Wozniak wanted to make the parting amicable. It was his style. So he agreed to stay on as a part-time Apple employee at a $20,000 salary and represent the company at events and trade shows. That could have been a graceful way to drift apart. But Jobs could not leave well enough alone. One Saturday, a few weeks after they had visited Washington together, Jobs went to the new Palo Alto studios of Hartmut Esslinger, whose company frogdesign had moved there to handle its design work for Apple. There he happened to see sketches that the firm had made for Wozniak’s new remote control device, and he flew into a rage. Apple had a clause in its contract that gave it the right to bar frogdesign from working on other computer-related projects, and Jobs invoked it. “I informed them,” he recalled, “that working with Woz wouldn’t be acceptable to us.”
When the Wall Street Journal heard what happened, it got in touch with Wozniak, who, as usual, was open and honest. He said that Jobs was punishing him. “Steve Jobs has a hate for me, probably because of the things I said about Apple,” he told the reporter. Jobs’s action was remarkably petty, but it was also partly caused by the fact that he understood, in ways that others did not, that the look and style of a product served to brand it. A device that had Wozniak’s name on it and used the same design language as Apple’s products might be mistaken for something that Apple had produced. “It’s not personal,” Jobs told the newspaper, explaining that he wanted to make sure that Wozniak’s remote wouldn’t look like something made by Apple. “We don’t want to see our design language used on other products. Woz has to find his own resources. He can’t leverage off Apple’s resources; we can’t treat him specially.”
Jobs volunteered to pay for the work that frogdesign had already done for Wozniak, but even so the executives at the firm were taken aback. When Jobs demanded that they send him the drawings done for Wozniak or destroy them, they refused. Jobs had to send them a letter invoking Apple’s contractual right. Herbert Pfeifer, the design director of the firm, risked Jobs’s wrath by publicly dismissing his claim that the dispute with Wozniak was not personal. “It’s a power play,” Pfeifer told the Journal. “They have personal problems between them.”
Hertzfeld was outraged when he heard what Jobs had done. He lived about twelve blocks from Jobs, who sometimes would drop by on his walks. “I got so furious about the Wozniak remote episode that when Steve next came over, I wouldn’t let him in the house,” Hertzfeld recalled. “He knew he was wrong, but he tried to rationalize, and maybe in his distorted reality he was able to.” Wozniak, always a teddy bear even when annoyed, hired another design firm and even agreed to stay on Apple’s retainer as a spokesman.
Showdown, Spring 1985
There were many reasons for the rift between Jobs and Sculley in the spring of 1985. Some were merely business disagreements, such as Sculley’s attempt to maximize profits by keeping the Macintosh price high when Jobs wanted to make it more affordable. Others were weirdly psychological and stemmed from the torrid and unlikely infatuation they initially had with each other. Sculley had painfully craved Jobs’s affection, Jobs had eagerly sought a father figure and mentor, and when the ardor began to cool there was an emotional backwash. But at its core, the growing breach had two fundamental causes, one on each side.
For Jobs, the problem was that Sculley never became a product person. He didn’t make the effort, or show the capacity, to understand the fine points of what they were making. On the contrary, he found Jobs’s passion for tiny technical tweaks and design details to be obsessive and counterproductive. He had spent his career selling sodas and snacks whose recipes were largely irrelevant to him. He wasn’t naturally passionate about products, which was among the most damning sins that Jobs could imagine. “I tried to educate him about the details of engineering,” Jobs recalled, “but he had no idea how products are created, and after a while it just turned into arguments. But I learned that my perspective was right. Products are everything.” He came to see Sculley as clueless, and his contempt was exacerbated by Sculley’s hunger for his affection and delusions that they were very similar.
For Sculley, the problem was that Jobs, when he was no longer in courtship or manipulative mode, was frequently obnoxious, rude, selfish, and nasty to other people. He found Jobs’s boorish behavior as despicable as Jobs found Sculley’s lack of passion for product details. Sculley was kind, caring, and polite to a fault. At one point they were planning to meet with Xerox’s vice chair Bill Glavin, and Sculley begged Jobs to behave. But as soon as they sat down, Jobs told Glavin, “You guys don’t have any clue what you’re doing,” and the meeting broke up. “I’m sorry, but I couldn’t help myself,” Jobs told Sculley. It was one of many such cases. As Atari’s Al Alcorn later observed, “Sculley believed in keeping people happy and worrying about relationships. Steve didn’t give a shit about that. But he did care about the product in a way that Sculley never could, and he was able to avoid having too many bozos working at Apple by insulting anyone who wasn’t an A player.”
