5 CEOs Who Think Like Steve Jobs

by Jeff Reeves | October 7, 2011 9:00 am

Steve JobsROCKVILLE, Md. — Apple (NASDAQ:AAPL[1]) shareholders and gadget geeks are mourning the loss of the company’s iconic founder. Apple has been one of the few true growth stories on Wall Street lately, and the death of Steve Jobs at just 56 years old makes you wonder if we have any good stocks — and more importantly, any good leaders — remaining.

True, the headlines make it seem like only charlatans get to be CEOs these days, and shareholders have to fear executives more than trust them. An overpriced MBA and a golden parachute are more common than they should be in corner offices.

But take heart. While Steve Jobs was a cultural force the likes of which the world might never see again, there still are wise and talented leaders out there right now. These CEOs share the Apple founder’s ability to create value for shareholders and employees, and to define their industry to both competitors and consumers alike.

Lest you think such success depends on an iPhone-like innovation, it’s worth noting that gadgets were only part of the Steve Jobs story. There was his focus on a long-term vision that trumps the quarterly drumbeat of the Street. There was his shrewd use of capital to grow and cripple competitors. And above all, there was his desire to connect completely with customers so his product would almost sell itself.

Lest you think Steve Jobs was the only one who understood these concepts, here are five CEOs who think like he did:

James Sinegal, Costco

What the heck does a 30-gallon tub of mayonnaise at Costco (NASDAQ:COST[2]) have to do with the iPad? Probably not much. But when it comes to innovative business builders — guys with a long-term focus on shareholder value and connecting with consumers in new ways — Steve Jobs and James Sinegal were two peas in a pod.

Sinegal co-founded Costco and has been president since 1983. His innovations made Costco the first warehouse club to include fresh food, eye-care clinics, pharmacies, gas stations and other businesses previously thought out of place on retail floorspace. Under Sinegal’s leadership, shares of Costco are up 2,800% and have paid modest dividends since 2004.

Perhaps the most Jobs-like quality Sinegal has is his desire to put the “user experience” above everything else. For a retailer, that means customer service — and happy, motivated employees who feel they have a stake in the company. About four out of every five Costco workers get health care and benefits, even though about half are part-timers. The average wage is $19 an hour, and there have been no layoffs in the recession.

In this respect, the Costco founder actually might be one up on Steve Jobs. Many Apple critics malign the company’s outsourcing to Asia, while Sinegal managed to create an industry leader that offers livable wages to almost 150,000 Americans — all while COST stock beats the market and is on track to turn a cool $1.4 billion in profits.

The only question is whether Costco can keep this up after Sinegal steps down at the end of the year.

Jeff Bezos, Amazon

Jeff Bezos AmazonName this stock: This tech giant is one of the biggest names in technology and single-handedly has redefined an entire industry. Thanks to its founder and current CEO, shares are up about 12,700% since 1997.

Did you guess Apple? You’re wrong. While all those earlier statements apply, Apple stock is “only” up about 8,200% since 1997. The company I’m talking about is Amazon (NASDAQ:AMZN[3]), led by Jeff Bezos that entire time.

Lest our grandchildren assume Apple is responsible for everything, remember that Amazon was the first true e-commerce success story. And though people talk about the Kindle Fire as an iPad competitor, it actually is the other way around — the original Kindle was here in 2007, just a few months after the iPhone was born and while viability of “e-books” still will very uncertain.

According to comScore[4], in June 2011 Amazon was visited by 282 million people, or 20.4% of the world’s online population. Think about that: 1 in 5 folks with an Internet connection visit the site each month.

And Jeff Bezos isn’t done. The Kindle Fire has a real shot at competing in the tablet market, and the movement into streaming video with Amazon Prime could gain momentum as Netflix (NASDAQ:NFLX[5]) struggles.

Jim Skinner, McDonald’s

McDonald’s (NYSE:MCD[6]) exec Jim Skinner didn’t found the company he now leads. But he did begin his career with McDonald’s as a lowly restaurant manager trainee in Illinois about 40 years ago — making him intimately related with his employer. Steve Jobs wrote code before writing notes to shareholders, and Jim Skinner tallied frozen patties before the MCD balance sheet.

And like Jobs, Skinner also was called upon to revitalize his company in its hour of need. From 2000 to 2003, McDonald’s share price plummeted from a high above $33 to around $13. McDonald’s was struggling under many negative perceptions — that it killed folks with unhealthy food, bribed kids with toys and treated workers like indentured servants. But thanks to a revitalization plan Skinner helped craft as vice chairman and enacted when named CEO in 2004, MCD stock is now at about $87 per share — almost seven times those 2003 lows.

