Published by One Sec Writer on 24 Nov 2009
How Steve Jobs Transformed American Business Part 2
Cited: Fortune Magazine
Continued from “How Steve Jobs Transformed American Business Part 1“
Jobs had come up with an idea for strategy of building company-owned retail stores and it was derailed at the time as it risky cash during. He was convinced people would convert to Apple if he could speak to them directly and not just the faithful Macintosh users that included artists and students, but everybody. Today, company-owned retail stores are integral to Apple’s success.
For those paying attention after Jobs’ return, the CEO was telegraphing Apple’s trajectory. “I would rather compete with Sony (SNE) than compete in another product category with Microsoft,” he told Time in early 2002. “We’re the only company that owns the whole widget — the hardware, the software, and the operating system. We can take full responsibility for the user experience. We can do things that the other guy can’t do.”
“He did this with a nervous board,” says Bill Campbell, a former Apple executive who went on to become chairman of Intuit (INTU) and an Apple board member. “He knew that this is what customers wanted.” What’s striking looking back is how little there was to sell in the original Apple stores. Jobs knew how he’d fill them.
Jobs made it his business to know everything about Apple. “He’s involved in details you wouldn’t think a CEO would be involved in,” says Ken Segall, a former Chiat/Day creative director who has worked with Apple on and off for years. Jobs commissioned the iconic “Think different” campaign, says Segall, well before any of Apple’s new products were introduced — or even described to the ad team. “He’d say, ‘The third word in the fourth paragraph isn’t right. You might want to think about that one.’ “
The rare pairing of micromanagement with big-picture vision is a Jobs hallmark. Early in his return to Apple, he recognized that gorgeous design was a differentiator for Apple in a computer industry gripped by the successful blandness of Dell, Microsoft, and Intel (INTC, Fortune 500).
“I cannot count the number of clients who have marched in and said, ‘Give me the next iPod,’ ” writes Tim Brown, CEO of product-design consultant Ideo, in his new book “Change by Design.” “But it’s probably close to the number of designers I’ve heard respond — under their breath — ‘Give me the next Steve Jobs.’”
Jobs also has a knack for pouncing at the right moment. The music industry had failed repeatedly to develop its own digital-music sales site before Apple came along with iTunes, which was by then prepared to become a store for buying music.
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Jobs cleverly made his pact with the record labels when iTunes worked only on Macs, which in 2002 had a personal-computing market share in the low single digits. Apple’s humble position — before iTunes became compatible with Windows, expanding its potential market share to nearly all PCs — was a virtue. This made iTunes an experiment rather than a destructive paradigm shift.
“I don’t understand how Apple could ruin the record business in one year on Mac,” said Doug Morris, the head of Universal Music, according to “Appetite for Self-Destruction,” a new book about the record industry’s ills by Rolling Stone writer Steve Knopper. “Why shouldn’t we try this?” Writes Knopper: “By the time Steve Jobs came around, he was the last resort. He was merely smart enough to know it. He played tough, but not any tougher than any lawyer for a major label who had negotiated an artist contract in recent decades.”
A key Jobs business tool is his mastery of the message. He rehearses over and over every line he and others utter in public about Apple, which authorizes only a small number of executives to speak publicly on a given topic.
Key to the Jobs approach is careful consideration of what he and Apple say — and don’t say. Harvard professor David Yoffie estimated that in the months between announcing and selling the first iPhone in 2007, Apple received $400 million in free advertising by not making any public statements, thereby whipping the media into a frenzy.
Jobs himself is careful to avoid overexposure, preferring to speak only when he has products to promote. He didn’t disclose his 2004 cancer surgery until after it occurred, and then only in an employee e-mail that was strategically released to news outlets. Similarly, he told the world of his recent leave in another employee missive, with no additional comment from him or anyone else at Apple.
Nobody in Jobs’ sphere speaks without the permission of the company’s media relations team, which reports directly to Jobs. Apple declined to make Jobs available for an interview for this article. It did bless the participation of some people in Apple’s orbit to speak about him, while nixing requests for others. The secrecy has rankled corporate governance experts, who insist the health of such an indispensable CEO warrants greater disclosure.
Jobs was initially mum as well about a stock options backdating scandal that embroiled the company’s former finance chief and general counsel. In an eventual SEC filing, Apple said Jobs was aware that the company had adjusted option grant dates so that the grants were more profitable for employees. Jobs apologized for the backdating, calling the episode “completely out of character for Apple.”
Jobs manages the money, the message, the deals, the design, and more. Consider the case fairly made that the long-ago enfant terrible of the computer industry has built up impressive business chops and that his company is peerless. But if nothing else, his recent illness is a reminder that Steve Jobs is mortal. When he’s gone, how long will his company thrive without him?
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Apple’s future.
This past September, when Steve Jobs made his triumphant return to the public eye, he thanked precisely one Apple executive by name: Tim Cook, Apple’s chief operating officer.
At an event to introduce a new line of iPods, Jobs first informed a crowd of journalists, analysts, and Apple developers that he now possessed the liver of a “twentysomething liver donor who had died in a car crash.” Then he thanked Cook and the rest of the management team for “ably” running Apple in his absence. Cook, in turn, led a standing ovation for Jobs, his arms raised over his head from the front row of a San Francisco auditorium.
With Jobs back at work, the conversation has been postponed as to whether Cook, or anyone else, is prepared to fill Jobs’ shoes. “At Apple the hierarchy is determined by who Steve calls,” says a former Apple executive. “There’s a lot of value in ‘Steve said.’”
Larry Ellison, a CEO known to dislike the topic of succession, says of his friend, “He’s irreplaceable. He’s built a fabulous brand. He’s got a wealth of products. Whenever he leaves, I hope he retires in good health and he’s sailing off in his yacht in the Mediterranean. But they’re going to miss him terribly, because it’s a consumer products company. The product cycle is so fast.”
There are signs that Jobs has inculcated the troops enough to last awhile without him. “The organization has been thoroughly trained to think like Steve,” says someone with contacts among the Apple executive team. “That’s why the six months went so smoothly. People could envision, ‘This is what Steve would do.’”
Jobs, in fact, inspires far beyond Apple. Larry Page and Sergey Brin recently told The New Yorker that Jobs is their hero. When Jeff Bezos released Amazon.com’s smooth, shiny Kindle 2, the Jobs envy was obvious. Venture capitalist Marc Andreessen, who co-founded Netscape, says he often evokes Jobs in his advice to entrepreneurs. He says, “The threshold for the release of the first product should be, ‘What would Steve Jobs do?’”
Steve Jobs will probably let us know when he’s done good and ready given his habit of secrecy, surprise and his braids. He is already created $150 billion in shareholder wealth, transformed movies, telecom, music and computer industry as well as influencing everything to do with retailer design. What else is there for him to do?
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My Take: Well, for 54-year-old man who is about to turn 55, I think he has done a hell of lot. If I was able to ask him a question it would be, Do you think your life has been worthwhile? Then I would probably ask him to lend me some money. 
The article is right however, many artists and designers use Apple or Macintosh computers to do their work especially in the movie and fashion industry. You will find that many designers create their T shirt designs on a Mac. Designers all over world create designs for limited edition T shirts, shoes, pants and more on a Mac just as animation producers and movie editors do.
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