Think Different. This was Apple’s brilliant 1997 ad campaign featuring images of Mahatma Gandhi, Pablo Picasso, John Lennon and Yoko Ono, Maria Callas and many other creative leaders.
Apple’s new-ish leader, Tim Cook, thinks different too. Though lacking Steve Jobs’ star quality and possibly his sociopathic tendencies as well, Cook is a different type of leader: a kind one.
At a recent shareholders’ meeting, when asked about Apple’s new dedication to environmental causes and whether these would hamper profits, Cook replied, “We do things because they are just and right.”
This is not something one often hears from the pursed mouths of CEOs.
Cook’s statement echoes one made by Warren Buffett in his 1969 letter to his partners. Several years back he had purchased Berkshire Hathaway, a struggling textile mill and some partners were itching to bail on it. Buffett stood firm: “I have no desire to trade severe human dislocation for a few percentage points additional return per annum,” he wrote. Berkshire Hathaway was an illiquid stock that traded ‘by appointment only’. Buffett happily bought up his partners’ unwanted shares for around $45 per share and today, well, a single Berkshire Hathaway shares trades for $189,000 USD.
Which begs the question: Exactly how many more percentage points per annum does an investor need to chase and at what cost?
When our scorecard only measures finance, it misses all the other facets of value, like sustainability, fairness, and good governance. Contrary to reducing gains, these pillars are the foundation for long-term gains.
The mindset that views companies as being worth more dead (intrinsic value), than alive (PEG:price earnings growth), is similar to the belief that Nature, too, is worth more dead than alive.
I suppose it works. Until it doesn’t. (Read The Giving Tree by Shel Silverstein for a lesson in the real cost of greed.)
Apple’s meteoric profits—it is sitting on a cash pile of $150.6 billion USD— have some investors chanting, “Gimme, gimme, gimme”. Apple is the Giving Tree. Wisely, Cook is re-writing the book.
Far from hurting business, his commitment to environmental conservation, (Al Gore is on the company’s board) ,and gender rights has attracted more investors than ever.
I bought Apple in the early 90s and then sold it for $23 during the company’s ‘troubles’ between CEOs. Typical rookie mistake. Hey ho.
I love the brand. I love that Cook has hired smart fashion-industry folk from Yves Saint Laurent and Burberry. And I love that Apple makes pots of money. I’m ready to take another bite.