The road to Steve Jobs' resignation, and the rise of Tim Cook as his successor
On August 24, 2011 Apple cofounder Steve Jobs announced his resignation as Apple CEO, six weeks before his death. AppleInsider takes a look back at the controversies and ethical dilemmas of what happened when the CEO got sick and how Tim Cook emerged as his successor.
Steve Jobs' resignation followed a leave of absence from the company starting in January, during which Cook had served as acting CEO. His stepping down was an unmistakable end of an era for the company, and a very different departure from the first time Jobs left Apple, in 1985.
The resignation followed a multi-year saga in which the executive was widely assumed to be in failing health. But, Jobs was not always forthright about the exact nature and severity of his illness.
The first battle
Jobs was first diagnosed with pancreatic cancer in the fall of 2003. In an extreme example of Jobs' stubborn nature, he first fought his disease with alternative medicine, as well as a special diet.
Eventually, in the summer of 2004, Jobs underwent a surgery, known as a "Whipple procedure," that successfully removed the tumor. Tim Cook had assumed Jobs' duties on an interim basis during his recuperation.
He told Apple employees about the cancer shortly before his surgery, and disclosed the diagnosis and surgery after they happened. But, he didn't address the cancer battle at length in any public way until his famous commencement address at Stanford University in June of 2005.
"About a year ago I was diagnosed with cancer," Jobs told the Stanford graduates. "I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn't even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months."
"My doctor advised me to go home and get my affairs in order, which is doctor's code for prepare to die," added Jobs. "It means to try to tell your kids everything you thought you'd have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes."
In an example, perhaps, of his famed "reality distortion field," Jobs' speech wasn't exactly an accurate depiction of the timeline, front-dating his diagnosis and leaving out the period of several months in which he used alternative treatments.
For a period of couple of years, Jobs appeared to recover well. Attention on his health lessened, but never quite faded completely.
The World Wide Developers Conference in 2006 was the first of several public appearances that caused whispers about whether Jobs was unwell. In that WWDC keynote, Jobs' appeared thinner than usual. Some commented that his performance on stage wasn't as high-energy as it normally was at such events.
"Is Steve Jobs ill?," Forbes publisher and columnist Rich Karlgaard asked, noting Jobs' gaunt appearance, as well as the grim survival rates for the type of cancer he'd battled just a couple of years earlier. "Apple without Steve Jobs is unthinkable... And we really, really hope the answer to our headline question is no."
Karlsgaard's column was perhaps the first to raise a question with which journalists and ethicists would wrestle for the next few years, in regards to Jobs. Is it responsible to speculate about the state of a public person's health? Is it only his business, or should serving as the CEO of a high-profile, publicly traded company compel someone like Jobs to be honest and transparent about whether he has a major illness?
The Jobs health rumors were at a low simmer for most of 2007, but came back in a big way the following year, when Jobs showed up at the 2008 WWDC looking more gaunt than ever. An Apple spokesperson responded to questions about his appearance by telling the press that Jobs was suffered from "a common bug."
That denial failed to quiet doubts, leading to Jobs' infamous phone call with the The New York Times' Joe Nocera.
Culture of Secrecy
Nocera, then a Times business columnist, wrote a piece on July 26, 2008, on what he called "Apple's culture of secrecy." He began by calling out Jobs for fudging the timeline of his diagnosis in the Stanford speech and omitting the part about spending nine months trying to beat the tumor with a special diet.
Then, he noted that the party line from Apple, rather than including any denials about cancer, was to simply state that "Steve's health is a private matter." Nocera went on to accuse Apple of acting less than forthright with its investors and the public, and stating that "Apple simply can't be trusted to tell the truth about its chief executive."
Once hearing that Nocera was writing about the matter, Jobs decided to call him.
"You think I'm an arrogant [expletive] who thinks he's above the law," said Jobs. "I think you're a slime bucket who gets most of his facts wrong."
Jobs went on to tell Nocera, off the record, what his exact health problems were. Nocera was later able to say that the issues were "a good deal more than a common bug," but not life-threatening and not a recurrence of cancer.
"After he hung up the phone, it occurred to me that I had just been handed, by Mr. Jobs himself, the very information he was refusing to share with the shareholders who have entrusted him with their money," Nocera wrote.
