Haunted Empire: Apple After Steve Jobs

by Yukari Iwatani Kane

  “It’s quite hard to mess up that bad on such fundamental layers,” said Marcus Thielking, a former executive at German navigation software maker Navigon who helped run a mapping start-up called Skobbler, which built its app using some of the same data as Apple. He suspected that some of the issues occurred when Apple tried to improve performance by reducing data size or tweaking the amount of data the app consumed. If Apple was using rough GPS signals from users’ iPhones to help build its map, that could also create problems since the phone location data can be noisy and unreliable. To offset that, most mapping app makers went through a process called street matching, in which they matched the signals to the map they had. So if people were moving in a grid where there was nothing, they would investigate to see if there was a street there that they had missed.

  Apple may not have encountered this many problems had it stuck to a simpler app. But Forstall and his team were so eager to supplant Google Maps that they may have become too ambitious. Developing such a complex mobile application was extraordinarily difficult. The process required battalions of people, lots of coordination, and exhaustive testing, especially if you were taking data from multiple sources that then needed to be matched up and aligned with where things were in real life. Google had legions of staff working on maps around the world. Smaller start-ups used an army of volunteers who fanned out in any new location to run extensive accuracy tests for months before debut. At Apple, Forstall had fewer than one hundred people working on maps. As with Siri, the project had been developed quietly, and Apple had kept the team purposefully small. The company had failed to run enough tests to assure reliability.

  Once again, Apple’s arrogance and secrecy had trumped common sense. It had received advanced warning of the problems and yet had gone ahead with the launch anyway. Developers who had been testing the maps application had filed bug reports and complained. One developer who received a response was told that the issues were “well understood.” But little appeared to have been done to fix them. The question was why? Who knew about the extent of the problems but thought it was okay to proceed? It was unlikely that Forstall hadn’t known, but did Forstall keep the problems from Cook, did Cook know and decide to proceed anyway, or did Cook give the green light without making sure the application was ready? Here was another indication of Apple’s engineering process breaking down.

  The complaints began hours after its release. By the next day, as the cries grew into a storm of disbelief and outrage, Apple’s leadership was already in damage control mode. Cook wanted Forstall to issue a mea culpa in his name, but the iOS chief balked. Phoning in remotely to a meeting with other executives, he told Cook that Apple should handle the maps problem the same way that it had dealt with the iPhone 4 antenna issues—no apology. If there was to be a letter to the public, he thought it should come from Apple rather than himself. Jobs had encouraged such dissent because he thought such vigorous debates helped the company reach the best decision, but Cook hated public posturing.

  Two days after the maps app launched, Cook issued a personal apology.

  To our customers,

  At Apple, we strive to make world-class products that deliver the best experience possible to our customers. With the launch of our new Maps last week, we fell short on this commitment. We are extremely sorry for the frustration this has caused our customers and we are doing everything we can to make Maps better.

  We launched Maps initially with the first version of iOS. As time progressed, we wanted to provide our customers with even better Maps including features such as turn-by-turn directions, voice integration, Flyover and vector-based maps. In order to do this, we had to create a new version of Maps from the ground up.

  There are already more than 100 million iOS devices using the new Apple Maps, with more and more joining us every day. In just over a week, iOS users with the new Maps have already searched for nearly half a billion locations. The more our customers use our Maps the better it will get and we greatly appreciate all of the feedback we have received from you.

  While we’re improving Maps, you can try alternatives by downloading map apps from the App Store like Bing, MapQuest and Waze, or use Google or Nokia maps by going to their websites and creating an icon on your home screen to their web app.

  Everything we do at Apple is aimed at making our products the best in the world. We know that you expect that from us, and we will keep working non-stop until Maps lives up to the same incredibly high standard.

  TIM COOK

  Apple’s CEO

  In an unprecedented move, Apple directed users to the competition’s apps. Though Cook tried to sound an upbeat note about how many customers were already using Apple Maps, this was an indirect admission of how deep the problems were. They were unlikely to be resolved anytime soon.

  Apple rarely showed such deep contrition. Jobs had usually opted for defiance even when he was obviously in the wrong. During the brouhaha over the iPhone 4 antenna, much of the discussion about public relations strategy had revolved around how Apple could address the issue without “your tail between your legs,” as Jobs’s longtime PR guru Regis McKenna put it. But that attitude had fed a growing image of Apple as arrogant. Cook wanted to change that image and viewed this as an opportunity to make that shift.

  Cook never forgave Forstall for refusing to apologize. A month later he asked his mobile software chief to leave the company.

  News of Forstall’s departure fell like a bombshell. Even the most senior members of the iOS team learned of his firing just moments before it was publicly announced. Though the mapping catastrophe was the trigger, there were broader reasons for his departure. As a colleague in Jobs’s management team, Cook must have seen Forstall’s political maneuverings over the years as he took credit for accomplishments but blamed others for hiccups. Forstall was the least liked executive on the team. Since Cook took over, he had also been complaining, saying that there was no “decider” anymore. Without Jobs, Forstall didn’t have a protector.

