What Explains the Lack of Innovation at American Express

Ch apte r 12. Mini -Case

Can You Foll ow an Icon and Succeed? Apple and Tim Cook After Steve Jobs

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Stev e Job s was App le’s co -founde r an d icon ic CEO. A nu mbe r of obse rve rs fee l tha t muc h of

App le’s pheno mena l success , espec ially after 2000 , is a produc t of his “gen ius ” an d leade rsh ip.

Becaus e of this an d a leade rsh ip style tha t va ries sign ifican tly from his predecesso r’s, so me

hav e ques tione d Tim Cook ’s ab ilit y to succee d Job s as App le’s CEO. Yet, in 2014 , seve ral yea rs

after assu ming the CEO pos ition , App le ha d wha t Tim Coo k referred to as an “unbe lievab le yea r”

give n tha t the firm so ld 20 0 milli on iPhone s an d gene rated $20 0 billi on in revenue . App le’s stoc k

price inc rease d by 65 pe rcen t, an d the co mpany ’s marke t va lue reache d more tha n $70 0 billi on ,

the larges t eve r of an y U.S. firm. At the time, App le’s marke t va lue more tha n doub led tha t of

Microso ft. Prior to assu ming the CEO pos ition , Cook ’s primary expe rienc e ha d bee n as manage r

of ope rations ; his succes s in this do main led to his appo intmen t as CO O prior to assu ming the

CEO role. Interes ting ly, a sign ifican t pe rcen tag e of App le’s sa les flow from produc ts deve lope d

an d introduce d to the marke t unde r Jobs ’ leade rsh ip. As such , the jury is still ou t on Cook ,

espec ially with rega rd to deve lop ing marke tplac e successe s in the form of ne w produc ts, task s at

which Job s exce lled .

Job s an d Coo k hav e differen t leade rsh ip styles . So me though t Job s was ruthless , impu lsive , an d

almos t man iaca l in deve lop ing ne w produc ts an d find ing pa ths throug h which the y beca me

marke tplac e successes . Cook ’s kno wledg e an d sk ills do no t mak e him an expe rt in produc t

deve lop men t, des ign , or marke ting . Becaus e of this, he de lega tes thos e respons ibiliti es . As the

firm’s ke y strateg ic leade r, Coo k tries to bu ffer an d maintain App le’s co rpo rate cu lture tha t

deve lope d large ly du ring Jobs ’ tenu re. Thus , the emphas is remains on innova tion tha t is va lue d

in the marke tplace . To suppo rt this emphas is an d to nu rture the firm’s all-impo rtan t cu lture, Coo k

hires talen ted ind ividua ls to join the top manage men t tea m who blen d well with the cu lture. He

ha s mad e so me ve ry goo d hires , suc h as Ange la Ah rend ts who no w head s App le’s ve ry

impo rtan t retail stores . As a leade r, Coo k is les s emotiona l in his style an d ac tion s co mpa red to

Jobs . So me refer to this aspec t of Cook ’s style as a “measu red emotiona l app roac h to

leade rsh ip.” He empo wers his top manage men t tea m membe rs in way s tha t allow eac h of the m

to manag e the func tiona l area for which the y hav e respons ibilit y. He also encou rage s eac h tea m

membe r to adop t a long -run pe rspec tive while lead ing .

Obse rve rs hav e bee n ab le to high ligh t othe r difference s be twee n Cook ’s an d Jobs ’ strateg ic

leade rsh ip app roaches . Compa red to Jobs , Coo k more regu larly sha res the limeligh t with his

leade rsh ip tea m, spo tligh ting the ir con tribu tion s while do ing so . One ana lys t sugges ted tha t Coo k is a goo d leade r who bu ilds an effec tive tea m aroun d him. W ith respec t to strateg ic

cho ices , Cook ’s dec ision s hav e resu lted in major acqu isition s (e.g., an aud io co mpan y for $3

billi on ) an d deve lop ing en terprise so lution s for co rpo rate IT un its; Job s oppose d ac tion s of thes e

types . Unde r Cook , App le formed an allianc e with IBM to deve lop en terprise app lica tion s with a

focu s on the iPad , espec ially the ne w an d large r ve rsions .

During Cook ’s ea rly tenu re as CEO, App le introduce d seve ral innova tion s inc lud ing the App le

watch , which en tered the marke t in Ap ril 2015 . Th is produc t’s marke tplac e succes s is ye t to be

de termined ; initial repo rts sugges ted tha t de man d exceede d supp ly, caus ing App le to inc reas e

produc tion . In add ition , hints prov ide d by Coo k sugges t tha t App le may be plann ing to en ter the

telev ision marke t. Mos t impo rtan tly, Coo k claims tha t App le’s goa l is to chang e the way peop le

work. Th e firm intend s to focu s resea rch an d deve lop men t efforts to deve lop produc ts to ach iev e

this ob jec tive .

