Cook relies on core values as Jobs' surrogate at Apple

By Dawn C. Chmielewski and Jessica Guynn

Jan. 16, 2009 12 AM PT

LOS ANGELES AND SAN FRANCISCO — Steve Jobs’ leadership of Apple Inc. has been the stuff of American business lore. Less heralded is the role that Tim Cook played in rescuing the company from near irrelevance.

Through a series of roles, most recently chief operating officer, Cook fixed what ailed Apple in the mid-1990s: poor product quality, spotty availability and absurdly high prices. His reward: For the second time in five years, Jobs this week tapped Cook to run the company while the chief executive takes a medical leave.

Cook, 48, is a workaholic and fitness nut who is known for being as obsessive and demanding as Jobs himself. The Alabama native and Auburn University engineering graduate has quietly made his mark running the operations of Apple for many years.

And he is the person entrusted by the Cupertino, Calif., company’s board to lead during Jobs’ absence.

Jobs, who has attributed weight loss to a hormone imbalance, said Wednesday that he was taking his leave through June because his health issue was more complex than previously believed and because curiosity about the matter continues to be a distraction.

Investors, who are accustomed to Cook’s Southern drawl on quarterly earnings calls, reacted calmly to the transition of power, sending the stock down just 2% to $83.38 on Thursday.

“Supply chain management, which seems so incredibly unsexy, is very sexy when you look at your bank account and you have managed the product transitions perfectly,” said Mike Janes, who worked with Cook as general manager of Apple’s online store for five years, starting in 1998. “That’s the thing that Tim is absolutely a master at.”

He has brought efficiency and discipline to the duller aspects of one of the world’s most famous consumer brands. He also keeps a lid on costs so Apple can spend a fortune marketing and designing products such as the Mac computer line, the iPod digital media player and the iPhone.

He was recruited from Compaq Computer Corp. in 1998 to clean up Apple’s manufacturing, distribution and supply operations.

Cook took a radical step. He pulled Apple out of the manufacturing business, closing factories and warehouses. The amount of time inventory sat on Apple’s balance sheet shrank from months to days. He was also instrumental in helping convert Apple’s computer line to processors made by Intel Corp.

Those kinds of behind-the-scenes moves are as vital to Apple’s success as the splashiest product launch and have helped generate billions of dollars in cash on hand and no debt. Such a healthy balance sheet has been enormously useful for Apple as it locks in suppliers and corners markets.

“Tim happens to be one of the most respected names in supply chain management anywhere in the world,” said Kevin O’Marah, chief strategist at AMR Research, a Boston consulting firm that ranks the top 25 companies in sourcing, making and delivering products. “Apple is No. 1, and that is so much not the way it would have been in the days before Tim Cook. It’s like the world flipping upside-down. He’s been completely transformational to the company.”

Even as Jobs has kept a tight rein, Cook’s responsibilities have increased dramatically. In 2000, Cook took over the sales force and customer support. In 2004, he took over the Macintosh division and filled in while Jobs was recuperating from surgery to remove a cancerous tumor from his pancreas. Today he also oversees iPhone sales and operations and negotiates with wireless carriers who sell the popular device.

“Tim is an amazing, brilliant mind when it comes to operational excellence and is really a master of execution,” said Janes, now chief executive of FanSnap Inc., an online ticket search engine. “I worked at Federal Express for 14 years. I know what world-class operators look like, and Tim Cook is right at the top of the list.”

Around Apple, Cook is known for his calm temperament and his work ethic: The son of a retired shipyard worker and a homemaker, he is often the first in and last out of the office. He begins e-mailing executives at 4:30 a.m. and, for years, held a regular Sunday night staff meeting by telephone to prepare for Monday meetings, according to a November profile of Cook in Fortune magazine.

Steve Doil, who worked with Cook at Compaq and Apple, said Cook brings a quiet intensity to the job that stands in contrast to the table-pounding, in-your-face style of Jobs. “I’ve never heard Tim raise his voice,” Doil said.

Cook demands excellence from those around him and is known as the master of penetrating, endless lines of questioning. “A lot of people would say, ‘Boy it was the most gut-wrenching experience of my life,’ ” Doil said. “All the man expects is you are hired to do your job, do it well.”

Although analysts uniformly give Cook high marks on execution, Apple hasn’t said whether Cook will be the next CEO.

“Often, outsiders are brought in when a company needs to be shaken up and changed,” said Sanford C. Bernstein analyst Toni Sacconaghi Jr. “Most investors would say that’s not the case at Apple. The goal is to try to continue the magic.”

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Tim Cook has history in tech

While Steve Jobs is on medical leave, Tim Cook, above, is taking over daily operations at Apple Inc.

Age: 48

Title: Chief operating officer

Previous jobs: Vice president of corporate materials, Compaq Computer Corp.; head of manufacturing and distribution, IBM Corp.’s personal computer business in North and Latin America

Degrees: MBA, Duke University; bachelor of science in industrial engineering, Auburn University

Interests: Cycling, Auburn football

Source: Times research