Once again Jobs had produced an iconic new product, this one a harbinger of a new millennium. It fulfilled the promise of “Think Different.” Instead of beige boxes and monitors with a welter of cables and a bulky setup manual, here was a friendly and spunky appliance, smooth to the touch and as pleasing to the eye as a robin’s egg. You could grab its cute little handle and lift it out of the elegant white box and plug it right into a wall socket. People who had been afraid of computers now wanted one, and they wanted to put it in a room where others could admire and perhaps covet it. “A piece of hardware that blends sci-fi shimmer with the kitsch whimsy of a cocktail umbrella,” Steven Levy wrote in Newsweek, “it is not only the coolest-looking computer introduced in years, but a chest-thumping statement that Silicon Valley’s original dream company is no longer somnambulant.” Forbes called it “an industry-altering success,” and John Sculley later came out of exile to gush, “He has implemented the same simple strategy that made Apple so successful 15 years ago: make hit products and promote them with terrific marketing.”
Carping was heard from only one familiar corner. As the iMac garnered kudos, Bill Gates assured a gathering of financial analysts visiting Microsoft that this would be a passing fad. “The one thing Apple’s providing now is leadership in colors,” Gates said as he pointed to a Windows-based PC that he jokingly had painted red. “It won’t take long for us to catch up with that, I don’t think.” Jobs was furious, and he told a reporter that Gates, the man he had publicly decried for being completely devoid of taste, was clueless about what made the iMac so much more appealing than other computers. “The thing that our competitors are missing is that they think it’s about fashion, and they think it’s about surface appearance,” he said. “They say, We’ll slap a little color on this piece of junk computer, and we’ll have one, too.”
The iMac went on sale in August 1998 for $1,299. It sold 278,000 units in its first six weeks, and would sell 800,000 by the end of the year, making it the fastest-selling computer in Apple history. Most notably, 32% of the sales went to people who were buying a computer for the first time, and another 12% to people who had been using Windows machines.
Ive soon came up with four new juicy-looking colors, in addition to bondi blue, for the iMacs. Offering the same computer in five colors would of course create huge challenges for manufacturing, inventory, and distribution. At most companies, including even the old Apple, there would have been studies and meetings to look at the costs and benefits. But when Jobs looked at the new colors, he got totally psyched and summoned other executives over to the design studio. “We’re going to do all sorts of colors!” he told them excitedly. When they left, Ive looked at his team in amazement. “In most places that decision would have taken months,” Ive recalled. “Steve did it in a half hour.”
There was one other important refinement that Jobs wanted for the iMac: getting rid of that detested CD tray. “I’d seen a slot-load drive on a very high-end Sony stereo,” he said, “so I went to the drive manufacturers and got them to do a slot-load drive for us for the version of the iMac we did nine months later.” Rubinstein tried to argue him out of the change. He predicted that new drives would come along that could burn music onto CDs rather than merely play them, and they would be available in tray form before they were made to work in slots. “If you go to slots, you will always be behind on the technology,” Rubinstein argued.
“I don’t care, that’s what I want,” Jobs snapped back. They were having lunch at a sushi bar in San Francisco, and Jobs insisted that they continue the conversation over a walk. “I want you to do the slot-load drive for me as a personal favor,” Jobs asked. Rubinstein agreed, of course, but he turned out to be right. Panasonic came out with a CD drive that could rip and burn music, and it was available first for computers that had old-fashioned tray loaders. The effects of this would ripple over the next few years: It would cause Apple to be slow in catering to users who wanted to rip and burn their own music, but that would then force Apple to be imaginative and bold in finding a way to leapfrog over its competitors when Jobs finally realized that he had to get into the music market.
CHAPTER TWENTY-EIGHT
CEO
Still Crazy after All These Years
Tim Cook and Jobs, 2007
Tim Cook
When Steve Jobs returned to Apple and produced the “Think Different” ads and the iMac in his first year, it confirmed what most people already knew: that he could be creative and a visionary. He had shown that during his first round at Apple. What was less clear was whether he could run a company. He had definitely not shown that during his first round.
