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Firing Steve Jobs

2010 June 15

Two big stories have come out recently that appear to be in stark contrast to each other: Apple’s emergence as the most valuable tech company on the planet and John Sculley’s speaking out on firing Steve Jobs back in 1985.

What’s interesting is that so many of the character flaws that led the board to oust Jobs 25 years ago are still present today.  In fact he remains infamous for them.  Then, as now, Jobs was brilliant and petulant, inspiring and frustrating.  With Jobs at the helm, the question remains whether Apple’s success will perpetuate or be just another peak in a roller coaster career.

It’s a question worth asking and, whatever the answer, there are lessons there for all of us.

Why Jobs was Fired

While getting rid of Jobs seems incredibly stupid now, it was far from condemned at the time.  As this article makes clear, Jobs behavior was abhorent and he wasn’t showing results.  By all accounts, he was temperamental and erratic.  It seems unlikely that any corporate board would have kept him on.

Moreover, the board was not made up of corporate stooges, but some very competent people who agonized over the decision.  John Sculley, the CEO, was earlier the mastermind behind the fantastically successful Pepsi Challenge, which was instrumental in catching up to arch-rival Coke.

It’s also important to note that Apple seemed to prosper without Jobs.   During Sculley’s tenure from 1983-1993, revenues grew tenfold, from $800 million to $8 billion.  They launched the groundbreaking PowerBook and had other triumphs.  It wasn’t until the mid-90’s, or roughly a decade after Jobs’ departure, that Apple really began to falter.

Jobs Years in the Wilderness

After Apple, Jobs had a somewhat mixed record.  His NeXT computer was hailed as a technological triumph (Tim Berners-Lee wrote the first web code on one) but not a commercial success. It was ahead of its time, but way too expensive to be practical.  The hardware division was eventually scrapped and NeXT became exclusively a software company.

He had, of course, better luck with Pixar, which became a runaway success.  Their first film, Toy Story, changed the animated genre forever and was followed by an impressive string of hits.  Among other accomplishments, Pixar has won 24 Oscars and grossed billions at the box office.

However, even this success was tarnished by Jobs’ falling out with the equally mercurial Michael Eisner, which nearly caused the important Disney partnership to collapse.  This altercation, however, ended happily for Jobs when Pixar was acquired by Disney, giving him 7% of the stock and making him the largest shareholder of the combined company.

The Triumphant Return

Despite the commercial failure of NeXT computer, the company had built an operating system consequential enough to make it an attractive acquisition target.  In 1996, roughly a decade after Jobs ouster, Apple acquired NeXT and Jobs returned as an advisor.  In a little over a year, he became CEO.

The rest, as they say, is history.  The performance and styling of the iMac rejuvenated the desktop business.  This was then followed by the iPod, iPhone and iPad, all of which redefined their categories.  Jobs today is undoubtedly the world’s most admired CEO.

However, the question remains:  Will he flameout again?  Is the roller coaster ride over and smooth sailing ahead?  I would suggest that the answer isn’t nearly as clear cut as many would believe.

Enron, in its time, was also one of the world’s most valuable companies with a history of innovation and a charismatic CEO.  While I don’t believe Apple is another Enron, the point stands.  The mighty can fall – and fast.

As Much as Things Change, They Still Stay the Same

One of the things that is striking when you hear stories about the old Steve Jobs is how similar he seems to the new Steve Jobs.  He’s still the same illustrious, combative and capricious man he always was.

I’ve written before about how Jobs’ habit of following his own star is an enormous strength, but it’s a weakness too, perhaps even a fatal one.

What was the point in starting a public feud with Adobe over flash?  While he can’t be faulted for favoring HTML5, which is a W3C recommendation and therefore the most likely future standard, why the public histrionics?  Many companies are moving toward HTML5 without making negative headlines. (For a fairly non-technical explanation of the issue, see here).

He now seems to be pursuing a similar clash with Google and who knows who will be next.  It’s clear that Jobs does not back down from a fight or a slight.  What is not clear is to what end?

As I wrote in a previous post, one of the dangers of dominance is that you encourage others to build coalitions against yourself.  Jobs seems to revel in doing so, and that’s dangerous – even for Steve Jobs.

That he still displays the same character flaws that led to trouble in the past does not bode well for Apple.

