Steve Jobs: Apple's greatest legacy or its biggest obstacle?

Does creating and maintaining a truly successful company like Apple demand a heartless and arrogant leader?
Written by Scott Raymond, Inactive

Steve Jobs, Steve Wozniak and Ronald Wayne formed Apple Computers on April 1, 1976. The coincidence of the date should not go unnoticed. The first commercially successful home computer, the Apple II, was released a year later.

Jobs' early years prior to forming Apple played a great part in explaining the CEO that runs Apple today. He has said that people that didn't share his counterculture roots couldn't understand his way of thinking. Keep in mind that his counterculture roots included using LSD, which has a history of causing flashbacks and psychosis in some cases.

Prior to forming Apple, Jobs worked at Atari, and had been tasked with creating a circuit board for the game Breakout. For each chip that was eliminated from the machine, a bounty of $100 would be awarded. Jobs had no interest in actual engineering work, so he offloaded the task to his friend Steve Wozniak with a promise to split the bonus evenly. Wozniak reduced the number of chips by 50. Jobs told Wozniak that Atari had only given them $700 instead of $5,000, and that Wozniak's share was $350. It was a taste of things to come.

After Apple took off, Jobs' methods of doing business business savvy became apparent, showing a marked lack of humility. He was known as someone who ruled by force of personality, unwilling to hear viewpoints other than his own, ridiculing the ideas of others and bad-tempered outbursts. Fortunately for Apple, Jobs wasn't running the company.

In 1978 Apple hired Mike Scott away from National Semiconductor, to be later replaced by John Sculley from Pepsi in 1983. A well-known quote of the pitch to Sculley was Jobs asking him, "Do you want to sell sugar water for the rest of your life, or do you want to come with me and change the world?"

Steve Jobs is famously known for bragging about stealing others' ideas (see video above). Possibly the most famous would be his visit to Xerox PARC in 1979. There he got his first glimpse of the mouse-driven GUI interface of the Xerox Alto, which was eventually to be implemented in the Apple Lisa and the Apple Mac.

Of course, Jobs' abrasive personality didn't make this easy. There was friction between him and the rest of the Apple Lisa team, and he was pushed out. Jobs moved to the Macintosh team and took it over. There was a turf war battle over which product would ship first. The Lisa won, but it was overpriced and had no software. It was a failure out of the gate--the largest failure since the Apple III in 1980.

The Macintosh was introduced a year later, and was initially a success. Follow-up sales, however were lackluster; again, high prices and lack of software were to blame. The LaserWriter printer and desktop publishing turned this around.

By 1985, a power struggle between Jobs and Sculley had formed. The board of directors wanted Sculley to rein in Jobs from spending money on untested products. Although he was persuasive and charismatic, Jobs had become increasingly erratic and temperamental towards his team. The working relationship between Jobs and Sculley deteriorated, and Sculley removed all managerial duties from Jobs.

Subsequently Jobs put together an attempt to oust Sculley for leadership of Apple. Sculley called a board meeting during which the board of directors sided with Sculley. His arrogrance led to his downfall, and Steve Jobs resigned from Apple later that year.

[Apple Without Steve Jobs]»

After Jobs left Apple, he started NeXT, a higher education computer company aimed at creating affordable workstations. He also purchased the Graphics Group from LucasFilm, which eventually became known as Pixar.

Meanwhile, Apple's fortunes waxed and waned under the stewardship of John Sculley. Initially running on the success of the Mac, continual division of the company into smaller and smaller market segments, lack of direction on many products, and failed attempts with various consumer products all took their toll on the company.

In 1994, Apple partnered with IBM and Motorola to create a new computing standard based on the PowerPC architecture. It was the only positive result from the alliance, and every CPU used in Apple hardware from 1994 to 2006 was based on the PowerPC.

Sculley was ultimately responsible for the implosion of Apple's engineering department during this time. As Apple grew, managers were able to get funding for pretty much any project, most of which had little or no commercial potential. From 1990 to 1995, almost none of these projects had any measure of success, save for Mac OS updates.

Eventually the board of directors had had enough, and voted Sculley out, bringing Michael Spindler on as CEO. The change in leadership had little effect overall, and by 1996 Spindler was replaced by Gil Amelio. A purge was in order, and Amelio began laying off employees by the truckload.

It was obvious that a major shift in direction in management and creativity was in order. Amelio chose to purchase NeXT and the NeXTSTEP operating system, and bring Steve Jobs back as an advisor. However, after record lows on the stock price and major financial losses, the Apple board of directors chose to vote Amelio out and instate Steve Jobs as interim CEO.