Jobs threw himself into the task with a detail-oriented realism that astonished those who were used to his fantasy that the rules of this universe need not apply to him. “He became a manager, which is different from being an executive or visionary, and that pleasantly surprised me,” recalled Ed Woolard, the board chair who lured him back.
His management mantra was “Focus.” He eliminated excess product lines and cut extraneous features in the new operating system software that Apple was developing. He let go of his control-freak desire to manufacture products in his own factories and instead outsourced the making of everything from the circuit boards to the finished computers. And he enforced on Apple’s suppliers a rigorous discipline. When he took over, Apple had more than two months’ worth of inventory sitting in warehouses, more than any other tech company. Like eggs and milk, computers have a short shelf life, so this amounted to at least a $500 million hit to profits. By early 1998 he had halved that to a month.
Jobs’s successes came at a cost, since velvety diplomacy was still not part of his repertoire. When he decided that a division of Airborne Express wasn’t delivering spare parts quickly enough, he ordered an Apple manager to break the contract. When the manager protested that doing so could lead to a lawsuit, Jobs replied, “Just tell them if they fuck with us, they’ll never get another fucking dime from this company, ever.” The manager quit, there was a lawsuit, and it took a year to resolve. “My stock options would be worth $10 million had I stayed,” the manager said, “but I knew I couldn’t have stood it—and he’d have fired me anyway.” The new distributor was ordered to cut inventory 75%, and did. “Under Steve Jobs, there’s zero tolerance for not performing,” its CEO said. At another point, when VLSI Technology was having trouble delivering enough chips on time, Jobs stormed into a meeting and started shouting that they were “fucking dickless assholes.” The company ended up getting the chips to Apple on time, and its executives made jackets that boasted on the back, “Team FDA.”
After three months of working under Jobs, Apple’s head of operations decided he could not bear the pressure, and he quit. For almost a year Jobs ran operations himself, because all the prospects he interviewed “seemed like they were old-wave manufacturing people,” he recalled. He wanted someone who could build just-in-time factories and supply chains, as Michael Dell had done. Then, in 1998, he met Tim Cook, a courtly thirty-seven-year-old procurement and supply chain manager at Compaq Computers, who not only would become his operations manager but would grow into an indispensable backstage partner in running Apple. As Jobs recalled:
Tim Cook came out of procurement, which is just the right background for what we needed. I realized that he and I saw things exactly the same way. I had visited a lot of just-in-time factories in Japan, and I’d built one for the Mac and at NeXT. I knew what I wanted, and I met Tim, and he wanted the same thing. So we started to work together, and before long I trusted him to know exactly what to do. He had the same vision I did, and we could interact at a high strategic level, and I could just forget about a lot of things unless he came and pinged me.
Cook, the son of a shipyard worker, was raised in Robertsdale, Alabama, a small town between Mobile and Pensacola a half hour from the Gulf Coast. He majored in industrial engineering at Auburn, got a business degree at Duke, and for the next twelve years worked for IBM in the Research Triangle of North Carolina. When Jobs interviewed him, he had recently taken a job at Compaq. He had always been a very logical engineer, and Compaq then seemed a more sensible career option, but he was snared by Jobs’s aura. “Five minutes into my initial interview with Steve, I wanted to throw caution and logic to the wind and join Apple,” he later said. “My intuition told me that joining Apple would be a once-in-a-lifetime opportunity to work for a creative genius.” And so he did. “Engineers are taught to make a decision analytically, but there are times when relying on gut or intuition is most indispensable.”
At Apple his role became implementing Jobs’s intuition, which he accomplished with a quiet diligence. Never married, he threw himself into his work. He was up most days at 4:30 sending emails, then spent an hour at the gym, and was at his desk shortly after 6. He scheduled Sunday evening conference calls to prepare for each week ahead. In a company that was led by a CEO prone to tantrums and withering blasts, Cook commanded situations with a calm demeanor, a soothing Alabama accent, and silent stares. “Though he’s capable of mirth, Cook’s default facial expression is a frown, and his humor is of the dry variety,” Adam Lashinsky wrote in Fortune. “In meetings he’s known for long, uncomfortable pauses, when all you hear is the sound of his tearing the wrapper off the energy bars he constantly eats.”
