Steve Jobs took over as CEO of Apple on September 16, 1997 (he was interim CEO from then to January 5, 2000, when he officially dropped “interim” from his title). That’s almost 14 years as CEO — a long time, considering that the average CEO tenure for large U.S. companies is around six years.
Simply put, during this time, his performance was astounding. If you had invested $100,000 in Apple the day he rejoined in 1997 and held that investment until he stepped down this year, your investment would have been worth $6.86 million, a 35.4% compounded annual growth rate. That means, on average, Apple’s shareholder return grew 35%, year in and year out, for 14 years.
In our CEO ranking, we used three metrics to score a CEO (see the January 2010 article for the methodology). Jobs’ final scorecard for his entire tenure from 1997 to 2011 is:
Country-adjusted total shareholder return: 6,682%
Industry-adjusted total shareholder return: 6,621%
Market Capitalization increase during tenure:*** $341.5 billion
These numbers are head and shoulders above his scorecard at the time of our 2009 ranking. Back then, country-adjusted total shareholder return was 3,226%, less than half of what it became at the end of his tenure. Even if we updated the scorecard for all the CEOs in our ranking, we doubt anyone would come even close to this performance.
if you look at the shareholder return performance from 1997 to 2011, it is not a linear, steady upward trajectory (see the chart below, which shows cumulative total shareholder return, expressed as the return on $1 invested on September 16, 1997). He did not add 35% growth in shareholder return every year. The chart is in fact pretty flat from 1997 to mid 2000, when it starts moving upward. There is a long build-up period, followed by a rapid increase.
In the new book, Great by Choice, Jim Collins and Morten analyzed the 1997-2002 period and discovered something interesting. It was a period of instilling discipline and launching innovations that started small and gradually were built out to big things (e.g., the first retail store, or the first iPod/iTunes product in 2001 that only worked on a Mac and had no online store). It wasn’t a period of chasing the next big breakthrough innovation, even though in hindsight it may look like it. Steve Jobs combined creativity with discipline, and innovation with scale.