I converted to Apple products nearly 20 years ago at University when working in the student union. They weren’t my first computer by any means – I was part of that generation of BBC/Spectrum users and I went to a school that was enlightened enough to start teaching me BASIC when I was 11. That was 1981. But an Apple was the first computer I paid serious money for when, during my MBA year, my secondhand Panasonic “laptop” the size of a trolley-dolley case, sporting windows 3.1 on an orange screen finally bust.
Me and a friend went that weekend to get new computers and instinctively we went to the Apple reseller (no Apple store in those days) and bought little grey powerbooks. At the time my finance professor was an Apple nut – all his finance notes had been published on Apple hardware and software, and at a time when APPL was trading around $20, he thought they’d be a buy at just under that. That was about two years before Steve Jobs returned to the company.
The rise of Apple’s shares then has been meteoric and well documented, and in the midst of the outpouring of grief for Steve Jobs, it got me thinking about other great CEOs, especially Jack Welch of GE, who also presided over a period of stellar share price growth and was often feted as the “CEO’s CEO”.
Some important contrasts/similarities between the two:
- Welch seemed very much old school CEO: Bottom line focused; obsessive about shareholder value (or he was then); presiding over ‘old’ industries and employing a seemingly archaic corporate structure that nevertheless worked.
- Jobs stressed intuition and as far as finances go, he seemed to employ a “build it, and they will come” mentality.
- Suits & Wall Street vs Turtlenecks and California.
- Something of a cult following amongst the two companies. With Apple, despite Jobs’ charisma, I think it really was more bound up in the products. With GE it had more to do with Jack Welch (it is hard to get excited about vehicle finance or gas turbines, I admit).
- A simple philosophy with Apple that is difficult to discredit, if only because it’s simultaneously vague and obvious. Of course we should all make great products, at a great price, that make us happy. That philosophy can live long after Jobs, and even if it isn’t as successful a company in the future, it will be hard to pin that on a failure of the existing philosophy (interestingly, I think Apple had that philosophy from the start and it clearly did change under Sculley…)
- Jack Welch, on the other hand ended up renouncing the shareholder value philosophy that guided him during his tenure.
I doubt Apple lacked strict capital budgeting techniques but I bet they followed the philosophy; they weren’t the philosophy itself. This is precisely what I take from the above incomplete list: the need to define goals and objectives in terms of customer experience, access and then work backwards to whatever metrics are appropriate.
But isn’t that obvious?
