Inside Apple: How America's Most Admired--and Secretive--Company Really Works (13 page)

Papermaster didn’t last long, though, and the brevity of his tenure constitutes a cautionary tale for Apple’s prospects at attracting senior managers in the future. Steve Jobs was on medical leave when Papermaster, who declined repeated requests to be interviewed, started at Apple. By the time Jobs returned, the word on Papermaster was that he wasn’t fitting in. He wasn’t seen as fighting hard for his division, a requisite internally. “Papermaster is a really nice guy, proverbially the guy you’d want to have a beer with,”
said someone who interacted with him during his time at Apple. “He is Cplermaste warm, patient, and willing to listen—just not the right qualities for Apple. It was so painfully obvious to everyone.” It was said that when he came back to work, Jobs paid little attention to Papermaster, meaning the new executive had achieved “bozo” status in the founder’s exacting judgment.

After Apple released its revamped iPhone 4, in June 2010, the company was hit by a raft of complaints over dropped calls, an episode dubbed “Antennagate” after Steve Jobs personally announced that the cause was a faulty antenna in the phone. (Jobs famously suggested that users weren’t holding the phone correctly and then offered a rubber case to correct the problem.) Word leaked on August 7, 2010, that Papermaster, who oversaw the engineering of the phone, had quietly left Apple. He later reappeared as a vice president at Cisco, and, in late 2011, as chief technology officer at semiconductor maker AMD. Bob Mansfield added responsibility for devices engineering to his portfolio.

A
s CEO, Steve Jobs developed a loyal and able corps of lieutenants, a group he continued to direct up until nearly the last days of his life, despite having given up the chief executive’s post. Jobs similarly dominated Apple’s board of directors, even though he was its chairman only after stepping down as CEO.

The tale of Arthur Levitt’s brief flirtation with joining the Apple board in 2001 illustrates how Jobs ran things. Levitt was nearing the end of his run as chairman of the Securities and Exchange Commission under Bill Clinton
when Steve Jobs called to invite him to join the board. A committed Apple fan, Levitt was delighted. “I told him there’s no board in America I’d rather join,” Levitt recalled a decade later. Levitt flew to California, breakfasted with Jobs, met other members of the board, and attended Jobs’s Macworld keynote at San Francisco’s Moscone convention center. He received a board packet and a calendar of future board meetings and was excited about his first post-government assignment. Before he flew east, he left a copy of a recent speech he’d given on corporate governance with Fred Anderson, then Apple’s chief financial officer.

When Levitt landed, there was a message waiting for him from Jobs. “I called him back, and he said he didn’t think I’d be happy on the board,” Levitt said. “He was effectively saying I was no longer wanted.” Jobs didn’t seem to like Levitt’s opinion of what constituted good governance, including Levitt’s opinion that board members should attend all meetings. Larry Ellison, an Apple board member at the time and a close friend of Jobs, had a poor attendance record. “He said I wouldn’t be happy because his ‘best director’ didn’t attend board meetings,” said Levitt. “I was horribly disappointed.”

Jobs’s attitude toward Ellison, who left the board in 2002, citing his inability to attend board meetings, spoke volumes to his idea of board governance. Jobs continued to call Ellison his best director. He loved to tell the story of how he blew up the cover of a magazine with Ellison’s face on it and placed the life-sized photo in an empty chair at Apple board meetings. “I’d turn to him and say, ‘Larry, what do you think about that?’ ” Jobs recounted years later.

For years, Apple had no chairman, simply two “co-lead” directors, former Genentech CEO Art Levinson and former Intuit CEO Bill Campbell. The board had only six members other than the CEO, and many counted a connection to Jobs. Campbell was one of Jobs’s closest f Csardriends and personal advisers, and he eventually relinquished his “lead” role because of the fiduciary need to disclose facts of Jobs’s health he preferred not to discuss. Mickey Drexler had been CEO of the Gap, on whose board Jobs had served. Still, despite its personal connections to Jobs, Apple’s board was considered first-rate based on the quality of its members. Andrea Jung, CEO of Avon Products, brought consumer experience and took Campbell’s place as co-lead director. Al Gore, the former vice president, gave regulatory counsel—for years Jobs feared that Microsoft would stop supporting the Mac—and as an avid user of Apple’s products became an eloquent advocate for the customer experience.

