Musings

Steve Jobs: a study in leadership

I know I said the previous post would be my last on Apple for now, but indulge me just one more today (and I do promise that the next post will be about something else - already drafting it). 

As part of a course I did in early 2010, I prepared a presentation and brief paper on Steve Jobs as a leader. It doesn’t examine the issues particularly in depth, but it is a nice overview of some aspects of his management style that led to his (and Apple’s) successful second act.

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Leadership profile: 
Steve Jobs, CEO Apple Inc

Introduction and background

Stephen Paul Jobs is the CEO of Apple Inc, the world’s largest technology company, as well as a member of the board, and largest individual shareholder, of the Walt Disney Company.  He founded Apple in his garage, and spearheaded the ‘personal computing’ revolution of the early 1980s.  After being kicked out of the company in 1985, he purchased a computer animation company from George Lucas that he turned into Pixar Animation Studios.  At the same time, he founded NeXT Computer, whose software forms the framework of the successful Mac OS X operating system. With Apple in dire straits, Jobs was brought back into the fold in 1997 as interim CEO following Apple’s acquisition of NeXT.  

What followed is termed one of the ‘greatest second acts’ in business.  Jobs dramatically cut down Apple’s product line (to desktop and portable computers in professional and consumer varieties) and refocused the paradigm for personal computing around the ‘digital hub’ – the concept that discrete lifestyle tasks could be enhanced if organised efficiently by a computer focused on those tasks.  Amongst other things, this led to the creation of the iMac all-in-one computer, the iTunes Music Store, the iPod music player, the iPhone and now the iPad tablet.  This shift cemented Apple’s position as one of the dominant players in the consumer technology space.  Meanwhile, he sold Pixar to Disney, becoming himself one of the most powerful players in the screen content business. 

Strategic vision

Jobs’ success can be traced back to the strategic vision he has employed at each stage of his career.  Despite being apparently blinded by his zeal to democratise personal computing in the 1980s, it is this focus on selling dreams and experiences rather than products or features, that has translated into the massive success that Apple now enjoys as a technology and media company.  He maintains an absolute conviction that his company is delivering a ‘magical’ experience, that all but removes the technological interface and allows users to do what they want intuitively.  

This conviction is born of his personal development during the counter-cultural movements of California in the 1960s and 1970s.  Frustrated with his studies and his summer job at Hewlett Packard, Jobs dropped out of college and decided instead to travel to India, listen to Bob Dylan and attend classes in typography and design.  Through his friendship with Steve Wozniak, he discovered that computers could be a tool that would bring information (and hence, power) to the masses.  Each of these experiences has had been profoundly realised throughout his business ventures – from the importance of the graphical user interface and typography in the original Macintoshes, the computer automation of the animation process at Pixar, the open standards and networking developed at NeXT, right up to the digital hub and the focus on proliferating digital music (and later, screen content) at Apple in the 2000s. 

Jobs has displayed a willingness to think long-term, and stay out of short-term ‘feature’ arms races with his competitors in order to focus on getting the core experiences right.  By doing so, Jobs senses where the market will be in the future, and brings the market along with him. He then surprises his customers with so-called ‘features’ (such as copy-and-paste or multitasking on a phone) that his competitors have boasted about all along, but appear never to have gotten right in as intuitive a manner as Apple delivers.  Again, this is apparent with his stoic refusal to ship anything greater than a one-button mouse (despite the fact that the current ‘Magic’ mouse has no buttons, it can still do what many multi-button mice cannot), the introduction of digital rights managed music (and its subsequent removal), a closed vertically-integrated content distribution model with the iPod and iTunes, and third party applications on the iPhone and iPad.   

Further, Jobs understood very early on that product design not only matters, but is paramount in the consumer retailing business.  While other computer companies sold expandable beige boxes, Apple created candy-shaped and coloured devices that hid the components underneath a well-crafted shell.  Despite criticism from outsiders about the ‘closed’ nature of such products, Jobs’ conviction that his customers don’t want technological features but all-in-one experiences that ‘just work’, has resonated with the market.  In many ways, this reflects one of the key motivators behind Jobs’ leadership style – decisions should be made on the basis of creating more good, rather than bad, karma.