Lessons to Learn

What the future holds for Steve Jobs and Apple is anybody’s guess.  They could go on to even greater success (although that’s hard to imagine) but it’s not out of the realm of possibility that the creation of too many enemies combined with the inevitable stumble (everybody has them eventually) could cause them to tumble from their pedestal.

Nevertheless, even before knowing how the story ends, there is still a lot we can learn from the ongoing Steve Jobs soap opera.

Don’t be a Jerk: As a manager, I’ve found that Robert Sutton’s rule is worth following and learned to get rid of difficult people quickly, no matter what their supposed talents.  They inevitably cause more problems than they solve and I haven’t once regretted their departure.

Jobs, of course, is an exceptional case, but I have the feeling that if the board had it to do over they would fire him again.  They were acutely aware of his talents, they just couldn’t work with him (and many people in Silicon Valley still feel the same way).  Despite 20/20 hindsight, I don’t fault the board one bit for sacking him.

Focus on What’s Important: It’s clear that getting fired was anguishing for Jobs. It is also equally apparent that it didn’t have to happen.  There was little utility in his erratic behavior, even for himself.  It was pure ego.  He did it because he felt he could get away with it.

Conversely, when it comes to products, Jobs seems to prioritize quite well.  As I wrote in a previous post, one of the reasons for the iPad’s success is its strategic clarity.  It does what it does very well and isn’t cluttered with needless features that add little except weight, price and confusion.

It’s unfortunate that Jobs seems more focused on clashes lately than building the next great product.

In the End, the Product Wins: The reason for Jobs’ and Apple’s, success has been and will always be because the products far outperform others.

Neither the iPod, the iPhone nor the iPad were strategic strokes of genius.  They were all launched into categories that were already established.  They won because they were demonstrably better than the competition due to a nearly superhuman focus on detail and usability. (Having built technology products, I know what that takes)

Apple’s future will be defined more by it’s products than on who Steve Jobs can insult or how outraged he can get at any imagined slight.  Maybe he will continue to gloriously succeed, but it will be in spite of his tantrums, not because of them.

So why is he wasting his time?

– Greg

14 Responses leave one →
  1. June 16, 2010

    Hi Greg–

    Amusing post indeed. I’m confident that you have compiled a completely accurate assessment of the personna of Steve Jobs. In the end, who cares?

    Nothing … and I mean absolutely nothing he does can diminish what he has accomplished. Of course, these accomplishments were not his alone. Much, if not all, of Apple’s innovations over the last 10 years have been the result of collaborations with far brighter minds than his Highness. Job’s gift is about vision and aggregation. Jobs has indeed “put a dent in the universe”… he can act like a spoiled brat all he wants, however anyone who purchased and held on to Apple stock over the last decade would hardly give any of this fuss a passing thought…

    Thomson Dawson
    http://www.pullinc.com
    Thomson Dawson´s last blog post ..If you register your site for free at

    [Reply]

    Greg Reply:

    Thompson,

    Your point is well taken and of course your right about his accomplishments. My Apple posts in the past have been highly positive.

    However, there is a reason why many in Silicon Valley still refuse to work with him.

    – Greg

    [Reply]

  2. June 16, 2010

    Hello Greg:

    The article is quite insightful, and a bit provocative too. Thanks.

    I have a different view about Jobs. I believe him to be three different things. The first is a creative who obsesses with the aesthetics of functionality. The second, the epitome of an architect who designs homes. Architects, as you are aware, can be a bit overbearing when it come to design, material, space, and content. The latter may even include teh architect’s selection of the homes furnishings, or the shoes the owner has to wear therein. The third, Jobs is increasingly a good human being and a cross-demographic example of courage and hope.

    I will skip the discussion on the creative Jobs, except to say that he now seems to well integrate real life user experiences with elegance. The result of all of this is transformative; the computer becomes a seamlessly integral part of one’s lifestyle.

    As for Jobs the architect, my take on him is that underlying all of this seemingly micromanaged stuff is, of course, control. Throughout Job’s history, he has not just written software, but also integrated such into his own computers. Some may state that this reflects a different / Apple business strategy, but such conclusions likely miss the point about Jobs.

