Why won’t Tim Cook escape the shadow of Steve Jobs?
To understand why Tim Cook will not become a second Steve Jobs at Apple, first need to understand why Steve Ballmer did not become a second Bill Gates at Microsoft.
In the early 2000s, Microsoft was also the No. 1 software company in the world, and almost no one could use a computer without meeting its products. 16 years later, Microsoft is just a name next to other big guys in technology village like Apple, Facebook, Amazon, Google, …
After running Microsoft for 25 years, founder Bill Gates ceded the position of CEO to Steve Ballmer in January 2000. In the next 14 years, Ballmer has achieved many irreplaceable achievements: revenue increased 3 times, reaching 78 billion USD; profits more than doubled, reaching 22 billion USD; big win with Xbox and Kinect gaming devices; acquiring Skype chat service and Yammer enterprise social network …
However, according to the entrepreneurial expert Steve Blank, the truth is that Ballmer's achievements are only valuable in the short term, and the CEO missed a series of long-term opportunities to keep Microsoft in place. No. 1 In 2000, Microsoft accounted for 95% market share of the computer operating system, but in 2016, the company accounted for less than 1% of the operating system market share for smartphones. In other words, Microsoft has lost 99% of a market with up to 2.1 billion customers.
|Steve Ballmer and Bill Gates. Photo: dot429.com|
According to Blank, Ballmer missed five billion dollar opportunities: (1) to lose search services to Google; (2) to lose the smartphone market to Apple hands; (3) to lose the mobile operating system array to Google and Apple; (4) to lose entertainment content to Apple and Netflix hands; (5) to lose cloud services to Amazon. What made a very good CEO like Ballmer miss these opportunities?
Microsoft has no shortage of talented engineers in the five areas mentioned above, and they also have many projects in that direction. However, the problem is that Ballmer restructured the company towards optimization around the available strengths: Windows and Office. Projects that are not related to these areas are ranked second and never receive proper attention or resources. In order for Microsoft to become a leading company in cloud computing, entertainment content, or mobile technology, they must become a service company, instead of continuing to be a product company. .
According to Blank, the failure of Microsoft and Ballmer was that even though Ballmer was a top-class CEO, he was still a good builder and enforcer based on an existing business model, while the world changed. too fast. The business model that Microsoft has built since the 20th century is still operating very well, but the company has ignored the more important new models. By 2014, Ballmer's successor, Satya Nadella, finally made the necessary changes: toward mobile and cloud technology, developing augmented reality technologies (AR) and intellectual assistants. Artificial (AI). Maybe Microsoft will not regain the number 1 position they have ever had, but Nadella has already taken the company out of the way left behind.
What is the biggest difference between Ballmer and Gates? Ballmer is a very good CEO in following an existing business model, Gates is an excellent CEO in both that and creating new business models. In other words, Gates is the visionary CEO, Visionary CEO, who has the ability to change business models before market changes, or even create new markets before people. other. Those are the people who still retain their "blood fire" starting their business even at the highest peak of their careers.
Where will Apple go?
Finished talking about Microsoft, it's time to talk about Apple. From being a niche market-based computer company (less than 3% in 2000), Apple has become the world's largest market capitalization group (643 billion USD) thanks to the turning point Full of CEO Steve Jobs's decision. According to Blank, the three most important steps Jobs has made are: (1) making Apple an entertainment company with iPod and iTunes in 2001; (2) become a mobile device company with iPhone in 2007; (3) became a software market service with the App Store in 2008. Each such turn brought about billions of dollars in revenue and profit for Apple.
The key to the success of these turning points is that they are not only about product transformation, but also transformation of business models: new customers, new markets, new distribution channels, also as a change in internal structure (services and design become more important than hardware development). As a visionary CEO, Jobs can present each new Apple product by himself because he understands them little by little, and has a consistent vision of the company's market trends and orientation. .
|A visionary CEO will know how to create a turning point in place to create new growth for the company. Photo: Business Insider|
However, the problem of companies built by CEOs like Bill Gates or Steve Jobs is that they only have room for such a "thinker". Around these CEOs will be very good managers in executing, but lack of great creators. And when the visionary CEO leaves the company, one of those managers will be chosen instead. At Apple, CEO (COO) Tim Cook was chosen by Steve Jobs to be his successor.
As the type of person who values stability and consistency, the new CEO will bring many changes within the company. The biggest risk these changes create will be to make creative individuals in the company replaced by those who prefer to focus on processes and discipline. In addition, while a visionary CEO is a person who focuses on the product and understands each feature, the process-executing CEO is only interested in creating and distributing the product.
|3 major turning points that Steve Jobs created at Apple. Photo: Business Insider|
After 5 years of Tim Cook's operations, Apple's revenue doubled to $ 200 billion, profits also doubled, and the amount of cash tripled. However, at the same time, Apple only released one truly new product, the Apple Watch smart watch. And when Apple Watch was released in 2014, the presenter was not CEO Tim Cook, but vice president of technology Kevin Lynch.
According to Blank, if it does not change in time, Apple will fall back into the "crash" that Microsoft once had. As a master of both interface and product design, Apple took advantage of that strength to rise to the No. 1 position. However, Google and Amazon have foreseen the future in artificial intelligence utilization services. Can control voice like Amazon Alexa or Google Assistant. These services will be installed on devices everywhere in the house, instead of just on phones like before.
|Tim Cook handed over the presentation of the new Apple Watch product to vice president Kevin Lynch. Photo: Applesencia.com|
Of course, Apple is not the follower in this game either: remember that Siri is the world's first voice-assistance service. Apple is also actively investing in self-driving car technologies, speakers with artificial intelligence, virtual reality … However, a CEO is too focused on processes and supply chains, as well as a lack of real passion. With the product, it will be difficult to create the necessary organizational changes as well as the business model to bring these new technologies to market.
How to choose the right successor?
According to Blank, when a visionary CEO leaves the company, the board needs to think very carefully about how to choose a replacement. Strategically, need to calculate whether the company wants to continue to maintain a focus on creativity and risk tolerance, or to consolidate its existing strengths and achieve maximum yields? In terms of victory, it is necessary to determine whether an external creator, an existing process manager, or "risking" an innovator is in the middle position?
One of the first challenges is that the former CEO himself is also biased towards choosing a process-saver. Blank said that when choosing Ballmer and Cook, both Gates and Jobs were confused between the ability to implement the plan with passion for the product and to listen to customer needs.
The next obstacle is that if a creative CEO is chosen, then the old CEO's right-handers, senior managers specializing in the process, will leave because they think they should have been chosen. At that time, the company will lose the best people in making the CEO's vision a reality.
The third obstacle is that visionary CEOs often become part of the company's brand. Speaking of Apple, people think of Steve Jobs, Mark Zuckerberg and Facebook, and Tesla is Elon Musk, … More importantly, these CEOs have always been a form of corporate internal standards, and constitute pressure. force for successors to follow the path. Years after these CEOs leave, successive CEOs can still think in a way that "If he is here, what will he do?", Instead of thinking about what they themselves need to do.
Finally, a big obstacle is that when a corporation reaches a stature like Microsoft or Apple, the operating system will easily make the mistake of thinking that it is time to put all your energy into how to increase stock prices. votes and dividends, from which only think about short-term benefits instead of long-term. That's when the company becomes reluctant to risk and fear losing what it has. This may be true yesterday, but with today's technology development momentum, the motto is, "If you don't take your market share yourself, there will be others doing it for you."