In his 2002 book
Take on the Street
, Levitt called Apple’s board “highly qualified, prominent members of corporate America” but added that it nevertheless was “not designed to act independently of the CEO.” He acknowledged that Apple had performed brilliantly in turning itself around. That was beside the point, however. “Small, insular boards lack the outside perspective that is necessary in case a company finds itself in trouble,” concluded Levitt. “Especially when the CEO is as charismatic as Jobs, it’s crucial to have independent thinkers who do not act as an extension of management.”

No one would suggest that Apple is a company “in trouble.” What id="filepos206837">s more, whether it was guided solely by
Jobs or not, the board thoroughly succeeded in fulfilling one of its key tasks by providing for an orderly succession at the top. Just as Apple won’t truly be publicly tested until the products that were in the pipeline when Jobs died have been introduced, we won’t learn the value of its board until the company faces its first crisis without its former leader.

I
first met Tim Cook on October 20, 2010, at an Apple product launch on the company’s campus. Two years earlier, I had spent months working on an unauthorized profile of Cook that ran on the cover of
Fortune
magazine under the title, “The Genius Behind Steve: Could Operations Whiz Tim Cook Run the Company One Day?” No journalist had probed his background, career milestones, or personality as much as I had; yet I had never been granted an interview with him. I introduced myself to a smiling Cook. As we shook hands, I expected at least the slightest acknowledgment that this was our first time meeting each other, a nod or wink from him signifying something like,
Oh boy, I can’t believe you called my Auburn classmates from the early 1980s and my old boss at IBM
.

I was mistaken. Personal chitchat was not on the agenda that day. It wasn’t in the Apple script.

When Cook and I connected, I happened to be standing in the “demo room” after a press event dubbed “Back to the Mac” at which Apple unveiled a bevy of new computers. These events seem routine to the journalists who attend them, but they are not routine to the Apple employees who put them together. Each year there’s an event for the iPhone, often to coincide with the annual Worldwide Developers Conference—WWDC in Applespeak. Another event showcases Apple’s music offerings, often to highlight enhancements to iTunes or the iPod. iPad events are newer. The Mac event is a staple. These highly choreographed productions occur at one of about three locat FiB theions: the massive Moscone Center in San Francisco, a more intimate theater at the nearby Yerba Buena Center for the Arts, or Apple’s Town Hall auditorium in Infinite Loop 4 in Cupertino. The format is prescribed no matter the venue: a keynote address filled with demonstrations of whatever products and services are new, usually followed by an opportunity to see and play with the devices. In attendance typically will be journalists, investors, and partners, examples of the latter being cell phone companies for an iPhone event, game developers for an iPad event, and so on. But the focus is on the press, whose role is to rev up the blogosphere or start jawboning into the camera, explaining to the world the latest tricks up Apple’s corporate sleeve.

On the day I encountered Cook, Apple had revealed its revolutionarily redesigned MacBook Air, a unibody, ultra-lightweight laptop computer. As an Apple news release enthused, the new computer was “an incredibly thin 0.11-inches at its thinnest point” and weighed “just 2.3 pounds.” By chance, I was standing next to a chest-
high display table holding a MacBook Air when Cook approached. Immediately he asked me what I thought of the computer. Unsure how to respond, I mumbled something about it being impressive. That was all he needed to launch into a short discourse on just how impressive the MacBook Air was. Its solid-state flash storage capacity that replaced the old disk drive—just like an iPad!—was fantastic. The new computer was super-thin, light, and fast as all get-out. It was like nothing else anybody had ever done before in the computer industry.

Cook and I chatted for a few minutes more as a minder from Apple’s public relations staff hovered nearby, along with Phil Schiller, Apple’s senior vice president of worldwide product marketing. Elsewhere in the room a frail-looking Steve Jobs held court with other journalists, reiterating the points about the MacBook Air he had made in his formal presentation and watched over by the head of Apple’s PR department, Katie Cotton. A handful of other top executives mingled with the press, echoing the points Jobs and Cook were making about the laptop’s magical new features.

