all of your business functions satisfy that customers buying decision.
The times you see true entrepreneur breakthroughs generally are in a form of technology (think CO2 sequestration) or a retail concept: generally image, the end of a life cycle or mode of delivery/bypass the middleman. Think Abercrombie or craft beers replacing Bud or home delivery or Amazon. The truth is that such entrepreneurial innovation happens all the time. It’s just that people tend to be more bedazzled by the size of served market or its public display rather than its intrinsic nature. To be sure, Jobs had an insight. He saw a need for customer interface and support – ease of use. Bravo. But it quickly devolved into the blocking and tackling of management. Incremental features developed by clever technical guys. Bleeding them into the market in planned obsolescence. Outsourcing to China. Jobs kept the cult appeal alive (apparently with fart smellers) by being first and glitzy product intros, but we see how fleeting that is. And the truth is, Samsung has a better phone.
“I have this idea that’s probably going to lose money, but I love the idea.’ And they pay me to do it. If they don’t, someone else will, looking to sign me for something more commercial.”
A loss leader. Not a novel concept.
To expand on Guarneri’s observations by “commodity” I mean a product that is differentiated solely on price. PCs are a commodity product; Macs are boutique products, niche products.
That’s true of all of Apple’s products. They aren’t the market leader in any market in which Apple competes. They don’t have the best-selling smartphone, notebook computer, tablet, etc.
John Scully made the error of trying to make Apple into just another vendor of commodity products and it appears that Tim Cook is embarked on the same path. Apple can’t survive on that let alone grow any more than IBM could. Apple needs mystique and that’s what Steve Jobs provided. The company has survived by shrewd supply chain management. It has now ridden that train as far as it will go.
Non-Apple people love to accuse us Apple people of being part of a cult. This is cute but not true.
The Microsoft universe produced lousy products requiring one to pore over manuals, assemble components, and when none of it worked, spend hours merely trying to find a customer service department, let alone getting useful advice. In addition, the Microsoft universe produced ugly products. I spend easily 8 hours a day between work and play staring at my laptop. Forgive me if I don’t wish to look at something fugly.
Apple does a better job. Period. For people who want their computers to actually, you know, work and make sense, Apple is infinitely better. Reverse snobbery does not alter that basic fact: they do a better job. More expensive? Yes. My car is also more expensive than a Trabant, but it also goes faster, looks way better, is far more comfy and is both safer and more fun to drive.
One of the reasons I’m so irritated with Cook is that Pages was turned into an app and promptly lost the ability to handle large, marked-up documents. (Like 500 page, edited manuscripts.) As a result I was forced to buy MS Word. Jesus Christ what an ugly, messy, jumbled, incoherent mess. I hate having it on my computer. Piece of crap apparently needs an update almost daily, and being MS I have to assume it forms a big, glaring security hole. I still only use it to copy-edit, never to compose.
It’s just nonsense to insist that the old days of putty-colored boxes festooned with wires and loaded with software that either didn’t work at all, or worked in the most annoying way possible. (Mr. Clip-it? That was not Apple.) I am annoyed with Apple, but I have no interest in going back to the confused, who’s-in-charge, clusterf-ck that is Microsoft.
To each his own. My wife and daughter both use Apple computers. I’m Microsoft.
I find Apple marginal at best, at least for what I do. And MS dominates the business world.
And further to Dave’s comment, how many times have I talked about a market as a pyramid. And the width represents potential served market. If you are down in the base you get closer and closer to commodity status, primarily price, with marginal contributions like delivery in the buying decision. It’s generally cost+ pricing. The upper tip of the pyramid is where you go for margin, based on perceived quality, exclusivity, features etc. Niche marketing. Sometimes the perception is an illusion.
Take for instance In N Out burgers. Took the daughter to SF on way to Hawaii last summer. She had to have In N Out. Glorified McDonalds. A cult product and following. But at least they had a guy walking around with ketchup for you. So,you got that going for you…..
My remarks aren’t about technical superiority. Technical superiority is, essentially, irrelevant to market share or units sold. It’s just not true that the technologically superior product prevails.
There are eleven Windows desktops or notebooks sold for every Mac desktop or notebook sold. That’s the very definition of a niche product. That back in 2005 there were 60 Windows desktops or notebooks sold for every Mac desktop or notebook just tells us that the desktop/notebook market is mature.
Whether Apple will continue to be a player in that mature desktop/notebook market is something the company needs to decide. Apple’s recent new Mac product offerings suggest it isn’t interested.