Becoming Steve Jobs

by Brent Schlender

  Think Different also bought Apple some precious time at a moment when the company had little of tangible value to show off. Steve knew, of course, that he would eventually have to deliver products that lived up to the campaign. But he didn’t have them in the fall of 1997. The campaign offered cover while Steve and his team began the hard slog ahead.

  Even without Steve’s own voiceover some in the press did indeed view Think Different as yet another moment of Steve’s grandiosity, and as such, cause for more concern than applause. But in retrospect, it seems clear that it was the exact opposite of grandiose: it was the first step of a leader who would now progress only in steps, not by leaps and bounds. “He was so focused,” remembers Fred Anderson. “He was intense and both patient and impatient at the same time.” Steve had begun to move incrementally.

  WHILE THE THINK DIFFERENT campaign captured the public’s attention, Steve was busy throwing out all kinds of pieces of the old Apple. The restructuring touched every corner of the company. Out went the Newton and eMate product lines, and the stores and engineering and marketing groups that supported them. (In an odd twist of fate, ex-CEO Amelio came back to visit Steve at Apple headquarters late in 1998 with an offer to buy the assets and intellectual property of the mothballed Newton operations. A few days after the meeting, Steve told me he was flabbergasted that Amelio would have any interest in trying to make a go of it with the Newton. But selling it to him would have been “a cruel joke,” he told me. “I can be mean, but I could never be that mean. No way would I let him further humiliate himself—or Apple.” So the Newton stayed dead. Many of its key engineers were retained, however.)

  Out went the contracts that licensed the MacOS to the clone manufacturers. Steve hated the idea of having his operating system in the hands of others, and he had refused to sign on as iCEO without the promise that he could shut down the clones. This was the most expensive of the many decisions Steve made in the course of stabilizing the company. To avoid the litigation that would naturally arise from Apple abrogating the contracts, the company had to pay the clonemakers to disappear quietly. The most successful of these was Power Computing, which had commandeered a 10 percent share of the market for MacOS-compatible computers. Apple paid $110 million in cash and stock to acquire the company and hire some of its engineers.

  Out went the inventory. Tim Cook became a new member of the team in March 1998 when he was hired away from Compaq—where he had been called “the Attila the Hun of inventory”—to be Apple’s chief of operations. Cook was a wiry bird of a southerner, thin and bookish-looking despite his athleticism—he biked and ran long distances regularly. Cook spoke quietly, with a soft Alabama drawl, but he may have been the toughest executive at Apple. Cook’s work drew no public attention, but it was crucial to trimming the company. In the nine months after he arrived, Apple reduced its inventory from $400 million worth of unsold, unwanted Macs down to $78 million. Cook was responsible for perhaps the most dramatic example of Steve’s hurry to rid himself of the burdens of Apple’s recent past: the bulldozing of tens of thousands of unsold Macs into a landfill in early 1998.

  Finally, out went another 1,900 employees. This was the last tranche of Anderson’s resizing of the company. All in all, Anderson had taken the company from 10,896 full-time employees down to 6,658. Steve told me that being a father made firing people much harder than it had been. “I still do it,” he said, “because that’s my job. But when I look at people when this happens, I also think of them as being five years old, kind of like I look at my kids. And I think that that could be me coming home to tell my wife and kids that I just got laid off. Or that it could be one of my kids in twenty years. I never took it so personally before.”

  But if he had perhaps grown more sensitive, he had also grown more focused. As Steve pushed through the downsizing, Anderson discerned a profound difference between the iCEO and his predecessors: Steve kept the greater needs of the company first and foremost, whatever the cost. Sometimes his ability to do so could seem almost cruel, as when, in 1998, he decided that 3,600 layoffs wasn’t enough and ordered 400 more people to be let go. But he was determined to lead a company staffed by the best people possible—he wanted Apple’s staff to brim with the exceptionalism he had witnessed at Pixar. “When I returned to Apple, I was blown away by the fact that a third of the people there really were A to A-plus people—the kind you’d do anything to hire,” he told me. “Despite Apple’s troubles, they’d stayed, which was the miracle. That was the good karma of Apple. It was carried through by those people deciding to stay through it all. Another third were very good—you know, the really solid kind of people every company needs. And then there was another third who were unfortunate. I don’t know whether they’d ever been good or not, but it was time for them to leave. Unfortunately, a lot of those people were in management. Not only were they not doing the right things, but they were instructing everybody else to do the wrong things, too.” Steve’s narrow determination was critical: the core team could unite around Steve, knowing that he would do absolutely whatever it would take to turn this company around. He was all in, and working as hard as anyone. “It was pretty bleak those first six months,” he told me later. “I was running on vapor.”

