Sometimes it's a good idea to phone a friend when we are in need of guidance. After all, a hallmark of effective leadership and decision-making is being able to admit when you need help, and to seek out advice as needed.
Whether you are starting a new position at a new job or are a massively successful industry titan, pursuing advice is something anyone at any career level--leader or not--can do. And in the case of Apple CEO Tim Cook, he was able to phone none other than Warren Buffett, billionaire investor and philanthropist, for counsel.
As Cook recounted to CNBC at the Berkshire Hathaway shareholder's meeting,
I'd been in the CEO spot maybe a year or so, we had a growing amount of cash, we had crossed the $100 billion mark, if my memory is correct. When I don't have experience with something, I make a list of the people that I think that are the smartest people that I can contact to get advice...Warren was on the top of the list. As you can imagine, I hadn't met Warren before. I get his number, I call out in Omaha, and I wasn't sure that he'd take the call. But he took the call, and I had a great conversation with him, and that was the first time that I met Warren.
What Buffett said to Cook was clear and succinct. Remembers Cook, "[Buffett] said, 'Let me just cut through it, if you believe that your stock is undervalued, you should buy your stock.'" When Steve Jobs consulted with Buffett, the famous investor had also advised that Apple use its cash to buy back shares of the company's stock.
Cook's consultation with Warren was an important part of Apple's decision to start stock buybacks at the end of 2012--even though Buffett gave the same advice to Steve Jobs, who had rejected it for years.
Apple's repurchase program, which has a variety of benefits like "earnings accretion, dividend savings, and getting closer to an optimal capital structure," is something that Cook believes takes care of the company as well as its future.
But this Apple CEO believes this decision can also positively affect consumers as well: "We're fortunate in that, when we buy our stock we think that almost 50 percent of U.S. households own Apple stock, either directly or indirectly through indexes and mutual funds and so forth," Cook explains. "And so it helps everybody or helps a large number of people."