Inside Apple: How America's Most Admired--and Secretive--Company Really Works (10 page)

T
ypical Apple employees, in fact, don’t need to know many people at all—just a handful of colleagues in their immediate group. The anthropologist Robin Dunbar theorized in 1992 that humans are capable of maintaining
meaningful relationships with no more than an average of 150 people simultaneously. He came to this conclusion after scientifically observing primates in the wild and their “self-grooming” habits—in other words, the way they nurtured and supported one another in the pursuit of life-sustaining tasks. Steve Jobs observed a different group of creatures—engineers working on the first Macintosh computer in the 1980s—and came to a similar conclusion. He declared during his first tour at Apple that he never wanted the Macintosh division to be larger than one hundred people.

Small group sizes, and the number one hundred in particular, have been integral to the Apple culture ever since. Apple isn’t alone in this. Companies are forever trying to figure out how to foster separate “skunk works” projects or commit discrete SWAT teams to important assignments.
Amazon.com
had a “two-pizza” rule: Teams couldn’t be bigger than the number of people that could be fed by two pizzas in the (likely) event they were working late and got the munchies.

Apple frequently assigns major projects to small groups. For example, just two engineers wrote the code for converting Apple’s Safari browser for the iPad, a massive undertaking. It is, after all, how a start-up would approach something important, though in the start-up’s case it would be because there aren’t a lot of people around—a necessity rather than a conscious management decision. “If two to four people can get it done, you don’t need twenty to thirty, which is how so many other companies do it,” said Andrew Borovsky, the former Apple designer. “At Apple, really small teams work on really important projects. That is one of the advantages of being in a start-up.”

Jobs enshrined the importance of a small group in an ultra-secret gathering called the “Top 100.” The expression refers to both the group and the meeting, which was held more or less annually when Jobs was well and less consistently when he wasn’t. Jobs described the group alternatively as those he would choose if he were to start the company over again and the people he’d want with him in the proverbial life raft should the good ship Apple sink. Attendance at a Top 100 was a highly coveted and emotionally charged moment in an executive’s career because Jobs doled out invites based on his opinion of the individuals in question rather than their rank. Relatively low-level engineers would attend, because Jobs wanted them there, while certain vice presidents would be excluded. o ie excluHurt feelings over exclusion were the norm, which is what Jobs expected and even relished.

Everything about the Top 100 was shrouded in secrecy. For years it was held at the Chaminade Resort & Spa in Santa Cruz, California, and later at the Carmel Valley Ranch, on the opposite side of the Monterey Bay. Attendees were prohibited from driving themselves to the meeting. Instead these essential and wealthy executives boarded a bus in Cupertino for the drive south. Participants were told not to put the meeting on their calendars and not to discuss it internally. That was folly, of course, because senior executives needed help from their subordinates to get ready for their roles in the meeting. “We would prepare materials for people who would attend the Top 100,” remembered Michael Hailey, a manager who was not among the elect to be invited. “Then we’d tongue-in-cheek have a Bottom 100 lunch after they were gone.”

So secretive were the details of the Top 100 meeting
that Apple had the meeting rooms swept for bugs beforehand. Jobs was known to forbid food servers from entering the room while products were being shown. He once encouraged attendees to introduce themselves to the person sitting next to them to ensure that no one had snuck into the room.

Once ensconced at their exclusive off-site, the Top 100 were treated to a thorough review of Apple’s product plans for the next eighteen months or so. Jobs sat at the front of the room, kicking things off with a presentation that described his vision for the company and then presiding over presentations by other executives. Executives who attended said the presentations were of the caliber of a Steve Jobs keynote, meaning that tremendous effort went into them. “There would be half a dozen presentations a day, each only an hour long,” recalled an executive who attended many Top 100s. “You could really talk about anything in those meetings. You didn’t have to worry about secrecy. You could put everything out on the table: the pros, the cons, all that kind of stuff.”

The meetings were intended to allow the level of leadership below the executive team—people who in such a siloed and segregated company wouldn’t ordinarily interact with one another—to bond. They were also a venue for sneak peeks at upcoming products. The store concept was revealed at a Top 100. So was the first iPod.

At the last Top 100 Steve Jobs attended, in November 2010, he showed off the iPad 2 and its colorful new magnetic cover—four months before the public got to see it. A highlight for attendees was an extended Q&A between Jobs and his executives. One asked why Jobs himself wasn’t more philanthropic. He responded that he thought
giving away money was a waste of time. The San Francisco Giants won the World Series during a dinner session of that last Top 100—a distraction to the many Giants fans in the room, and an irritant to Jobs, who was completely uninterested in sports.

The Top 100 was a mostly internal affair, though the rare external guest made an appearance. Intel chief executive Paul Otellini presented the year Apple and Intel began a partnership to place Intel chips in Macs. As Apple prepared to enter the phone business, its key contacts at AT&T, Glenn Lurie and Paul Roth, briefed the computer-industry executives on the wireless world and its history. Lurie remembered the meeting for having exposed him to Apple executives beyond the narrow group with whom he’d been dealing on the iPhone. “I walked away incredibly impressed with the individuals,” he said. (Lurie’s role with Appto ole witle is so important to him that his official AT&T bio states that he has “responsibilities for AT&T’s ongoing operations and relationship with Apple Inc., having led negotiations to bring the iPhone to AT&T.” It notes his brief career as a professional soccer player but doesn’t mention the name of any other AT&T partner.)

Those left behind described excessive whispering and neck craning over empty offices and the absence of VIPs during the meeting, which didn’t officially exist on anyone’s agenda. “We weren’t supposed to know where they were. But we all knew where they were,” recalled someone who had not made it into Steve Jobs’s life raft. “They in turn weren’t supposed to be working while they were there, but they’d do emails and take phone breaks to avoid falling too far behind.”