That September, at an iPod event, Jobs poked fun at the controversy by flashing the Mark Twain quote "reports of my death are greatly exaggerated" on screen behind him.
Hormone imbalance - and absence
Jobs' health came to the forefront once again the following January, when he didn't deliver his customary address at the Macworld Expo.
In a letter dated January 5, 2009, Jobs stated that he had been diagnosed with a "hormone imbalance," which was the reason for his extreme weight loss. He said he would undergo treatment but remain as CEO.
"So now I've said more than I wanted to say, and all that I am going to say, about this," wrote Jobs.
Just nine days later, Jobs wrote another letter in which he disclosed that "during the past week I have learned that my health-related issues are more complex than I originally thought." He therefore announced a medical leave of absence that would extend until June, with Cook once again stepping in as acting CEO.
Jobs positioned the announcement as an attempt to avoid distractions for the company and "allow everyone at Apple to focus on delivering extraordinary products."
The board of directors wasn't pleased.
Jerome York, then a board member, told the Wall Street Journal at the time that he was "disgusted" that Jobs hadn't been more honest about the health disclosures. He said that he had even considered resigning from the board over it. For unknown reasons, the Journal did not report this until after York died the next year.
That April, Jobs underwent a liver transplant, although this fact also wasn't disclosed until much later. Nor was Jobs' refusal of Tim Cook's offer to donate part of his own liver.
Steve Jobs did not appear at the WWDC in 2009, but he did return to work at Apple as scheduled, in late June. He appeared on stage, for the first time in nearly a year, in September, at an event to introduce a new line of iPods.
"I'd like to thank everyone in the Apple community for the heartfelt support," he said. "I'm vertical, back at Apple and loving every day of it."
The year 2010 was associated more with the launch of the first iPad and the iPhone 4. There was very little news about Jobs' health, but, again, it never quite went away.
The Last Leave
On January 17, 2011, Jobs announced that he would once again be taking a medical leave of absence.
"At my request, the board of directors has granted me a medical leave of absence so I can focus on my health," Jobs wrote in a letter. "I will continue as CEO and be involved in major strategic decisions for the company."
He once again placed Cook in charge in his stead, but unlike his 2009 leave, he did not announce a planned return date.
"I love Apple so much and hope to be back as soon as I can," Jobs added. "In the meantime, my family and I would deeply appreciate respect for our privacy."
Jobs would make his last public appearance not at an Apple event, but rather a Cupertino City Council meeting on June 7, discussing the plans for Apple's new headquarters.
The Final day
"I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple's CEO, I would be the first to let you know." read Jobs' letter, on August 24, 2011. Unfortunately, that day has come."
He went on to "strongly recommend" that the board implement its succession plan, with Cook ascending to the CEO chair.
"I believe Apple's brightest and most innovative days are ahead of it. And I look forward to watching and contributing to its success in a new role," Jobs said. "I have made some of the best friends of my life at Apple, and I thank you all for the many years of being able to work alongside you."
Jobs, despite his leave, reportedly worked an entire day at Apple's headquarters and attended a board meeting on the day of his resignation.
Steve Jobs died on October 5, 2011. He was 56 years old.
Lessons from a health crisis
Following Jobs' death, and especially after the publication of Walter Isaacson's authorized biography and some other books in the ensuing years, a few things became clear. Jobs, for much of the last five years of his life, was much sicker than he let on.
Apple's board, whether to protect Jobs or its own stock price, either never pushed Jobs to go public about the severity of condition, or actively covered it up.
The Isaacson book revealed more about the timeline of the late CEO's illness. It painted a more complete picture of Jobs' refusal to use traditional medical treatment when he was first diagnosed, and how his family and friends, including Intel's Andy Grove, ultimately talked him into surgery.
Jobs admitted to the biographer that he had regrets about his original course of alternative treatment. To this day, it's still not clearly established exactly when Jobs' cancer recurred, or if it was ever in remission at all.
Steve Jobs accomplished a lot while fighting cancer, likely in immense physical pain a great deal of time. And, he set up Apple for success.
