Tim Cook’s Epic Growth Challenge at Apple

Cook must make the world’s most valuable company more valuable, when conventional strategies would barely move the needle.

One of the great business leadership challenges of recent years is playing out before us now, widely unappreciated for what it is. That’s a bold claim but easily justified. I’m talking about the challenge facing Apple CEO Tim Cook. He’s unique among business leaders, one of the few leaders in any field to have made both of our first two rankings of the World’s Greatest Leaders; in 2014 he was No. 1. In addition, Apple aapl is the world’s most valuable company. More than four years after taking over from Steve Jobs, Cook is widely hailed as a man who has done the impossible, following the legendary co-founder and leading Apple to far greater success.

So what’s the challenge? For the answer, please check out Shawn Tully’s eye-opening new article, “Why Apple’s Investors Are Questioning its Future.” Shawn, a master of financial analysis, shows how Cook has set a standard of financial performance that is so high, it may be impossible to meet in the future. That’s a nice problem to have, you may say – but it’s still a problem.

Specifically, investors are lowering their estimate of Apple’s value. Last May they thought the company was worth $740 billion. Today they think it’s worth $568 billion. The reason is that they believe Apple has become an iPhone company; without that incredible hit product, Apple’s revenues wouldn’t have increased at all last year, and the iPhone now accounts for 66% of Apple’s total sales. Investors worry, reasonably, that Apple will never find another iPhone. The developed economies are pretty well saturated with smartphones by now, and while Apple has been doing great in China, you have to wonder if the government will ever let a non-Chinese company dominate their country with such a critically important technology.

So Cook faces a mammoth challenge: finding ways to make the world’s most valuable company even more valuable when it’s already so big that conventional growth strategies—extending product lines, moving into new territories—would barely move the needle. That’s why we shouldn’t be surprised by reports (unconfirmed) that Apple is getting into the autonomous car business, for example, and may buy Tesla. The car business is at least big enough to provide noticeable growth for Apple.Like most things at Apple, the Cook leadership drama is happening almost entirely behind the scenes. But that fact shouldn’t discourage us from trying to observe as much of it as we can. Cook’s first job as CEO is to increase the value of Apple. Whether he succeeds or fails, his attempt to do it is business strategy and leadership on an epic scale.

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