At a meeting early in his tenure, Cook was told of a problem with one of Apple’s Chinese suppliers. “This is really bad,” he said. “Someone should be in China driving this.” Thirty minutes later he looked at an operations executive sitting at the table and unemotionally asked, “Why are you still here?” The executive stood up, drove directly to the San Francisco airport, and bought a ticket to China. He became one of Cook’s top deputies.
Cook reduced the number of Apple’s key suppliers from a hundred to twenty-four, forced them to cut better deals to keep the business, convinced many to locate next to Apple’s plants, and closed ten of the company’s nineteen warehouses. By reducing the places where inventory could pile up, he reduced inventory. Jobs had cut inventory from two months’ worth of product down to one by early 1998. By September of that year, Cook had gotten it down to six days. By the following September, it was down to an amazing two days’ worth. In addition, he cut the production process for making an Apple computer from four months to two. All of this not only saved money, it also allowed each new computer to have the very latest components available.
Mock Turtlenecks and Teamwork
On a trip to Japan in the early 1980s, Jobs asked Sony’s chairman, Akio Morita, why everyone in his company’s factories wore uniforms. “He looked very ashamed and told me that after the war, no one had any clothes, and companies like Sony had to give their workers something to wear each day,” Jobs recalled. Over the years the uniforms developed their own signature style, especially at companies such as Sony, and it became a way of bonding workers to the company. “I decided that I wanted that type of bonding for Apple,” Jobs recalled.
Sony, with its appreciation for style, had gotten the famous designer Issey Miyake to create one of its uniforms. It was a jacket made of ripstop nylon with sleeves that could unzip to make it a vest. “So I called Issey and asked him to design a vest for Apple,” Jobs recalled. “I came back with some samples and told everyone it would be great if we would all wear these vests. Oh man, did I get booed off the stage. Everybody hated the idea.”
In the process, however, he became friends with Miyake and would visit him regularly. He also came to like the idea of having a uniform for himself, because of both its daily convenience (the rationale he claimed) and its ability to convey a signature style. “So I asked Issey to make me some of his black turtlenecks that I liked, and he made me like a hundred of them.” Jobs noticed my surprise when he told this story, so he gestured to them stacked up in the closet. “That’s what I wear,” he said. “I have enough to last for the rest of my life.”
Despite his autocratic nature—he never worshipped at the altar of consensus—Jobs worked hard to foster a culture of collaboration at Apple. Many companies pride themselves on having few meetings. Jobs had many: an executive staff session every Monday, a marketing strategy session all Wednesday afternoon, and endless product review sessions. Still allergic to PowerPoints and formal presentations, he insisted that the people around the table hash out issues from various vantages and the perspectives of different departments.
Because he believed that Apple’s great advantage was its integration of the whole widget—from design to hardware to software to content—he wanted all departments at the company to work together in parallel. The phrases he used were “deep collaboration” and “concurrent engineering.” Instead of a development process in which a product would be passed sequentially from engineering to design to manufacturing to marketing and distribution, these various departments collaborated simultaneously. “Our method was to develop integrated products, and that meant our process had to be integrated and collaborative,” Jobs said.
This approach also applied to key hires. He would have candidates meet the top leaders—Cook, Tevanian, Schiller, Rubinstein, Ive—rather than just the managers of the department where they wanted to work. “Then we all get together without the person and talk about whether they’ll fit in,” Jobs said. His goal was to be vigilant against “the bozo explosion” that leads to a company’s being larded with second-rate talent:
For most things in life, the range between best and average is 30% or so. The best airplane flight, the best meal, they may be 30% better than your average one. What I saw with Woz was somebody who was fifty times better than the average engineer. He could have meetings in his head. The Mac team was an attempt to build a whole team like that, A players. People said they wouldn’t get along, they’d hate working with each other. But I realized that A players like to work with A players, they just didn’t like working with C players. At Pixar, it was a whole company of A players. When I got back to Apple, that’s what I decided to try to do. You need to have a collaborative hiring process. When we hire someone, even if they’re going to be in marketing, I will have them talk to the design folks and the engineers. My role model was J. Robert Oppenheimer. I read about the type of people he sought for the atom bomb project. I wasn’t nearly as good as he was, but that’s what I aspired to do.