There is an incident that occurred during the tenure of Steve Jobs' position as CEO of NeXT that is relevant here. It's important to remember that Steve Jobs tended to be abrasive and arrogant in his dealings with others. In 2009, Jason Perlow wrote an article for ZDnet that detailed his distaste for Steve Jobs and Apple.

Back in 1993, Perlow was working for Canon as a software engineer. Canon had invested $140 million in NeXT, and was also the manufacturer of the magneto-optical drive unit for the system. However, the NeXT systems turned out to be extremely overpriced and mainly ignored by the world, resulting in NeXT being unable to pay its bills.

As part of the debt settlement between Canon and NeXT, Canon was supposed to take ownership of the manufacturing plant in California in order to produce PowerPC-based Windows NT systems, but the deal with Steve Jobs fell through. Instead of going bankrupt, NeXT laid off over half of its staff, and went into a software partnership with Sun, Canon and HP to produce NeXTSTEP for Intel, Sun SPARC and other chip architectures. It was, however, ridiculously overpriced and didn't sell.

The one thing that NeXT did have that was commercially viable was WebObjects. Perlow thought it would be a good idea to have it available for development. In Jason Perlow's words:

As I understand, when the Japanese head of IT for Canon USA asked NeXT if we could have a site license, they asked us to pay for it, and he blew his top. After all, the company owed us a LOT of money.

Jason is being modest. The Japanese head of IT cursed at Jobs in Japanese for having the temerity to demand more money from Canon when they were already hundreds of millions of dollars in the hole.

The only thing that really saved NeXT from being a complete and total failure was being rescued by Apple, the company that had turned its back on its founder. It was an interesting confluence, to say the least. Apple was failing, and losing money, yet they gave Steve Jobs hundreds of millions of dollars for his company and operating system, and brought him back on board. Apple must have been desperate indeed.

It's also imporant to note another aspect of Steve Jobs' career during this period. As head of Pixar, he took a very laid-back approach to running the company. His management style had become more open and relaxed, and he welcomed creative ideas from his staff. Pixar experienced great success with its projects; most notably, Toy Story in 1995.

[The Reality Distortion Field]»

With Jobs' return, and his promotion to interim--then permanent--CEO, massive change took place. An influx of cash from Microsoft in exchange for non-voting shares of stock assured future releases of Microsoft Office for Mac, and helped heal the rift that had widened during the lawsuit years when Apple sued Microsoft for patent infringement.

Apple introduced the Apple Store, a retail location where consumers could purchase Apple products. In 1998, Apple introduced the iMac. Its unique design by Jony Ive, combined with an affordable price and modern technology, was a huge success.

Apple and Steve Jobs were on a roll. They purchased companies that increased their software portfolio, and combined the technologies of NeXTSTEP and FreeBSD to create the hugely popular OS X.

During Jobs' absence at Apple, the operating system and the hardware designs had been licensed out to third-party manufacturers, allowing Mac clones to be sold at a lower price than those coming from the Cupertino company. Jobs felt that this diluted the brand and introduced instability. The theory was that by keeping the product line and operating system closed to outside companies, Apple could maintain a high standard of quality.

Suffice to say, Steve Jobs' performance at Apple prior to his ousting left a great deal to be desired. When he returned, however, it appeared he could do no wrong. The company found renewed direction and purpose. Each new product that was released, while not necessarily groundbreaking, tapped into the needs and desires of their target market. Devices such as the iPod took the company in a direction that was unique for a personal computer company.

One such device, the iPhone, had been in the works since 1999, and was finally released in 2007. It was not an original concept to be sure, but it was far more advanced than what was currently available. The Microsoft Pocket PC phones were a non-starter, and the Palm Treo phones were showing signs of age.

Apple caught the competition by surprise, and they scrambled to catch up in order to compete. It was a situation that would repeat itself time and again. Apple had finally reached a point where they were ahead of the game, and dictating the rules, rather than simply owning a small corner of the computing market.

An unfortunate side effect of all of this success was Steve Jobs' direction that Apple's products became a closed ecosystem. No more clones, no open systems. Everything would be controlled by Apple. Of course, Microsoft still ruled the corporate world. It was a simple matter of economics; PCs running Windows were a lot cheaper than Apple computers. There was more software, more support, and a wider range of available hardware to run it.

That doesn't really matter to Steve Jobs and the fans of Apple products. These days, Apple fans are usually referred to using the derogatory term "fanboys". They are derided for buying into the Reality Distortion Field that seems to characterize the perception of Apple these days. Keynote addresses by Jobs were usually accompanied by what ammounts to hero worship and a cult of personality.