The coordinated messaging was classic Apple, just one of countless examples of how Apple manages its image in a conscious, forceful, yet seemingly casual manner that nevertheless leaves absolutely nothing to chance. Messaging is another area where Apple goes its own way. The company breaks the mold when it comes to how it tells stories to consumers and how it treats information—no differently than it would silicon, titanium, or some other essential yet precious commodity. Call Apple’s system Curate and Control.

Apple also brings its usual level of fanatical attention to
how it communicates to the outside world, but it employs different approaches depending upon the audience. With consumers, the message is ubiquitous but limited in scope. With journalists, information becomes a commodity that Apple doles out only after weighing the risk versus the potential return on investment. As part of its plan to debut, market, and sell each product, Apple decides who will speak about it and to whom, what the talking points will be, and which members of the press will be blessed with coveted interviews. The precise words Apple uses to communicate its message are repeated so many times that everyone, internally and externally, can recite them by heart.

The hallmarks of the Apple product message are, as with so much at Apple, simplicity and clarity. Throughout its history, Apple has unveiled products and features that either didn’t previously exist in the i Kxisimplndustry or represented meaningful leaps forward. The simple design and capabilities of the first iPod and the groundbreaking multitouch expand-and-contract feature on the iPhone are two noteworthy examples.

The trick with selling breakthrough products is to explain them clearly. Bob Borchers, who was a senior product marketing executive for the iPhone, described Apple’s approach to educating the public about the new product in 2007, when the smartphone market was dominated by BlackBerry and Palm. “When we launched the iPhone, it could have been a gazillion things,” he recalled. “It did a huge number of functions and had multiple features.” Rather than listing a multitude of capabilities, he said, Apple executives “boiled it down to three things: It was a revolutionary phone; it was the Internet in your pocket; and it was the best iPod we’d ever created.”

The key, said Borchers, was highlighting exactly what made the iPhone stand out but giving consumers only as much as they needed to get excited. “If you compare that to any other mobile phone positioning in the market, it was unlike any of those devices,” he said. “But this was the message that we rolled out in every piece of material that was in every briefing. It was everywhere.”

It would be easy to dismiss this relentless repetition as creepily cultish, but this is just one of many ways that Apple achieves a brand identity that is the envy of any marketing professional. Consistency of message helps build customer loyalty. Clear messaging can also have a huge impact on the bottom line. “If there’s one thing that I take away today, and I still use time and time again, it’s that the best messaging is clear, concise, and repeated,” reflected Borchers, who became a venture capitalist with the Silicon Valley firm Opus Capital after leaving Apple. “You’re going to get tired of the message. You’re going to do twenty briefings, and they’ll all sound exactly the same to you. But that’s what you want, because the person who is hearing it is hearing it for the first time. And where you get into trouble is where you start to mix it up because you’re getting bored. So one of the key things was: Just use the same words over and over and over again. That will turn into the same words that the consumer hears, which ultimately will turn into the same words that they then use to define the product to their friends.”

The happy outcome for Apple is that consumers don’t feel played. Apple fanatics and industry pros may chuckle about the famous Steve Jobs “reality distortion field”—the founder’s hypnotic ability to convince listeners of the goodness of whatever he happened to be pitching. But
for consumers, Apple has manufactured their reality. The message comes at them from all directions, but it is easy to understand. It feels organic, not forced. Yet make no mistake: Apple planned the message’s dissemination from beginning to end.

G
iven that Apple is the ultimate top-down organization, the art of corporate communications began at the top. “Steve was a storyteller,” reflected one departed executive. “He could weave a story the company could get behind. It’s almost unheard of in a company that size.” Executives committed the corporate stories to memory long before they began telling them to customers. That’s because they already had debated, vetted, tweaked, and tested the story line repeatedly from the time Steve Jobs first told it to them to the time they talked about it in public.