This tech giant is losing top talent hand over fist. Find out why!

Wednesday: The Independent Investor FROM THE DESK OF MILES EVERSON: Hello! Welcome to “The Independent Investor!” Every Wednesday, we bring you articles about investing because we believe diving into this activity can help you attain wealth creation and achieve true financial freedom. Today, we’re excited to share with you another facet of investing that some investors don’t pay attention to. Continue reading to know how talent can heavily influence a company’s long-term viability and earning power. CEO, MBO Partners Chairman of the Advisory Board, The I Institute

This tech giant is losing top talent hand over fist. Find out why! Apple stood as one of the best places to work for in the mid-2000s because it was run by some of the most legendary names in the tech world. Steve Jobs, a true visionary, helmed the tech firm and was responsible for pioneering the personal computer. He was also behind the creation of the iconic iPhone and iPod. Jobs wasn’t alone though, as he had help from people like Jony Ive. Joining Apple in 1992, Ive climbed the ranks until he became the tech firm’s Senior Vice President of Industrial Design and Chief Design Officer. Throughout his tenure, he helped create the iPod, iPhone, Macbook, and the Apple Watch. He was also responsible for designing the Apple Park and Apple stores. However, in 2019, Ive left Apple but stayed on as a consultant until 2022. Following his departure, Ive started LoveFrom, his own design firm. The departure wasn’t a major hit to the tech giant; however, Ive’s exit follows the departure of several of Apple’s other visionaries. According to recent news, this exodus of talent is only getting worse. So today, we’ll take a look at this issue and discuss why it’s a worrisome sign for investors. Losing Talent Hand over Fist In February 2024, Bart Andre, one of Apple’s last remaining industrial designers from the early 90s announced his departure from the company. He joined three other senior product designers who all left in 2023. It’s not just members of the industrial design team heading for the exits, as several senior software designers have stated their intentions to leave as well. According to a 2017 report from consulting firm McKinsey, finding and retaining good talent is extremely vital to a business’ success. In a study of more than 600,000 researchers, entertainers, politicians, and athletes, McKinsey found that high performers are five times more productive than average ones. Various studies show that the performance gap is even more pronounced in roles that are more complex. For example, high performing software developers are nine times more productive than their average peers. Nearly all of the senior designers who worked under Ive have left to work for his new firm. On top of that, Apple decided to put someone else to lead its design teams, which reportedly frustrated the tech firm’s creatives. The significance of the exodus of talents cannot be stated enough. After all, design is a crucial part of Apple products. This means if the firm cannot churn out great ones, investors will have a hard time justifying the premiums they pay for the tech giant’s shares. For the past several years, Apple has been a strong business because of its exceptional talent… and if those folks go elsewhere in droves, the company will surely suffer from brain drain, leading the tech giant to struggle in keeping its returns high. Apple might not feel the effects of the brain drain right away since it has strong competitive advantages when it comes to brand recognition. However, if the firm doesn’t do anything to resolve its talent problem, it won’t be able to rely on its advantages forever, leading investors to miss out on their expected returns in the long run. Talent Matters As an investor, you need to pay attention to where good talent is heading as this will allow you to further evaluate a firm’s ability to churn great returns. After all, a company’s success is not just dictated by its business model and products on offer. The talent it has is a big factor too. So, the next time you scour the market for opportunities, dig deep into a firm’s talent pool. This is one of the signals that will help you find out whether or not a company can sustain its financial performance for years to come. ANNOUNCEMENT: Discover the key to navigating the lucrative world of resource investing! On July 7 to 11, 2024, The Rick Rule Natural Resource Symposium will return to The Boca Raton in Florida to deliver unparalleled and profitable insights on resource and commodities investing. In this one-of-a-kind event, you’ll have the chance to get front-row access to exclusive insider insights, participate in sponsored breakfasts, lunches, breakouts, and panel sessions, as well as join first-class celebrations with an exciting speaker lineup. My friend and colleague, Professor Joel Litman, will be speaking in this symposium. I highly encourage you to join this event! This symposium is thoughtfully crafted to ensure you walk away with your own personalized resource and commodities investment plan for the year ahead. Register now through this link to secure your slot. You have an option to register as an onsite attendee or via livestream only. Hope to see you there! Hope you’ve found this week’s insights interesting and helpful.     Did you know that in 2011, a Harvard Business Review (HBR) article caused panic on Wall Street? Learn more about this decades-old “wisdom” about mergers and acquisitions (M&As) in next week’s article!