Declarations of the next new thing were greeted as if Apple had discovered the cure for cancer and cars that run on water and good intentions. It doesn't mean that Jobs was selling snake oil; it just means that his audience had been lulled into a distorted sense of proportion. A perfect example of this is the claim that the Apple iPad is the beginning of a "post-PC" world.

The truth is that nothing Apple currently produces is part of a post-PC world. In order to sync music to your iPod, you need iTunes installed on a Windows or Mac computer. The same goes for activating your iPhone and iPad, and also if you want to upgrade the firmware on these devices.

Jobs appears incapable of avoiding this kind of rhetoric, which is both infuriating and sad. The truth is that Apple doesn't need to resort to trickery of this kind. The company is the most highly valued tech company in the world now, and is the leader in numerous technology fields.

[It's a Wonderful Life]»

If nothing else, Steve Jobs had matured from an abrasive, arrogant salesman with poor interpersonal skills into a savvy, smooth showman. His personal life, however, showed some rather unusual behavior that could go far in explaining the kind of person--and businessman--he is.

In 1955, Steve Jobs was born out of wedlock to unwed college students. His mother gave him up for adoption, with the intention that he be adopted by well-to-do parents. Instead, he was adopted by a lower middle class couple who were only allowed to adopt him on the stipulation that they sent him to college when he grew up.

I am not going to go into full detail of Steve Jobs' biography. There are plenty of biographies of Steve Jobs on the net; One such can be found here.

It is not known if being adopted instilled a sense of abandonment in him. On the other hand, Jobs himself has gone much further than that. When he was 23, he fathered a daughter named Lisa with Chrisann Brennan. He refused to acknowledge paternity of the child, going so far as to sign an affidavit swearing that he couldn't father a child because he was sterile.

Lisa's mother raised their child on welfare--even though Jobs was already quite wealthy by that time.

He did eventually acknowledge his daughter. He would have had to, eventually. Jobs got married in 1990 and fathered three children.

As shown previously, Steve didn't play well with others. In a 1981 note from Jef Raskin, then head of the Macintosh project at Apple, he describes his issues with Jobs to Mike Scott, then CEO of Apple:

Jobs regularly misses appointments He acts without thinking and with bad judgement He does not give credit where due Jobs often reacts ad hominem He makes absurd and wasteful decisions by trying to be paternal He interrupts and doesn’t listen He does not keep promises or meet commitments He makes decisions ex cathedra Optimistic estimates Jobs is often irresponsible and inconsiderate

Former employee of Apple and key member of the Macintosh development team, Andy Hertzfeld, relates this story concerning Steve Jobs and handicapped parking spaces. Jobs is also known for having no philanthropic tendencies, and does not donate to charity.

Corporate donations to charity were discontinued at Apple when he returned, ostensibly to curtail spending when they were cash poor. Apple is now the most highly valued tech company in the world, yet this anti-charity policy has yet to change.

Arrogant, selfish and inconsiderate. Traits that defined Jobs early in his career. And even though he has mellowed later in life, they still shape the leader of Apple today. It comes as no surprise then that he concealed the truth about his health, including the pancreatic cancer in 2004 and the liver transplant in 2009, from the public and the shareholders.

Any regular person would be entitled to privacy about such intimate details of their health, but Jobs has a very hands-on approach to his management of Apple. If he is ill, the shareholders have a right to know. Jobs is currently on medical leave from Apple, and while Tim Cook is currently in charge of day-to-day operations, there is no defined path of succession should Jobs no longer be able to fulfill his duties as CEO.

There is no denying that without the return of Steve Jobs, Apple would have failed as a viable company in the late 1990s and closed up shop. There is also no denying that in spite of his ability to charm people and sway their opinion, he is not a nice person.

There are others. Before Bill Gates retired from Microsoft and began giving his fortune away, he had a similar reputation. Larry Ellison, CEO of Oracle, is well known for his ego and arrogance. Dick Cheney, former Vice President and professional cranky old coot, used to run Haliburton. Former Exxon CEO Lee Raymond couldn't give a damn about the environmental damage caused by the Exxon Valdez oil spill, choosing to fight tooth and nail from having to clean up the mess.

Is it possible that in order to create and maintain a truly successful company like Apple, the CEO must be a completely heartless, arrogant bastard? Maybe that truly is the road to ultimate success. Given the options, it takes a special kind of person to leave that kind of legacy.

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