Highlights of Tim Cook’s Interview with Businessweek

It’s an unusually media heavy day for the normally very private Tim Cook. Tonight his interview with Brian Williams airs on NBC and Bloomberg Businessweek has published a long, and fascinating, interview with Tim Cook led by Businessweek’s Josh Tyrangiel. While portions of both interviews have been discussed already—Tim Cook Says Apple To Start Manufacturing Macs In USA Soon and Tim Cook: Television is an “Area of Intense Interest”—the discussions in the Businessweek interview are too compelling not to comment more on.

I’m going to tell you right now that I can’t do the Businessweek interview justice in this single post. The interview covers 11 (web) pages and is a fascinating read. I’ve picked some of the areas that I think are most interesting and most compelling about Tim Cook and Apple’s direction, but to get a complete sense you’ll have to sit down and read it yourself (hint: if you’re saving to Instapaper or Evernote, click the “Print” button you’ll get the whole interview on one page to save).

How Apple has changed, and how it hasn’t…

Tim Cook isn’t Steve Jobs, and Steve didn’t want him to be. One of the quotes repeated in the article is: “He goes, ‘I never want you to ask what I would have done, Just do what’s right.’ He was very clear.” So while Apple is different, it is also the same:

The first thing to realize is that all the things that have made Apple (AAPL) so special are the same as they have always been. That doesn’t mean that Apple is the same. Apple has changed every day since I have been here. But the DNA of the company, the thing that makes our heart beat, is a maniacal focus on making the best products in the world. Not good products, or a lot of products, but the absolute best products in the world.

But, unlike Jobs, Tim Cook has opened parts of Apple up to inspection and scrutiny, like the manufacturing process and suppliers:

There are lots of little things that change, and there will be lots of little things that change over the next year and the years thereafter. We decided being more transparent about some things is great—not that we were not transparent at all before, but we’ve stepped it up in places where we think we can make a bigger difference, where we want people to copy us. So there are things that are different, but the most important thing by far is, the fiber of the place is the same.

You know, it’s clearly something I wanted to do, yes. But others wanted to do it, too. Our transparency in supplier responsibility is an example of recognizing that the more transparent we are, the bigger difference we would make. We want to be as innovative with supply responsibility as we are with our products. That’s a high bar. The more transparent we are, the more it’s in the public space. The more it’s in the public space, the more other companies will decide to do something similar. And the more everybody does it, the better everything gets.

It’s a recognition that we need to be supersecretive in one part about our products and our road maps. But there are other areas where we will be completely transparent so we can make the biggest difference. That’s kind of the way we look at it.

Bringing in the Fair Labor Association to audit Foxconn has either a bold move or one done under pressure, but the outcome is the same, we have a much better sense of the human cost of the devices we adore:

So we’re doing a number of things that I think are really great, really different, and industry-leading. I think no one is looking at this as deeply as we are or going as deep in the supply chain. We’re back to the mines. We’re going all the way, not just at the first layer. And in addition to that, we’ve chosen to be incredibly transparent with it. I invite everyone to copy us.

On creativity and innovation

There are few companies in the world as innovative and creative as Apple. People must wonder if it’s something they put in the food or water in the Apple cafeteria (I certainly do), but truly according to Tim Cook, it’s more like something that has been ingrained in the people at Apple over the years:

Two things. One, I wouldn’t call it a process. Creativity is not a process, right? It’s people who care enough to keep thinking about something until they find the simplest way to do it. They keep thinking about something until they find the best way to do it. It’s caring enough to call the person who works over in this other area, because you think the two of you can do something fantastic that hasn’t been thought of before. It’s providing an environment where that feeds off each other and grows.

So just to be clear, I wouldn’t call that a process. Creativity and innovation are something you can’t flowchart out. Some things you can, and we do, and we’re very disciplined in those areas. But creativity isn’t one of those. A lot of companies have innovation departments, and this is always a sign that something is wrong when you have a VP of innovation or something. You know, put a for-sale sign on the door. (Laughs.)