  Still, even though Steve had been disciplined about cutting the company down to its proper size, nobody could really be sure that he was the man to lead Apple forward. Despite ostentatiously declining to receive a salary, Steve was an expensive, unproven bet. Some $450 million of Apple’s $816 million loss for 1997 could be attributed to the acquisitions of NeXT and to the purchase and liquidation of Power Computing. One way to understand that number is to realize that Apple had paid out more than a half billion dollars for two acquisitions whose asset value, mere months after the deals were concluded, was just one-fifth that number. A more revealing way to think of it is that Apple had shelled out more than a half billion dollars to rehire Steve Jobs.

  A FEW MONTHS before Steve came back to Apple, I asked him what he thought Apple’s top priority should be. Should it be a new operating system, now that Avie Tevanian was there to create it? “Not at all,” he replied, with a forcefulness I hadn’t been expecting. “What Apple needs more than anything is to ship a great new product, not necessarily some new technology. The trouble is, I don’t think they even know how to make a great product anymore.” He paused as if he realized how damning that statement sounded, and abruptly added, “That doesn’t mean they can’t.”

  This time, Steve didn’t immediately set out to solve everything with the introduction of some groundbreaking new machine. This was a big change from what he’d attempted at NeXT and at Apple the first time around. Instead, he laid out a plan in broad strokes for the company’s entire product line. Before Steve would ask his engineers to come up with a particular new product, he wanted to be sure they understood how it would fit into Apple’s overall plan. He wanted everyone working from the same playbook, and he wanted that game plan to be crystal clear. He couldn’t afford any of the strategic confusion that had hampered the development of the NeXT computer.

  The key was to simplify Apple’s ambitions so that the company could sharply focus its substantial engineering talent and brand equity on a few key products and broad markets. To understand why Steve could pare down Apple’s offerings so drastically in 1997, it helps to think of personal computers as protean devices that can be programmed to be any of a number of tools—a word processor, a supercalculator, a digital easel, a searchable library of research materials, an inventory control system, a tutor, you name it. There’s no need for the machine to have a different physical form to perform each different service. All it needs is powerful, adaptable software within. And in the mid-1990s, the capability of software was expanding faster than ever, thanks to the advent of local area networks and the burgeoning Internet. When software can link you to other people, and to databases housed on other computers far away from yours, it becomes much more powerful than an application that is limited stri
ctly to whatever is stored on your own personal computer.

  Steve set out to show how Apple could transform itself into a profitable company while offering no more than four basic products: two separate models of desktop PCs, one for consumers and one for professionals; and two separate laptop versions aimed at those same constituencies. That’s it. Four quadrants, four product lines. No more redundant engineering efforts, extraneous manufacturing processes, or sales pitches aimed at tricking consumers into buying unnecessary features. With only four basic products to design, Apple’s engineers and industrial designers could invest the time and effort to make their hardware and their software distinctive.

  This critical decision was as controversial as anything Steve did during this period. Employees were outraged that their pet projects, including some truly valuable technologies that Apple had been developing for years, were being cast aside. Some technologies provided consumers with a tangible benefit, but if they didn’t fit into Steve’s quadrant structure, they had to go—the institution, he decided, could only focus on so much.

