Wednesday, March 12, 2014

Why Tim Cook is Right and Richard Branson is Wrong

On the surface, Richard Branson is a Tim Cook fanboy. He's two thumbs up on Tim Cook's advice for NCPPR to get out of Apple stock. But I think that Branson misunderstood what was going on and why Cook, rightly, took NCPPR to task. NCPPR was doing two things, not one. The first was pushing Apple on climate change. The second was seeking to get Apple to apply conventional ROI calculations on all that it does. NCPPR's account of the event stresses the fight on the first issue but it was the second issue that prompted Tim Cook's invitation to sell the stock.

This invitation makes sense. It's a core value at Apple that they are willing to chase after long-term projects that don't conventionally show value but do pay off in the long run. NCPPR's desire to fit Apple into the conventional mode of profit seeking analysis violated a core value that underpins the company and its stock so Tim Cook just said, in essence, "that's okay, its not for you".

Branson, like much of the media coverage, thinks that this is a fight about global warming and the freedom not to seek profit. But here Branson's dead wrong. The fight over environmental sustainability is something that Cook isn't taking off the table because one way or the other that fight doesn't touch on Apple's core values of making insanely great products.

Apple's already gone through one round of conventional ROI leadership in the past. This period was known as the death watch years when Apple fell behind and was on virtually everybody's list of dead corporation walking. If they're smart, they'll never go in that direction again.