Fundamentals of Management 6th Edition by Ricky Griffin

Exercise 24

Being Steve Jobs
When you hear the word personality , what's the first thing you think of? A high-profile person like Oprah or Bono? Or do your thoughts turn to that dynamic and organized set of characteristics that make each person different from other people? Steve Jobs, the charismatic and controversial cofounder and head of Apple Computer, could come to mind in either case. He's a personality with an interesting personality. He's the public face of an extremely successful company whom some people see as an inspiring visionary and others as an insufferable egotist. The bottom line is that a complex and often contradictory personality is clearly a factor in the remarkable success of not one but two business ventures notable for high-tech breakthroughs and marketing savvy.
Born in San Francisco in 1955 and raised in the Bay Area by adoptive parents, Jobs spent one semester at Reed College in Oregon and then worked briefly at Hewlett-Packard, where, in 1971, he met fellow electronics aficionado Steve Wozniak. After a short stint at Atari, an early videogame maker, Jobs backpacked around India in search of spiritual enlightenment. When he returned to the United States, he hooked up again with Wozniak at Atari. In 1976, 21-year-old Jobs convinced exelectronics hacker Wozniak to commercialize a personal computer that he'd designed for his own use, and with funding from an angel investor, they started Apple Computer. Wozniak's design became the first commercially available personal computer, and by 1980, Apple's initial public offering had made millionaires of Jobs, Wozniak, and a lot of other people.
As CEO, Jobs marshaled his idealistic vision and high standards to push the company on to further success, but as rapid expansion put more and more pressure on his managerial skills, the company turned to an experienced executive, hiring PepsiCo CEO John Sculley to take over in 1983. Jobs continued to oversee the development of a new computer called the Macintosh, which, despite a series of failed designs and cost overruns, was introduced in 1984. The first small computer with a graphical user interface, the Macintosh was enormously successful. Meanwhile, however, Jobs and Sculley clashed continually, until, in May 1985, the Apple board forced Jobs to resign as head of the Macintosh unit. "People in the company had very mixed feelings about it," admits chief scientist Larry Tesler. "Everyone had been terrorized by Steve Jobs at some point or another, and so there was a certain relief that the terrorist would be gone. On the other hand, I think there was incredible respect for Steve Jobs by the very same people, and we were all very worried what would happen to this company without the visionary, without the founder, without the charisma."
Jobs protested by selling his Apple stock and, in 1985, starting up NeXT Computer to market a technologically advanced workstation. In the late 1980s, MIT computer scientist Tim Berners-Lee used the NeXTSTEP operating system to build the first web browser and editor (WorldWideWeb), but the system was too expensive for most people. Jobs continued to push NeXT products in the scientific and academic markets, but by 1993, the company had shifted exclusively to the development of software such as NeXTSTEP. Meanwhile, in 1986, Jobs paid $5 million for Star Wars impresario George Lucas's animation studio, called The Graphics Group, which he proceeded to manage with an uncharacteristic hands-off style.
In 1996, Apple, though hampered by a record-low stock price and crippling financial losses, purchased NeXT for $429 million, and Jobs came along with it. In July 1997, the board removed CEO Gilbert F. Amelio and named Jobs "interim CEO" (or "iCEO," as Jobs put it). Jobs focused on returning the company to profitability, and in March 1998, he announced the termination of several researchand-development projects. His predecessor had actually cut the number of such projects from 350 to 50, while Jobs's further reductions merely reduced the number from 50 to 10. Some people lost their jobs, but Amelio had presided over 4,100 layoffs (about 30 percent of the workforce). Nevertheless, rumors about further cuts-indeed, about summary firings-started to run rampant. Employees were reportedly wary about bumping into Jobs in an elevator, afraid that they might be unemployed by the time the door opened again. Apparently, it wasn't so much the reality of the situation as accounts of Jobs's abrasive personality and blunt manner that made Apple employees apprehensive (although Jobs's profession that he intended to do more cutting than Amelio may have been a contributing factor). "When Steve attacks a problem," explained an executive at Adobe, Apple's biggest software supplier, "he attacks it with a vengeance. I think he mellowed during the NeXT years, [but] he's not so mellow anymore."