    About being fired. When Jobs was fired, he had become a liability to Apple. He seemed obsessed with spurring new product development and revenue growth by a rather destructive means: insisting on competition among employees and divisions. This competitive insistence literally placed a firewall between the Apple side of the company and the Mac side. The house became divided. Not a soul at the company seemed to understand his role, nor did one have a grasp of the big picture about a product or the company itself. Jobs also effectively fostered employee distrust. He seemed unable to write good software and had to rely on others to keep him in business. Both Apple and Jobs went into a tail spin. (It did not help that Jobs also became a litigant who was hellbent on kill Bill (Gates)). Jobs would say — years after returning to Apple, that his termination was a necessary part of his latter successes.

    Apple’s thing with Adobe may actually reflect a bigger business lesson that Jobs learned over the years. Adobe has been an integral part of the successes of Apple’s products, but they have also materially benefitted from the relationship– oftentimes at Apple’s expense. Knowing this, and lacking control over Adobe’s product development or part of its market share, Apple set out to launch its own set of competitive products. It did so, in part, by acquiring smaller entities that brought innovation to the table. Final Cut Pro, Maya, etc., are all examples of competitive products Apple launches to eat away at Adobe’s dominance. (Multi-Touch — another acquired technology — is a mash-up of both hard and software, but represents a paradigm shift in the whole user interface. It is already accelerated the death of the mouse and track pad.) In short, I do not believe Apple ever once to have Adobe put it (Apple) in a position where it is beholding to Adobe for anything. (That said, it would not surprise me in the least if Apple has not devoted a ton of R&D into cocoa, and for the expressed purpose of developing a cross-platform application that out preforms Flash.)

    I think Job’s relationship with Google is healthy. There seems to be lots of informal cross-pollination between the company, as well as a constructive kind of friendly competition. Apple seems to benefit from the arrangement because it is able to refine slices of Google genius. Google seems happy because it can launch new products that serve as reasonably good substitutes to Apple’s products. I really believe Jobs and Google will continue the relationship to further grow opportunities for their respective company’s interests.

    It is always important to pay very close attention to Apple’s successes for other reasons. First, the company’s successes seem to really make Jobs a better and more creative person. Second, the company’s successes have served as a positive leverage against Jobs’ other challenges. Consider, even amid his life threatening illnesses, Jobs has become more mellow and — surprisingly calm. (Remember the wireless server complications at WWDC 2010? Jobs handled it with grace.) Third, Jobs seems more intent on making products more accessible to larger audiences. Last, Jobs now looks beyond Apple, and seems intent on investing in the growth of a new generation of computing, developers, etc. All these things are good.

    I agree with your position on the iPad, but also believe there are other aspects of the device that we should all consider. Yes, the device — by way of Jonathan Ives simple aesthetic concepts, integrates no brainer usability with best in class video performance and best in class efficiencies. That, however, is the least of what it brings to the market space. The device is literally a paradigm changer. When the dust settles with the iPad, we may find that every computer manufacturer needs an iPad-esque device to stay in the game: that the laptop market has disappeared; the e-Readers have become resigned to things like the Dollar Store; and, not one of our yet to be born grand children will be able to discern the utility of a mouse.

    In many ways, Jobs’ new successes serve as a lesson that all of us should learn. He learned. He learned from being fired, and took the occasion to become a better leader and human. He learned that rather than get stuck in fights with the likes of the Microsoft(s) of the world, he would do better by just doing a job better than before. he learned, to the extent possible, not to let anyone have leverage over him, by forming strong alliances with smaller powers. In all these things we see commonalities in Job that are the same as ours.

    [Reply]

    Greg Reply:

    Ibrahim,

    This time I completely disagree with you (except about the creativity and product stuff).

    The Adobe feud makes no sense. Everybody will move to HTML5 and away from flash. Why the histrionics? And there is most certainly a problem between Apple and Google. See here: http://www.nytimes.com/2010/03/14/technology/14brawl.html

    It to me seems that he really hasn’t learned his lesson.

    – Greg

    [Reply]

    Chris Grayson Reply:

    Hi Greg,

    Just wanted to chime in here.

    The fight with Adobe was picked by Adobe, not Apple.

