Tech firms have discovered themselves within the crosshairs of Trump’s aggressive tariff insurance policies over the previous week, with the Magnificent Seven shedding $2 trillion in worth within the newest market downturn and presumably extra ache to come back.
Due to its important publicity to China, Apple initially noticed the biggest selloff of the group. The iPhone maker’s shares dropped roughly 20% within the week after Trump introduced his reciprocal tariffs, earlier than rebounding modestly on Thursday and Friday
Nonetheless, analyst and investor sentiment hasn’t turned on Apple, partly due to the coaching and pedigree of its present CEO, Tim Cook dinner, and his background as a supply-chain whisperer.
“We’re at a moment in which the kinds of responsibilities a COO is used to having might best serve a CEO,” says Jeremy Friedman, affiliate professor of enterprise and geopolitics at Harvard Enterprise Faculty. “The focus is on logistics right now.”
Dan Ives, a senior analyst at Wedbush Securities, has warned towards Trump’s plans to power Apple to fabricate iPhones domestically—one thing that business-world watchers agree could be disastrous. And though Apple is in an unenviable place, he says that Cook dinner is uniquely suited to assembly the second.
“The reality is that no company is more in the eye of the storm,” says Ives. “But given Cook’s history, in my opinion, as one of the best leaders in the world, there’s no one better to navigate this than him.”
Cook dinner as a grasp operator
Cook dinner arrived at Apple in 1998 at a crucial second for the corporate. The tech model loved sturdy shopper demand, however its cluttered provide chain and stock mismanagement created huge challenges and inconsistent high quality. Cook dinner, who had held senior operations roles at Compaq and IBM, and is an engineer by coaching, redesigned Apple’s sprawling provide chain and constructed its just-in-time stock system. Apple’s legendary cofounder Steve Jobs named Cook dinner as CEO simply months earlier than his loss of life.
It was the suitable transfer for a myriad of causes, together with what was about to occur within the enterprise atmosphere. Analysis from McKinsey printed in 2022 exhibits that in contrast with a long time in the past, firms are experiencing extra unforeseeable disruptions to their provide chains, and with better penalties, than ever earlier than. However firms with senior leaders and board members who’re additionally operational masterminds are often first to reply in a disaster, making them excessive performers, says Daniel Swan, who co-leads McKinsey’s operations observe globally.
Leaders steeped in operations perceive “from the bottom up, what’s happening,” says Swan. They develop a granular somewhat than superficial understanding of occasions, he says, which ends up in “understanding the implications for your products, your customers, and allows you to make much better decisions.”
Whether or not it’s conflicts, pandemics, climate occasions, or commerce wars, operators know to be proactive, understanding that disruptions are part of life, he provides. And somewhat than getting fixated on discovering one “right” resolution, he says, system thinkers search for responses that provide flexibility.
“The one thing about supply-chain disruption is, by definition, you’re going to be wrong,” he says.
‘10% diplomat’
In his early years as CEO, Cook dinner confronted criticism for not delivering massive splashy new merchandise or projecting the grand visions of his well-known predecessor. Nevertheless, Cook dinner has proved to be the suitable man for the function, iterating on merchandise, increasing Apple’s market share, and creating the world’s first $3 trillion firm (a number of others have since adopted)—whereas maneuvering in an more and more difficult world.
Even in durations of relative calm, Cook dinner has been identified for specializing in provide on the proper time—for instance, by leaping forward of rivals to e book vacation air freight properly upfront of the Christmas season.
Within the newest take a look at of his tactical abilities, Cook dinner has already demonstrated why flexibility issues. Apple reportedly simply determined it might be sourcing extra U.S.-bound iPhones from India, the place Trump set tariffs at 27%, somewhat than from China, the place they’re now 145%. The transfer is seen as a stopgap measure whereas tariff negotiations proceed.
That sort of agility doesn’t come simply to an organization working at Apple’s scale. However after the pandemic, when Apple finally suffered the identical shortages, delays, and billions in misplaced gross sales as different firms, Cook dinner started constructing further paths to manufacturing, says Friedman, giving Apple the pliability to maneuver manufacturing to a level, with out transferring all of its provide chain out of China.
To make certain, CEOs discover themselves in uncharted waters following Trump’s tariffs. Apple is on monitor to expertise an unprecedented problem together with the remainder of company America, and there’s solely a lot {that a} chief government can do to blunt the ache of double-digit levies. Ives’s estimate put the post-tariff value of an iPhone as excessive as $3,500. And simply because the market started to totally soften down on Wednesday, President Donald Trump introduced a 90-day pause on tariffs for all U.S. buying and selling companions except China, on whom he raised tariffs much more. Briefly, the unpredictability continues.
However except for Cook dinner’s COO background, he has been constructing relationships in Washington, or as Ives places it: “Cook is 10% politician, 90% CEO.”
Within the president’s final time period, Cook dinner used his diplomacy abilities to win a tariff exemption from Trump, a pacesetter with whom he has developed a robust working relationship.
It’s unclear whether or not the identical opening for aid exists at this time, or whether or not Apple’s chief has a bonus over some other CEO or billionaire making an attempt to affect Trump’s insurance policies, says Friedman. Nevertheless, he notes, because the chief of what was as soon as the world’s most useful firm, caught between two superpowers, Cook dinner could also be enjoying a task as a future statesman on a bigger scale than simply managing his personal firm. Accordingly, in February, Apple introduced plans to spend $500 billion within the U.S. to help its efforts in synthetic intelligence, including a brand new manufacturing facility and creating 20,000 jobs over the following 4 years.
“One can imagine, if there is some sort of grand bargain between the U.S. and China coming in the next year or two,” he says, “Tim Cook might as soon as anybody play an intermediary role.”
This story was initially featured on Fortune.com