Under Jobs, Apple showed a profit in the first quarter of 1998 after substantial losses in 1997 and the first part of 1998. Analysts predicted that continued improvement would depend on a steady stream of new products, but Jobs, according to biographer Alan Deutschman, preferred to put the bulk of his energy and capital into marketing and rejuvenating the company's image as a maker of hip, cool-looking computers rather than counting on some stunning technical breakthrough to turn the company around. The result was the immensely successful "Think Different" campaign, which centered on a TV ad featuring celebrated visionaries such as Albert Einstein and Bob Dylan. The campaign marked a turning point for the company, restoring an image that had been tarnished by financial embarrassment and a flood of lackluster new brands. Jobs took a personal interest in the campaign, and according to a Newsweek reporter who watched it with him, he teared up when he saw the commercial for the first time. "That's what I love about him," recalls Katie Hafner. "It wasn't trumped up. Steve was genuinely moved by that stupid ad."
Meanwhile, Jobs had by no means neglected Apple's new-product pipeline. He had streamlined a process in which projects often overlapped by focusing the company's efforts on two new product lines, both of which used Apple's existing PowerPC G3 processors and Mac OS operating system: a desktop computer called the iMac and a laptop called the PowerBook G3. The iMac, which Jobs had green-lighted as a special research product shortly after he'd begun his second tour of duty as Apple CEO, featured an innovative design (an egg shape with a colorful shell of translucent plastic) and a distinctive aesthetic appeal. Supported by an energetic marketing campaign, it became what Forbes declared an "industry-altering success" and a piece of cultural iconography. Apple was once more a juggernaut in the computer industry. Apple, declared Jobs, "leads when it expresses its vision through its products, exciting you and making you proud to own a Mac.... The same focus and passion that brings these products to market has also made us a healthier company."
Fortune magazine, which has acknowledged Jobs as "one of Silicon Valley's leading egomaniacs," has also given him the entirely complimentary epithet of "master of disruption," observing that in a little over a decade after his return to Apple, Jobs enjoyed "the kind of position that most mad-genius tech wunderkinds can only fantasize about: thrilling consumers while wreaking havoc in multiple industries." Jobs, it seems, has a special talent for an approach to competing in dynamic industries that management strategists call high-end disruption -making moves that have allowed Apple to redefine industry rules and create significant new markets.
When, for example, Apple decided to branch out into the development of other digital appliances, it virtually hijacked the music industry with the introduction, between 2001 and 2003, of the iPod portable music player, iTunes digital music software, and the iTunes Music Store (which by 2006 would account for 10 percent of all music sales in the United States). The iPhone, a combination of cell phone, iPod, and Internet device, went on sale in June 2007, and by January 2009, Apple was the thirdlargest mobile-phone manufacturer in the world, behind only Nokia and Samsung.
Jobs may be (as his critics claim) an erratic self-absorbed control freak with unrealistically high standards and a bad temper, but since his return to the top spot, the value of Apple's shares has gone up more than 38-fold. By comparison, Microsoft shares have only doubled in value over the same stretch of time.
Finally, remember The Graphics Group, the animation studio that Jobs picked up back in 1986? In 1991, Jobs reached an agreement with Disney to produce three computer-animated feature films using the company's high-quality imagerendering technology. Rechristened Pixar, the studio turned out three movies ( Toy Story , A Bug's Life , and Toy Story 2 ) that grossed a total of $2.5 billion-equal to the highest per-film gross in the motion-picture industry. Under a subsequent agreement, Pixar continued to produce blockbuster hits, including Monsters, Inc. ; Cars ; and Finding Nemo (which grossed more than $800 million). In 2006, Disney bought Pixar for $7.4 billion in an all-stock transaction that made Jobs Disney's largest single shareholder and newest board member.
Fortune 's Fred Vogelstein attributes Jobs's astounding success to his genius not only for developing wildly popular products, but for exploiting-indeed, fostering-conditions of turbulence in the industries in which he works: At both Apple and Pixar, says Vogelstein, "Jobs has been able to simultaneously harness technology in a way that throws the status quo into disorder and ride that chaos to the front of the pack."
How do personality traits support entrepreneurial drive? What personality traits contribute to Jobs's success as an entrepreneur?