Inside Apple

by Adam Lashinsky

  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 tradeoff without each person advocating aggressively for his position.” Arguments 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.”

  The rough treatment was a signature Jobs move. Another executive who interviewed with Jobs remembered his condescendingly challenging the assertion that Apple should sell music. This was a time when the iPod already was a modest success, but users lacked an easy way to buy songs. Jobs dismissed the idea during this executive’s interview, but within months he announced the iTunes Music Store. Whether by pre-planned design or simply because it was his way, the confrontational interview questions allowed Jobs to learn if a recruit could handle Apple’s rough culture. It would not be the last time the incoming employee would face a withering assault on his ideas.

  Even during his ascetic days as a dope-smoking hippie in need of a shower, Steve Jobs exhibited the charismatic bearing around Apple that provoked comparisons not with Narcissus but with a messianic figure. Insiders referred to him merely as SJ. And as early as 1986, Esquire magazine titled a profile of Jobs in the wilderness of his new computer company, NeXT, as “The Second Coming of Steve Jobs.” Journalist Alan Deutschman used the same trope as the title of his 2000 book, which chronicled the beginning of what truly became Apple’s rebirth. The metaphor took hold even more firmly in later years. Anticipation of Apple’s iPad was so intense in 2009 that bloggers began referring to the unreleased product as the “Jesus tablet.” Following its release, the Economist ran an illustration of Jobs on its cover, caricaturing him as Jesus Christ, complete with a golden halo, under the headline: “Book of Jobs: Hope, Hype and Apple’s iPad.”

  Jobs’s spirit permeated Apple. Most big tech companies rely on massive acquisition programs to grow. Cisco, IBM, HP, and Oracle are the best examples. All are acquisitions machines. Apple, in stark contrast, has announced twelve acquisitions in the last decade, none exceeding $300 million in size. One reason is that the people who join through acquisitions haven’t received the same inculcation as more carefully chosen employees. Given the challenges of integrating apostates and agnostics into a culture of true believers, Apple’s CEO showed intense interest in each deal that did take place, even those that didn’t tip any financial scales. Lars Albright, a co-founder and senior vice president for business development of Quattro Wireless, which Apple bought for $275 million in December 2009, recounted Jobs’s role in what for Apple was a relatively small transaction. “Over time it became extremely clear that Steve was the voice of the company,” said Albright. “We always thought it was something of a negotiating tactic for them to frequently say, ‘We’re going to check with Steve’ or ‘Steve has to weigh in.’ But it turned out that at every major step he was briefed and giving opinions and setting the tone for the discussions.”

  The prelude to concluding a deal with Apple typically included an extended sit-down for the CEO of the target company with Jobs. The discussion had less to do with the strategic imperatives of the acquisition than it did with Jobs’s attempts to feel out the talent he was acquiring. “There’s a lot of Steve worshiping at the company,” said an ex–Apple employee who joined by way of acquisition. “People will say, ‘Well, Steve wants this, Steve wants that.’ There are a lot of ‘Steve’ references in everyday life there. Some references are more relevant than others.”

  Some executives formalized the process of evoking the co-founder in written form. “The easiest way to get something done was to write an email with STEVE REQUEST in the subject line,” said a former employee. “If you saw an email with a STEVE REQUEST at the top that would definitely get your attention.” The result was a company that marched in lockstep with the perceived beat of a charismatic leader who was omnipresent. Said another former executive who joined Apple in an acquisition and stayed on for a while: “You can ask anyone in the company what Steve wants and you’ll get an answer, even if 90 percent of them have never met Steve.”

  Apple employees liked to tell “Steve stories,” such as tremulous rides in the elevator with him or staying out of his way if he appeared in the company cafeteria. Jobs himself used storytelling masterfully, and for years he used a parable—again, kind of like that other guy who “changed the world”—to drive home the message of accountability at Apple. According to more than one account, Jobs made a habit of delivering his parable to newly named vice presidents at Apple. Jobs would launch into a faux dialogue between himself and the janitor who cleans his office.

  The scene begins with Jobs discovering an awkward situation whereby the waste bin in his office at Apple repeatedly is going unemptied. One day he happens to be working late and he directly confronts the janitor. “Why isn’t my garbage being emptied,” asks the powerful CEO. “Well, Mr. Jobs,” replies the janitor, whose voice is quivering, “the locks have been changed and nobody gave me the new key.” In his acting-out of the parable, Jobs is relieved to know there is an explanation to the mystery of his rotting trash and that there is an easy solution as well: Get the man a key.

