It’s time for a new Apple CEO

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Over the last couple of years, Apple was so fortunate to set one record after another in terms of revenue, profit, profit margins etc. Just this year for the first time in 15 years, Apple reported an annual decline in sales, revenue, and profit compared to last year. And to be honest, the signs were pretty clear that this had to come.

Under the leadership of Tim Cook, Apple lost its place as a Digital Master and innovator and is now slowly transforming to a Fashionista according to the framework of Westermann (2014). Let me explain why this is happening.

In the recent years, Apple completely shifted its focus from a variety of products to the cash cows of the company, namely the iPhone. While the iPhone receives updates every year to be equipped with state of the art chips, camera, and display, Apple decided to leave other products behind that were not contributing so much to the company’s revenues and profits. There are dozens of example: The iPad Air 2 hasn’t been updated since 2014, neither has been the iPad mini. The MacBook Air hasn’t received a major update since 2010, and the Mac Mini and the Mac Pro didn’t even get a new chipset since more than two years.
Just last week, Apple introduced new MacBook Pros (finally, after keeping the older models for more than one year on the shelf), where they got rid of all ports but the headphone port, replacing them with four identical USB C ports. They also included a smaller battery than in previous models and not the latest Intel chipset. The only innovation is the Touch Bar, a contextual toolbar at the top of the keyboard that automatically changes to surface app-specific commands.

With the development of Apple in the recent years, one might also get the feeling that products get developed more and more in silos with little communication and coordination between departments. Let’s look at some examples here:

  • If you buy a brand new flagship iPhone 7 and a brand new MacBook Pro, there is no way you can connect them without an adapter. You can also not use the headphones that ship with your iPhone 7 on your new MacBook without an adapter.
  • Let’s have a look at software. Siri was introduced in 2011 for iOS and it took more than 5 years for it to arrive on MacOS. Two years ago, MacOS received a major update for its search function Spotlight, that in a way tries to behave like Siri, just with text input. These two parallel developments raise the question why they didn’t coordinate the work on both of these frameworks and instead developed two different features that have the same functionality just with different inputs.

The results are pretty clear:

  • In terms of software, Apple has fallen behind its competitors. For example, Google Docs and Microsoft Office support collaboration since a couple of years and Apple took until this year to finally launch a collaboration feature for their Office suite. This list is almost infinite. Apple’s iCloud is not as good as Dropbox or Google Drive, Siri doesn’t have the capabilities of a Google Assistant, Google Photos is superior to iCloud photos and so on…
  • In terms of hardware, the competition gets better and better, raising the bar for Apple to be the leader in innovation. The new Surface Studio by Microsoft is way more innovative than everything that Apple has introduced for desktop computers in the last couple of years. Okay, desktop computers and innovation don’t really sound like a natural fit anymore, but let’s look at cell phones. The Samsung Galaxy Note 7 had a superior camera than the iPhone 7 does (I wrote this in past tense and not present tense for obvious reasons), almost all Android phones have a fast-charging capability and when we look at the quality of a Google Pixel it’s on par with the quality of an iPhone.

So, with all these negative developments happening, Tim Cook was fortunately foreseen enough to already have chosen his potential successor. Be aware that this is just my personal hypothesis here, but I will lay out some reasoning why I believe that way. When Tim Cook personally convinced Angela Ahrendts to step down from her CEO position at Burberry to join Apple as a VP, I am pretty sure that not only the $80 million paycheck in her first year convinced her to move jobs but also the prospect to eventually to move up on the career ladder at Apple. I am pretty sure that Tim chose her to be his successor and he really wanted her to join Apple, why else would he as a CEO pay her more in her first year than he pays himself?

Apple right now is just at the start of facing a crisis. There is no sign that a new iPhone could catch up with the success of the iPhone 6 and 6S and new products like the Apple Watch do not live up to the expectations. Most of the new ventures that Cook tried so far, failed before they even saw the light of day. Examples here are the rumored Apple TV (an actual television) or the Apple Car, where rumor has it that no clear leadership and internal conflicts led Apple to shelve the project.

For Ahrendts, this would be the perfect time to step up to provide Apple with a better digital leadership and bring the company back on track. Her excellent track record at Burberry’s of providing excellent leadership and a clear vision, thereby transforming the company is the perfect requisite for Apple in its current situation. It’s easy, Ahrendts once said, to run a company while the economy is expanding, and easy to get lazy. A sharp downturn tends to focus the mind. Ahrendts would also help Apple to correct its focus and to see new chances of growth in products that are already forgotten by Apple’s leadership. “The idea is balance,” she once said in an interview, “knowing the market, the customer, and perfectly anticipating demand.” She seems like a natural fit for the position of the CEO of Apple, even if she doesn’t have a background in the tech industry.