In mid-2018 , so me ana lys ts were ques tion ing the de lay s App le was encoun tering whe n

introduc ing produc ts to the marke tplace . Of three major produc t launche s unde r Coo k sinc e

beco ming the firm’s CEO in 20 11, AirPod s ea rbud s an d the HomePo d speake r misse d pub licly

announce d sh ipp ing da tes . Th e App le W atch , men tione d above , en tered the marke t later tha n

the firm des ired , initially caus ing cus tomers to expe rienc e lon g wait times to bu y the produc t. Th e

App le Penc il an d Smart Keyboa rd, two critica l accesso ries for the iPa d Pro, also en tered the

marke t later tha n announce d initially. On the othe r hand , App le’s first qua rter 201 8 resu lts yielde d

all-time high s in bo th revenu e an d ea rnings . In an ove rall sense , on ly the march of time will yield

ins igh ts neede d to de termine if as CEO, Tim Coo k was a succes s as Stev e Jobs ’ successo r.

W ith a marke t va lue of ove r $90 0 billi on in ea rly 2018 , it see ms tha t as App le’s ke y strateg ic

leade r, Cook ’s effec t on the firm he was lead ing was pos itive .

Sou rces : 2018 , Transc ript: App le CEO Tim Coo k on the co mpany ’s 201 8 Q1 ea rnings , iMore,

ww w.imore.co m, Feb rua ry 1; T. Mick le, 2018 , Tim Coo k stumbles at his spec ialty, sh ipp ing App le

produc ts on time, W all Stree t Jou rna l, ww w.wsj.co m, Janua ry 6; R. Sa fian , 2018 , W hy App le is

the world’s mos t innova tive co mpan y, Fas t Compan y, ww w.fas tco mpan y.co m, Feb rua ry 21 ; T.

Lo ftus , 2015 , Th e morning do wnload : App le will ‘chang e the way peop le work,’ CEO Tim Coo k

says , CIO Jou rna l, blogs .wsj.co m, Janua ry 28 : 2015 , App le’s Tim Coo k cites reco rd sa les an d

‘unbe lievab le’ yea r, New York Times , ww w.ny times .co m, March 10 ; A. Chang , 2015 , App le CEO

Tim Coo k is forging an unusua l pa th as a soc ial ac tivist, Lo s Ange les Times, ww w.latimes .co m,

March 31 ; A. Lash insk y, 2015 , Beco ming Tim Cook , Fo rtune , Ap ril 1, 60 –72 ; T. Higg ins , 2015 ,

App le iPhone s sa les in China ou tse ll the U.S. for first time, Bloo mbe rgBus ines s,

ww w.bloo mbe rg.co m, Ap ril 27 ; J. Le wis, 2015 , Tim Cook : A cou rageou s innova tor, Time, Ap ril 27 , 26 ; J. D’Onfro, 2015 , Tim Coo k droppe d a major clue abou t App le’s nex t big produc t, Yaho o

Finance , finance .yahoo .co m, Ap ril 28 .

Cas e Discuss ion Ques tion s

1. W ha t make s a CEO’s job so co mplex ? Use the cha lleng e Tim Coo k face s as Stev e Jobs ’

successo r to prov ide exa mples tha t suppo rt you r ans wer.

2. Tim Coo k ca me from App le’s interna l manage rial labo r marke t to succee d Stev e Jobs . In you r

view, was us ing the interna l manage rial labo r marke t the bes t app roac h to follow whe n

rep lac ing Jobs ? Use materials in the chap ter rega rding the interna l an d ex terna l manage rial

labo r marke ts to exp lain you r ans wer.

3. Give n the ir differen t leade rsh ip styles , desc ribe the difference s yo u se e in App le’s cu lture

unde r Tim Cook ’s leade rsh ip co mpa red to the cu lture in App le whe n Stev e Job s was CEO.

4. Using information in this Mini-Cas e as well as add itiona l materials ava ilab le to yo u via sea rches ,

ho w do yo u eva lua te Tim Coo k as a CEO? Is he an effec tive strateg ic leade r or no t? Use

exa mples from the chap ter’s discuss ion of “Ke y Strateg ic Leade rsh ip Ac tions ” to jus tify you r

ans wer to this ques tion .

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