Name: Insights: Apple's Long-Term Decisions are Key to Success
Uploaded: 2020-02-06
Duration: 2 min 40 s
Description: Tim Cook explains how the CEO should contribute to future growth and success. (June 2018)

[MUSIC PLAYING] One of them is around trying to change the metrics that businesses use to measure their performance, with an eye toward diminishing short termism and maximizing long termism. Apple has been good at this for a long time. My challenge to you is it worked out really well for Apple. That's part of your culture so now you can continue to be long term oriented. What's an action that the rest of the companies in the room can take to make themselves behave in a long term fashion despite the pressures to be short term? You have to have a board and a CEO and a sort of a top level management team that is willing to put aside the stock price. Because if you're making a decision based on the investor, short term investors, you're going to be guaranteed to be making terrible decisions. And so this is, like, number one, two, and three. If you do that, it will set the tone in the organization. And so I look at the investments we make. The big ones are all multi-year, some time five, seven, 10 years out. And they're certainly not conducive to a 90-day cycle. And so we report every 90 days because it's a requirement. If I were king for a day, 90-day earnings things would be just flushed. They're a remnant of a different day and time, I think, and really are not set for modern business. And so what you have to do as the CEO on the board is you have to just look yourself in the mirror and say, I'm going to take the heat. And I'm going to tell my investors, we welcome all of you. But if you're short term, I'd really advise you not to get in. Because it's not how we're going to make our decisions. But as you know, many CEOs may in the course of three or six months or nine months, they may well lose their jobs in that scenario. And your answer to them is, so what? That's what you're being paid to do, right? I think if you're the CEO, you have to look at something broader than yourself. There has to be something bigger. And your company is not going to be successful if you're making 90-day decisions. 

Insights: Apple's Long-Term Decisions are Key to Success

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The CEO should contribute to future growth and success.

Apple's Long-Term Decisions are Key to Success

Tim Cook explains how the CEO should contribute to future growth and success. (June 2018)

one of them is around trying to change the metrics. That business is used to measure their performance with an eye toward diminishing short termism and maximizing long termism. Apple has been good at this for a long time. Might. My challenge to you is that, you know, it worked out really well for Apple. It's part of your culture. So now you can continue to be long term oriented. What's in action that the that the rest of the companies in the room can take to make themselves behave in a long term fashion despite the pressures to be short term? Yeah, you have to have ah eh board and a CEO in a sort of a top level management team that is willing to put aside the stock price. Because if you're making a decision based on the investor short term investors, you're gonna be guaranteed to be making terrible And so this is like number 12 and three. Uh, if you do that, it will set the tone in the organization. And so I look att, Um, the investments we made the big one are all multi year sometime, you know, 57 10 years out and they're certainly not conducive to a 90 day cycle. And so we report every 90 days because it's a requirement. If I were king for a day, 90 day earnings, things would be just blushed. They're a remnant of a different day in time, I and have really are not set for modern business. And so what you have to do is the CEO, and the board is You have to look yourself in the mirror and say, I'm gonna take the heat and I'm gonna tell my investors we welcome all of you. But if you're short term, I've really advise you not to get in because it's not how we're gonna make our decision. Um, but as you know, many CEOs may in the course of three or six months or nine months, they may well lose their jobs in that in that scenario, and your answer to them is so what? That's what you're being paid to do, right? I think if you're the CEO, you have to look at something broader than yourself. There has to be something bigger, and your company is not going to be successful. If you're making 90 days