Apple: 35,000 'Wicked Smart' People Will Keep Things Humming

Back in 1997, Apple (AAPL) was a company in turmoil. It was losing money. Its stock was at an all-time low. And it had experienced several failed attempts to improve the Mac operating system.

Fast-forward to today and Apple is a brand name recognized around the globe for its Mac computers, iPod music players, iTunes online store and most recently, the iPhone. It has a loyal, cult-like following of fans and was ranked by Fortune Magazine in 2007 as one of the Most Admired Companies. On Wednesday, it once again reported a financially-strong quarter, beating Wall Street estimates by a mile and selling millions more iPods than anyone expected for a dismal holiday season across every other industry.

During the years of the Apple’s transformation, one man has been at the helm of the company: Steve Jobs.

But now he’s sick, with a condition that we only know to be “more complex” than he originally believed. He’s taken a medical leave of absence through the end of June. And everyone - from Silicon Valley bloggers to Wall Street investors - wants to know how he’s doing, wondering if he’ll really be able to return to work and, if not, what the company has planned in terms of succession.

Until now, the company has been silent about Jobs’ health, maintaining the position that his health is a private matter. But on the earnings conference call Wednesday, Cook finally broke his silence and answered a question - sort of - about a Jobs-free company, should the CEO not return:

There is a breadth and depth and tenure among the Apple executive team and these executives lead over 35,000 employees that I would call all wicked smart. And that’s in all areas of the company from engineering to marketing to operations and sales and all the rest. The values of our company are all extremely well entrenched. You know, we believe that we’re on the face of the Earth to make great products and that’s not changing. We’re constantly focused 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 pollenization 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 that regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well.

Translation: Apple is not just Steve Jobs. It’s a collaborative machine where creativity meets meticulous detail, a place where people know what the big boss demands and work hard to deliver to his satisfaction - even when he’s not there. It’s also the fan base, ready on the sidelines to spread the word for Steve and the company. And don’t forget the power of the retail stores, there to pull in the newbies so they can touch and feel the Apple experience, right at the mall.

None of this is meant to imply that there’s no value in what Steve Jobs does on the stage. Of course there is. But let’s not fool ourselves either. Apple isn’t going to throw jeans and a black turtleneck on just anyone and put him on stage as a fill-in to sell the products.

In fact, now that Mac, iPod and iPhone are household names, the company may no longer need a pitchman on stage, just like it no longer needs trade shows. People are already buying and, if Apple keeps delivering innovative technology and creative design, people will continue to buy. Based on what Cook had to say on the conference call, the internal Apple machine already knows that. There’s no reason to think that, just because Steve Jobs isn’t around, that the whole place - all 35,000 wicked smart people - will suddenly start slacking off and that the company will suddenly shrivel up. Nothing could be further from the truth.

Steve Jobs needs his rest. It’s time to leave him alone and for all of us outsiders to quit worrying about the future of the company. Now that I’ve heard from Cook, I have a sense of relief that all will be fine in Cupertino. Wall Street has no reason to worry. Steve Jobs has left the company in good hands.

Comments

[Mr Bill:]

amen

Jan 22 11:22 AM

[Tom B:]

I'll take anybody on Apple's BoD over Steve Ballmer any day.

Jan 22 11:33 AM

[Buffeted:]

"Steve Jobs has left the company in good hands." Well the first part of your sentence is fact and the second is fiction until proven beyond products still in apple's pipeline.

Yours is yet another opinion built on a yielding to silence which sanctions a public relations fiasco unacceptable from any publicly traded corporation.

Whether SJ's will live and return as CEO or he's dead as a door nail is beside the point, which is one of credibility for apple and uncertainty for shareholders.

Also, I personally disagree that Apple can keep up the act without SJ. We wont know for some time though. Cook is a good operations manager, but there's no one else at the company with the all around genious of SJ, and he's hired a lot of great talent to contribute, while staying out of his way when it comes to vision. Still a good company, but a different company.

Jan 22 11:46 AM

[asus389:]

Apple employs some of the smartest people. Its where you go in the industry if you want to do something great, for the sake of doing something great. When Apple does a product, they go all out. They have plenty of people to carry the ship forward. And to be quite honest, despite the fact that Apple started not doing so well in the mid 90s, it actually grew immensely under John Schully. In fact, only in the past few years has Apple reached the size it was under Scully. So I wish SJ the best, he is clearly a defining vision for Apple, but to write them off if they transitioned to a new CEO would be foolish.

Jan 22 12:17 PM

[skipaq:]

I have been buying Apple products since the early 1980's. At that time there were industry 'experts' inside and outside Apple who believed that Steve Jobs wasn't CEO material. He ended up being forced out.

Fast forward to the late 1990's and Steve is back when Next is purchased. Again there are 'experts' everywhere saying that this would be Apple's death. Now the 'experts' are saying his absence means Apple's death. This crowd cannot be pleased.

The company that Steve was forced out of is not the same that exists today. Steve Jobs would probably say that he has changed. This company is far more established and prepared than it ever has been. Give Steve Jobs credit for this. But understand that he wouldn't be much of a CEO if this company cannot continue without him.

