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January 22, 2009, 10:15 am

The Cook Doctrine at Apple

There was a magical moment that had nothing to do with financial results Wednesday afternoon in Apple’s (AAPL) conference call with investors. What made the magic remarkable is that it came from Tim Cook, the supposedly uncharismatic, unemotional, uninspiring chief operating officer of the company, the guy whom Steve Jobs tapped to run day-to-day operations during his medical leave of absence, even though Cook already runs the company’s operations.

Asked the inevitable first question about how the company would function without Jobs, Cook let loose the following, courtesy of Seekingalpha.com, a monologue I’m labeling the Cook Doctrine, that he appeared to deliver extemporaneously:

We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing 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-pollination 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 regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.

This is fascinating at a number of levels. Some of it is stuff you’d expect from anyone in Apple’s senior management. Some ideas have been articulated at Apple for years. But this shows an executive who has given tons of thought to what it means to lead Apple. He couldn’t have been clearer that he’s in charge, at least for now. It also was a show of strength, as when Cook later threatened Palm (PALM) with patent litigation.

It raised so many questions too. Other than the company’s proprietary operating systems, what technologies was Cook referring to? What are some projects Apple has considered and rejected? When has the company been wrong — and been “self-honest” about it? What’s an example of the culture being so embedded that things work, even when Jobs isn’t involved?

There is so much to learn about Apple that frankly has been obscured for so long by the cult of personality around Steve Jobs. As Cook said before beginning his series of “We believes,” it’s a place with a deep bench. Yet few have heard of the supporting cast memebers, in part for fear of their being poached, in part because its always been all about Steve.

What’s clear is that Apple’s current leader — whom I’ve admittedly spent a lot of time thinking about – is eloquent, forceful and passionate about Apple. He may be a just-the-facts operations wonk with little experience in design, marketing for products. But he’s clearly so much more as well.

“When has the company been wrong — and been “self-honest” about it?”

PowerPC vs Intel chips?

Posted By jon, palo alto, ca : January 23, 2009 10:42 pm

I don’t think these are difficult questions to answer. Just off the top of my head I would say that following technologies are ones that Apple would consider primary: OS X obviously; Quicktime; the multi-touch technology they bought with Fingerworks; Fairplay DRM; the milling approach to building Macbooks; and now the IC technology bought with PA Semi. An example of the courage to change is that they altered the iPhone screen at the last minute, delaying its launch. The third question begs the question, as we could just as easily ask for an example of where Jobs was needed to make things work when the culture failed. With 35,000 employees and dozens of products it seems self-evident that Jobs has only a minimal effect on many products.

Posted By James, Washington, DC : January 23, 2009 4:59 pm

Adam, Thanks for highlighting that great Tim Cook quotation about Apple’s values. You are right that it was a “magical moment.” To me Cook’s comment resonates with something Steve Jobs said at the D5 Conference in 2005: “I don’t think about legacy much. I just think about being able to get up every day and go in and hang around these great people and hopefully create something that other people will love as much as we do.” We overlook this quality when we focus on the iconic Steve Jobs and miss the important way that he and others at Apple have coalesced as a team. You can see it from the managerial depth in Cupertino to the enthusiastic sales persons in the Apple stores around the world. — And yes there is something wildly improbable about Apple’s success. As Jobs put it in his 2004 Stanford Commencement Address, “Stay Hungry, Stay Foolish.” In an age when financial crisis is taking down so many companies, American business could use more of that Apple idealism and whimsy. I’m reminded of something that Abraham Lincoln said during the Civil War, when some critics complained that the battle-genius Ulysses S. Grant drank too much liquor: “Find out what brand General Grant drinks and give it to the rest of my generals.”

Posted By Bill Youngs, Cheney, Washington : January 23, 2009 2:24 am

Tim made it VERY clear that he wasn’t targeting Palm when he discussed Apples intellectual property but any who would steal their work.

Posted By Bill, Minneapolis, Mn. : January 22, 2009 4:48 pm

Actually….I believe Cook wrote this himself. Why? Well as an Auburn University grad myself:

The Auburn Creed

“I believe that this is a practical world and that I can count only on what I earn. Therefore, I believe in work, hard work.

I believe in education, which gives me the knowledge to work wisely and trains my mind and my hands to work skillfully.

I believe in honesty and truthfulness, without which I cannot win the respect and confidence of my fellow men.

I believe in a sound mind, in a sound body and a spirit that is not afraid, and in clean sports that develop these qualities.

I believe in obedience to law because it protects the rights of all.

I believe in the human touch, which cultivates sympathy with my fellow men and mutual helpfulness and brings happiness for all.

I believe in my Country, because it is a land of freedom and because it is my own home, and that I can best serve that country by “doing justly, loving mercy, and walking humbly with my God.”

And because Auburn men and women believe in these things, I believe in Auburn and love it.
-George Petrie (1945) ”

Sounds familier to me.
The Auburn Creed is recited at most major events (barring athletic) at Auburn and Cook is an involved Alumni.

Posted By MIke, Birmingham, Alabama : January 22, 2009 4:04 pm

This is not the Cook Doctrine. This is the Apple Doctrine and Steve Jobs gave it to Apple.