  At this point in his lesson, Jobs would shift to the moral that the newly minted VP—or, on occasion, a VP who needs to be reminded—was meant to take away from the parable. “When you’re the janitor,” Jobs would continue, now speaking directly to the executive, not theatrically to a fictional janitor, “reasons matter. Somewhere between the janitor and the CEO reasons stop mattering, and that Rubicon is crossed when you become a VP.” Jobs made a practice of noting that if Apple were to repeatedly turn in a poor financial performance—it hadn’t happened in years, of course—he would take the heat from Wall Street. VPs in turn would take the heat from him if their performance suffered. Finally, invoking Yoda from Star Wars, Jobs would tell the VP: “Do or do not. There
is no try.”

  How long the deceased narcissistic co-founder, longtime CEO, and pervasive presence at Apple could continue to influence the corporate culture at Apple was Topic A among the media in the wake of Jobs’s death. “Some of me is in the DNA of the company. But single-cell organisms aren’t that interesting,” Jobs said months before his death. “Apple is a complex multi-cellular organism.” The whole look and feel of the company and its products reflect his personal aesthetic: simple, even austere, witty at times, and brutally efficient. But can an organization survive without its narcissistic driving force? Maccoby gives examples of companies that foundered, including Disney after Walt’s death, and others that thrived, like IBM after the Watson family no longer ran it.

  Two lines of inquiry address the dilemma of the indispensability of Steve Jobs. One is to look at what happened at Disney when the founder passed away (which I do in chapter 8). The other (which I’ll look at in greater detail in chapter 9) is to see how Apple alumni who have left to start their own companies are faring.

  Disney is an instructive example in pondering the influence Steve Jobs will continue to exert at Apple from his grave. In the years after his death, Disney execs were known to ask, “What would Walt do?” His office remained untouched for years, and in 1984, when Michael Eisner arrived as Disney’s new chief executive, Walt’s secretary was still on the job. Given the ubiquity of Jobs’s presence at Apple when he was CEO, it’s impossible to imagine that “What would Steve do?” won’t be an oft-repeated phrase at Apple for quite some time. The degree to which Apple executives allow themselves to be driven by their interpretation of the answer to that question as opposed to doing what he taught them to do will in no small part determine the future success of the company. Indeed, his absence will put to the test a company culture that Jobs spent his final years attempting to institutionalize. It will take years, but eventually the world will learn if Steve Jobs was Apple—or if he succeeded in building a complex organism strong enough to survive his death.

  2

  Embrace Secrecy

  Apple employees know something big is afoot when the carpenters appear in their office building. New walls are quickly erected. Doors are added and new security protocols put into place. Windows that once were transparent are now frosted. Other rooms have no windows at all. These are called lockdown rooms: No information goes in or out without a reason.

  As an employee, the hubbub is disconcerting. You quite likely have no idea what is going on, and it’s not like you’re going to ask. If it hasn’t been disclosed to you, then it’s literally none of your business. What’s more, your badge, which got you into particular areas before the new construction, no longer works there. All you can surmise is that a new, highly secretive project is under way, and you are not in the know. End of story.

  Secrecy takes two basic forms at Apple—external and internal. There is the obvious kind, the secrecy that Apple uses as a way of keeping its products and practices hidden from competitors and the rest of the outside world. This cloaking device is the easier of the two types for the rank and file to understand because many companies try to keep their innovations under wraps. Internal secrecy, as evidenced by those mysterious walls and off-limits areas, is tougher to stomach. Yet the link between secrecy and productivity is another way that Apple challenges long-held management truths and the notion of transparency as a corporate virtue.

  All companies have secrets, of course. The difference is that at Apple, everything is a secret. The company understands, by the way, that it takes things a little far, because it has the slightest hint of a sense of humor about its loose-lips-sink-ships mentality: A T-shirt for sale in the company store at 1 Infinite Loop, which is open to the public, reads: I VISITED THE APPLE CAMPUS. BUT THAT’S ALL I’M ALLOWED TO SAY.

