Everyone credits Steve Jobs for the success of Apple but where would Apple be without their “failed” former CEO John Sculley who had to oust Steve Jobs from the company he founded? Not to say that their contributions were both equal but they were both instrumental in shaping Apple for its incredible success. It is well understood that organizations need different types of leaders at different times. Sometimes organizations need a good failure to create the drive that will propel them toward success. And sometimes leaders find their passion within the boiling animosity of working relationships. All of these situations were found with the Steve Jobs vs. John Sculley saga at Apple. So how can we learn from them?
Added 9/10/2013: Interview with Sculley at Forbes Global CEO Conference in Bali, Indonesia. From an audience member’s question, Sculley gives his longest so far on why he fired Steve Jobs and what he learned from it.
How did we get here? It is important to remember that John Sculley was brought in to run Apple because then CEO Mike Markkula desperately wanted to retire and he thought that Jobs lacked the “discipline and temperament” to run Apple. Sculley wasn’t the first choice, primarily because he lacked “technical” experience, but he was recognized as one of the hottest product marketers in the country. Steve was impressed with what John had been able to accomplish at Pepsi with the Pepsi Challenge and he anxiously wanted him to join Apple. After a six month courtship, Sculley eventually joined Apple as CEO in May 1983.
Not the right timing. Jobs might have been a visionary but his demanding, and frequently unpredictable, expectations were continually taking projects off track. His delays with the development of Apple Lisa computer eventually got him shifted to Macintosh development team where it was more of the same. All of these delays were costing the company a considerable amount and putting their future at risk. The Macintosh eventually saw a successful launch but there was rising concern amongst Apple’s Board of Directors. Sculley was told by the board to “contain” Jobs which he tried to do but it only infuriated Steve to the point where he tried to have Sculley ousted as CEO. Eventually, it was Sculley who had Jobs driven from the company, lighting the long fuse inside of Steve to seek his revenge.
Stoking the fire. In kicking Steve out of his own company, Sculley had motivated Jobs like no one else could. In Walt Isaacson’s biography of Jobs he described how even twenty-five years later Steve still “seethed” when recalling his ouster from Apple. At the time Jobs was quoted as saying that “Don’t worry, I am not going to let him get away with it!” This kind of animosity can toxic but it can also be extremely motivating. It reminds me of the story the German brothers Rudolf and Adolf Dassler who started making sports shoes in their mother’s laundry room in the 1920s. The bothers were partners in the sports shoe business but a rift had formed between them and in 1948, forcing them to go their separate ways as Adidas and Ruda (eventually to be renamed as Puma). For the last 60 years these two companies have battled as bitter rivals in sports equipment and clothing business. It is this intense rivalry that many analysts cite as a major factor in driving their ultimate success. Their passions fueled their competition and their competition fueled their companies.
Looking back. The reality in the Jobs vs. Sculley feud had created a dynamic that previously didn’t exist. By leaving the company that he founded and loved, Jobs got a chance to fail with NeXT Computer in ways that might have ended up destroying his beloved Apple. He was able to come back to Apple with the lessons that he had learned from NeXT and Pixar.
Sculley mentioned (in an interview posted on Cult of Mac) that “it was a big mistake that I was ever hired as CEO.” He knew that he wasn’t the first choice – Steve was the first choice but the board didn’t think he was ready. Since Steve was still Chairman, the largest shareholder, and the head of the Macintosh division he both oversaw Sculley and was overseen by Sculley. Through hindsight, it is clear that there was little chance for that relationship to have been sustainable. Sculley would have preferred a structure that would have allowed for both of them to focus on what they best brought to the company. Later in the same interview Sculley mentions, “It’s so obvious looking back now … that would have been the right thing to do. We didn’t do it, so I blame myself for that one. It would have saved Apple this near-death experience they had.” But without this “near death” experience Apple wouldn’t be the same company.
In the now infamous commencement address that Jobs gave to Stanford University graduates in 2005 he said that getting fired from Apple was one of the best things that could have happened to him. He noted, “The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.” Jobs had come to understand the connectedness in what had happened to both him and to Apple. Jobs went on to say that, “I’m pretty sure none of this would have happened if I hadn’t been fired from Apple. It was awful-tasting medicine, but I guess the patient needed it.”
A successful return. In 1996, Jobs eventually returned to Apple as it was struggling to remake the Apple OS as multitasking operating system. The solution would be for Apple to acquire Jobs’ NeXT Company which had already given up on the hardware side of the business to focus on their multitasking NeXTSTEP operating system. In 1997, a year later, Apple CEO Gil Amelio was ousted and Steve Jobs was named interim CEO. In 2000, Jobs announced that he was dropping the “interim” from the title and the rest is history: iPods, iTunes, iPhones, iPads, and of course the numerous desktop and laptop Mac computers that were part of Apple’s humble beginning. As of October 25, 2012, Apple has the highest market capitalization in the world and is valued at $573 billion.
Food for thought:
- How many times in our own careers have we thought of the regrets that we should have done this or we should have done that? Now look back on those same events with five, ten or twenty years of perspective – do you still have those regrets?
- At Pepsi, Sculley was known as an innovative marketer and advertiser with little passion for product development or information technology. Why would he have been the right candidate for CEO?
- Jobs admired Sculley and thought he could learn a lot from him. Sculley thought Jobs was one of the brightest people he had ever met and they shared a passion for ideas. How is it that these two smart men couldn’t see the shortcomings of the structure/arrangement that they were entering?