Everybody in our company is responsible to be innovative, whether they’re doing operational work or product work or customer service work. So in terms of the pressure, all of us put a great deal of pressure on ourselves. And yes, part of my job is to be a cheerleader, and getting people to stop for a moment and think about everything that’s been done.

Not to mention one of the secrets of creativity, small teams who work closely together:

And so you look at all this, and you go, “Oh my God. How could one company do all of this?” And it’s not like we have that many people. As a matter of fact, that’s a secret. You know, small teams do amazing things together.

This plays right into the changes Tim Cook made recently with giving Scott Forstall the boot (could even say similar to the ouster of … at Microsoft). Small teams who can work together who can be struck with an idea and rush down to a key person who might have more insight and continue. If you have people with fiefdoms, silos, and turf wars that kind of collaboration and innovation is impossible. More on that in a moment…

On the changing nature of the technology business

It’s safe to say that Apple has been handed a perfect set up circumstances to succeed. Technology has improved and evolved to a point where the devices we’d love to have can actually be made. Sure we all wanted a tablet like on Star Trek, but when that show was made, it wasn’t even possible. Heck, I saw the show-used PAAD Sir Patrick Steward held in the show…it’s a block of wood. Truly a piece of painted wood with stickers. Now you watch a show when people are using tablets, you know they really have tablets that work (I wonder if they are really just playing Words with Friends with each other on set). So Apple is in a huge, growing, and increasingly competitive market, are they able to rise to the challenge?

We find ourselves in two markets right now that are extremely fast-growing and extremely large—that’s the phone space and the tablet space. The PC space is also large, but the market itself isn’t growing. However, our share of it is relatively low, so there’s a lot of headroom for us.

The MP3 market has shrunk. It’s shrinking because people are listening to music on their phones, but it’s still big. We sold 35 million iPods last year, and we love music. I still use a dedicated music player in the gym every day, and I think many people do. Clearly they do with what we’re selling.

The most successful product in consumer electronics history, and we change it all in a day and go with an iPad mini and a fourth-generation iPad. Who else is doing this? Eighty percent of our revenues are from products that didn’t exist 60 days ago. Is there any other company that would do that?

If you can do something like draw 80% of revenues from something you just introduced, I’d say you’re well poised to grow in the future.

A different kind of team dynamic

When you have a fiery, passionate, strong personality leader at that top, I think you can have people like Scott Forstall in leadership positions. Steve Jobs probably could keep things running (smoothly, I don’t know), but Tim is not Steve and he doesn’t want to run the company where you need a horse whip to make sure people work well together. If innovation and collaboration are closely tied, then it makes sense that your executive team, the entire team, can sit in the same room together (much less sit together and get stuff done).

So how do we keep doing that and keep taking it to an even higher level? You have to be an A-plus at collaboration. And so the changes that we made get us to a whole new level of collaboration. We’ve got services all in one place, and the guy that’s running that has incredible skills in services, has an incredible track record, and I’m confident will do fantastic things.

On each of his senior people:

Jony [Ive, senior vice president of industrial design], who I think has the best taste of anyone in the world and the best design skills, now has responsibility for the human interface. I mean, look at our products. (Cook reaches for his iPhone.) The face of this is the software, right? And the face of this iPad is the software. So it’s saying, Jony has done a remarkable job leading our hardware design, so let’s also have Jony responsible for the software and the look and feel of the software, not the underlying architecture and so forth, but the look and feel.

I don’t think there’s anybody in the world that has a better taste than he does. So I think he’s very special. He’s an original. We also placed Bob [Mansfield, senior vice president of technologies] in a position where he leads all of silicon and takes over all of the wireless stuff in the company. We had grown fairly quickly, and we had different wireless groups. We’ve got some really cool ideas, some very ambitious plans in this area. And so it places him leading all of that. Arguably there’s no finer engineering manager in the world. He is in a class by himself.

And Craig [Federighi, Apple’s senior vice president of software engineering] is unbelievable. We don’t subscribe to the vision that the OS for iPhones and iPads should be the same as Mac. As you know, iOS and Mac OS are built on the same base. And Craig has always managed the common elements. And so this is a logical extension. Customers want iOS and Mac OS X to work together seamlessly, not to be the same, but to work together seamlessly.

