Inside Apple: How America's Most Admired--and Secretive--Company Really Works (3 page)

Then, with the company back on its feet thanks to the success of the iMac and the jettisoning of numerous unprofitable and non-core products, such as the handheld Newton and printers that were indistinguishable from the competition, Jobs set Apple on the course that would transform it from niche pioneer to global champion. Apple opened its first retail stores in 2001, initially to sell Macs. Then it started stocking the stores: with the first iPods that year, followed by a succession of follow-on iPods, including the Mini, the Nano, the Shuffle, and the Touch. Consumers used the iTunes Store, first introduced in 2003, to fill their devices with music, and later movies and TV shows. The stores were stuffed with Apple products and scores of third-party accessories by 2010, when Apple released the groundbreaking iPad.

It was during this burst of creative energy that Apple’s CEO first became ill. He learned in 2003 that he had a rare, initially treatable form of pancreatic cancer but didn’t have the tumor removed until 2004, when he took his first leave of absence. A healthy period followed—this is when the iPhone was born and the iPad took shape—but Apple-watchers knew something was amiss when Jobs showed up for an Apple developers’ conference in June 2008 looking gaunt. The next year he announced a second leave, this time so he could have a liver transplant performed. He returned to work in mid-2009 but never regained the weight he’d lost the previous year.

The last time Jobs presented to the public, on June 7,
2011, it was before the Cupertino City Council. He had come to show the city Apple’s plans for a new, twelve-thousand-person headquarters and campus in Cupertino to be built partly on land purchased from a shrinking Hewlett-Packard. The hometown boy played to an awed audience, expressing his desire for his company to continue paying taxes in Cupertino and mindfulner and mi of the history of the land in question. (Apple was Cupertino’s largest taxpayer, he noted, and it would be a shame if the company were forced to move to Mountain View.) The presentation contained all the usual Jobs flourishes: clean slides, persuasive points to convince the council his plan was sound, and a dash of heartstring-pulling emotion. He noted that apricot trees had once covered the 150 acres where Hewlett-Packard had built its computer systems division. He knew this, of course, because he had grown up nearby. Now landscaping covered only 20 percent of the site, and too much of the rest was covered with asphalt. Apple’s plans called for increasing the landscaping dramatically, including providing a home for six thousand trees where thirty-seven hundred now stood. “We’ve hired a senior arborist from Stanford,” Jobs told the council—an expert in indigenous trees. Said the indigenous executive, who knew full well he wouldn’t live to see the new headquarters built: “We’ll want to plant some apricot trees.”

W
hen he died, much was made of how singular Steve Jobs had been. For comparisons, observers needed to reach back to the mythic inventors and showmen of earlier eras, particularly Thomas Edison and Walt Disney.
Jobs was singular, to be sure. But he also was of a type. He was what psychotherapist and business coach Michael Maccoby called a “productive narcissist.”

In 2000, Maccoby published an insightful article in the
Harvard Business Review
that applies Freudian terminology to three categories of executives Maccoby had observed in corporate life. “Erotics” feel a need to be loved, value consensus, and as a result are not natural leaders. These are the people to whom a manager should assign tasks—and then heap praise for a job well done. “Obsessives” are by-the-books tacticians with a knack for making the trains run on time. An efficient head of logistics or bottom-line-oriented spreadsheet jockey is the classic obsessive. The greats of business history, however, are “productive narcissists,” visionary risk takers with a burning desire to “change the world.” Corporate narcissists are charismatic leaders willing to do whatever it takes to win and who couldn’t give a fig about being liked.

Steve Jobs was the textbook example of a productive narcissist. An unimpressed Jobs was famous for calling other companies “bozos.” His own executives endured their rides on what one called the “bozo/hero rollercoaster,” often within the same marathon meeting. Jobs brought an artist’s eye to the scientific world of computers. His paranoia built a company that is as secretive as the Central Intelligence Agency. Jobs, perhaps more than any other businessperson of the last century, created the future others couldn’t see.