Don’t get me wrong here, I am not an Apple hater, I like Apple products and I am writing this on a MacBook but with the recent update of the MacBook, I become truly worried about the direction Tim Cook is leading this company. I think Tim has contributed his fair share to the development of the company but should now have the courage to step down and leave place for improvement.

Please feel free to share your own opinion on this topic. I am really interested to see what you think about the recent developments of Apple and the consequences in the future.

 

Sources:
George Westerman, 2014. Leading Digital: Turning Technology into Business Transformation. Edition. Harvard Business Review Press.

https://www.theguardian.com/technology/2016/oct/25/apple-profits-sales-decline-2016-iphone-7

http://www.dailytech.com/Meet+Apples+New+CEO+Tim+Cook/article22538.htm

https://web.archive.org/web/20100914002455/http://magazine.wsj.com/features/the-big-interview/earning-her-strips/5/

http://www.macrumors.com/2016/10/31/ipad-sales-3q16-idc/

http://www.macrumors.com/roundup/apple-car/

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The difference between a CIO, a CTO and a CDO

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In light of the importance of leadership capabilities for the digital transformation of an organization, chances are high that you stumble upon abbreviations like CTO, CIO or CDO. I didn’t really know what the exact difference is, so I started to do conduct a little research and I would like to share the results with you.

The term CIO, Chief Information Officer, was first defined by Synnott and Gruber in 1981 as a senior executive of the organization responsible for information policy, management, control, and standards. They further added that the five primary functions of a CIO include participation in corporate strategic planning, responsibility for information systems planning, leading the development of corporate or institutional information policy, management of the organization’s information resources, and development of new information systems capabilities. I believe this definition is still quite accurate to describe the role of a CIO today. Just today the focus of a CIO is much more on actually increasing profits with the use of IT. From the definition, you can also tell that a CIO is rather internally faced and is mostly responsible for processes that happen within the organization.

The role of a CTO, a Chief Technology Officer, shares some common attributes with the role of a CIO. Both positions need to have a strong business understanding in order to bring added value to the organization and to align their respective responsibilities with organizational goals. They also need to have a technical background, so that they can understand and evaluate the underlying technologies in a business. In comparison to a CIO however, the CTO has a more customer facing role and is mostly responsible for enhancing the company’s product offerings. Connected to that, another difference of both roles is that the CTO is usually responsible for the development of new technologies in a company, whereas the CIO has its focus more on organizational problems and tries to solve these with existing IT solution.

Next to both roles, which have been around for a while now, the role of a CDO, a chief digital officer, has emerged recently. His major responsibility lies in digitally transforming traditional businesses to digital ones. In order to do so, the CDO needs to determine the parts of the business where influencers are able to support the change and to empower these influencers. That’s why, it is especially important that the person that fills in this role is not only a digital expert but also familiar with all parts of the organization.

I hope this short summary helped you to get a better understanding of these particular roles in an organization. Please keep in mind that these are not fixed roles and every company can interpret a role differently and the roles have been changing throughout the past. If you want to read further on this topic, I recommend you to check out my sources. Also, if you are curious how people actually became CTOs, CIOs or CDOs and what jobs they did prior to that, I recommend you to just use the LinkedIn advanced search and search for these positions in the country of your choice. This works fine even if you are not a Premium user.

I wonder what your opinion is on these roles. Does every company need to have all three roles on their board? Or do you think the CDO is just an evolution from the CIO and will make this role redundant?

 

Sources:

Penrod, James I. “The Chief Information Officer in Higher Education. Professional Paper Series,# 4.” (1990).

Synnott, William R., and William H. Gruber. Information resource management: opportunities and strategies for the 1980s. John Wiley & Sons, Inc., 1981.

http://www.computerwoche.de/a/der-cio-totgesagt-und-alle-haende-voll-zu-tun,2528153

http://www.forbes.com/sites/peterhigh/2014/03/03/why-your-company-should-consider-adding-a-cio-to-the-board/#4791a363e2f6

http://www.uniforum.org/publications/ufm/nov96/cio.html

http://www.huffingtonpost.com/don-tapscott/do-companies-still-need-a-cio_b_6214482.html

https://en.wikipedia.org/wiki/Chief_digital_officer#cite_note-8

https://en.wikipedia.org/wiki/Chief_technology_officer

https://en.wikipedia.org/wiki/Chief_information_officer

http://www.techrepublic.com/blog/tech-sanity-check/sanity-check-whats-the-difference-between-cio-and-cto/

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