Self-awareness and lessons from failure

In this vein, one of the keys to Jobs‘ success has been recognising his strengths and understanding himself.  This did not come easily to him, for he was an adopted child who did not know his birth parents (who eventually married) and sister until much later in his life.  Similarly, he disowned his daughter for many years, until he finally accepted her into his life and named the Apple Lisa (a predecessor of the Macintosh) after her.  During the heady early days at Apple, Jobs saw himself as the great mind driving the company, but recognised the fact that he lacked the business acumen and experience to achieve the greatness to which he aspired.  Accordingly, he lured John Sculley, formerly CEO of Pepsico, to run Apple with the famous solicitation ‘Do you want to keep selling sugared water for the rest of your life, or do you want to come with me and change the world?’

Such presumptive brashness from a man in his twenties eventually led to his expulsion from Apple and the subsequent decade in the technology wilderness.  Jobs went from being an overnight young millionaire to being washed up, forced to watch the paradigm he believed he created usurped by what he considered to be an inferior commodity (Microsoft Windows), while the company he built floundered without him.  Once again, Jobs was forced to recognise what he had going for him – this time, the wealth he had built up during his time at Apple.  He wisely applied this to getting a good deal on Lucasfilm’s computer animation division, and to provide the startup capital for what would become NeXT.  In all these ventures, he continues to apply his consistent vision, despite the fact that the world around him had deemed it unworkable, and moved on.

Jobs’ second shot at success came from finally understanding that he had to let go of fights he couldn’t win, in order to focus on the singular experiences he wanted to deliver.  Despite railing against the monolithic IBM and shrewd Microsoft for many years, Jobs came to understand that for his company to success, others did not have to fail.  On his return to Apple in 1997, he negotiated a deal that ended years of acrimony between Microsoft and Apple and resulted in strategic cooperation and cross-licensing and compatibility agreements that saved Apple from almost certain bankruptcy.  Jobs focused on developing software and content solutions for customers rather than trying to be the most accessible hardware vendor.  He refocused the product strategy, but also allowed scope for certain ‘hobby’ projects that pushed the envelop of design and application, such as the Powermac Cube and the Apple TV.  These ‘hobbies’ started out as apparent white elephants, but provided the basis for new, more popular product applications down the line. Effectively, throughout his return to Apple, Jobs had become the leader he needed to bring in earlier to realise the greatness of the vision for his company. 

Despite this intense focus on product development, Jobs himself is aware of the secondary market of rumours, speculation and hype that has built up around the products he delivers.  In most cases, he harnesses this hype into a positive force for the company, by maintaining strict silence until the moment at which announcements are made to maximise impact.  Further, he has been known to personally answer emails send to his email address on a regular basis and in a frank, matter-of-fact manner, something unheard of for other CEOs.

Team building and communication

Following from this, another key strength of Jobs’ has been recognising that he does not himself possess the technical knowledge or the specific skills in order to realise this vision.  While he started off as a tech person, Jobs very quickly transitioned his focus to sales and management.  

Accordingly, he needed to bring in the talent to build and ship the products and experiences he dreamed of delivering.  Initially, his partnership with Steve Wozniak was one of the most importance of the personal computing era.  But that partnership faded with time and the manner in which both left the company.  During his wilderness, Jobs’ targeted talented individuals like John Lasseter, who turned Pixar into a hugely successful studio by using both powerful technology and classical storytelling.  Following his return to Apple, Jobs discovered and nurtured creative talent such as Jonathan Ive, Apple’s chief product designer, Tony Fadell, the creator of the iPod, and more recently, Tim Cook, the steady hand behind the till as chief operations officer.  Despite the public image of a micro-managing megalomaniac, Jobs actually cultivates a carefully constructed team which acts cohesively to realise the Apple vision.