All of this has been said by Steve Jobs. All of it. Why is Cook repeating it? He says it because it is true. The only part of this that is news is that so many people still don’t understand this way of thinking.

Posted By Kingston, Union City, CA : January 22, 2009 3:48 pm

“When has the company been wrong — and been “self-honest” about it?”

MobileMe is a classic example. Rather than say all was great and just give it time, they said that they pushed it out the door too soon and that it wasn’t up to Apple’s standards.

Posted By Paul Schutte, Williamsburg, VA : January 22, 2009 3:41 pm

Apple may be using one Palm’s patents and that would be bad because Apple would be forced to cross license to Palm.

The Big Patent? Multi-Touch, a whole new interface for electronic devices. If only Apple has MultiTouch, then as consumers appreciate it, they will continue to buy the interface again and again in succeeding generations of advanced devices.

Bingo! Domination!

Posted By pk de cville, VA : January 22, 2009 3:37 pm

He also spent a lot of time defending the iPhone, whose sales, while an 88 percent increase over the year-ago quarter, fell below Wall Street expectations. And he threw down against other touchscreen handsets! The emotional remarks about the latter launched all kinds of litigation speculation today–guess Cook’s got his own power. Seriously, though, I think this shows that Apple’s future doesn’t lie in its smartphone–see why at http://www.mobilemarketingwatch.com/iphones-low-despite-apple-earnings/

Posted By Eydie, MobileMarketingWatch, CA : January 22, 2009 2:09 pm

Mr. Cook may have his background in “just operations, but excellence in operations requires a visceral understanding of “systems”. Apple excels in integrated systems, where the whole is much greater than the sum of its parts. Having experienced a number of organizations that lacked the understanding of systems, I can tell you that is a rare understanding, and can be leveraged far beyond the shipping of widgets. Without it, you have to reinvent the wheel each and every time. Which costs more?

Posted By Jane, Madison, WI : January 22, 2009 1:00 pm

Interesting that you pick tis out of the whole conference call. Kudos for you perception.

Most people dod not understand that this precisely is the reason for their success. It is this dedication and focus that at all levels that gives them the ability to create such great products.

But I think that the press has fallen victim to their own propaganda regarding the “Cult of Jobs” To my mind this was originally a tongue-in-cheek metaphor that has been reified by repetition into a real myth. Sure - fans are very enthusiastic about Apple products and certainly admire Steve, and he is a great “performer.” But in the end, the “cult” word is horribly overblown.

Posted By jmmx, Portland OR : January 22, 2009 12:27 pm

“its always been all about Steve”

Apple never said that, and Steve never said that. That’s what the pundits, the critics, and the fanatics say.

for fear of their being poached

I don’t believe Apple fears poaching; I believe Apple expects poaching. There secrecy is just a delaying tactic. Secrecy seems to be working, so I expect it to continue.

Posted By Steve W, Indialantic FL : January 22, 2009 12:06 pm

Why does Apple always get ripped apart by analysts, even when they are one of only a few companies that are exceeding expectations? It is true that they may not be as transparent as most analysts would like, but I really think bringing up Jobs’ illness is nitpicking. I’ve always been under the impression that numbers speak for themselves.

Posted By Tom, Seattle, WA : January 22, 2009 11:48 am

The depth is there.

It always has been.

No one has ever had to look until now.

Hopefully Steve will be back soon.

But he works with a team, no on his own.

At least that much is now clearer than before.

Posted By A. Viirlaid, Toronto, Canada : January 22, 2009 11:39 am

Threatening Palm is less a show of strength and more a sign of being afraid in my opinion. Palm has played in this sandbox for a while and it is unlikely there are any significant patent violations unless it is Apple violating one of Palm’s.

Posted By Tom, Los Angeles CA : January 22, 2009 10:54 am

I am so glad you recognized those very important statements that Cook uttered. He is truly dedicated to Apple and was undoubtedly chosen by Steve because of his knowledge and loyalty to continuing to move the company forward. It is so refreshing to read your remarks as I look back on all of the previously printed unfounded negativity surrounding the company. Bravo!!!

Posted By michiganjake, holland, michigan : January 22, 2009 10:36 am

That statement right there is EXACTLY the reason I buy Apple products.

We are constantly focusing 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…

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.

Those few right there is what makes an Apple product great.

Maybe you analysts and writers will finally ‘get it’ and stop screwing the stock over and the company. Here’s the BEST company in America that is turning a record profit in a RECESSION/DEPRESSION and it’s completely undervalued and slammed all the time by writers and analysts for NO GOOD REASON.

Posted By James, Arlington VA : January 22, 2009 10:28 am
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Adam LashinskyWall Street watchers think of capital markets and financial players out west as being on the "other" coast. That's not how it's viewed in the Pacific time zone. From the venture capitalists of Sand Hill Road to the bond kingpins of Orange County to the corporate finance department at a certain software company in Redmond, Wash., there's plenty going on "out there." Adam Lashinsky should know. A native of Chicago, he has covered West Coast finance for a decade, with an emphasis on money matters in Silicon Valley. If it involves money and it's happening west of the Mississippi, look for it in Go West.
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