The board became increasingly alarmed at the turmoil, and in early 1985 Arthur Rock and some other disgruntled directors delivered a stern lecture to both. They told Sculley that he was supposed to be running the company, and he should start doing so with more authority and less eagerness to be pals with Jobs. They told Jobs that he was supposed to be fixing the mess at the Macintosh division and not telling other divisions how to do their job. Afterward Jobs retreated to his office and typed on his Macintosh, “I will not criticize the rest of the organization, I will not criticize the rest of the organization . . .”
As the Macintosh continued to disappoint—sales in March 1985 were only 10% of the budget forecast—Jobs holed up in his office fuming or wandered the halls berating everyone else for the problems. His mood swings became worse, and so did his abuse of those around him. Middle-level managers began to rise up against him. The marketing chief Mike Murray sought a private meeting with Sculley at an industry conference. As they were going up to Sculley’s hotel room, Jobs spotted them and asked to come along. Murray asked him not to. He told Sculley that Jobs was wreaking havoc and had to be removed from managing the Macintosh division. Sculley replied that he was not yet resigned to having a showdown with Jobs. Murray later sent a memo directly to Jobs criticizing the way he treated colleagues and denouncing “management by character assassination.”
For a few weeks it seemed as if there might be a solution to the turmoil. Jobs became fascinated by a flat-screen technology developed by a firm near Palo Alto called Woodside Design, run by an eccentric engineer named Steve Kitchen. He also was impressed by another startup that made a touchscreen display that could be controlled by your finger, so you didn’t need a mouse. Together these might help fulfill Jobs’s vision of creating a “Mac in a book.” On a walk with Kitchen, Jobs spotted a building in nearby Menlo Park and declared that they should open a skunkworks facility to work on these ideas. It could be called AppleLabs and Jobs could run it, going back to the joy of having a small team and developing a great new product.
Sculley was thrilled by the possibility. It would solve most of his management issues, moving Jobs back to what he did best and getting rid of his disruptive presence in Cupertino. Sculley also had a candidate to replace Jobs as manager of the Macintosh division: Jean-Louis Gassée, Apple’s chief in France, who had suffered through Jobs’s visit there. Gassée flew to Cupertino and said he would take the job if he got a guarantee that he would run the division rather than work under Jobs. One of the board members, Phil Schlein of Macy’s, tried to convince Jobs that he would be better off thinking up new products and inspiring a passionate little team.
But after some reflection, Jobs decided that was not the path he wanted. He declined to cede control to Gassée, who wisely went back to Paris to avoid the power clash that was becoming inevitable. For the rest of the spring, Jobs vacillated. There were times when he wanted to assert himself as a corporate manager, even writing a memo urging cost savings by eliminating free beverages and first-class air travel, and other times when he agreed with those who were encouraging him to go off and run a new AppleLabs R&D group.
In March Murray let loose with another memo that he marked “Do not circulate” but gave to multiple colleagues. “In my three years at Apple, I’ve never observed so much confusion, fear, and dysfunction as in the past 90 days,” he began. “We are perceived by the rank and file as a boat without a rudder, drifting away into foggy oblivion.” Murray had been on both sides of the fence; at times he conspired with Jobs to undermine Sculley, but in this memo he laid the blame on Jobs. “Whether the cause of or because of the dysfunction, Steve Jobs now controls a seemingly impenetrable power base.”
At the end of that month, Sculley finally worked up the nerve to tell Jobs that he should give up running the Macintosh division. He walked over to Jobs’s office one evening and brought the human resources manager, Jay Elliot, to make the confrontation more formal. “There is no one who admires your brilliance and vision more than I do,” Sculley began. He had uttered such flatteries before, but this time it was clear that there would be a brutal “but” punctuating the thought. And there was. “But this is really not going to work,” he declared. The flatteries punctured by “buts” continued. “We have developed a great friendship with each other,” he said, “but I have lost confidence in your ability to run the Macintosh division.” He also berated Jobs for badmouthing him as a bozo behind his back.