  The question in many people’s minds, both inside and outside the company, was what his departure meant for Apple. Aside from Ive, Forstall was thought to most embody Jobs’s vision and spirit of innovation. He was a smart, capable software engineer, and Apple couldn’t afford to lose such talent just because he didn’t always work well with others. Some considered him to be an eventual CEO.

  But if Cook couldn’t corral Forstall and direct his abilities in a productive way, he had to let him ago. “Collaboration is essential for innovation,” Cook said in an interview. “We’re brought together by values. We want to do the right thing. We want to be honest and straightforward. We admit when we’re wrong and have the courage to change. And there can’t be politics. I despise politics. There is no room for it in a company.”

  Cook gave iTunes head Eddy Cue responsibility over Siri and Maps and his Mac software chief Craig Federighi control over iOS. Both were team players. The addition of Siri and Maps to the iTunes and iCloud team also made logical sense. All of the cloud-based services were now folded under one umbrella.

  Jonathan Ive took control over the team that designed the way people interacted with their devices. In many ways the decision made sense. Under Forstall, Apple had been pursuing what was known as skeuomorphism, a kind of visual design that maintains the ornamental characteristics of the old physical tools they stood in for. The calendar app, for example, had the kind of faux leather stitching that a desk calendar might have, and the books in iBooks were made to look as if they were sitting on wood shelves. The use of textures and shadows was pervasive in Apple’s software. Though it was Jobs who initially encouraged this style of design, the consensus lately had been that Forstall’s team had taken it too far. The podcast app referenced a reel-to-reel tape deck. Game Center was dressed in lacquered wood and green felt to make it resemble a casino. These elements were now deemed irrelevant and tacky, and they needed to be more aligned with the elegance and understatement of the devices themselves.
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br />   No one was seemingly better equipped to update the look and feel of the software than the person responsible for the physical design of Apple’s products. Designing people’s interactions with Apple’s devices was a natural extension of what Ive already did. The lead designer had lobbied to control this group for years, but Jobs had never allowed it. Cook was more willing to delegate responsibilities.

  John Browett was another one of his casualties. Since the retail executive joined Apple in April 2012, Browett had made sweeping changes to the Apple Stores. To boost profits, he had cut costs—laying off some store staff and cutting the work hours of those he had kept. He also put a greater focus on meeting sales targets and incorporated Dixons-like sensibilities into the stores’ layout by demanding that more accessories be displayed on shelves. In a company where the store experience was built around making technology accessible and where staff had been trained to provide Ritz-Carlton class service regardless of whether they made a sale, Browett’s actions were wildly unpopular. The staffing cuts in particular created such an uproar that the executive was forced to admit to his staff, “We messed up.”

  Just six months after his arrival, Browett was fired. The announcement of his departure was little more than a tersely worded footnote in the press release about the broader management changes.

  “I just didn’t fit within the way they ran the business,” Browett later said. “For me, it was one of those shocking things where you are rejected from the organization for fit rather than competency.”

  Fourteen months after Cook took over, he had finally shaken up the leadership team. But it had taken several missteps. Siri’s problems may not have been Cook’s fault, but how had he allowed the same pattern to repeat itself with maps, which fell squarely under his watch?

  And why had Cook picked Browett to run retail in the first place? The strategies Browett had tried to implement at Apple had been consistent with his experience at Dixons and Tesco. The culture at those retailers was oceans apart from Apple’s. Why Cook thought he would be a great fit had been a mystery to many.

  By this time, Cook’s management style was becoming more apparent. Cook delegated responsibilities and rewarded his executives as long as they did well. But if they made a mistake, he came down on them hard. The danger with that approach was people becoming risk-averse and stifling innovation.

  All of these considerations raised the question: Was Cook the best choice to chart Apple’s future?

  Apple, as it happened, was devoting considerable energy to studying the dynamics of leadership.

  Before Jobs died, he had created Apple University, an internal think-tank and management training center.

  Joel Podolny, the former dean of the Yale School of Management, headed the center. Another key member was Richard Tedlow, an esteemed Harvard professor who had studied the careers of some of history’s greatest business innovators such as Andrew Carnegie and Henry Ford.

  Podolny’s hand-picked team had free rein to talk to any of the executives, and they built case studies such as how the company had created its retail strategy. The curriculum included examples from the outside, ranging from the collapse and subsequent bankruptcy of the A&P grocery chain to the design process for Manhattan’s Central Park. Occasionally they invited guest lecturers to talk to Apple’s executives.

  One of them was a Harvard professor, Gautam Mukunda. A political scientist-turned-management expert, Mukunda had studied the role of a leader in organizations under pressure. He arrived in Cupertino as Cook was grappling with the Apple Maps fiasco.