Jobs is also a master communicator.  One of the methods in which Jobs inspires not only his team, but also his customer base and the world-at-large, is by telling springboard stories that connect the brand promise and history of the company with the direction in which its business is moving, and how that ultimately relates to new products shipping to consumers.  Jobs is effective at keynote speaking, demonstration and sales because he is a great storyteller and an engaging performer.  His enthusiasm and conviction is so boundlessly apparent, that he wraps up all present (whether Apple staff, fans, or hardened journalists) in the so-called ‘reality distortion field’, where even the simplest of things appears revolutionary and magical, so engaged are the audience in Jobs’ storytelling.  In telling stories, Jobs also uses classical storytelling techniques, such as the rule of threes and the hero’s journey (where the hero is always Apple, and the villain its competitors). As noted earlier, Jobs not only takes the initiative to communicate on a one-to-one basis with his customers, he will also disseminate any important thoughts he has on developing technological issues (such as digital rights management in music or Adobe’s Flash on the iPhone) on a one-to-many basis through the Apple website.  Unlike many other CEO, he is so committed to his vision of technological excellence that he is unafraid to make his perspectives public.

Criticisms and Belbin profiles

However, this dedication also carries a number of negative consequences.  Jobs’ conviction has been criticised as arrogance blinding him to the demands of the market, and leaving him open to a repetition of the move to irrelevance Apple suffered in 1980s and 1990s.  It has been said that Jobs’ working style is dictatorial and slave-driving, and that he cultivates a working environment of fear amongst his employees (who dread riding the elevator with him, for fear they may no longer have a job at the other end).  

Further, many criticise the closed, proprietary nature of Apple’s products as anti-competitive, and it has been alleged that Apple’s hyper-secrecy surrounding new products not only stifles free speech, but may have inadvertently caused several workers in Apple’s Chinese manufacturing facilities to take their own lives. Given the publicity given to Jobs’ views, he is also criticised for being hypocritical, dismissing certain features of functionality (such as video on iPods or multitasking on iPhones) as unnecessary and a hindrance on the user experience, only to embrace them in the next generation of his products.

These negative characteristic tend to fit with the ledership styles that can be attributed to Jobs under the Belbin Team Roles test.  Jobs can be described in the ‘Thinking’ profile as a ‘Plant’, given his unorthordox creativity and imagination, characterised by the famous ‘Think Different’ slogan he brought to Apple in the late 1990s.  He tends to solve problems that his customers don’t even know they have.  On the other hand, he does not lower himself to fussing with the nitty gritty details of his products or his customers’ implementation problems.  From the ‘Action’ profile, Jobs is very much a ‘Shaper’ in that he has the drive to overcome the many obstacles that have been put in his way, but also tends to be provocative towards others, and can be totally inconsiderate as to their concerns or feelings.  In the ‘Social’ profile, Jobs is both a ‘Resource Investigator’ and a ‘Co-ordinator’, as he enthusiastically explores and communicated opportunities, promotes collaborative decision-making and delegation, but can lose enthusiasm with projects that are not working and shirk the blame when projects do not succeed.

Conclusion

On the surface, Steve Jobs has led a charmed life that has led to him having such great success that he has lost touch with the needs of his customers.  However, he has in fact suffered great failure during his life, which has enhanced his vision and commitment to the types of technological experiences people actually want in the future.  It is this conviction that characterises the leadership style that has made him one of the most important figures in the modern technology and media business and, for better or worse, determines the fate of his respective companies.

Dealing with the iPhone 4S

So here we are – another keynote, another apparent disappointment.

Only it shouldn’t have been – not to anyone who has paid remotely any attention to the comings and goings of Apple as a company, in general, and specifically its product release strategies, over the past decade or so.

That Apple does not comment on future product releases has been etched in stone since Steve Jobs took over in the late 90s. One of the dangerous consequences of Apple’s growing size and success due to Jobs’ (and now Tim Cook’s) stewardship has been the credence given to rumours and speculation that were once upon a time taken with the bag of salt they deserved. Now they have created a significant ‘sub-industry’ of analysts, rumour-mongers, tech pundits and enterprising industrial spies, all of whom benefit themselves from filling the void left by Apple in creating wild expectation (that finds itself priced into the market) and fostering bitter disappointment.