Now, why he holds each of these men in such high esteem, and why they have such crucial roles is clear from Tim’s own philosophy, he doesn’t have to know it all or be great at it all, he just needs to be good at finding the people who are:

I’ve never felt that I had to know it all, do it all, any of those things. I think you could have an S on your chest and a cape on your back and not be able to do all those things. I know of no one that can do all that. Maybe there are, but I’m not. So I rely on a lot of people for a lot of different things.

Finally, and maybe the real reason for Scott Forstall’s ouster: politics. I’ve worked in companies where everyone had agendas, where it was “my part of the company needs to be seen as more vital to your part of the company” and you spend a lot of time over thinking everyone’s motivations. That doesn’t lead to innovation or success, it leads to nothing but useless off site team building days because no one really wants to work with another person from another team. Tim Cook seems to have put the kibosh on all of that:

And there can’t be politics. I despise politics. There is no room for it in a company. My life is going to be way too short to deal with that. No bureaucracy. We want this fast-moving, agile company where there are no politics, no agendas.

When you do that, things become pretty simple. You don’t have all of these distractions. You don’t have all of these things that companies generally worry about. You don’t have silos built up where everybody is trying to optimize their silo and figuring out how to grab turf and all of these things. It makes all of our jobs easier so we’re freed up to focus on the things that truly matter.

If Scott Forstall couldn’t play ball in that environment, he had to go. Simple as that. That move from Tim Cook could very well be the defining moment of Tim Cook’s first year.

On what makes the iPad different from other tablets

We know Apple sells a lot of iPads. We also know that Amazon and Samsung sell lots of tablets too, so what is it that makes the iPad something special. Drawing from the Black Friday online shopping data, Tim Cook draws this conclusion:

Since these statistics do not correlate with unit sales, it suggests to me that the iPad user experience is so far above the competition. The iPad has become a part of their lives, instead of a product that they buy and place in a drawer. And so the advantage for us in having some competition is the more products that are out there, the more attention a category gets. The more attention the category gets, the more people that are in the buying and consideration process. I think that’s actually good for us.

If you love your device and it just fits smoothly into your life, you use it. If it’s just almost right, but not quite it starts sitting off to the side. Tim brings up netbooks as an example. I have a netbook. I bought it four years ago for a trip. I wanted something to offload photos onto without needing my full laptop (and I didn’t want to be online), but also have something to do a little writing on. After that couple weeks, I haven’t really used it since. It’s been wiped and reformatted to various Linux builds, but no matter how many times I want to start using it, it’s still a “meh” device. I’ve never felt that way about my iPads or iPad.

On the transition from Steve

The conclusion of the interview has to do with the transition from the era of Steve Jobs to the beginning of the Tim Cook era. Tim relates how Steve told him about the change:

So I go over to his house, and—I still remember how he started this discussion. He said, “There has never been a professional transition at the CEO level in Apple.” He said, “Our company has done a lot of great things, but has never done this one.” The last guy is always fired, and then somebody new comes in. And he goes, “I want there to be a professional CEO transition, and I have decided, and I am recommending to the board that you be the CEO, and I’m going to be the chairman.”

I hadn’t thought about it until I read that paragraph. Apple hasn’t ever had a nice, smooth, transition in leadership. For Apple to be seen as stable, it needed that transition. It also needed a transition that didn’t didn’t mirror what happens to other iconic companies with larger than life leaders (like Disney):

And as a part of this, I asked him about different scenarios to understand how he wanted to be involved as chairman. He said, “I want to make this clear. I saw what happened when Walt Disney passed away. People looked around, and they kept asking what Walt would have done.” He goes, “The business was paralyzed, and people just sat around in meetings and talked about what Walt would have done.” He goes, “I never want you to ask what I would have done. Just do what’s right.” He was very clear.

What’s next

This has been a banner year for Tim Cook and Apple. Maybe if things hadn’t been so successful, it we’d be reading very different interviews. However, I think as a testament to Steve Jobs’ insight into Tim Cook, Tim Cook has propelled Apple to new heights. Next year will still be a tough row to hoe, but I believe we can agree that Apple is in good hands.

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