  Mukunda—a former student of Clayton Christensen—had formulated a theory that leaders could rarely be categorized simplistically as “good” or “bad.” What was more important was whether they were “filtered” or not. Filtered leaders were people who had risen through the ranks, were entrenched in the culture, and were chosen after a careful internal process of selection and evaluation. In contrast, unfiltered or extreme leaders were often volatile characters who slipped through and got the job because of a particular set of unusual circumstances. Because they were outliers, they tended to do things differently. Their tenure was either a brilliant success or a catastrophic failure, but rarely in between.

  Filtered leaders were surer bets, but they were also relatively interchangeable because they more or less rose through the same process. Unfiltered leaders were riskier. While most failed, sometimes the payoff was huge.

  Jobs wasn’t a typical unfiltered leader because the company he led was his own creation. But the fact that he spent years in exile had made him an unlikely CEO candidate for Apple. He would never have been given a second shot if Apple hadn’t gone nearly bankrupt. Saving the company had required someone who understood the culture but could think in fresh ways—someone with the nerve to take risks.

  Cook was a classic example of the filtered leader, not just at Apple but also with respect to corporate America. Cook had started his career at an iconic American company, IBM, and obtained an MBA before spending fifteen years at Apple, studying every move that Jobs had made. Cook had been fully indoctrinated into Apple’s way of seeing the world. He had also mastered the mundane logistics. He did not pretend to be an innovator or a visionary. His gift allowed him to see inside the mysteries of the supply chain, not the future.

  Apple’s two CEOs were exemplars of Mukunda’s theories. The professor believed that Jobs had made the right decision in choosing Cook as his successor instead of turning to another wild card. Unfiltered leaders were a huge gamble. Given the high rate of failure of such leaders, the chances were low that Apple would have found two spectacular unfiltered successes in a row. Cook might not have been able to perform the kind of amazing feats that his predecessor had made look so easy, but his organizational skills allowed him to build on the advantages that Jobs had created. More importantly, Cook could transition the company so it revolved around a system rather than an individual.

  With a filtered leader at the helm, Mukunda believed Apple would inevitably evolve into a different company. In an industry where there were few obvious products left to reimagine, Cook was unlikely to orchestrate more game-changing ones. He wasn’t wired for risks. The question was, would that kind of steady, less innovative business be an acceptable outcome for Cook, the board, and Apple’s shareholders?

  Cook had often repeated Jobs’s advice to not dwell on the past. At the same time, Cook had also stressed that Apple’s culture would not change.

  “Apple is this unique company, unique culture that you can’t replicate. I’m not going to witness or permit the slow undoing of it because I believe in it so deeply,” he had told investors at the Goldman Sachs conference in February 2012. “Steve drilled in all of us over many years that the company should revolve around great products. And that we should stay extremely focused on a few things, rather than try to do so many that we did nothing well. And that we should only go into markets where we can make a significant contribution to society.”

  In the face of increasing competition from Android in the mobile market, however, Apple’s culture might need to change for the company to continue thriving. Cook needed to show more willingness to depart from Apple’s past.

  To Mukunda, it was a simple matter of what he called business physics.

  “There are just forces in any environment and any market that constantly drag companies to the mean,” said Mukunda, referring to factors like complacency or margin pressure by competitors. “What Apple did was essentially in violation of business physics for an extremely long time. They created this beautifully optimized machine.”

  The problem with that strategy was that, when consumers stopped caring as much about the things Apple was optimized for such as design, they might choose to focus on something else that didn’t play to the company’s strengths.

  The fundamental question, Mukunda believed, was what kind of leader did Cook want to be? If Cook wanted to focus on profits and consolidate Apple’s leadership in the industry, the
n he just needed to put the right people in place to churn out the next Macs, iPhones, and iPads. If he wanted Apple to stay a revolutionary company, then he needed to bring in new, unfiltered leaders who were hungry and bold.

  “Apple can be an excellent ordinary company or a genuinely extraordinary one,” Mukunda said. “But it can’t be both.”

  Either way, Cook needed an executive team built around his strengths, weaknesses, and vision. His current team was still largely Jobs’s team, assembled around Jobs’s personality. The likelihood that they could be successful under someone else was low.

  “The team that’s got them where they are,” Mukunda said, “is not the team that’s going to get them where they’re going to go.”

  The company was arguably facing its biggest threat since Jobs had brought the company back from the brink. When Apple unveiled the iPhone and then the iPad, it had shown swaths of rivals the way to what Jobs often talked about as the post-PC era, in which traditional computers would be supplanted by smartphones, tablets, and other connected non-PC devices. Now everyone was chasing the same vision. Most obviously there was Google. But Amazon.com was an ambitious company with a strong following and the resources to compete against Apple. Facebook understood how people liked to connect better than anyone else. Apple’s old rival Microsoft was still very much in the game with its Windows Phone operating system. Companies like Research In Motion and Sony hadn’t given up, either. Many of them were led by unfiltered leaders. Amazon.com had Jeff Bezos. Facebook had Mark Zuckerberg. And Google had Larry Page. Meanwhile, Apple had Cook, the self-proclaimed “Attila the Hun of Inventory.”

  Around the world, people still remembered Steve Jobs. But the mention of Tim Cook drew blank stares among ordinary consumers.