  The core executive team understood the necessity of the quadrant structure, even though it meant killing projects that were dear to staffers they respected. And eventually the rest of the company came around. They could see that the quadrants put Apple on the exact opposite course of the Windows PC manufacturers, who were busy churning out all manner of unremarkable, albeit faster and more powerful boxes. The quadrants returned Apple to its historic mission—to serve the high end of the consumer and professional markets with leading-edge products.

  What the quadrant strategy wasn’t is equally important. It was not an effort to solve all problems with one insanely great machine. Steve had been twice burned by that strategy. He had developed enough cautious wisdom to see that breakthroughs were not the solution now. Apple’s customers—past, present, and potential—would first have to be shown that the company would survive, that it knew how to consistently produce and deliver distinctive products, and that it could reliably turn a profit. Only after that was accomplished—and Steve was the first to admit that it would take several years—could he think about how to exploit emerging technologies to break new ground again.

  “SAVE APPLE WAS the mission,” remembers Jon Rubinstein. “When we came in the company was almost dead. So let’s save Apple—it’s worth saving. It was that simple.”

  Steve ran the new Apple through a remarkably strong, remarkably motivated core group, consisting of Anderson, Cook, Rubinstein, and Tevanian, as well as sales head Mitch Mandich from NeXT; marketing chief Phil Schiller, a former Apple guy whom Steve brought back from Adobe; and Sina Tamaddon, a software guy from NeXT who also engineered several key deals. This group—minus Mandich, who would leave in 2000, and with the eventual addition of design chief Jony Ive—would drive operations at the company well through the mid-2000s. Given Steve’s volatile reputation and track record as a manager, it’s remarkable that they remained together for so many years.

  Steve didn’t do the kinds of things that leaders often do to cement a strong group. He didn’t take the guys out to dinner. “We had good relationships within the senior executive team,” remembers Tevanian, “but we built them ourselves. It wasn’t through Steve. I can count on one hand the times, in the eight years that I was there, that we went to dinner together, mostly to an Indian restaurant nearby.”

  Steve didn’t give his team much formal feedback. “During the U.S. versus Microsoft antitrust case,” says Tevanian, “Microsoft subpoenaed all my personnel records at Apple. So I’m sitting down with our lawyer, George Riley, and he says, ‘I’ve gotten your file from HR.’ He pulls it out and there’s one piece of paper in it, something meaningless. He’s like, ‘Avie, where is your file? Where’s your annual reviews and all that?’ I told him that I’d never had an annual review!”

  “Steve didn’t believe in reviews,” remembers Jon Rubinstein. “He disliked all that formality. His feeling was, ‘I give you feedback all the time, so what do you need a review for?’ At one point I hired an executive coach so I could do three-sixty reviews with my own team. He was a really good guy, and I tried to get Steve to talk to him, but he wouldn’t. In fact, he asked me, ‘What do you need that for? That’s a waste of time!”

  Steve didn’t lavish anyone with praise, or make them available to reporters who wanted to get behind the scenes of what would become a remarkable comeback. This was not because Steve was hungry for personal press coverage. He wasn’t, anymore. In his twenties, he had craved the limelight during his first flush of celebrity: “friendships” with Yoko Ono and Mick Jagger, the heady feeling of things like owning a penthouse suite in the San Remo in Manhattan, and attention from Time and Rolling Stone and Playboy confirmed that he had left his prosaic, middle-class upbringing in the suburbia of Northern California far behind. When he started NeXT, he had for a brief time courted the press to help give his startup a boost. But by the mid-nineties, playing up his celebrity held little appeal to Jobs. While he craved recognition for the quality of his work, he didn’t desire fame in and of itself. He directed Katie Cotton, his communications chief at Apple, to adopt a policy in which Steve made himself available only to a few print outlets, including Fortune, the Wall Street Journal, Time, Newsweek, BusinessWeek, and the New York Times. Whenever he had a product to hawk, he and Cotton would decide which of this handful of trusted outlets would get the story. And Steve would tell it, alone.