    When the iPhone launched without Flash, NO smartphones supported Flash. It was a non-issue until Adobe contested an Apple advertising claim of being able to “view the whole web” on the iPhone. Furthermore, Apple made no to-do what-so-ever over not having Flash on the iPad. It was running the same OS as the iPhone, which also did not have Flash. It was Adobe that went completely on the offensive, launching a no-holes-barring PR attack on Apple for not including Flash on the iPad… which Apple ignore for months. Precisely because Apple did not respond to Adobe’s attacks in the press, Adobe’s one-sided PR campaign began to get traction (due to Apple silence on the matter, Adobe’s was the only side of the story being told), and the media began to frame the story around the perspective that Adobe was selling. Then and only then, did Apple belatedly acknowledge that there was even an “issue” at all, when Steve wrote a non-provocative, very straight forward, point-by-point explanation of why Apple had made the choices they had, regarding Flash. And in true Apple style, they have since gone silent on the matter. Far from what you describe as “histrionics,” beyond one open letter in response to Adobe’s massive (and likely multi-million dollar) PR campaign, Apple/Jobs have hardly acknowledge the issue at all.

    As for Google, it has certainly shown Steve Jobs’ possesses at least one of the same weaknesses from his youthful years, but not at all any of those that you suggest. Specifically, Jobs has a blind-spot for trusting people he lets inside the inner circle. In the 80s, he thought IBM was Apple’s enemy, so he brought Microsoft inside the circle, believing they had a common adversary in IBM. Apple positioned Microsoft as their #1 strategic alliance in the industry. Steve was slow to acknowledge the emerging competition with Microsoft, long after others realized it was Microsoft, not IBM, that would prove Apple’s undoing.

    In the same manner — long after others (including the DOJ) saw the writing on the wall, with the oncoming competition between Apple & Google, Steve had the same blind-spot. This time Steve still viewed Microsoft as the main enemy, and had aligned Apple with Google as their #1 strategic alliance, as a common combatants against Microsoft. He was very slow to acknowledge what many others (including myself) saw as obvious: that it was Google, not Microsoft, who was inevitably to emerge as Apple’s principal new corporate adversary — keeping Google executives on Apple’s board long long after it was prudent to do so.

    As an Apple shareholder myself, I occasionally have some disagreements with Job’s decisions. However, I have to be candid with you here: I disagree nearly completely with the perspective that you’ve framed your article.

    I am, however, confident it will prove to be provocative link-bait for your site, and I will give it a tweet.

    Your dialog is always a pleasure.

    cheers,
    Chris

    [Reply]

    Greg Reply:

    Chris,

    I’m not disputing your facts and reasonable people can disagree on the same version of events. However, Steve Jobs seems to fall out with everybody. Moreover, he’s notorious for feuds and they seem to be never-ending.

    I am also an Apple stockholder and somewhat of a Steve Jobs fan (my previous posts about Apple were very positive). I just wish he would focus on what he does best – make great products. Business dsputes are normal, but they seldom do they rise to the level of vitriol that Jobs seems to bask in.

    In any case, thank you for being so polite in a comment to a post that you obviously disagreed with. It is much appreciated (and if it’s any consolation, it didn’t serve very well as “link bait” – not one of my most popular posts).

    – Greg

    SomeRandomNerd Reply:

    I just wanted to chime in on the “Adobe feud” story – again, from what I’ve seen, it looks much more like a fight that Adobe started and Apple responded to. After 3 years of vague (but public) statements from Adobe about how they were working with Apple and confident that Flash would be coming to the iPhone, the tone definitely changed when the iPad was announced.

    For Adobe, it was a very clever marketing move. Until 2009, the story was that Flash was great for the desktop, but didn’t work on mobile devices. In 2010, Adobe managed to reframe the argument from being about “Mobile devices” to being about “Apple devices.” Which meant that the three year old technical story about Adobe having failed to make Flash work on iPhones, Android, Windows Mobile, Blackberry etc. was eclipsed by the political story about Apple not allowing Adobe to put their products onto the iPhone.

    Of course, the fact that there were also stories about Apple’s App Store approval process that fit nicely with Adobe’s “victimised” slant of the story no doubt helped it to gain column inches. Not to mention moves like Adobe’s “We [heart] Apple” press and digital advertising.

    But it’s worth noting that there are two “Adobe Flash vs Apple” stories- the side of Flash player on iOS devices, and the side of Flash as a development platform being used to build iPhone apps. Given that Apple effectively pulled the plug on the feature of Adobe’s Flash tools just days before they were released to the market with it’s revised developer agreement, it seems hard to imagine that Adobe had bothered to get Apple’s blessing before they went ahead and tried to position Flash CS5 as an Xcode alternative for developer, and using the iPhone platform as a selling point.

