Why Apple Is #1
A Use Case for Peter Drucker’s Principles in 21st-Century Business
An original essay for Drucker+, by Dr. Dean McKay.
In a world of constant disruption, shifting customer expectations, and complex global challenges, Apple Inc.¹ stands out as a rare example of sustained excellence. The Drucker Institute at Claremont Graduate University ranks Apple as the number one public company in America, based not only on financial strength but also on customer satisfaction, innovation, employee engagement, and social responsibility.
This achievement is more than merely a reflection of sleek design or savvy marketing. It is the product of disciplined management principles that trace directly to the work of Peter F. Drucker. Drucker, often referred to as the father of modern management, articulated a set of enduring insights that continue to shape the best-run organizations today. Apple provides a compelling use case for how Drucker’s principles can be employed—and how they remain powerfully relevant in today’s business context.
For executives navigating rapid transformation—from artificial intelligence to climate risks, from shifting demographics to geopolitical uncertainty—the Apple story is more than corporate history. It’s a practical roadmap for leading with clarity, courage, and discipline. Drucker believed that in turbulent times, leaders must return to fundamentals: defining purpose, focusing on the customer, empowering people, and fostering innovation.
America’s Best-Managed Companies 2024
The Drucker Institute at Claremont Graduate University ranks Apple as the number one public company in America, based not only on financial strength but also on customer satisfaction, innovation, employee engagement, and social responsibility.
Seven CEOs, One Druckerian Arc
Apple’s evolution under seven different CEOs shows an arc of learning and leadership, with each era highlighting Drucker’s core insights: focus on the customer, disciplined innovation, strategic clarity, and purpose-driven execution.
1. Michael Scott (1977–1981): The Operational Pioneer
Apple’s first CEO brought needed structure to a fast-growing startup. He turned the Apple II into a business success and began the transition from founder-led vision to professional management. However, Scott’s top-down style contrasted with Drucker’s belief in empowering knowledge workers and fostering a culture of collaboration.
2. Mike Markkula (1981–1983): The Moralist Mentor
Markkula, an early investor and board member, crafted Apple’s first written philosophy emphasizing empathy, focus, and quality perception. These principles closely mirrored Drucker’s belief in the importance of mission clarity and customer focus. Markkula helped mentor Jobs in strategic thinking and organizational discipline, embedding a values-driven ethos that would later be revived.
What is less widely known is that Peter Drucker had a direct influence on Markkula. He had read Drucker's books and admired his insights into purpose-driven management. According to those familiar with Apple’s early history, Markkula embraced Drucker’s emphasis on integrity, customer orientation, and thoughtful leadership. He once recommended Drucker’s writings to Jobs as a blueprint for building a company that could endure beyond any one product or personality. Markkula’s Drucker-inspired influence helped shape more than Apple’s marketing philosophy but also its foundational culture of excellence and ethical accountability.
Markkula served as Apple's chairman of the board (COB) from 1985 to 1997.
3. John Sculley (1983–1993): The Marketing Executive
Sculley brought consumer marketing expertise and helped launch the Macintosh, but internal conflict and lack of strategic focus plagued his tenure. His power struggle with Jobs reflects Drucker’s warning: leadership must serve a shared mission, rather than a personal ambition. Despite his contributions to brand building, Apple lost its customer-centric clarity under his watch.
4. Michael Spindler (1993–1996): The Misaligned Strategist
Spindler emphasized globalization and cost control but failed to align innovation with customer value. Apple became overextended and unfocused, a classic case of what Drucker called “activity without results.”
5. Gil Amelio (1996–1997): The Stabilizer Without Vision
Amelio attempted to restore financial discipline and simplify Apple’s product lines, an effort aligned with Drucker’s principle of “planned abandonment.” However, he lacked a compelling vision. Drucker emphasized that leaders must inspire as well as manage—Amelio did the latter, but not the former.
6. Steve Jobs (1997–2011): The Drucker Disciple (Unknowingly)
Jobs’ return transformed Apple into a Druckerian masterpiece. He revived customer obsession, cut cluttered product lines, and introduced innovations (iPod, iPhone, iPad) that redefined industries. He was ruthless in strategic abandonment and focused relentlessly on the customer experience. Jobs embodied Drucker’s mantra: “The purpose of a business is to create a customer.”
A core tenet of Drucker’s philosophy is to build on one’s strengths rather than diluting resources across unrelated fields. Apple has demonstrated a relentless focus on its core strengths: designing user-friendly devices and integrating hardware, software, and services into a cohesive ecosystem. Instead of diversifying indiscriminately, like some of its competitors, Apple invests deeply in its core competencies, driving unparalleled quality and performance within its ecosystem. For example, the synergy between Apple’s devices and services (e.g., iCloud and Apple Music) ensures that customers are immersed in the Apple experience.
