Monday, 1 December 2014

Tim Cook has created as much value as Steve Jobs

Apple CEO Tim Cook

It’s true.


Since Tim Cook became CEO, Apple’s market capitalization has surged by almost $350 billion through the end of November. That’s roughly twice its size in August, 2011, when tech visionary Steve Jobs was forced to relinquish the job by his ultimately fatal illness. In nominal terms no company has ever been as big as Apple. (Though if you adjust for inflation Microsoft was bigger at its peak in the late 1990s.)



Now it’s clearly silly to suggest that once Cook took over as CEO the company’s success became his and his and alone. Even setting aside the fact Jobs co-founded Apple in a Silicon Valley garage in 1976, it was Jobs’ vision—after his return to the company in the late 1990s—that supercharged Apple, turning it into the ubiquitous behemoth it is today.


That said, Cook’s record as CEO has been remarkable. With, arguably, a modicum of market turbulence, he moved quickly to transition the company from the world’s pre-eminent growth stock into a more staid dividend-paying blue chip. That, in itself, is a great achievement. But Apple under Cook seems to have quite a bit of growing left to do, and much of that is due to Cook’s willingness to chase market trends that come from outside of Apple itself. (The large-screen and well-received iPhone 6 Plus being the most recent example.)


But beyond the leadership narratives is a more fundamental question: How much credit does a CEO deserve for the performance of his company?


In the backdrop of all efforts to quantify CEO performance is what Thomas Piketty calls the “illusion of marginal productivity.” The influential French economist argues that in most large corporations, it’s essentially impossible to connect the performance of a single manager with the company as a whole. Of course, that doesn’t mean managerial talent doesn’t exist. Jobs and Cook show that it does. On the other hand, visionary leadership at Apple’s high echelons might just be the exception that proves the rule.




Tim Cook has created as much value as Steve Jobs

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