    Greg Reply:

    Dear Mr. Nerd,

    Yeah, I’ve heard that Adobe is not exactly innocent and I’m sure that it’s true, just as it’s clear that most people, not just Steve Jobs, would feel somewhat slighted by Google’s development of Android, just as I’m sure that there is a real reason behind every one of Steve Jobs’ tantrums.

    However, the point is that going nuclear over every business dispute is not only a waste of time, but will most likely cost him dearly at some point and in no way contributes to Apple’s success. (I do own some Apple stock, so I really am rooting for them:-)

    Very interesting blog btw. Well worth checking out http://somerandomnerd.com/

    – Greg

    – Greg

    insider Reply:

    [ for some reason, I can’t “reply” to “SomeRandomNerd”‘s message, so this will have to do ]

    Knowing very well how things developed, I can tell you that yes, initially Apple did want Adobe to put Flash on iPhone, but at they point they didn’t have a full flash ready.

    However, as time went by, Apple saw that iPhone is successful even without flash, and in fact started seeing it as a threat. The biggest point is that Flash enables cross-platform compatibility, and is also (iOS-excluded) ubiquitous. Having Flash on the iOS would be a VERY strong value proposition to developers – they could target the desktop, iOS & Android “in one shot”. Which would level the playground for hardware makers, and would have Apple compete on price & hardware features.

    Remember – when Adobe was eventually ready to ship Flash on iOS and found a way around Apple’s license agreement – they simply changed the agreement. And they didn’t do it nicely either (by warning Adobe, or even – say – when the prerelease/beta program stared); oh no, they waited until DAYS before CS5 launch to drop the news…. in the meantime, also mesing things up for magazine publishers like Wired, who already had bought into AIR for iPhone.

    To say that Adobe picked up the fight is to buy into Steve’s propaganda…. just look at the facts, they are incredibly clear.
    (it’s also telling that Steve’s campaign was “why Flash is obsolete” while Adobe’s campaign was “we love Apple”. Just looks at those public messages, who’s at war, who’s picking a fight and who is merely responding? Isn’t it obvious, really?)

  3. June 18, 2010

    Greg:

    In many ways, I think you are like Jobs. Purposefully provocative. A bit restless. And, always ready for a fight.

    Ok, here is my shot across your bow: I think you are a bit jealous of Mr. Jobs.

    LOL.

    [Reply]

    Greg Reply:

    Ibrahim,

    Actually, I’m a fan of Steve Jobs (and in the past have been accused of writing excessively positive posts). As someone who has built technology products, I have an idea what it takes to build products as good as Apple’s.

    I just don’t see the point in wasting his energy with mindless feuds.

    In actuality, I kind of like the idea of the flash community becoming obsolete. They were always a bit of a pain in the ass, but if you needed the work done, you had little other choice. HTML5 will make organizing workflow and staffing much easier.

    – Greg

    [Reply]

  4. Katya permalink
    June 20, 2010

    Greg,

    Nice post. Who knows where would be Apple now if Jobs wasn’t fired at one point of time. After all firing Jobs didn’t hurt the company at all as we can see right now.

    – Katya

    [Reply]

    Greg Satell Reply:

    Katya,

    He seems to think that his “years in the wilderness” helped him.

    – Greg

    [Reply]

  5. Sunil permalink
    November 8, 2011

    Hi ibrahim, Do you think a movie critic condemns a movie, even a hit one , because he couldn’t make one? Your argument, that being jealous of steve jobs, doesn’t make sense. If anyone can be called genious or become famous by just scolding others, we would be scolding each other. If this article was just about scolding jobs, you wouldn’t care. You replied here because the statements are compelling. In your analysis of jobs, you only referred to good traits that made jobs successful. The conflict is only about his bad traits. People hesitate(actually frightened) to talk about them when the person is successful but when it comes to losers, they say ,sometimes even without thinking, it that these are the traits that made him a loser. Bad traits can’t favour anyone. Elixir(good traits) gives life. Poison(bad traits) takes life. There are no exceptions, for anyone.

    [Reply]

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