Decision Making by Apple CEO

There was a recent Benzinga report (https://www.benzinga.com/topic/warren-buffett ) about a conversation between Warren Buffet and Steve Jobs years ago when Steve Jobs was at the helm of Apple. With the great success Apple had under his leadership, Steve was debating about what to do with the pile of cash he had. Steve Jobs was obviously a transformative figure for the tech industry and but he was humble enough to seek advice from Warren Buffet about his options with his cash.

According to the article, Buffett outlined the four primary options available for deploying cash: stock buybacks, dividends, acquisitions, or holding onto it. With Steve Jobs felt that Apple stock being undervalued, Buffet thought buybacks could be a wise choice. Ultimately, however, Jobs decided to take no action and maintain the company’s cash reserves.

I found the story interesting in several aspects in terms of leadership.

First of all, Steve Jobs, being known for his arrogance and brazen style, had the self-awareness of knowing where his expertise lies and humble enough to seek advice from someone who probably had a better perspective and more expertise for cash management. It is likely Steve Jobs understood the four options well, but getting the perspective from someone else always help one make decisions.

Secondly, it is interesting that Steve Jobs, after hearing the advices from Warren Buffet, decided to maintain the cash position, rather than follow Buffett's advice. It is not unusually for leaders to seek advices with different perspectives, but ultimately it is your decision and you have to take ownership and take responsibility for that decision.

It is also interesting to note that Tim Cook started buyback program soon after the unfortunate death of Steve Jobs in 2011 and has since spent about $600 billions for stock buyback. The different decisions by the two leaders could be a reflection of their personal outlooks of the company at the time of potential strategic growth opportunities vs. more stable operation of a more mature business. Both have done very well for its shareholders under their respective leadership.

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