How Tim Cook can save himself (and Apple)September 12, 2013: 10:16 AM ET
What the confused Apple CEO can do to avoid getting canned and having to slink away with nothing but his $378 million compensation package as comfort.
By Fraser P. Seitel
FORTUNE -- I'm sure Tim Cook is hugely competent, a wonderful operating executive, and a real nice guy.
But as CEO of the world's most respected high-tech franchise, he has been an unmitigated disaster.
In the two years since Cook assumed the reins of Apple from iconic Steve Jobs, the new CEO has presided, shockingly, over the dismantling of Apple's pristine reputation for innovation and the crumbling of Apple's high-flying stock. (Full disclosure, I own the stinkin' stock!!)
Cook's latest catastrophe came Tuesday, when, with typically-unbridled Apple anticipation before a packed media house in Cupertino, he personally announced what was billed as "Apple's next big thing."
Only it wasn't.
Rather than unveiling a game-changing new iPhone or revolutionary new TV or space-age iWatch or even a long-rumored deal with China Mobile -- instead, Apple introduced two phone iterations, one cheaper, plastic and colorful; the other with a faster processing chip and better camera.
"Incredible," gushed CEO Cook about 10 times in his keynote.
Only it wasn't. "Underwhelming" would have been more like it.
And the next day, Apple stock dropped 27 points in a day the rest of the market soared.
How could this happen?
- 1. Apple's products are still the envy of the world.
- 2. Apple's stores and personnel are still the model of enthusiastic competence and professionalism.
- 3. Sure competition has increased -- especially from the Samsung Galaxy S phone -- but Apple is still the dominant force in a market that has ample room to grow, particularly in China and India.
- 4. Apple's price/earnings ratio -- which generally measures the market's "valuation" of a company -- is a paltry 12, compared to Google's 27 (GOOG), IBM's 13 (IBM), or General Electric's 17 (GE). Even the hopeless Dell (DELL) has been awarded an 18 P/E by the market.
So what has caused Apple's fortunes to tumble?
Two words: Public relations.
Apple, one of the greatest marketing companies of all time, has never been known for good public relations.
Steve Jobs was a marketing genius but less good when it came to public disclosure. Jobs was well known for his dictatorial control, secretiveness, and arrogance. Apple famously refused to share any details of the founder's health, even though the company's fortunes and stock price were materially linked to the CEO's personal well-being.
So Apple observers were optimistic when the more affable/less intimidating Mr. Cook replaced his late predecessor in August 2011 that Apple would become a more communicative, more accessible, more public relations-savvy company.
Not only has Apple's public relations gotten worse under Mr. Cook, it's also starting to lose its marketing touch; so much so that with Apple's stock back down 33% from its peak, investors are once again calling for the CEO's scalp.
What can the confused Cook do to prevent the ignominy of getting canned and having to slink away with nothing but his $378 million compensation package as comfort?
How 'bout these for starters:
Take your "image" seriously.
By all reports, Steve Jobs was one of the most arrogant human beings ever to grace the planet. He was vindictive to competitors, abusive to his employees, and, according to Apple's chief designer, didn't bathe!
But Jobs was also brilliant, so he didn't much care about cooperating with the media, for example; Apple's image, he felt, would take care of itself. And largely he was right.
Tim Cook, on the other hand, while thankfully not as arrogant as Jobs, doesn't possess the aura of "brilliance" that protected his predecessor. He's had a tough time recently proving he's even "competent." The premature release of not ready-for-prime time Apple Maps and the company's apology for customer service in China exemplify how Apple has appeared to waver on Cook's watch.
So Cook, unlike Jobs, has to pay attention to what's being said about Apple in the market, and he should work to "influence" the conversation, so that investors and others aren't frustrated or disappointed in what Apple ultimately says.
On Tuesday, when the market expected product breakthroughs and a contract with China Mobile, it got, instead, a lot of on-stage whoop-de-doing from Apple executives. Immediate verdict: Much ado about nothing.
Smart companies, concerned about their public image, never let securities analysts or journalists get too far afield from realistic expectations. Apple doesn't seem to care.
Meet the media.
Steve Jobs rarely deigned to be interviewed by hoi polloi in the media, and Tim Cook appears to share that disdain. So Cook media sightings are few and far between.
Meanwhile, Apple's adversaries -- from self-promoting hedge fund managers to finally vindicated analysts -- are given free rein to bash Apple any time they want. With no resistance from the company -- and little pushback from TV anchors -- Apple enemies pontificate unchallenged, as was the case after Tuesday's suicidal product launch.
The public relations axiom is that, "Silence grants the point;" and Apple's silence, accordingly, suggests the firm has no answer for its critics.
All Tim Cook would have to do is ask for airtime on CNBC, and his mere appearance -- even if he revealed little -- would at least indicate that Apple is willing to discuss its plans, explain its culture, and answer its critics.
Again, Jobs could get away with media invisibility; Cook can't.
Buy a blazer.
Which leads to Tim Cook's primary problem as Apple CEO: He ain't Steve Jobs. And never will be.
Somehow, Cook is convinced that he has to become a Jobs' clone to be respected. But whereas Jobs was cocky and confident, Cook is wooden and forced.
Jobs famously presented Apple products, always dressed in jeans and a black turtleneck sweater. Cook presents Apple (AAPL) products in jeans and a black open-collar shirt; evidently believing that switching the shirt for the turtleneck suggests a break with the past.
Why not take a risk and purchase a blue blazer! Anything to break the deleterious chokehold of the Steve Jobs' legacy.
So while Cook has done some good things like stock buybacks and dividends and China expansion, the stark fact is that Apple's stock slide and reputational falloff are largely "man-made," and the "man" who deserves most of the blame is its new CEO.
Tim Cook needs to be his own man. He should be accessible to the media, change his tone, change his look, and let an increasingly dubious financial community and public understand why he deserves to replace the great Steve Jobs.
Soon, CEO Cook is scheduled to have lunch with his newest shareholder, the ever-lovable and eternally patient Carl Icahn, whose stake in Apple used to be $1 ½ billion, when he purchased the stock a month ago. The two were originally scheduled to discuss another Apple buyback, but after this week's bloodletting, shareholder Icahn may have other things on his mind.
Happy dining, lads.
Fraser P. Seitel has been a communications consultant, commentator, author, and teacher for 40 years. He teaches public relations at NYU and is the author of the Prentice-Hall textbook The Practice of Public Relations, now in its 12th edition, and co-author of Rethinking Reputation and Idea Wise. He may be reached at firstname.lastname@example.org