While versions of the Top 100 exist at other compa
nies, these off-sites are usually more egalitarian in the guest list and contain some training component that suggests to attendees they are being considered to move up the organizational chart. Apple’s approach to career development is yet another way it runs contrary to the norms at other companies. The prevalent attitude for workers in the corporate world is to consider their growth trajectory.
What’s my path up? How can I get to the next level?
Companies, in turn, spend an inordinate amount of time and money grooming their people for new responsibilities. They labor to find just the right place for people. But what if it turns out that all that thinking is wrong? What if companies encouraged employees to be satisfied where they are, because they’re good at what they do, not to mention because that might be what’s best for shareholders?

Instead of employees fretting that they were stuck in terminal jobs, what if they exalted in having found their
perfect
jobs? A certain amount of office politics might evaporate in a corporate culture where career growth is not considered tantamount to professional fulfillment. Shareholders, after all, don’t care about fiefdoms and egos. There are many professionals who would find it liberating to work at what they are good at, receive competitive killer compensation, and not have to worry about supervisin
g others or jockeying for higher rungs on an org chart. If more companies did these things, it might work, and it might not. It might not even work so well at Apple after Steve Jobs hasn’t been CEO for a few years. But if more companies thought about such things, they’d most certainly be more like Apple.

O
n January 21, 2009, exactly a week after Steve Jobs announced a six-month medical leave of absence, Tim Cook presided over a conference call with Wall Street analysts and investors following the release of Apple’s quarterly earnings. Predictably, the very first questioner wanted to know how Cook would run the company differently from Jobs. The analyst also asked the awkward question on everyone’s mind: Would Cook succeed Jobs if the CEO didn’t return?

Cook didn’t brush off the question with the usual bromides that baseball players and executives are so fond of. “There is extraordinary breadth and depth and tenure among the Apple executive team,” he began, “and they lead 35,000 employees that I would call wicked smart. And that’s in all areas of the company, from engineering t foKo marketing to operations and sales and all the rest. And the values of our company are extremely well entrenched.”
Cook certainly could have stopped there. But his emotions were raw at the time, in part because he was genuinely concerned about Jobs’s health. He knew the “Apple community”—customers, developers, employees—was concerned, too. So he continued, as if reciting a creed he had learned as a child in Sunday school:

We believe that we are on the face of the earth to make great products, and that’s not changing. We are constantly focusing on innovating.

We believe in the simple not the complex.

We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us.

We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.

And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well. And… I strongly believe that Apple is doing the best work in its history.

The apparently extemporaneous statement was extraordinary on a number of levels. For starters, Cook was
emphatically hitting all the notes of an oft-played Steve Jobs symphony. He evoked Apple’s values. He cited Apple’s messianic mission. He ticked off the boxes of simplicity, focus, and relentlessness, all Jobs hallmarks.

More than that, Cook was introducing himself to a slice of the public that barely knew him. True, Cook had been at Apple for more than a decade and had run the company when Jobs first was treated for pancreatic cancer in 2004. Yet he remained a cipher to almost everyone other than a handful of top Apple executives and some of the company’s important suppliers and business partners. The basic rap on Cook was that he was the drab automaton who ran all the unglamorous parts of the business Jobs abhorred: supply-chain logistics, product fulfillment, customer support, inventory management, channel sales, hardware manufacturing. And even if he did run the company in Jobs’s absence, many believed he’d never be CEO. Right before Jobs stepped down for his 2009 medical leave, a prominent Silicon Valley investor who was unwilling to be quoted by name called the likelihood that Cook would become CEO “laughable,” adding that “they don’t need a guy who merely gets stuff done. They need a brilliant product guy, and Tim is not that guy. He is an ops guy—at a company where ops is outsourced.”

What the investing public, at least, learned from Cook during that earnings call was that there was something of a spark to this fellow, and more than a little ambition. He also revealed himself to be just a bit poetic—or at least someone who can parrot back the poetry learned during time spent inside a prestigious organization. His
We believe
s turned out to have been at least a subconscious
echo of the “Auburn Creed,” an earnest statement of I believes recited at Auburn University, Cook’s alma mater in his native Alabama:

I believe that this is a practical world and that I can count only on what I earn. Therefore, I believe in work, hard work.

I believe in education, which gives me the knowledge to work wisely and trains my mind and my hands to work skillfully.

I believe in honesty and truthfulness, without which I cannot win the respect and confidence of my fellow men.

I believe in a sound mind, in a sound body and a spirit that is not afraid, and in clean sports that develop these qualities.

I believe in obedience to law because it protects the rights of all.

I believe in the human touch, which cultivates sympathy with my fellow men and mutual helpfulness and brings happiness for all.

I believe in my Country, because it is a land of freedom and because it is my own home, and that I can best serve that country by “doing justly, loving mercy, and walking humbly with my God.”

And because Auburn men and women believe in these things, I believe in Auburn and love it.

Unbeknownst to his listeners, Cook had simultaneously just offered his own version of the “Apple Creed,” a wordier version of the long-ago promise by Jobs that Apple would make “insanely great” products. He also
cheekily answered the critics who believed that Apple would crumble when Jobs stepped down. (In his authorized biography of Steve Jobs, released just after Jobs’s death, Walter Isaacson reported that Jobs was “rankled and deeply depressed” by Cook’s comment that “regardless of who is in what job” Apple would continue to do well.) Mr. Back Office just might have more of the Vision Thing than folks had given him credit for.