The way Jobs led is merely the first example (of many) of how Apple’s ways depart from decades of received wisdom on corporate life. In his most recent book,
Great by Choice
, management expert Jim Collins and his co-author
Morten T. Hansen hold up Microsoft rather than Apple as the model of a company that delivers outstanding returns to shareholders. (It didn’t help their analysis that the data set for the companies they investigated ended in 2002—shortly after Microsoft’s star began to fade and just as Apple’s began to shine.) For years, the trend in business has been toward empowerment. Collins rhapsodizes in his earlier classic
Good to Great
about the humble “Level 5 leader” who shares credit with his or her subordinates and delegates responsibility. In Collins’s cosmology of corporate life, the reverse was supposed to be true as well. Great leaders weren’t ents werensupposed to be tyrants. They were supposed to empathize with the feelings of those below them.

Jobs did just the opposite. He micromanaged to a shockingly high degree and to an amazingly low level in the organization. One ex-employee recalled being responsible for an email that would be sent to Apple customers simultaneously with the launch of a new version of a product. Ahead of the launch, Jobs engaged this employee in a repeated back-and-forth by email over the punctuation in the message. “A first iteration of anything was never good enough for him,” said the former employee. At the height of his power Jobs personally ran marketing, oversaw product development, involved himself in the details of every acquisition, and met weekly with Apple’s advertising agency. Before illness slowed him, Jobs was the only Apple executive to play a significant role at any Apple public event, be it a product launch or a keynote speech. When Apple did grant interviews to the press to promote an upcoming product launch, Jobs was the primary—and sometimes only—Apple spokesman.

There are few companies where this sort of leadership style would fly. But should there be? CEOs aren’t supposed to be jerks. They’re not supposed to make their employees cry. They’re not supposed to hog all the credit for a team’s job well done. Yet accepting that the flame of one’s own public profile needed to be extinguished at the altar of Steve was a fact of life for even senior Apple executives. Avie Tevanian, one of Apple’s senior software executives in the late 1990s and early 2000s, recalled the time, in 2004, that he commented at a public event on the expected upgrade cycle for the Mac operating system. There was nothing controversial in what he said, in Tevanian’s opinion. He merely was confirming what already was well known, that the upgrade would take slightly longer than prior releases. “I got a scathing phone call from Steve,” Tevanian remembered. “He said: ‘Why would you say something like that? We have no news to report; you shouldn’t have said that.’ ” Up to that point, Tevanian hadn’t spoken much in public, even though he was one of the highest-ranking Apple executives. Afterward, he rarely did at all, which was just the way Jobs wanted it.

Hogging the spotlight created resentment, but it was also characteristic of the type of leader Jobs was. In his book
The No Asshole Rule: Building a Civilized Workplace and Surviving One That Isn’t
, Stanford business professor Robert Sutton calls Jobs “exhibit one” of chapter 6—titled “The Virtues of Assholes”—a chapter Sutton said he didn’t want to write: “It sometimes seems as if his full name is ‘Steve Jobs, that asshole.’ I put ‘Steve Jobs’ and ‘asshole’ in Google and got 89,400 matches.”

Joking aside, Sutton goes on to make a case consistent with Maccoby’s Freudian analysis. Perhaps, he argues,
ignoring the very qualities that adherents of “empowerment” have been advocating is an acceptable model of leadership today. Jobs may have been an asshole, Sutton implies, but he was an effective asshole. People who worked for Jobs argue, Sutton writes, that

he is among the most imaginative, decisive and persuasive people they’ve ever met. They admit that he inspires astounding effort and creativity from his people. And all suggest—although his tantrums and nasty critiques have driven the people around him crazy and driven many away—they are a crucial part of his success, especially his pursuit of perfection and relentless desire to make beautiful things. Even those who despise is who deshim most ask me, “So, doesn’t Jobs prove that some assholes are worth the trouble?”

