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CEO Tim Cook's greatest opportunity

By Professor Rosa Chun - October 2011

News of Steve Jobs’ death sent shockwaves through the technology industry, a world that he, in large part, shaped with his career. Apple’s executives are now left with the challenge of how to lead a company, whose identity has been inextricably linked to Jobs’ for decades. The task is formidable, especially when Apple’s fanatically loyal customer base is considerably less certain about what to expect from CEO Tim Cook. That is partly because Apple's culture of secrecy and Jobs’ visibility have combined to make Cook relatively unknown to the public at large. The uncertainty is compounded by the fact that earlier attempts to replace Jobs proved disastrous. Until now, Jobs seems to be the only one to have had that special chemistry required for running Apple.

What makes leading Apple difficult to maintain is the fact that the company is not selling a product as much as it is a vision, the founder's vision. Apple products are undeniably cutting edge, well built and beautiful to look at, but ultimately they are commodities that now face tough competition. Samsung is gnawing into iPhone sales by offering technically superior product for comparable price.

According to recent media coverage, it would seem that Apple is interested in developing a new vision, one which includes CSR. Jobs never showed much interest in public ‘do-gooding.’ He always maintained that equipping the public with the best technology is worth more than cash grants to charities. But earlier this month Cook announced that Apple would embrace a new corporate charity matching program, using a model much like those of other major companies—a dollar for dollar match for employee donations of up to $10,000 a year. Cook clearly wants to send the message that Apple is evolving in the way it perceives CSR, a major differentiating factor between himself and his charismatic predecessor. However, the decision curiously followed media allegations regarding Apple’s lack of CSR activities, including a New York Times (link) article mentioning matching as a solution employed by a considerable portion of the Fortune 500 companies.

Apple still needs to embrace the core values that make it a “cool” company: in short, that owning an Apple product secures membership in a select group. While Apple is perhaps overdue for a CSR strategy, the decision to enact donation matching is decidedly not the "Apple Way." The sequence of events surrounding last month’s announcement as well as the fundamentally uncreative quality of the program presented imply that Cook is only responding to media pressure rather than bringing to CSR the same kind of innovative and inspiring vision for which Apple is so highly regarded. And in that regard, the corporate matching program is a fail.

Developing a CSR strategy around neither a sense of obligation nor calculation but rather around certain well-defined character virtues is highly effective. In particular, integrity, empathy and zeal, among others, are critical during times of uncertainty; they need to be well coordinated and implemented from the inside-out—not the other way around.

Integrity: Any major organizational change is accompanied by insecurity. The transition from Jobs’ approach to hiring and firing is bound to create uncertainty among employees, and in corporate environments uncertainty inevitably creates pernicious maneuvering and second guessing at middle management levels. The new CSR initiatives should present both the company and its new CEO with a unique opportunity to promote an image of integrity and to differentiate the new leadership from that of the Jobs era. However, philanthropy is not a good place to start. It should start from inside, promoting trust and openness, the internal integrity.

Empathy: Empathy creates emotional bonding between the company and stakeholders allowing companies to endure a difficult time. Apple is currently embroiled in lawsuits that are likely to restrict consumer choices in the future if it carries on. Publishers are frustrated by Apple’s hammerlock over apps and magazine subscriptions on the iPad. There have been indications that Samsung, Apple's most threatening competitor, angered by patent law suits, will finally fight back to counter sue Apple. While from Apple’s point of view, taking legal action against competitors may seem necessary as a means of protecting innovation, public opinion works differently. For multinational companies the legal victory can often end with a kind of zero sum game, leaving it with a reputation for arrogance and insecurity. Apple will have to worry about its reputation all the more so if it wins the battles against competitors.

Even more telling, the suicides at China's manufacturing behemoth, Foxconn, have created the uncomfortable impression that “cool” products like the iPad are being produced by what amounts to economic slave labor. This is decidedly “uncool” and not the image that Apple wants to portray.

Zeal: Zeal is perhaps the virtue most-embedded at Apple’s core and is represented by their continuous innovation and excitement in terms of products and customer experience. By emphasizing CSR, Tim Cook would need to bring that famous Apple zeal to social issues, offering an innovative approach, as competitor Google did, when it famously began encouraging its employees to spend 20% of their time on their own projects.

It goes without saying that Cook and Apple are standing at a precipice. Product innovations can be short-lived. A serious CSR strategy could quietly shift Apple’s sales pitch from personal charisma to the great public good, doing Apple good in the long term. The leaders of innovative organizations that undergo the uncertainty that comes with change, would be wise to promote both integrity and empathy internally, thus ensuring that zeal continues to inspire consumers throughout their tenure and for years to come.

Rosa Chun is Professor of Corporate Reputation, Ethics and Marketing at IMD.

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