Rather than having any collapse after his death, the company has thrived. And in his time as CEO, Cook has more than lived up to Jobs' wish that "Apple's brightest and most innovative days are ahead of it."
The obvious choice
"The last two weeks for me have been the saddest of my life by far," said Tim Cook at Apple's memorial service for Steve Jobs in October 2011.
As Jobs had said in his resignation letter, Cook did take over. While he now seems the clear choice, it wasn't so certain at the time.
Three years before Jobs's death, Fortune magazine quoted Cook addressing the idea that he could take over Apple.
"Come on, replace Steve? No. He's irreplaceable," Cook said at the time. "That's something people have to get over. I see Steve there with gray hair in his 70s, long after I'm retired."
Then, too, there was Jony Ive.
"[Jony Ive] has more operational power than anyone else at Apple except me," Steve Jobs had said according to Isaacson. "There's no one who can tell him what to do, or to butt out. That's the way I set it up."
He apparently set up other things, though, but in typical Apple fashion this was kept secret. Typically a large corporation will have worked out who can replace key figures when necessary, and Apple did do this. But, the company refused to reveal it ahead of time.
Just as his health concerns had raised questions among shareholders, so had Apple's apparent lack of a succession plan. There was even a demand from groups including the Central Laborer's Pension Fund that Apple make a plan and publish it.
Bloomberg's Eric Jackson argued, though, that there was no evidence to say Apple hadn't made its plans. The financial magazine even suggested that "Steve Jobs's hottest app may be [his] succession plan". (Article requires subscription.)
The plan wasn't confirmed at all until that resignation letter mentioned its recommendation that Cook become CEO. We still don't know what else was in the plan — but there were changes coming that may have been part of it.
However, there were also pressures from outside the company, pressures from people who did not believe Tim Cook could take over from Jobs. Apple's stock price and value took a dip around this time, too, though that is arguably because the company wasn't releasing major new projects.
Then it did — and unfortunately not very well. When Apple Maps was released with significant problems in 2012, Cook apologized publicly. "We are extremely sorry for the frustration and we are doing everything we can to make Maps better," he said in a public email that has since been removed from Apple's site.
Perhaps one of the things Apple did to make Maps better was to drop the man who introduced it. Scott Forstall left Apple a few weeks later on October 29, 2012.
Forstall had been a long-standing Apple employee and at times had been predicted to become CEO one day.
His departure was such big news that it rather overshadowed another one that was announced on the same day. John Browett, head of Apple retail, was out just a couple of months after Cook had originally hired him.
Browett had been a replacement for Ron Johnson, who had previously overseen the launch and huge growth of Apple Stores, but who had now moved to JC Penney — which remains in trouble to this day, along with a large portion of American retail other than Apple stores.
After deciding Browett wasn't the right replacement, Cook took added the head of retail duties to his own workload.
Cook retained operational control of Apple's retail arm until he hired Angela Ahrendts away from fashion firm Burberry in 2014. With Apple's fortune, now assured success and giant retail operation, it was probably an easier task to persuade Ahrendts to join Apple than it had been for Jobs to convince Cook.
He also radically changed Apple's management team. Eddy Cue, Craig Federighi, Jony Ive and Bob Mansfield were all Apple stalwarts who took on extra or new responsibilities.
Each of their roles has evolved since but this was the formation of the Apple team that we now see at WWDC and Special Event presentations.
In his tenure as CEO to date, Cook has overseen technology such as the Apple Watch, the AirPods, the HomePod and multiple versions of both the iPhone and iPad.
However, he has always kept this balance of business and technology plus a genuine eye to the greater good, if perhaps not to the Apple or Jobs devout. In 2014, he became the first CEO of a Fortune 500 company to come out as gay and did so against his famous preference for privacy.
"If hearing that the CEO of Apple is gay can help someone struggling to come terms with who he or she is, or bring comfort to anyone who feels alone, or inspire people to insist on their equality, then it's worth the trade-off with my own privacy," Cook wrote in Bloomberg.
Cook also said that he plans to give away all of this wealth, once he's paid for the college education of his nephew, and he has been steadily doing exactly that.
In August 2018, for instance, he donated approximately $5 million worth of Apple shares to an undisclosed charity.