Inside Apple: How America's Most Admired--and Secretive--Company Really Works (23 page)

An unsung attribute of Steve Jobs that Apple also will miss is his role as a masterful networker and gatherer of information. Had times gotten really rough, Jobs would have made a fine journalist. He furiously worked the phones, calling up people he’d heard were worthy and requesting a meeting. No one turned down the chance to meet with Jobs, of course, and he used the opportunity to soak up information. His uncanny insight into trends
in business and technology weren’t a fluke. Jobs worked hard for his market intelligence.

Jobs played reporter until near the end of his life. On June 28, 2011, he sent word through former Adobe CEO Bruce Chizen that he wanted to speak to the young CEO of a start-up called Lytro, where Chizen was an adviser. Lytro was pioneering a consumer “light-field” camera that used sensors to automatically refocus blurry photos. It was potentially breakthrough technology and of obvious interest to Apple, whose iPhones and iPads had cameras. The company’s CEO, Ren Ng, a brilliant computer scientist with a PhD from Stanford, immediately called Jobs, who picked up the phone at home and quickly said, “If you’re free this afternoon maybe we could get together.” Ng, who is thirty-two, hurried to Palo Alto, showed Jobs a demo of Lytro’s technology, discussed cameras and product design with him, and, at Jobs’s request, agreed to send him an email outlining three things he’d like Lytro to do with Apple. “What struck me the most was how clear his communication was,” recalled Ng. “His eyes were just so brilliant. His glasses kind of levitated off his nose. I told him we drew a lot of inspiration from the iPad. He really smiled. It was clear it resonated.”

The rest of the crew at Apple either is too busy to schmooze or was always discouraged by Jobs from doing it, lest they get too big for their britches or too distracted from their Apple work. Recall his not altogether accurate quip about “not letting Forstall out of the office.” Scott Forstall does get out, but Jobs was serious about the sentiment. He circulated; Apple executives stuck to their knitting. A closed system doesn’t easily absorb ideas from
outside its cone of silence. Jobs supplied Apple its ideas, but he was one of a kind.

Other challenges abound, especially the fact that no matter how much Steve Jobs might have resisted the characterization, Apple is a big, compl k a Othericated company now. Its marketing remains fanatically clear, clever, and effective. But Apple is in all senses of the expression a multinational company selling multiple products. The days of fitting all its products on a conference room table are behind it. Even the product tabs at the top of the
Apple.com
home page are instructive. They read: Store, Mac, iPod, iPhone, iPad, iTunes, Support. Clear and straightforward, yes, but these diverse categories represent far more balls in the air than Apple had a decade ago.

A diverse company calls for depth of management, and the moment Steve Jobs stepped down the weaknesses of Apple’s organizational structure, which worked so well under Jobs, became apparent. Tim Cook had overseen sales for years, for example, and Apple already was searching for a sales chief. (A top Google executive, Dennis Woodside, turned down an offer to take up the position in the fall of 2011.) Jobs personally oversaw advertising for Apple. Phil Schiller has added that responsibility to his portfolio, but that will stretch him thin, and advertising—as opposed to product marketing—is not Schiller’s bedrock experience. Apple has begun working out meaningful quirks. Weeks after Cook became CEO, Apple dropped the word “Mac” from Bob Mansfield’s title, recognizing that his responsibilities included device engineering, too. Craig Federighi, the head of Mac software, reported to Jobs and now reports to Cook. But Scott Forstall is the king of the software hill at Apple. His role needs clarification, such as formally putting all software under him.

Jobs’s death also left Apple’s board without a chairman again. A month later, co–lead director Art Levinson, a former CEO himself, assumed the chairmanship. At the same time, Disney CEO Robert Iger joined the Apple board, deepening the Apple-Disney relationship.

Key Apple practices increasingly will come under pressure. When Apple slightly missed Wall Street’s earnings projections in October 2011, the company attributed a falloff in iPhone 4 sales to rumors about an expected new phone. Allowing the rumor mill to affect sales is not the Apple way. Indeed, it is unheard of. What’s more, fear of reprisal from Jobs was one reason employees (and ex-employees) kept their mouths shut. Tongues will become looser over time at Apple.

It will be intriguing to see how Apple will adjust its PR strategy in a post-Jobs world. Apple has more than enough money to continue to purchase and place its ads on the back cover of any magazine it likes, literally and figuratively. But the company has lost its best resource for landing Apple on the front cover. In the near future, the news media will cooperate with Apple on whatever it wants. The story is that good, with or without Jobs. But now his reality-distortion field has been deactivated, and eventually journalists will push back against Apple’s stingy approach to public relations.

Partners naturally will push back, too, as they become increasingly well versed in the tactics Apple deploys against the likes of Cisco, the phone companies, and countless others. Five years from now, will a CEO devote days to rehearsing a three-minute presentation when the ultimate prize is not an audience with Steve Jobs? It seems unlikely. Ironically, Apple will confront a paradoxi
cal image problem. In contrast to the outpouring of love for Steve Jobs after he died, the Apple family expressed outrage at the unsparing portrayal of his dark side in his authorized biography by Walter Isaacson, which was released nineteen days after Jobs’s death. A similar fate could await Apple. Customers rightly love Appl ktlyography e for the delight its products bring them. But Apple’s ubiquity increasingly will enable the many stories of its roughness, with partners and employees alike, to shift beyond the business realm and into the public psyche.