Don't invest in a company that you think is doomed without its' CEO. Find a company you believe will do well because it has great products that people want over the competition. Two years down the road? Apple's pipeline of products? Go see a fortune-teller and stay out of the stock market.

Jan 22 01:19 PM

[Dooog:]

This is a GREAT article that eloquently explains what Apple is all about, thanks to Tim Cook's "speach" on yesterday's conference call.

Jan 22 01:21 PM

[Zoltan L. K...:]

Those who doubt Apple's potential without Steve Jobs never understood the role he playes at the company. He is not a showman in the first place but a team builder. And that is exactly what he did at Apple. He leads wit strong hands but he opposed many of the new successful products and not just as a devil's advocate. Its the people and the culture that he assembled best and he always focused leadership on innovation and less on marketing. He said once that a primarily marketing focused management ruins innovative companies.

Jan 22 01:40 PM

[Tom B:]

"At that time there were industry 'experts' inside and outside Apple who believed that Steve Jobs wasn't CEO material."

Not being "CEO-material" is a high compliment, IMHO. I have come to believe that about 99% of them are inept, self-serving pissants.


On Jan 22 01:19 PM skipaq wrote:

> I have been buying Apple products since the early 1980's. At that
> time
there
> were industry 'experts' inside and outside Apple who believed
that
> Steve Jobs wasn't CEO material. He ended up being forced out.
>
> Fast
forward
> to the late 1990's and Steve is back when Next is purchased.
Again
> there are 'experts' everywhere saying that this would be Apple's
death.
> Now the 'experts' are saying his absence means Apple's death.
This
> crowd cannot be pleased.
>
> The company that Steve was forced
out
> of is not the same that exists today. Steve Jobs would probably say
that
> he has changed. This company is far more established and prepared
than
> it ever has been. Give Steve Jobs credit for this. But understand
that
> he wouldn't be much of a CEO if this company cannot continue
without
> him.
>
> Don't invest in a company that you think is doomed
without
> its' CEO. Find a company you believe will do well because it
has
> great products that people want over the competition. Two years
down
> the road? Apple's pipeline of products? Go see a fortune-teller
and
> stay out of the stock market.

Jan 22 02:41 PM

[Greg Powers:]

I take exception to the repeated characterization of Apple users as a "cult" and their devotion to Apple's products as "cult-like." I have used Mac computers since the first machines back in the '80s and now have an iPod (no iPhone yet); I have also used Windows at various times over the years. Apple's have always been a superior products. Much like the definition of insanity is repeating the same action over and over and expecting a different result, a cult is a group of people who stick with a leader (or product) even when they realize there is cyanide in the Kool Aid. To my mind, the 90% of the market that has stuck with Windows all these years are the cult, not Apple users. Apple users are pragmatic, not blindly devoted.

Jan 22 02:45 PM

[KenC:]

Tim Cook was waiting to say the above. I'm sure Steve Jobs signed off on it, because it was a canned statement. Steve said something very similar at one of those Q&A's it may have been a year ago at the shareholder meeting.

Jan 22 04:31 PM

[AppleMan:]

Well Said, with 35,000 people, one person does not make a company. If (and that's a big if) Jobs does not return Apple will be just fine with Cook rmanaginig all those wicked smart people.

Jan 23 09:13 AM

[SmartyGuy:]

You wish you knew what you were talking about. Is Pixar "keeping up its act" without Jobs? He wasn't as hands on? He didn't supply his vision there? How do YOU know? You don't know. That's my point, notwithstanding your "personal opinion." You're perpetrating the same noise that's gone on far too long. "Staying out of his way..." indeed.

On Jan 22 11:46 AM Buffeted wrote:
> Also, I personally disagree that Apple can keep up the act without
> SJ. We wont know for some time though. Cook is a good operations
> manager, but there's no one else at the company with the all around
> genious of SJ, and he's hired a lot of great talent to contribute,
> while staying out of his way when it comes to vision. Still a good
> company, but a different company.

Jan 23 12:01 PM

[mollytjm:]

Thank you for this article. thinking of pc users as part of the microsoft cult does make sense...it finally suggests why they put up with in inferior and troublesome OS for all these years.

i'm a value investor and for value investors, this is black friday...time to shop...but for good companies what are very undervalued...like APPL.

Jan 24 11:00 AM

[Dana H.:]

And there were plenty of smart people at Apple after Jobs left the first time. What went wrong then, and why won't it go wrong again this time?

Jan 27 03:45 PM

[Dana H.:]

P.S. I think Steve Jobs is a business genius, and business geniuses are not as easy to find as some people might think. Nor is successfully running an enterprise like Apple as simple as some seem to think.

P.P.S. And I don't even own a Mac. (Except a 1st generation Mac from 1984 sitting in a closet somewhere.)

Jan 27 03:48 PM

[mollymoon88:]

As one the those insiders, I have to say that my personal drive and love for Apple hasn't diminished and won't. I look forward to carrying the Apple word to all newbies young and old as well as look back at older Apple products with those that have been with us for a while. We all carry Apple in our hearts, and care deeply for the atmosphere and people it breeds and attracts. My wicked awesome knowledge, which Apple has given me is not something to turn your nose up at. We are still the number one open source Operating System and our corporate standards of excellence are no joke. Apple is safe in our hands, and our consumers'.

Mar 19 02:25 PM