A big part of that plan was to refocus on the customer. The menu got healthy. The Dollar Menu was added. The 24-hour drive-through window, the McCafe line of coffees, Wi-Fi access points and the first major store redesign since in 1970s hoped to win back repeat customers. And it worked big-time.

To top it off, MCD’s annual dividend was 40 cents in 2003. Now, it stands at $2.40 — a stunning 510% increase in just eight years, while many companies cut or killed dividends during the recession!

Skinner never created an iPad, but income investors might think that dividend creation is even more impressive.

Larry Page, Google

Larry Page GoogleI hear the groaning already, but hear me out. For starters, Larry Page was the programming wonk who co-founded Google (NASDAQ:GOOG[7]) based on his Ph.D study at Stanford. That kind of creativity and boots-on-the-ground experience is very Jobs-like — graduate degree notwithstanding.

Also, the company’s mission statement is “to organize the world’s information and make it universally accessible and useful.” That’s about as focused on the customer and user experience as you can get.

While some snicker at boondoggles like a car that drives itself or alternative energy schemes, Google’s endless quest at innovation is to be admired when so many companies suffer from an utter lack of creativity. There might be some flops, but can anyone argue with the ubiquity of Gmail? How about the upstart Android operating system — which could seriously give Steve Jobs’ brainchild, the iPhone, a run for the money now that Motorola patents are in house. Then there’s the utter dominance of Google Maps, Google Ads and, of course, Google search.

Though shares haven’t been perky recently, Google is up 375% since its IPO in 2004. The Dow Jones is up just 10%.

Don’t forget: Apple wandered in the wilderness during its adolescent years, too. Perhaps the most Jobs-like thing of all would be for Page to create the next big thing that truly takes Google to the next level. Considering Larry Page just stepped into the chief executive role in April, taking over for Eric Schmidt, this could be the beginning of the company’s second act.

John C. Martin, Gilead Sciences

Gilead Sciences (NASDAQ:GILD[8]) CEO John C. Martin has been the brains behind one of the fastest-growing drug stocks on Wall Street since taking over in 1996. The stock is up about 2,700% in those 15 years. The Dow is up a mere 85% since 1996, and lumbering Big Pharma stocks are a fraction of that.

Gilead’s CEO isn’t just a shrewd businessman, either. Like Jobs, he soaked up the technical knowledge necessary to lead such a highly cerebral company — Doc Martin holds a Ph.D in organic chemistry from the University of Chicago, and awards from the American Chemical Society and the International Society for Antiviral Research.

Also like Jobs, Martin understood how to take calculated risks and use capital responsibly to grow and squeeze out competitors. After riding high due to successful antiviral medications including flu vaccines, in 2006, Gilead made quality acquisitions to enter into the profitable cardiovascular and respiratory markets.

As for future innovations, Gilead currently is in Phase III testing for four HIV/AIDS treatments, with one more in Phase I trials and four additional medications in pre-clinical runs. If one of these treatments packs a significant punch against HIV/AIDS, then Gilead truly will command a product that is every bit a global force as the iPad.

Jeff Reeves[9] is editor of InvestorPlace.com. As of this writing, he did not own a position in any of the stocks named here. Follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook.

Endnotes:

  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. COST: http://studio-5.financialcontent.com/investplace/quote?Symbol=COST
  3. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  4. According to comScore: http://www.comscore.com/Press_Events/Press_Releases/2011/8/Amazon_Sites_Visited_by_1_in_5_Global_Internet_Users_in_June
  5. NFLX: http://studio-5.financialcontent.com/investplace/quote?Symbol=NFLX
  6. MCD: http://studio-5.financialcontent.com/investplace/quote?Symbol=MCD
  7. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  8. GILD: http://studio-5.financialcontent.com/investplace/quote?Symbol=GILD
  9. Jeff Reeves: https://investorplace.com/2011/10/american-brands-kodak-amr-american-airlines-sears/2011/09/2011/09/market-swings-dow-jones-buy-and-hold-dividends/2011/09/2011/09/2011/08/ugly-truths-obama-stimulus-jobs-economy/2011/08/2011/08/2011/08/2011/08/2011/08/2011/08/hewlett-packard-hp-stock-buyback-autonomy-buyout-hpq/2011/08/author/jeff-reeves/

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