Vogel Wakefield blog

Vogel Wakefield blog

February
29
2016

Tim Cook: public leadership in action

Tim Cook: public leader

Tim Cook, CEO of Apple

 

Apple’s showdown with the Obama administration over the latter’s demand that it decrypt the phone of one of the San Bernadine terrorists is a test case in public leadership. The dispute counter-poses the social goods of national security and citizen privacy. The FBI wants the former to trump the latter. Apple is arguing for the two to be held in a more considered balance. What’s interesting from a public leadership perspective is that Apple is taking a considerable risk; it’s by no means clear that things will play out in its favour. This is no mere PR stunt.

Public leadership is leadership that delivers public value: the outcomes an organisation creates for society. While the idea of public value was devised to raise the game of the public sector, since the crash of 2008, it has acquired increasing saliency for private corporations. As Robert Phillips puts it, public leadership repairs the contract between corporations and the public:

“Public leadership echoes the Aristotelian principle of virtuous leadership. It makes the case for the state (business state or political state) as an active polis: designed for the flourishing and wellbeing of all its citizens, not just the pursuit and protection of power and elites.”

Public leadership does not prioritise shareholder value but nor is it antithetical to it. Apple has long pursued a strategy that puts product excellence and consumer interest ahead of profit – in doing so, demonstrating that profitability and corporate growth follow. What’s more, Apple’s chief executive, Tim Cook, has form in attending to the social context of his leadership. In 2014, when challenged at a shareholder meeting on the cost of Apple’s environmental initiatives, Cook advised the investor to “get out of the stock”. The same year, when he spoke publicly about his sexuality, he located this within his responsibilities as a business leader:

”If hearing that the CEO of Apple is gay can help someone struggling to come to 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.”

In the current controversy, in contrast to the FBI’s spin that this is a purely one-off request in a case of exceptional national importance, Apple is looking to the wider, precedent-setting implications. It is asserting protection of individuals’ privacy as a civic duty of equal importance to the question of national security. And it’s taking a global perspective where the FBI is fixated on local considerations. If Apple succumbs to US government pressure, what can possibly hold back demands from more repressive regimes? For instance, when China judges what pressures it can apply to foreign companies, it is influenced by the boundaries that apply in the US, according to a policy analyst on internet freedom, Raman Jit Singh:

“The reality is the damage done when a democratic government does something like this is massive. It’s even more negative in places where there are fewer freedoms.”

Given that China is now the biggest market for the iPhone, it’s impossible not to notice Apple’s commercial interest in safeguarding Chinese consumers’ use of their smartphones. This is not lost on the FBI which dismisses Apple’s stance as a marketing ploy. Apple is at pains to deny this, insisting, “This is and always has been about our customers.” But this strikes me as a hollow denial that misses the point.

Most internet giants, like Google and Facebook, make their money by marketing data mined from their users. They share an interest with the security agencies in weakening privacy. Apple generates its revenue by selling its products directly to its end users. Since its business model is not based on profiling its users but on making its products as attractive as possible to them, it is more strategically driven to be sensitive to privacy concerns.

It’s no accident therefore that, of all tech companies, it is Apple that has ended up putting the case for the broader political considerations at stake in the exploitation of consumer technology for surveillance. Apple’s corporate interest lies in putting citizen privacy more forcefully onto the public agenda.

It seems Apple has strong legal arguments on its side. As the Electronic Frontier Foundation points out, it cannot be compelled under the All Writs Act (which the Obama administration has cited in bringing its action) to assist in ways that would be “unreasonably burdensome”. The EFF explains that the FBI’s demand – challenging, as it does, the very essence of Apple’s business model – easily meets this desciption:

“Reengineering iOS and breaking any number of Apple’s promises to its customers is the definition of an unreasonable burden. As the Ninth Circuit put it in a case interpreting technical assistance in a different context, private companies’ obligations to assist the government have ‘not extended to circumstances in which there is a complete disruption of a service they offer to a customer as part of their business.”

Apple is requesting, instead, that the questions of national security and privacy be considered in the round:

“We feel the best way forward would be for the government to withdraw its demands under the All Writs Act and, as some in Congress have proposed, form a commission or other panel of experts on intelligence, technology, and civil liberties to discuss the implications for law enforcement, national security, privacy, and personal freedoms. Apple would gladly participate in such an effort.”

What gives Tim Cook’s stand the hallmark of public leadership is his advocacy of the broad and long-term societal advantage. A response characterised by managerialism would more likely look to the company’s short-term interest in acceding to the administration’s demands. We have become used to this kind of expediency in corporate behaviour. As the Harvard Business School academic, James Austin, says, Cook’s focus on the social context of business puts him “on the cutting edge of an emerging new mindset in corporate leadership about values and value creation.”

That Apple’s standing with privacy conscious consumers around the world may be enhanced by this stand does not invalidate the authenticity of Cook’s concerns. Rather, it underlines how the CEO of the world’s most successful company reads the trends around business in society and concludes that public leadership is his best option.

Image courtesy Thierry Ehrmann.

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