So to today’s news: an expectation had been circling around the world that Apple would release a redesigned, teardrop shaped “iPhone 5”, with an enlarged 4 inch (or larger screen) and an ovoid touch-sensitive home button. Chinese case companies had already manufactured cases for such a device (based on ‘reports’ from the aforementioned sub-industry) and some US case companies were so desperate to maintain a competitive edge that they started manufacturing large quantities of cases based on similar information – which, to reiterate, did not come from Apple itself. This expectation was also fanned by the emergence of competing Android handsets (such as the Samsung Galaxy S II) with larger screens that the iPhone’s trademark 3.5 inch screen; many in the sub-industry, and indeed many potential customers, hoped that Apple would match or beat Samsung in this regard.

As is obvious, this did not come to pass. These expectations were not realistic, for no other reason than the fact that they were refuted by others within the sub-industry who could not find any evidence in Apple’s manufacturing chain to support such claims (and indeed, evidence to the contrary). However, neither were they realistic from a simple appraisal of Apple’s well-known, certifiably successful, commercial strategy.

In the first instance, Apple does not respond to the competition – it sets its own bar. That may be a strange thing to say, when superficially it appears that they are currently lagging on certain features (such as screen size, as noted above). However, every single one of Apple’s flagship product releases could be similarly criticised (original iPhone had no apps or 3G, iPhone 3G had no copy & paste, iPhone 3GS and iPad had no multitasking, iPhone 4 and iPad 2 had weak notifications). On the other hand, many of these deficiencies were remedied through software support over three years, something that many of its competitors have not been able to match (even in the Android market). In addition, Apple focuses on integrating such features into its operating environment in a way that matches the overall experience of using its integrated hardware and software. That may not be enough for feature-seekers who demand the latest and greatest (the soonest), but it means that the larger portion of the market is able to take advantage of a mature and considered implementation.

Accordingly, although a larger screen may be what the competition is doing (and, by extension, what some customers want Apple to follow), Apple can’t simply slap on the larger screen Samsung is using and is unlikely to deliver one until they are satisfied it works as it should. Firstly, there is the issue of consistent resolution – in order for its operating system and third-party applications to be displayed consistently across its iPod Touch / iPhone / iPad products, Apple has maintained either the same or double the screen resolution for each. Introducing a slightly-larger screen size would either require a non-standard resolution (thereby destroying the uniform experience across products, which would be very unlikely), or reduced pixel density. Given the fanfare regarding the introduction of the iPhone 4’s ‘retina display’ last year, it would again appear unlikely that Apple would sacrifice pixel density simply for the benefit of a larger screen.

Further, there is the issue of whether a bigger screen is actually a good or a bad thing – after years of shrinking handsets, there was significant consternation of the size of the original iPhone when it was introduced in 2007. Almost five years later, some people are claiming that a bigger screen and a bigger device are a better thing – which demonstrates that the issue of screen size ultimately comes down to personal taste. If a larger screen is that important to you right now, then perhaps the iPhone is not for you – and the Galaxy S II is certainly a worthy device that might meet your needs. On the other hand, if you can wait, you may be rewarded if and when such an option does come along.

The other major source for disappointment has been the lack of a new design. I read one comment suggesting that Apple should fire their design team for not having done any work over the past year. I forgive that person for not appreciating the job description of an industrial designer, or what was required to bring the new internals of the iPhone 4S to the iPhone 4’s frame. I also forgive them for not appreciating the fact that said design team is more likely currently working away on any number of potential designs for the iPhone 6, which will need to be settled in the coming months in order to be ready for testing and production prior to next year’s release. Given the quality of Jony Ive’s product designs over the years (supported by a selection of his designs being featured at MoMA), one can understand why the corollary of Apple supporting a longer period for developing better designs (rather than churning out black plastic boxes year-after-year) is some longevity so that Apple could commercialise them over a longer period. If this weren’t obvious from Apple’s already well-established two-year design cycle for the iPhone, it should have been clear from their commitment to each new redesign of their Mac products, starting from the iconic iMac. Indeed, with Jony Ive and Tim Cook at the helm, Apple may very well find a way to implement a larger screen at some point in the future without sacrificing pixel density or consistent resolution – but rest assured that it will finally see the light of day once they can get it just right.