7. Tim Cook (2011–Present): The Architect of Excellence
Cook scaled Apple’s operations with extraordinary precision, embedding values like privacy, sustainability, and diversity into Apple’s core. Under Cook, Apple expanded its ecosystem and services business while retaining Jobs’ customer-first DNA. Cook’s leadership reflects Drucker’s emphasis on operational effectiveness, long-term thinking, and social responsibility.
Peter Drucker believed that leadership is about vision and decisiveness. Apple’s growth is primarily attributed to the clear and bold leadership of Steve Jobs and Tim Cook. Jobs possessed a visionary approach, daring to challenge conventional thinking and inspiring teams to create groundbreaking innovations. His ability to drive a vision forward was a defining factor in Apple’s renaissance in the 2000s. Following Jobs, Tim Cook brought a different but equally effective style, focusing on operational excellence, sustainability, and global expansion while maintaining Apple's innovative spirit. This leadership transition underscores Apple's foresight and adaptability as an organization.
For today’s executives, this leadership timeline offers a mirror: Who are you leading for? What are you willing to walk away from? Do your strategies reflect purpose or inertia? Apple’s journey demonstrates the compounding power of asking the right questions, making tough choices, and adhering to core principles.
Five Timeless Drucker Principles at Apple’s Core
“The purpose of business is to create and keep a customer.”
1. Start with the Customer
“The purpose of a business is to create a customer.”
Apple redefined product categories by obsessing over customer needs.² From the iPod to the iPhone to Apple Pay, Apple products solve real problems with simplicity and elegance. The design is not aesthetic for its own sake; it’s a strategy of empathy and usability. Drucker would argue that Apple doesn’t just serve customers—it understands them.
For executives today, this principle is a reminder that innovation must begin with insight, not technology for its own sake, but with a clear picture of how lives will be improved. From the release of the first Macintosh computer to the revolutionary iPhone, Apple’s focus on enhancing the customer experience enabled it to foster loyalty and dominate the consumer electronics market. It focuses less on competing and more on exceeding customer expectations, thereby driving its sales, satisfaction, and brand loyalty results.
Perhaps Drucker’s most famous insight is that the purpose of business is to "create and keep a customer." Apple has mastered this philosophy by creating an ecosystem that naturally encourages customer retention and brand loyalty. The integration of devices and services ensures that customers who own an iPhone are incentivized to purchase Macs, iPads, AirPods, and other Apple products due to their compatibility and seamless functionality. Additionally, Apple’s marketing strategies position their products as status symbols, fostering a community of devoted customers eager to buy the latest offerings. This cyclical customer creation ensures sustained revenue and growth.
“Innovation is the specific instrument of entrepreneurship.”
2. Innovation as a Discipline
“Innovation is the specific instrument of entrepreneurship.”
Apple’s culture of innovation³ is built into its processes. Whether transitioning to Apple Silicon or launching Vision Pro, Apple follows a system of long-term investment, iterative development, and market timing. This is not random creativity; it’s innovation with direction, purpose, and execution—a hallmark of Drucker’s view on entrepreneurship.
Today’s leaders must foster environments where innovation is not relegated to R&D but infused across the organization—from customer service to manufacturing, from marketing to operations.
“If we weren’t in it already, would we go into it now?”
3. Strategic Abandonment
“If we weren’t in it already, would we go into it now?”
Apple repeatedly walks away from legacy technologies: floppy disks, headphone jacks, USB-A ports, and even the iPod. This courage to abandon the past, even successful pasts, aligns with Drucker’s idea that yesterday’s successes often become tomorrow’s obstacles.
In a world where transformation is constant, Drucker’s question is more urgent than ever. Leaders must develop the will and mechanisms to discontinue what no longer serves their customers or their mission.
“The productivity of the knowledge worker is the most valuable asset.”
4. Knowledge Worker Empowerment
“The productivity of the knowledge worker is the most valuable asset.”
Apple’s functional structure emphasizes expertise over hierarchy. Engineers, designers, and domain experts have the authority to make decisions in their areas. Drucker argued that the most effective organizations empower specialists rather than centralizing decisions at the top.
Executives today face a generation of employees who seek autonomy, mastery, and purpose. Organizations that ignore this shift do so at their peril. Creating environments where talent flourishes is not a perk—it’s a competitive imperative.
“Objectives are not fate; they are direction.”
5. Purpose Drives Performance
“Objectives are not fate; they are direction.”
Apple’s objectives are clear: to deliver exceptional products, protect user privacy, and achieve carbon neutrality by 2030. These are not marketing slogans. They are integrated into the company’s design choices, supply chain strategies, and customer relationships.