Jobs’s insistence on involving himself in the smallest of matters was as old as Apple itself. In his seminal book about Apple’s earliest days,
The Little Kingdom
, Michael Moritz describes the lengths to which Jobs would go to have things his way. “When an IBM salesman delivered a blue Selectric typewriter instead of the neutral color he had specified, Jobs erupted,” Moritz wrote in 1984. “When the phone company failed to install the ivory-colored telephones Jobs had ordered, he complained until they were changed.” In the early days Jobs haggled with the smallest of vendors, and typically in a less-than-congenial or -respectful way. “He was very obnoxious to them,” Gary Martin, an early Apple accountant, told Moritz. “He had to get the lowest price they had. He’d call them on the phone and say, ‘That’s not good enough. You better
sharpen your pencil.’ We were all asking, ‘How can you treat another human being like that?’ ”

A narcissist to be sure, Jobs also had obsessive traits, and he made sure the people below him obsessed about details as much as he did. Indeed, Jobs’s requirement that things be done his way—and his persistence in verifying that his will be done—created Apple’s obsessive culture and called to mind a domineering orchestra conductor. “The leadership structure at Apple is what allows Apple to thrive,” recalled Michael Hailey, a former product marketing manager. “You had a visionary leader and people he trusted implicitly who had a knack for executing his vision. Jobs stayed involved from beginning to end to make sure everything matched his vision. He’d check off on the smallest things. That’s how you get discipline.”

Jobs was called Apple’s editor and also a curator. He picked and chose from among the ideas his employees rigorously vetted before presenting to him. Over and over Apple employees who were exposed to the Jobs decision-making process voiced amazement at the CEO’s uncanny knack for “being right.” Frederick Van Johnson, an Apple marketer in the mid-2000s, described a typical Jobs reaction matrix to being presented with a product plan. “He’ll look at it and he’ll say, ‘Yeah, great. Go for it.’ He may say, ‘That’s crap, back to the drawing board. Why do you even work here?’ Or he may say, ‘That’s great. But do this, this, and this, too.’ Because he has that insight. You know, he’s Steve. He may say, ‘You know, people are really interested in seeing this kind of thing.’ And you’re like, how did you even know that? You’re absolutely right. And it’s not even blowing smoke. Normally, he has some sort of weird insight where he just knows.”

How Jobs behaved as CEO will remain relevant at Apple for years because he so thoroughly infused the company with his idiosyncrasies. His unwillingness to follow other people’s rules gave Apple employees license to ignore the rules of the people with whom they do business. Jobs’s brutality in dealing with subordinates legitimized a frighteningly harsh, bullying, and demanding culture at Apple. Under Jobs, a culture of fear and intimidation found roots throughout the organization. If the narcissistic leader didn’t care about being loved and was willing to take extraordinary risks in the interest of winning, then so would his subordinates. “High-performance teams should be at each other’s throats” is how one person with relationships with multiple Apple executives summarized the culture. “You don’t get to the right trade-off without each person advocating aggressively for his position.” A? Ysition.rguments at Apple are personal and confrontational. This began at the top, and it is part of the company’s culture.

The drubbing extended to anyone Jobs considered welcoming into the company. Jeff Jordan, a venture capitalist who held senior-level posts at eBay, PayPal, and start-up OpenTable, recalled Jobs’s interviewing style when Jordan discussed a position at Pixar in 1999. Jobs invited Jordan, who had left Disney for a job at video retailer Hollywood Entertainment, to breakfast at Il Fornaio, a faux-rustic Italian eatery connected to the upscale Garden Court Hotel in downtown Palo Alto. Seated by himself in Il Fornaio’s completely empty back room, Jordan waited for Jobs, who showed up late, wearing a T-shirt and washed-out cutoff shorts. “They sat him, and immediately placed three glasses of orange juice in front
of him,” said Jordan, who recounted the interview more than ten years later as the most memorable of his career. Jobs opened by insulting Jordan’s professional accomplishments. “Disney’s stores suck,” he said. “They misrepresent my Pixar products all the time.” Jordan defended himself by explaining why, in his opinion, Disney’s stores did not suck, at which point Jobs abruptly changed gears. “After a bit, he leaned forward and said, ‘Let me tell you about this position at Pixar.’ ” (Jobs famously played multiple angles; he called Jordan to talk about Pixar, but he also was snooping around for someone to run Apple’s as-yet-unannounced retail stores.) Jordan began to grasp that he had witnessed a routine that was part theater and part genuine emotion. “His entire tone had changed at that point,” said Jordan. “I realized it was just a complete stress test, a highly efficient winnowing process.”