  Apple’s airy physical surroundings contradict its secretive core. From above, it appears that an oval football stadium could be plopped down inside Infinite Loop. Yet Apple’s headquarters isn’t visible to the untrained eye. Interstate 280 runs along the north end of campus, but passersby wouldn’t notice it as they sailed by at sixty-five miles an hour. (That wasn’t always the case. In the late 1990s, Apple called attention to itself by hanging giant photographs of the likes of Albert Einstein and Amelia Earhart from the back of IL-3 as part of its “Think Different” campaign.) Visitors to the pulsing center of Apple’s campus can drive around the loop that circles its six central buildings. Parking lots stand across from each of the main buildings, which are connected by walls and fences, forming a closed compound. Through the doors of those buildings, in the core of the loop, is a sunny, green courtyard with volleyball courts, grassy lawns, and outdoor seating for lunch. The splendid central cafeteria, Caffe Macs, features separate stations for fresh sushi, salad, and desserts and teems with Apple employees. They pay for their meals, by the way, unlike at Google, but the food is quite good and reasonably priced. A typical entrée might be grilled halibut on sautéed spinach with sweet potatoes–for $7. Other buildings across Apple’s patchwork of real estate in Cupertino have their own restaurant-quality cafeterias.

  The appearance is collegiate, but good luck auditing a class. Unlike Google’s famously and ridiculously named “Googleplex,” where a visitor can roam the inner courtyards and slip into an open door as employees come and go, Apple’s buildings are airtight. Employees can be spotted on the volleyball courts from time to time. More typically, visitors gaping into the courtyard will see a campus in constant motion. Apple employees scurry from building to building for meetings that start and end on time.

  Inside, Apple’s offices are decorated in corporate drab. The office of the CEO and boardroom are on the fourth floor of IL-1. Other Apple buildings—some rented, some owned—fan out around the Infinite Loop cluster in a checkerboard fashion because Apple doesn’t control every building in the neighborhood. These other buildings carry the name of the streets on which they sit, like Mariani 1 and DeAnza 12.

  For new recruits, the secret keeping begins even before they learn which of these buildings they’ll be working in. Despite surviving multiple rounds of rigorous interviews, many employees are hired into so-called dummy positions, roles that aren’t explained in detail until after they join the company. The new hires have been welcomed but not yet indoctrinated and aren’t necessarily to be trusted with information as sensitive as their own mission. “They wouldn’t tell me what it was,” remembered a former engineer who had been a graduate student before joining Apple. “I knew it was related to the iPod, but not what the job was.” Others do know but won’t say, a realization that hits the newbies on their first day of work at new-employee orientation.

  “You sit down, and you start with the usual roundtable of who is doing what,” recalled Bob Borchers, a product marketing executive in the early days of the iPhone. “And half the folks can’t tell you what they’re doing, because it’s a secret project that they’ve gotten hired for.”

  The new employees learn that first day of work that they’ve joined a different kind of company than anywhere they’ve worked before. Outside, Apple is revered. Inside, it is cultish, and neophytes are only entrusted with so much information. All new employees attend a half day of orientation, always on a Monday—unless Monday is a holiday. Much of the orientation is standard big-company stuff: a welcome package with stickers saying you’ve joined Apple, HR forms, and the like, as well as a T-shirt that says CLASS OF with the current year emblazoned on the front. Apple quickly makes the employees of the relatively few companies it acquires understand they are now part of the Apple family. Lars Albright, who became director of partnerships and alliances in Apple’s iAd mobile advertising business when Apple bought his start-up, Quattro Wireless, recalled the delight when a bevy of shiny new iMacs showed up almost immediately following the close of the transaction: “People felt very quickly like you were part of something special,” he said. Orientation Monday brings another rare treat. “There’s only one free lunch at Apple, and i
t’s on your first day,” said a former employee.

  Another highlight of an employee’s first day at Apple is the realization that there’s no one to help you connect your newly issued computer. The assumption is that those smart enough and tech-savvy enough to be hired at Apple can hook themselves up to the network. “Most people are expected to be able to connect to servers,” said an Apple observer. “People say: ‘That shit was hard, but I figured out who to talk to.’ That’s super smart. It’s a clever way to get people to connect with each other.”

  Apple does toss one bone to new recruits. An informal “iBuddy” system provides the name of a peer outside the primary team who can serve as a sounding board, someone for the bewildered new employee to ask questions. Many have said they met with their iBuddy once or twice at the beginning of their tenure—before they became too busy to meet again.

  Reality sets in at orientation in the form of the security briefing, the one element that no Apple employee forgets. Call it Scared Silent. Borchers, the iPhone marketing executive who had worked at Nike and Nokia before joining Apple, recalled the scene. “Whoever headed up security came in and said, ‘Okay, everybody understands secrecy and security are incredibly important here. Let me just explain why.’ And the rationale is that when Apple launches a product, if it’s been a secret up until the launch, the amount of press and coverage and buzz that you get is hugely valuable to the company. ‘It’s worth millions of dollars,’ I remember her saying.” So there’s no confusion, the penalty for revealing Apple secrets, intentionally or unintentionally, is clear: swift termination.