Confronting these complex issues, Apple undoubtedly will continue to defy so many of the management precepts taught in business school. However, the answer to what Apple’s future will be is unlikely to come from businessthink. Instead the best answer may come from theology, for the difference between a true belief system and idolatry is that a true belief system outlasts its founder. Steve Jobs wanted Apple’s values to survive him, though even his friends and admirers suspect he took some devilish pleasure in envisioning the whole thing going to pot again without him to pull the strings.

There are things Apple can do to carry on, but this would require the company that revolutionized the computer, the smartphone, and the MP3 player to be willing to revolutionize itself. Change will not come easily to one of the world’s most valuable companies. If Apple’s presumably incredible pipeline of products is the company’s tailwind, “If it ain’t broke, don’t fix it” will be a headwind that could turn treacherous in the years ahead.

Its executives must learn not to ask the question “What would Steve do?” and instead just do what they think is best. In fact, Tim Cook said at an employee celebration of
Jobs’s life that Jobs’s parting advice to Cook was “to never ask what he would do; just do what’s right.” If Cook doesn’t intend to be the final word on matters of taste or software architecture, then he’ll have to designate who will be. Otherwise Apple will devolve into the fractious company that Steve Jobs never allowed it to be. If Apple can truly continue to behave like a start-up, then it will need to become less arrogant and bullying and more paranoid and respectful. Otherwise, it will inevitably become more like Microsoft, which too often resembles the snow leopard Jobs rejected for the packaging of Apple’s software: fat and lazy.

A
pple held multiple tributes for Steve Jobs in the weeks after his death.
Apple.com
featured the iconic Albert Watson photo of Jobs, originally shot for a 2006 spread in
Fortune
, as the sole image on its home page. His penetrating gaze stared into the camera as he gently tugged at his graying beard. Just four Apple employees attended his funeral at Alta Mesa Memorial Park in Palo Alto on October 7, 2011: Tim Cook, Jony Ive, Eddy Cue, and Katie Cotton. Pixar’s Ed Catmull, Disney’s Bob Iger, longtime friends Larry Brilliant and Bill Campbell, and former Intel CEO Andy Grove also attended. Jobs’s family held a private event for him at Stanford University on October 16, attended by luminaries from Bono to Al Gore to Bill Clinton as well as top Apple executives and alumni. On October 19, Apple hosted an employee celebration at 1 Infinite Loop. Coldplay and Norah Jones sang—gratis. The company beamed a telecast to employees of its US retail stores.

When Tim Cook opened Apple’s quarterly earnings call with investors on October 18, less than two weeks
after Jobs’s death, he began with a statement. “The world has lost a visionary, a creative genius and an amazing human being,” Cook said. “Steve was a great leader and mentor and inspired everyone at Apple to do extraordinary things. His spirit will forever be the foundation of Apple, and we are dedicated to continuing the amazing work that he loved so much.” Cook thanked everyone who offered their condolences, an kndople, and then got down to the nitty-gritty business of Apple’s financial results.

It was in his response to the most mundane of questions that Cook symbolically revealed what kind of steward he might be for the company Steve Jobs first created and then saved. On every financial call with Apple in recent years, investors have asked if Apple will consider returning some of its cash to shareholders, potentially in the form of a dividend. It was like a bad running joke: Investors seriously wanted a dividend, but it wasn’t as if they were going to sell the stock if they didn’t get one. On this call, the dividend question came right on cue, and this time, Cook had a different answer. “I’m not religious about holding cash or not holding it,” he said. “I’m religious about a lot of things but not that one. And so we will continually ask ourselves what’s in Apple’s best interest and always do what we believe is in Apple’s best interest.” Cook didn’t elaborate on the subjects on which he remains religious. But Apple isn’t a religion. It’s just a fine company with an unrivaled track record, a strong set of values, and a culture of excellence.

I wrote earlier in this chapter that common sense suggests Apple ultimately can’t cope with the loss of Steve Jobs. That’s true. Apple very likely will stop being an
“insanely great” company. This will happen gradually, perhaps imperceptibly. A product will fail to delight. A member of the senior management team will depart, and then another. It will confront a host of problems, not the least of which will be the scrutiny of a world that obsessively watches its efforts to continue its string of success. Apple once was able to distract the public with arresting advertising and well-timed product releases, while behind the scenes it worked its magic. Now the curtain has been pulled back a little, and we see that real men and women are working furiously to keep things in motion. Customers so thoroughly anticipate new Apple offerings that despite Apple’s ability to keep the details of its releases secret the anticipation puts little dents in sales anyway.

Yet forecasting Apple’s fall from otherworldly status is beside the point. Apple failed plenty of times before, including during the second reign of Steve Jobs. If Apple TV was just a “hobby,” as Jobs called it, then why was Apple, the great focuser of corporate energy, working on it in the first place? Did MobileMe or a faulty antenna on the iPhone 4 represent an Apple in decline? Not really. Was it a failure when Apple lost stars like Tony Fadell, Avie Tevanian, and Ron Johnson? Sure, but the business of the company continued. Companies, like people, aren’t perfect. Apple in the last fourteen years of Stev
e Jobs’s life was far better than most, but it wasn’t perfect. Jobs was just particularly good at getting us to focus on the good and ignore the bad.

An Apple that is merely great, rather than insanely great, will be a disappointment, but only to the loyalists who demanded more from Apple all along. For the rest
of us, our expectations of Apple were always lower. We’ll keep buying merely great products for a long time.

It has been said of Apple that it is so different in the way it goes about the business of doing business that it’s like a bumble bee: It shouldn’t fly, but it does. Going forward, Apple will continue to fly. The explanation of how it does so, however, already is becoming just a little less mysterious.