Why PR teams should be involved in wider decision-making processes

By James Porter

Jan 11, 2019

Last week, to the shock of national newspapers, investors and technology reporters alike, Tim Cook announced a 9% drop in Apple’s share price. He blamed it, largely, on China. However, there was a line in his letter to investors that has been overlooked and demonstrates a severe lack of consideration towards his customers, the decision-making processes going on in Cupertino and of the role that PR and Communications employees should play.

The line in question is highlighted in the crucial paragraph below.

“While Greater China and other emerging markets accounted for the vast majority of the year-over-year iPhone revenue decline, in some developed markets, iPhone upgrades also were not as strong as we thought they would be. While macroeconomic challenges in some markets were a key contributor to this trend, we believe there are other factors broadly impacting our iPhone performance, including consumers adapting to a world with fewer carrier subsidies, US dollar strength-related price increases, and some customers taking advantage of significantly reduced pricing for iPhone battery replacements.

With one fell swoop Tim Cook demonstrated that he values his shareholders and their returns more than his customers satisfaction. Customers are not “taking advantage” by paying for what is now an accurate and fair cost for something that Apple intentionally made deteriorate through their ‘Updates’. Technology is supposed to advance, he made it reverse.

He may see the shareholders at meetings and they make demands of him but there are a lot more customers in this world than shareholders and he would be remiss to think that the power that lies in the hands of the millions of Apple customers is less than that of the shareholders.

The issue surrounding iPhone battery life, the cost of replacement and of general (intentional) performance decline over time was borne out of this mistaken belief. The decision to cause technological deterioration over time was stupid but it is a symptom of a far more serious disease: that churning out sales, for the sake of impressive profit forecasts (to appease investors), is a better decision than respecting the customer.

This is why PR and Communications professionals are a necessity in boardroom decision making processes. When the decisions are made by a CEO terrified of disgruntled shareholders, a CFO who looks at spreadsheets all day and lawyers who are paid so much they wouldn’t fathom replacing an iPhone battery, the idea of customer satisfaction evaporates.

A crucial part of communications, PR and crisis planning is the analysis of potential inflection points in the trajectory of a business and it’s clear the CMO at Apple is not party to decisions that he should be. And if he was? Well, he didn’t have the courage to tell Cook that conning customers by breaking their phones over time would come back to bite him. Yes, it may drive mindless consumption in the short term, but this then creates a share price that is not sustainable.

The assumption that follows from this is then not that the share price fell, but that it actually just adjusted to a more accurate and just level.

Yes, had the CMO or PR team been in the room they would have been voicing an opinion that ultimately led to a less dramatic rise in share price, which is unlikely to go down well. But the events of last week should serve as a lesson for all other listed and technology companies with ambitious plans: gradual growth over time is far more appealing to investors than erratic financial results driven by decisions that prioritise the short-term gains of shareholders over the long-term satisfaction of customers. After all, customers and shareholders are like in-laws. Nobody wants them to be in the same room for long periods of time, but if they are, it helps if they’re both happy.

The events of last week, and the adjustment of the share price, were long overdue. But the lessons are there to be learnt for Cook, and other listed companies: the decision-making process must involve employees whose day-to-day involves looking at things from the customers point of view, rather than just those worried about the bottom line and shareholder returns.