Executives today must lead with a north star. In a world saturated with data, stakeholders crave authenticity. Drucker knew that an organization driven by a clear, moral, and meaningful purpose would outperform those led only by numbers.
Efficiency and productivity, according to Drucker, are just as critical as innovation. Apple has achieved industry-leading operational efficiency, especially under Tim Cook, who previously served as Apple’s Chief Operating Officer. The company’s mastery of its supply chain, partnerships with manufacturers, and effective inventory management systems enabled it to scale efficiently while maintaining healthy profit margins. For example, Apple’s ability to precisely deliver new iPhones to millions of customers worldwide every year showcases its operational expertise. By eliminating inefficiencies, Apple has been able to reinvest in innovation and customer experience, ensuring the growth cycle continues.
Today’s Executive Challenge: Learning from Apple and Drucker
Modern executives face unprecedented volatility—AI transformation, geopolitical fragmentation, and shifting workforce expectations. What can they learn from Drucker, via Apple?
1 - Redefine Success Beyond Financials: Drucker’s multidimensional view of performance (customer value, people development, innovation, responsibility) matches the Drucker Institute’s five criteria—and mirrors Apple’s holistic leadership.
2 - Make Innovation Systemic, Not Sporadic: Apple succeeds not through occasional breakthroughs, but through consistent, disciplined innovation. Drucker insisted that this must be repeatable, not accidental.
3 - Treat Values as Strategy: Apple’s commitment to privacy, inclusion, and sustainability is a strategic, not just moral, approach. Drucker believed that long-term viability depends on consistently doing the right thing.
4 - Ask Drucker’s Two Core Questions:
What is our business?
Who is our customer?
These simple questions, when taken seriously, can reveal misalignments and open doors to clarity and focus.
5 - Embrace Strategic Abandonment: Just because a product or process worked yesterday doesn’t mean it will continue to be effective tomorrow. Drucker urged leaders to review what should be discontinued on a regular basis.
6 - Lead by Listening and Learning: Drucker taught that effective executives ask, listen, reflect, and adapt. In times of upheaval, humility and curiosity are not soft skills—they are survival traits.
7 - Build Institutions, Not Just Companies: Drucker believed that management was a social function. Executives must build organizations that are good not only at generating wealth, but also at developing people and strengthening society.
Conclusion: Drucker’s Legacy in a Digital Age
Apple Inc. is more than a technology company; it is a masterclass in applied management. Its rise to the top of the Drucker Institute rankings isn’t just a business achievement—it’s a validation of Drucker’s timeless insights.
Drucker often discussed the importance of anticipating change and adapting to evolving environments. Apple’s growth reflects its impressive ability to stay ahead of market trends. From foreseeing the rise of smartphones to predicting the potential of wearable devices, Apple positions itself as the leader in emerging technologies. For instance, Apple recognized the shift toward health and fitness technology and developed features like the Apple Watch’s heart health tracking and fitness monitoring. The company also invested early in augmented reality (AR) and artificial intelligence (AI), preparing for future transformations in tech and consumer behavior.
For today’s executives, the lesson is clear: Drucker’s ideas are not only still relevant—they may be more essential now than ever. As technology evolves, stakeholder expectations grow, and complexity increases, the clarity and wisdom of Drucker’s principles provide a guiding compass. Apple followed that compass, consciously or not. Others can too.
The question is not whether Drucker matters in the 21st century. The question is whether today’s leaders are willing to think as deeply, act as deliberately, and lead with as much purpose as Apple has done.
Executives who embrace these principles are doing more than adapting to disruption. They are redefining leadership in a world that demands more from its institutions—and more from its leaders.
A Personal Window into Apple’s Evolution: Five Decades of Firsthand Insight
Over the past fifty years, I have observed Apple not only as a loyal customer and user of its products but also from the vantage point of someone who has worked with the company and its leaders during several pivotal moments in its history. This long-standing relationship has given me a unique perspective on how Apple evolved, stumbled, and ultimately thrived—often in ways that reflect the very principles Peter Drucker championed.
In the 1970s, I was part of a classified team developing Charge-Coupled Device (CCD) imaging chips for the National Reconnaissance Organization (NRO), a highly secretive U.S. government agency at the time. One of the key scientists on that team was Dr. Gil Amelio, a brilliant technologist and future CEO of Apple. Together, we built space-based sensors that laid the groundwork for innovations in digital imaging. It was a relationship founded on engineering excellence and trust—traits I would later see Gil bring into the heart of Apple during one of its most difficult transitions.