In addition, there have been some minor quibbles about the lack of 4G / LTE and such. This may push some early adopters of such technology away, but ultimately Apple will bring these features on board when the market for them matures (which you’d be hard pressed to say is now, but could very well be next year). I can’t imagine many people dying in a ditch over this though.

Having examined the complaints, let’s look at what Apple has actually improved in the iPhone 4S. While it was widely expected, bringing the dual-core A5 processor to the iPhone (a frame smaller than that of the GS II) is still an impressive feat, and brings with it iPad 2-like performance – not that performance has been anything anyone with an iPhone 4 has been complaining about. However, the additional power is a foundation for Siri, the voice-activated personal assistant application that Apple recently acquired and has refined for the iPhone. Having not seen this in action, other than in the promotional videos, I don’t think I can really say much about it; however, while some might scoff at the idea of talking to their phones, I can certainly see circumstances in which it will come in handy – particularly when using a Bluetooth handsfree kit while driving (and possibly for cheating in pub trivia competitions).

There is also an improved 8 megapixel camera, which can shoot 1080p video and has a video stabilisation feature. While it’s true that a dedicated camera with a proper lens will always be better than whatever can be crammed into a phone, they say the best camera is the one you have with you – and more often than not, that is your phone. Given the fact that iPhone photos dominate Flickr, it seems that this rings true for many who simply wish to point and shoot. Improvements to the camera are always a welcome thing, and the large size of the iPhone’s sensor has made photos taken with it compare well against basic point and shoot cameras and other smart phones (particularly when in the hands of someone who can take a decent photo - no amount of technology can make up for that).

On top of all of this is the introduction of iOS 5 (which will also benefit existing iPhone 4 and 3GS, iPad and recent iPod Touch owners). Most notably, this brings with it a new notification system which addresses one of the ongoing complaints about the iPhone. Without belabouring the many other refinements in iOS 5, it reinforces my earlier point – that the true life-cycle of an Apple product is over the three years during which it is supported and updated by Apple. An iPhone 3GS bought in 2009 will get many of the benefits of iOS 5, while an iPhone 4S bought today will reap the benefits of similar software advances through to 2014. At the end of the day, many users may find this far more valuable than replacing their hardware every year because of a new design, or a new set of features that may or may not be refined enough for them to use regularly or effectively.

Finally, there is the issue of price.* I won’t lie, I was a little disappointed that there wasn’t a small downward inflection on pricing, given the introduction of the 64GB model. I fear that Apple has discovered that 8GB is actually more than ample at the moment for most smartphone users, hence the base model iPhone 4 remains priced at the entry-level 3GS’s $99 while the iPhone 4S models slot into the same prices for the similarly-sized iPhone 4’s with the 64GB slotted in at the high-end $399 spot. This is a bit of a departure from past practice during the evolutionary part of the cycle, as the iPhone 3GS kept the iPhone 3G’s price points while doubling the capacity. It’s unfortunate that a 16GB iPhone 4S exists and pushes the price of the other models up, but that is an unfortunate consequence of the continuing demand for iPhones in the market. Perhaps, if nothing else, today’s disappointment might result in some downward pressure on pricing, but I suspect that we won’t see such effects until close to the release of the iPhone 6 this time next year. 

(*) I am using US-subsidised prices for the purpose of comparing Apple’s standard offering over the years. In doing so, I assume that the reader is aware that these prices require a two-year contract, and should not be used as a point of comparison against local Australian prices, which are for outright contract-free purchases and subject to GST as well as the ever-varying fortunes of the Australian dollar.

Speaking of which, here’s a set of predictions for free – in late 2012, Apple will release an iPhone 6, which will have a larger retina display, an A6 processor (whatever March-April demonstrates that to be), an LTE antenna and a thinner, new, design. You heard it here first. ;)