Jobs looked stunned and countered with an odd challenge, that Sculley should help and coach him more: “You’ve got to spend more time with me.” Then he lashed back. He told Sculley he knew nothing about computers, was doing a terrible job running the company, and had disappointed Jobs ever since coming to Apple. Then he began to cry. Sculley sat there biting his fingernails.
“I’m going to bring this up with the board,” Sculley declared. “I’m going to recommend that you step down from your operating position of running the Macintosh division. I want you to know that.” He urged Jobs not to resist and to agree instead to work on developing new technologies and products.
Jobs jumped from his seat and turned his intense stare on Sculley. “I don’t believe you’re going to do that,” he said. “If you do that, you’re going to destroy the company.”
Over the next few weeks Jobs’s behavior fluctuated wildly. At one moment he would be talking about going off to run AppleLabs, but in the next moment he would be enlisting support to have Sculley ousted. He would reach out to Sculley, then lash out at him behind his back, sometimes on the same night. One night at 9 he called Apple’s general counsel Al Eisenstat to say he was losing confidence in Sculley and needed his help convincing the board to fire him; at 11 the same night, he phoned Sculley to say, “You’re terrific, and I just want you to know I love working with you.”
At the board meeting on April 11, Sculley officially reported that he wanted to ask Jobs to step down as the head of the Macintosh division and focus instead on new product development. Arthur Rock, the most crusty and independent of the board members, then spoke. He was fed up with both of them: with Sculley for not having the guts to take command over the past year, and with Jobs for “acting like a petulant brat.” The board needed to get this dispute behind them, and to do so it should meet privately with each of them.
Sculley left the room so that Jobs could present first. Jobs insisted that Sculley was the problem because he had no understanding of computers. Rock responded by berating Jobs. In his growling voice, he said that Jobs had been behaving foolishly for a year and had no right to be managing a division. Even Jobs’s strongest supporter, Phil Schlein, tried to talk him into stepping aside gracefully to run a research lab for the company.
When it was Sculley’s turn to meet privately with the board, he gave an ultimatum: “You can back me, and then I take responsibility for running the company, or we can do nothing, and you’re going to have to find yourselves a new CEO.” If given the authority, he said, he would not move abruptly, but would ease Jobs into the new role over the next few months. The board unanimously sided with Sculley. He was given the authority to remove Jobs whenever he felt the timing was right. As Jobs waited outside the boardroom, knowing full well that he was losing, he saw Del Yocam, a longtime colleague, and hugged him.
After the board made its decision, Sculley tried to be conciliatory. Jobs asked that the transition occur slowly, over the next few months, and Sculley agreed. Later that evening Sculley’s executive assistant, Nanette Buckhout, called Jobs to see how he was doing. He was still in his office, shell-shocked. Sculley had already left, and Jobs came over to talk to her. Once again he began oscillating wildly in his attitude toward Sculley. “Why did John do this to me?” he said. “He betrayed me.” Then he swung the other way. Perhaps he should take some time away to work on restoring his relationship with Sculley, he said. “John’s friendship is more important than anything else, and I think maybe that’s what I should do, concentrate on our friendship.”
Plotting a Coup
Jobs was not good at taking no for an answer. He went to Sculley’s office in early May 1985 and asked for more time to show that he could manage the Macintosh division. He would prove himself as an operations guy, he promised. Sculley didn’t back down. Jobs next tried a direct challenge: He asked Sculley to resign. “I think you really lost your stride,” Jobs told him. “You were really great the first year, and everything went wonderful. But something happened.” Sculley, who generally was even-tempered, lashed back, pointing out that Jobs had been unable to get Macintosh software developed, come up with new models, or win customers. The meeting degenerated into a shouting match about who was the worse manager. After Jobs stalked out, Sculley turned away from the glass wall of his office, where others had been looking in on the meeting, and wept.
Matters began to come to a head on Tuesday, May 14, when the Macintosh team made its quarterly review presentation to Sculley and other Apple corporate leaders. Jobs still had not relinquished control of the division, and he was defiant when he arrived in the corporate boardroom with his team. He and Sculley began by clashing over what the division’s mission was. Jobs said it was to sell more Macintosh machines. Sculley said it was to serve the interests of the Apple company as a whole. As usual there was little cooperation among the divisions; for one thing, the Macintosh team was planning new disk drives that were different from those being developed by the Apple II division. The debate, according to the minutes, took a full hour.
