Inside Apple: How America's Most Admired--and Secretive--Company Really Works

by Adam Lashinsky

  Jobs oversaw the development of the Macintosh, a revolutionary computer in its time because it implemented the breakthrough technology Jobs had observed at nearby Xerox PARC, the photocopier company’s Palo Alto research lab. With a computer “mouse” and a “graphical user interface” that allowed ordinary users to change sizes, fonts, and colors on their screens, the Mac changed the computer industry. When business faltered, however, Sculley kicked Jobs upstairs to the post of vice chairman. Jobs chose exile over sinecure, leaving Apple altogether in 1985.

  Jobs’s wilderness years were also some of his most important in terms of growth, professionally and personally. He founded NeXT, a high-end computer company initially targeted at education markets. It never gelled, but it gave him his first experience as a CEO. He’d gone from a mercurial screamer to a more nuanced developer of talent: Several of his top managers at NeXT formed the core of his eventual resuscitation of Apple. In 1986, he invested $10 million in a >models—Pixar for a time sold expensive workstation computers—the company would settle on computer-aided animation as its niche. Pixar was an “overnight” success when Toy Story debuted in 1995 and the company quickly went public, earning Jobs his second fortune.

  It was also during his time away from Apple that Jobs transformed himself from a glamorous, if ascetic, bachelor—for a while he dated the singer Joan Baez and the writer Jennifer Egan—to a family man. After addressing a business school class at Stanford in 1990, he introduced himself to a student who had caught his eye, Laurene Powell. They married the next year and ultimately raised their three children on a quiet street in Palo Alto, not far from the Stanford campus. Once again, Jobs led a paradoxical life. A world-famous businessman at work, he lived in a home with no security, no gates, and no lawn: The grounds outside the Tudor house were covered with California poppies and apple trees. The neighbors all knew when Jobs was home, because his silver Mercedes SL55 AMG coupe would be parked in the driveway. Jobs succeeded in keeping his children, and his wife, for that matter, out of the public eye. Laurene Powell Jobs ran an education-oriented philanthropic organization and served on the board of Teach for America (with her husband’s biographer, Walter Isaacson). A former investment banker, she spoke only occasionally in public. At the time of Jobs’s death, their son, Reed, a Stanford undergraduate, lived next door with some friends in a house his parents bought after persuading a longtime neighbor to move down the block. That way Reed could be close to his ailing father, as well as his younger sisters, Erin and Eve.

  Known for being alternately bullying and charming at work, Jobs showed his neighbors the same combo package. Evelyn Richards, who lived around the block from Jobs, once sent her Girl Scout daughter to the Jobs household to sell cookies. “Jobs answered the door himself,” Richards recalled. “But he told her he wouldn’t buy any because cookies are sugary and bad for you.” At the same time, his neighbors frequently spotted Jobs strolling around the neighborhood, either with his wife or, often, with his close friend and Apple board member Bill Campbell. Jobs also showed up at local gatherings just like everyone else. Richards recalled the Fourth of July block party in 2007, days after Apple began selling the iPhone, when Jobs showed off the phone to all who were interested. A poignant snapshot from that day shows Jobs out of uniform: He wore a baseball cap, a long-sleeved white shirt, and blue jeans, with a flannel shirt wrapped around his waist. In it, he stands next to another man, demonstrating the iPhone, looking like just any other Palo Alto dad displaying a new gizmo.

  If power corrupts, then success enhances: It makes the qualities of a leader appear in sharp relief. As Jobs entered the last and mind-bogglingly productive phase of his career, the many paradoxes of his personality became the management systems of the company. This Jobs-ian transformation began in earnest in 1997.

  The previous December, a floundering Apple had purchased NeXT. The prodigal co-founder returned as a “technical adviser,” and NeXT’s software became the foundation of a new operating system for Macintosh computers. The following July, Apple fired its CEO, Gil Amelio, a former chip executive from National Semiconductor who had failed to halt the hemorrhaging of cash that had begun under Apple’s two previous CEOs, John SculleyansJohn Sc and Michael Spindler.

  Even good news at Apple highlighted the fallen icon’s weaknesses. On August 6, 1997, Apple announced a $150 million investment from Microsoft. The cash certainly helped, but the real value to Apple was Microsoft’s commitment to continue developing its Office productivity software for the Macintosh for at least five years. Apple was so diminished that summer that many software programs didn’t come in a version for the Mac. The online publication CNET at the time opined that Microsoft’s move “amounts to little more than good public relations.” Microsoft, after all, didn’t want Apple to die. The elimination of Apple would hurt Microsoft in the eyes of antitrust regulators. This same observer, a newsletter writer focused on Windows products, noted: “The investment still doesn’t give Apple a coherent strategy for turning things around.”

  Behind the scenes, though, Jobs’s turnaround plan was well under way. The next month, Apple announced that Jobs would become interim CEO of Apple until a suitable replacement could be found. It would be three years before Apple made Jobs the permanent CEO. Until then he was known around the company’s headquarters as Apple’s “iCEO,” foreshadowing the i-nomenclature that would permeate Apple’s branding. Interim or not, Jobs was busy putting the pieces into place for the company’s rebirth. He recognized the importance of work Jonathan Ive was doing in Apple’s design laboratory, and Jobs set Ive to work on what would become Apple’s candy-colored iMacs—translucent, all-in-one computers that looked like clear TVs connected to a keyboard. He hired Tim Cook—an operations whiz from Compaq, and IBM before that—to revamp Apple’s bloated and broken supply chain.

  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 divisio
n. 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.”

  When 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 amo
ng 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.