CASE

Steve Jobs-Apple

Fortune ranked Apple #1 on its list of America's and the World's Most Admired Companies,115 and Steve Jobs was ranked #1 on its Most Powerful Businesspeople in the World.116 But he didn't start at the top. Together with Apple Computer co-founder Steve Wozniak, 21-year-old Steven Paul Jobs developed and built the personal computer (PC) in 1976 in Jobs's family garage. The Apple II kicked off the PC era in 1977, and in 1984 the Macintosh altered the direction of the computer industry. Jobs is also credited with desktop publishing, laser printers, and for pioneering personal computer networks. Jobs went on to create Pixar technology and a new business model for creating computer-animated feature films. More recent innovations under Jobs's leadership include the iPod, iTunes, iMovie, Apple TV, games, QuickTime Player (and other software), Apple Stores, and iPhone. He is ranked #1 for his leadership and power in influencing five industries: computers, Hollywood, music, retailing, and wireless phones. So far, no one has had more influence over a broader range of businesses than Jobs.117 Apple hasn't left its PC computer roots. When most people think of Apple today, the "i"products may come to mind; however, the hottest line is actually its Macintosh business because it has the status as the company's largest revenue source. Mac sales have grown at triple the rate of the rest of the PC industry. Apple is growing faster because it improves its hardware and software more often than anyone else.118 Apple and Jobs have had some problems along the way in their 30+ year history. In the late 1970s and early 1980s, IBM saw the success of the Apple PC and developed its own PC for business that was not compatible with the Apple operating system. IBM PCs were soon outselling Apple. Jobs decided that to compete he needed to bring in professional management to grow the company. Jobs hired John Sculley to replace him as CEO. Apple ran into problems, and Sculley and Jobs did not agree on how to run the company. The Apple board of directors choose Sculley over Jobs as CEO. Jobs lost control over the company he had started. As chairman of the board, Jobs had no real power or meaningful work to do. So Jobs left Apple in 1985 to start NeXT (a computer platform development company specializing in the higher education and business markets).

In 1986, Steve Jobs started what became Pixar Animated Studios and became its CEO. Jobs contracted with Disney to produce a number of computer-animated feature films, which Disney would co-finance and distribute. Films included Toy Story, A Bug's Life, Monsters, Inc., Finding Nemo, The Incredibles, and Cars. In 1997, Apple acquired NeXT to use its technology in its Apple computers and Jobs returned to Apple. Apple was still not doing well so the board appointed Jobs to his earlier position as CEO. In 2006, Jobs sold Pixar to Disney and remains on its board as its largest shareholder. Back as CEO of Apple, Jobs led the company from the brink of bankruptcy through the most dramatic corporate turnaround in the history of Silicon Valley.119 Jobs changed its culture back to a more entrepreneurial atmosphere. Jobs is a visionary, and Apple's success is born of continual and artful innovation in every aspect of its business. According to Jobs, Apple's success comes from simply trying to make great products that we want for ourselves, and then hope that customers love them as much as we do. Through self-assessment, Jobs realized his strength was in developing new products. The future of Apple depends on frequent product introductions and transitions. Therefore, Jobs places his focus and time on overseeing design teams who develop new products; the design teams have input into what is designed and how. Jobs is also among the most controversial figures in the business. People who have worked for Jobs over the years have mixed reactions to his leadership style. Some call him temperamental, aggressive, tough, intimidating, and very demanding. He has been known to verbally attack people who make mistakes and are not meeting goals and expectations. Yet, employees who perform up to expectation are well rewarded.

He is outspoken and not afraid to anger employees and customers. Even many who feared him also had great respect for him as he did inspire loyalty, enthusiasm, and high levels of performance through continuous innovation. Even people who left Apple say it's often brutal and Jobs hogs the credit, but they've never done better work.120 Bill Gates, co-founder of Microsoft, calls Jobs a visionary with intuitive taste. Steve makes decisions based on a sense of people and products. He does things differently, and it's magical. Jobs's ability to always come around and figure out where that next bet should be has been phenomenal. Gates and Jobs worked together in the early days of the development of the PC.121 Fortune states that Jobs "sets a dazzling new standard for innovation and mass appeal driven by an obsessive CEO who wants his products to be practically perfect in every way."122 In summary, at age 21 Steve Jobs co-founded Apple and built the first PC business; at age 25 Jobs was running Apple with a net worth of $25 million; at age 26 he made the cover of Time magazine; and at age 30 he was thrown out of the company he started. He went on to start two other companies and ended up back at Apple to save it from bankruptcy and then lifted it, and himself, to be ranked as the best in the world. Like all successful leaders, Steve Jobs wants to bring about change, takes innovative risk, is not afraid to fail, and is not always successful; but he comes back. At age 53 Jobs is listed as "co-founder" on 103 separate Apple patents and his net worth exceeds $5 billion (Disney stock value $4.6 billion and Apple stock value $628 million).123 Steve Jobs loves his work because he discovered what he was good at and what he enjoys doing--the secret to career fulfillment.
GO TO THE INTERNET: To learn more about Steve Jobs and Apple, visit its Web site (http://www.apple.com). Support your answers to the following questions with specific information from the case and text or with information you get from the Web or another source.

1. Explain how each of the five elements of our definition of leadership applies to Steve Jobs leading Apple (see Exhibit 1.1 on page 6).
2. Identify leadership roles played by Jobs as CEO of Apple. Which role was the most important?
3. Which level of analysis is the primary focus of this case?
4. Explain how each of the leadership theory classifications applies to this case, and which one is most relevant.
5. When Steve Jobs leaves Apple again, will Apple's performance deteriorate and go back into a crisis of near bankruptcy? Why or why not?
CAS E EX E R C IS E AN D RO LE -P LAY Preparation: Assume that you were a powerful board member of Apple in the 1980s. You were involved in helping Jobs select the new CEO, John Sculley, and that you have worked with Jobs on the board for five years. The board has disagreed with Jobs's recommendation to replace Sculley as CEO, so Sculley stays in power and Jobs is out of power. You have to tell Jobs the bad news, which you know he will not want to hear.

Your instructor may elect to let you break into small groups to share ideas and develop a plan for your meeting with Jobs. If you develop a group plan, select one leader to present the meeting with Jobs. Role-Play: One person (representing him- or herself or their group) conducts the meeting with Steve Jobs (to notify him that Sculley stays as CEO and he is removed from power) before the entire class. Or, multiple roleplays may take place in small groups of 5 to 6; however, role-players can't conduct the meeting in front of the team that developed the meeting plan. They must present to a group that did not develop the plan for the meeting. The people role-playing Jobs should put themselves in his place. How would you feel about being thrown out of the company you co-founded and led?