  Steve and I talked many times about his reluctance to share the spotlight with the others on his team, since I asked repeatedly to speak with them and was largely unsuccessful. Sometimes he’d aver that he didn’t want anyone to know who was doing great work at Apple, since he didn’t want them to get recruited by other companies. That was disingenuous, since Silicon Valley was an incestuous place where tech talent was tracked as closely as the stock market. What was true was that Steve didn’t think anyone else could tell the story of his product, or his company, as well as he could. Steve was a great performer in any setting, and he considered most interviews to be just another performance. He was a terrific extemporaneous thinker and talker, always confident that he could make the most of an opportunity to promote the company. He cared intensely about the look of any article he participated in, because he thought that photography and typography and a stylish layout helped convey the import of whatever message he wanted to get across.

  Under Steve’s guidance, Apple would develop one of the clearest brand identities in the world. So, while Steve’s policy irked some members of his core team, it was hard to argue with his success. Working for Steve meant accepting a whole range of idiosyncratic behaviors. Policies that seemed selfish often turned out to be good for the company. Strategies that at first appeared quixotic might well prove farsighted. The members of Steve’s core team learned to anticipate and live with his unpredictability. They knew they were working for someone special.

  Steve made sure in his own way that they knew he thought they were outstanding as well. Sometimes he’d ask one of them to join him on a long walk, whether around the Apple campus or near his home in Palo Alto. “Those walks mattered,” Ruby remembers. “You’d think to yourself, ‘Steve is a rock star,’ so getting quality time felt like an honor in some ways.” Steve also compensated his key employees richly, arranging lucrative long-term contracts loaded with stock options for everyone in the inner circle. “He was really good at surrounding himself with really good people and motivating them both philosophically and financially. You have to have the right mix. You have to provide just enough financial motivation in there so that people don’t just say, ‘Fuck you, I’m not taking this anymore.’ ”

  Steve also understood that the personal satisfaction of accomplishing something insanely great was the best motivation of all for a group as talented as his. “You had to believe that it was going to take some time; that you weren’t going to wake up tomorrow morning and it was all going to be fixed,” Tevanian once told me. “And that two years,
three years down the road you were going to look back and say, ‘Gee, we got through it.’ If you didn’t believe that, you were sunk. Because there was a lot of pain along the way, there were a lot of people saying it’s going to fail, it’s not going to work, this is wrong with it, that’s wrong with it, finding a million things wrong. But you just had to know that if you kept your head down, kept working, kept trying to do the right things, it would work out.” Saving Apple was an accomplishment everyone on the team would take pride in for the rest of their lives.

  “He cared deeply,” says Rubinstein. “And that made him a great manager when things weren’t going well. At the beginning of this time at Apple, it was such a pleasure because we were all in it together.”

  “When it was tough,” Avie adds, “he’d think carefully about all the decisions. He’d think through the impact of everything very carefully.” While Steve never hesitated to emphatically assert his opinion, sometimes his fretting would drive the group crazy, as he delayed important projects by fussing endlessly over minute considerations, such as whether to change the plug connectors for mice and keyboards. Mike Slade, the head of marketing for a brief period at NeXT, went back to work at Apple in 1998 as a consultant to Steve. “People want to paint him like he’s Michelangelo, you know?” says Slade. “But he was a real nervous Nelly, like an old-fashioned, tiny, old, small businessman saying, ‘Shall I cut another nickel off it?’ Like a junk merchant.”

  His attention to the job at hand was intense, and he set up his schedule to ensure that each of his key deputies was equally focused. Every Monday morning at nine o’clock, he convened the executive team (the ET, as it came to be known) in a conference room located in Building 1 of the Apple campus. Attendance was required. Referring to an agenda he himself had written up and distributed, he’d go around the table, asking specific questions about projects under development and getting updates from the team. Each person was expected to be fully prepared for any question he might ask about their area of responsibility. For some, like Fred Anderson or Nancy Heinen, the general counsel, this might be their main encounter with Steve for the week. Others, however, knew to expect rigorous follow-ups. The pressure was intense. Their past successes had earned them a place in the room, but Steve didn’t care about the past. With Steve, says Ed Catmull, “The past can be a lesson, but the past is gone. His question was always, ‘What are we going to do moving forward?’ ”