- Apple co-founder Steve Jobs beforehand revealed how he handled the dot-com bust and subsequent financial downturns. As a substitute of slashing jobs or budgets, the late CEO prioritized “investing(ing) our way through the downturn”—and simply two years after the 2008 monetary disaster, Apple launched the iPad.
Financial uncertainty is a problem for enterprise leaders of all sizes and shapes, with even a slight indication of fear sending an organization’s inventory falling.
Nonetheless, Steve Jobs was a grasp at holding his head held excessive—and his playbook for navigating the 2000 dot-com burst and the 2008 financial disaster would possibly simply be the blueprint at this time’s enterprise leaders want.
The Apple co-founder spoke to Fortune in 2008 concerning the then-economic downturn.
“What I told our company was that we were just going to invest our way through the downturn,” he mentioned. “That we weren’t going to lay off people, that we’d taken a tremendous amount of effort to get them into Apple in the first place—the last thing we were going to do is lay them off.”
As a substitute, Jobs revealed he was upping the corporate’s R&D (analysis and growth) funds “so that we would be ahead of our competitors when the downturn was over.”
“And that’s exactly what we did,” the late CEO added. “And it labored. And that is precisely what we’ll do that time.”
In 2003, whereas different corporations have been nonetheless recovering from the collapse of tech shares, Apple launched iTunes. The Nasdaq-100 took greater than 15 years to return to its dot-com-era peak. However within the meantime, Apple unveiled the iPhone and the App Retailer.
By the point the 2008 recession rolled round, Apple was nonetheless promoting tens of millions of smartphones and computer systems. Simply two years later, the iPad was launched.
In line with the Harvard Enterprise Overview, simply 9% of corporations flourish after an financial slowdown—and like Apple, companies that make good investments when the chips are down have a greater probability of turning into leaders of their market.
Apple is navigating one in every of its rockiest durations ever
Apple’s inventory had its greatest day since January 1998 yesterday off the information that President Donald Trump would pause his wide-sweeping tariff plans—which had triggered the market to freefall.
Nonetheless, it’s unlikely that champagne was being handed round on the firm’s Cupertino headquarters, provided that the commerce battle with China is seemingly simply getting began.
Trump’s improve of the tariff on Chinese language items to 125% bodes unhealthy information for the corporate, which creates a majority of its signature digital merchandise abroad. In line with Wedbush, Apple produces some 90% of iPhones, 75%-80% of iPads, and over 50% of Macs in China.
Consultants inform Fortune that any tariff will possible be handed on on to shoppers, probably resulting in a worst-case state of affairs the place merchandise like the brand new iPhone 16 balloon to over $2,000—a price ticket that almost all shoppers are unlikely to tolerate.
And whereas Jeff Fieldhack, a analysis director at Counterpoint Analysis, an Apple professional, believes Trump’s tariffs stay a negotiation tactic—if the commerce battle extends for months, it might turn into unimaginable for Apple to take Jobs’s weather-the-storm philosophy.
A CEO’s response to uncertainty is dependent upon the playing cards they’re dealt
Jamie Dimon, CEO of JP Morgan Chase, has described his administration model in the course of the 2008 monetary disaster as way more hands-on, however contemplating banks have been on the heart of the meltdown, he arguably had no different selection.
He defined to the How Leaders Lead podcast that the then-CEO of Bear Stearns, Alan Schwartz, known as him one night with a stark request: he wanted $30 billion that night time.
JP Morgan was in the end capable of purchase the corporate later that week and keep away from a extra dramatic market breakdown, however Dimon mentioned it labored as a result of he prioritized capital, liquidity, and profitability as quickly as he grew to become CEO in late 2005.
After working 5 a.m. to 10 p.m. each day, 5 days per week, for the remainder of the disaster, he discovered a useful lesson on easy methods to lead via volatility: “Serve your clients, do a great job in the downs—not just the ups. Don’t celebrate the rising tide, be prepared for the tide to go out.”
This story was initially featured on Fortune.com