By the 1980s, as the Cold War was winding down, I served as executive director of the President’s Roundtable, a consortium of CEOs, presidents, and senior executives from over 100 major companies grappling with the massive demand shifts caused by global geopolitical changes. Apple was an active participant, represented by Mike Markkula, one of its early visionaries. Markkula’s presence and input were consistently marked by thoughtful reflection, values-based leadership, and strategic restraint—qualities that echoed Drucker’s belief in mission clarity and management by values. Drucker was an advisor to the Roundtable.
In the early 1990s, I led the acquisition of Aptec Computers, a company that had developed an advanced parallel-processing server for image processing. That system drew attention from Apple’s R&D team in Cupertino, and we began collaborative work to license it as part of their advanced computing initiatives. This was a period when Apple was exploring bold new architectures, looking beyond the traditional desktop computing paradigm.
When Mike Markkula later recruited Gil Amelio to replace Michael Spindler as Apple’s CEO in 1996, Gil relocated to Tahoe City—ironically, my own home base since 1989. Our paths naturally crossed again, and we resumed our collaboration on the server project, now with a far greater sense of urgency as Gil took on the challenge of stabilizing Apple at one of its lowest points.
Through each of these chapters, I gained insight into Apple: its technical ingenuity, its leadership dynamics, and its ongoing identity search. From early visionaries like Markkula, to transition figures like Amelio, to today’s operational mastery under Tim Cook, Apple’s arc is both personal and professional to me. And in retrospect, I see clearly how much of what worked—and what failed—aligns with Peter Drucker’s enduring insights about customers, innovation, people, and purpose.
Citations & References
¹ Apple is among the largest companies in the world, with a broad portfolio of hardware and software products targeted at consumers and businesses. Apple's iPhone makes up a majority of the firm sales, and Apple's other products, like Mac, iPad, and Watch, are designed around the iPhone as the focal point of an expansive software ecosystem. Apple, founded in 1976, has progressively worked to add new applications, like streaming video, subscription bundles, and augmented reality. The firm designs its own software and semiconductors while working with subcontractors like Foxconn and TSMC to build its products and chips. Slightly less than half of Apple's sales come directly through its flagship stores, with a majority of sales coming indirectly through partnerships and distribution. Source: Pitchbook.com
² Drucker saw innovation as a creative endeavor and a discipline embedded within an organization’s operations. Apple lives by this principle by making innovation a systematic priority. Under the leadership of Steve Jobs, the company redefined entire industries with the introduction of the iPod, iPhone, and iPad, incorporating cutting-edge technology and visionary design. Even under Tim Cook, when Apple's leadership style shifted toward operational efficiency, innovation remained central to the development of products like Apple Pay and the Apple Watch. Apple’s ability to continually disrupt industries reflects Drucker’s belief that organizations must consistently innovate to stay relevant.
³ Drucker saw innovation as a creative endeavor and a discipline embedded within an organization’s operations. Apple lives by this principle by making innovation a systematic priority. Under the leadership of Steve Jobs, the company redefined entire industries with the introduction of the iPod, iPhone, and iPad, incorporating cutting-edge technology and visionary design. Even under Tim Cook, when Apple's leadership style shifted toward operational efficiency, innovation remained central to the development of products like Apple Pay and the Apple Watch. Apple’s ability to continually disrupt industries reflects Drucker’s belief that organizations must consistently innovate to stay relevant.
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About the Author - Dr. Dean McKay
Think mountain streams and Alpine lakes, tall pines and clear blue skies. See a slowly circling hawk or a majestic eagle soar by. Inhale the crisp air of a cross-country ski trail. Watch an eager Lab trot up the trail in front of you. Sit on a wide deck in the middle of the forest and enjoy nature. You have just entered my world.
A rocket scientist with NASA’s Saturn/Apollo man-on-the-moon program in the 60’s to disruptive technologies entrepreneur today, his goal is to create 10X value for organizations.
Value creation is a passion for me. I have been involved in a strategic initiative to take the last four decades of over 400 strategy retreats and incorporate apps and the cloud into a means to facilitate strategic thinking on a whole new level.
Adams Media published a book he co-authored with P. T. Shank, “Business Words You Should Know: 1,000 Essential Words and Phrases for Any Job” a business addition to the Adams vocabulary and literacy series and now available on Amazon.com and major booksellers.
He enjoys developing unique strategies called "10x" because they have the opportunity to change the way things are done by at an order of magnitude. Today my executive activities and investment focus provide strategic advice and include corporate governance and strategy formulation through a number of board appointments.
Dean holds a BS in mathematics from the University of Texas at Arlington, a MA and PhD in Executive Management from Claremont Graduate University - Peter F. Drucker and Masatoshi Ito Graduate School of Management. He lives in Tahoe City, California with his wife Susan Mix. They have five children 15 grandchildren, and 3 great-grandchildren. I enjoy skiing, fly fishing, woodworking, hiking, and working with non-profits.
