People say a lot of things about Steve Jobs, but not many would say he is under-appreciated. Tributes to his technological vision, decisiveness and success have poured in since Jobs announced on Wednesday that he is stepping down as Apple’s CEO due to poor health.
Yet there is one accolade that I have not seen him receive: Jobs probably is the most successful corporate turnaround artist in history.
Apple was little more than Silicon Valley roadkill in the late 1990s when Jobs returned to the company he had co-founded two decades earlier. Microsoft Windows, a corporate knock-off of Apple’s early Macintosh operating system, ran on more than 90 percent of all personal computers. Bill Gates was the industry titan, at or near the top of every list of the world’s richest men. Yet Apple overtook Microsoft last year as the most valuable technology company, and for a brief time during one trading day this month, it overtook Exxon as the most valuable public company, period.
The usual recipe for corporate turnarounds starts with a chief executive wielding a budgetary knife. Crisis management includes cutting staff, closing plants, selling unprofitable divisions, and paring back to focus on what the company can do best, or at least what it can do without bleeding cash until it runs dry.
Jobs’ predecessor, Gilbert Amelio, repeatedly tried to restore Apple’s competitiveness by reorganizations during the 1990s. He got nowhere, while the company’s board brought back Jobs, then his original co-founder Steve Wozniack, as advisers to try to help Amelio find his way. Amelio’s predecessor was former PepsiCo president John Sculley, who forced Jobs out of Apple in the mid-1980s. Apple’s slide to near-obscurity began under Sculley. He too tried to cut his way back to prosperity, without success.
The insight that set Jobs apart was that user satisfaction and user excitement are the keys to success. Jobs is not, as far as I know, a great inventor, engineer or programmer. He is great at knowing what people will like, and what they will want, before they themselves have ever thought about an item, let alone wanted it.
Jobs understood that most people will never buy a $250,000 sports car. They will, however, stand in line to buy a $25,000 compact that looks as cool as a $250,000 sports car, even if other $25,000 compact cars have better specs. Build a sexier product, and you can command a modest premium.
Back in the late 1970s and early 1980s, most microcomputers greeted users with a command prompt, something like A>. The A> just sat there, waiting for a user to type something meaningful. A user who did not know what to type was helpless. Nobody likes to feel helpless.
Even the earliest Apples made life easier than that. One hallmark of Apple software was that it came on self-starting disks. You inserted a disk containing the program you wanted to use, turned on the computer, and in a few moments you were doing what you wanted to do. No need to see a command prompt, though Apple’s machines could give you that if you wanted it.
Apple also pioneered the use of menus, which told the user what to type instead of offering an open command prompt. But the big breakthrough came in 1983, when the Apple Lisa became the first commercial machine to use a graphics-based interface, rather than one that relied on plain text. The Lisa was not a hit, but the all-in-one Macintosh released in 1984 was.
During his years away from Apple, Jobs founded NeXt Computer and used it, unwittingly, as the laboratory for future Apple products. OS X, Apple’s current operating system – one that has had far fewer problems than various Windows iterations – is based in part on software that ran NeXt machines.
A decade or so ago, while Jobs was putting Apple back on its feet, I carried a clamshell-style cellphone in my pocket and I kept a digital camera in my glove compartment. I was interested in having a digital “assistant” like the Palm Pilot, but I was running out of pocket space. I decided that my ideal phone would be a small, elegant device that could make calls, take pictures, play music, check email and tell me where to go next. In other words, an iPhone.
Apple paved the way for the iPhone with the iPod. My kids’ iPods were the first Apple products I ever bought. Then I bought iPods for my wife and myself. When I got tired of clearing malware off my teenage daughter’s laptop computer, I gave her a Macbook. Then I began buying Macs for myself and my firm, mainly because the Apple operating system was more stable and less prone to mischief than the various iterations of Windows.
I still have not bought myself an iPad, but my wife, who is our firm’s marketing executive, got one this summer. She needs to understand what people are using these days, and a lot of people who aren’t me are using iPads.
Apple did not invent any of these devices – not desktop computers, nor portables, nor digital music players, nor smart phones, nor tablets. It simply made them more attractive and easier to use than their competition, and that was enough to make Apple, at least briefly, the world’s most valuable company.
Apple’s renaissance over the past 15 years is one of the great business stories of our time. It is a story utterly linked to Steve Jobs. This is a good place to tip our virtual caps to him, wish him and his circle only the best, and give him his due as the leader of the greatest corporate turnaround we will likely ever see.