Jobs as iCEO
Here’s to the Crazy Ones
Lee Clow, the creative director at Chiat/Day who had done the great “1984” ad for the launch of the Macintosh, was driving in Los Angeles in early July 1997 when his car phone rang. It was Jobs. “Hi, Lee, this is Steve,” he said. “Guess what? Amelio just resigned. Can you come up here?”
Apple was going through a review to select a new agency, and Jobs was not impressed by what he had seen. So he wanted Clow and his firm, by then called TBWA/Chiat/Day, to compete for the business. “We have to prove that Apple is still alive,” Jobs said, “and that it still stands for something special.”
Clow said that he didn’t pitch for accounts. “You know our work,” he said. But Jobs begged him. It would be hard to reject all the others that were making pitches, including BBDO and Arnold Worldwide, and bring back “an old crony,” as Jobs put it. Clow agreed to fly up to Cupertino with something they could show. Recounting the scene years later, Jobs started to cry.
This chokes me up, this really chokes me up. It was so clear that Lee loved Apple so much. Here was the best guy in advertising. And he hadn’t pitched in ten years. Yet here he was, and he was pitching his heart out, because he loved Apple as much as we did. He and his team had come up with this brilliant idea, “Think Different.” And it was ten times better than anything the other agencies showed. It choked me up, and it still makes me cry to think about it, both the fact that Lee cared so much and also how brilliant his “Think Different” idea was. Every once in a while, I find myself in the presence of purity—purity of spirit and love—and I always cry. It always just reaches in and grabs me. That was one of those moments. There was a purity about that I will never forget. I cried in my office as he was showing me the idea, and I still cry when I think about it.
Jobs and Clow agreed that Apple was one of the great brands of the world, probably in the top five based on emotional appeal, but they needed to remind folks what was distinctive about it. So they wanted a brand image campaign, not a set of advertisements featuring products. It was designed to celebrate not what the computers could do, but what creative people could do with the computers. “This wasn’t about processor speed or memory,” Jobs recalled. “It was about creativity.” It was directed not only at potential customers, but also at Apple’s own employees: “We at Apple had forgotten who we were. One way to remember who you are is to remember who your heroes are. That was the genesis of that campaign.”
Clow and his team tried a variety of approaches that praised the “crazy ones” who “think different.” They did one video with the Seal song “Crazy” (“We’re never gonna survive unless we get a little crazy”), but couldn’t get the rights to it. Then they tried versions using a recording of Robert Frost reading “The Road Not Taken” and of Robin Williams’s speeches from Dead Poets Society. Eventually they decided they needed to write their own text; their draft began, “Here’s to the crazy ones.”
Jobs was as demanding as ever. When Clow’s team flew up with a version of the text, he exploded at the young copywriter. “This is shit!” he yelled. “It’s advertising agency shit and I hate it.” It was the first time the young copywriter had met Jobs, and he stood there mute. He never went back. But those who could stand up to Jobs, including Clow and his teammates Ken Segall and Craig Tanimoto, were able to work with him to create a tone poem that he liked. In its original sixty-second version it read:
Here’s to the crazy ones. The misfits. The rebels. The troublemakers. The round pegs in the square holes. The ones who see things differently. They’re not fond of rules. And they have no respect for the status quo. You can quote them, disagree with them, glorify or vilify them. About the only thing you can’t do is ignore them. Because they change things. They push the human race forward. And while some may see them as the crazy ones, we see genius. Because the people who are crazy enough to think they can change the world are the ones who do.
Jobs, who could identify with each of those sentiments, wrote some of the lines himself, including “They push the human race forward.” By the time of the Boston Macworld in early August, they had produced a rough version. They agreed it was not ready, but Jobs used the concepts, and the “think different” phrase, in his keynote speech there. “There’s a germ of a brilliant idea there,” he said at the time. “Apple is about people who think outside the box, who want to use computers to help them change the world.”
They debated the grammatical issue: If “different” was supposed to modify the verb “think,” it should be an adverb, as in “think differently.” But Jobs insisted that he wanted “different” to be used as a noun, as in “think victory” or “think beauty.” Also, it echoed colloquial use, as in “think big.” Jobs later explained, “We discussed whether it was correct before we ran it. It’s grammatical, if you think about what we’re trying to say. It’s not think the same, it’s think different. Think a little different, think a lot different, think different. ‘Think differently’ wouldn’t hit the meaning for me.”
In order to evoke the spirit of Dead Poets Society, Clow and Jobs wanted to get Robin Williams to read the narration. His agent said that Williams didn’t do ads, so Jobs tried to call him directly. He got through to Williams’s wife, who would not let him talk to the actor because she knew how persuasive he could be. They also considered Maya Angelou and Tom Hanks. At a fund-raising dinner featuring Bill Clinton that fall, Jobs pulled the president aside and asked him to telephone Hanks to talk him into it, but the president pocket-vetoed the request. They ended up with Richard Dreyfuss, who was a dedicated Apple fan.
In addition to the television commercials, they created one of the most memorable print campaigns in history. Each ad featured a black-and-white portrait of an iconic historical figure with just the Apple logo and the words “Think Different” in the corner. Making it particularly engaging was that the faces were not captioned. Some of them—Einstein, Gandhi, Lennon, Dylan, Picasso, Edison, Chaplin, King—were easy to identify. But others caused people to pause, puzzle, and maybe ask a friend to put a name to the face: Martha Graham, Ansel Adams, Richard Feynman, Maria Callas, Frank Lloyd Wright, James Watson, Amelia Earhart.
Most were Jobs’s personal heroes. They tended to be creative people who had taken risks, defied failure, and bet their career on doing things in a different way. A photography buff, he became involved in making sure they had the perfect iconic portraits. “This is not the right picture of Gandhi,” he erupted to Clow at one point. Clow explained that the famous Margaret Bourke-White photograph of Gandhi at the spinning wheel was owned by Time-Life Pictures and was not available for commercial use. So Jobs called Norman Pearlstine, the editor in chief of Time Inc., and badgered him into making an exception. He called Eunice Shriver to convince her family to release a picture that he loved, of her brother Bobby Kennedy touring Appalachia, and he talked to Jim Henson’s children personally to get the right shot of the late Muppeteer.
He likewise called Yoko Ono for a picture of her late husband, John Lennon. She sent him one, but it was not Jobs’s favorite. “Before it ran, I was in New York, and I went to this small Japanese restaurant that I love, and let her know I would be there,” he recalled. When he arrived, she came over to his table. “This is a better one,” she said, handing him an envelope. “I thought I would see you, so I had this with me.” It was the classic photo of her and John in bed together, holding flowers, and it was the one that Apple ended up using. “I can see why John fell in love with her,” Jobs recalled.
The narration by Richard Dreyfuss worked well, but Lee Clow had another idea. What if Jobs did the voice-over himself? “You really believe this,” Clow told him. “You should do it.” So Jobs sat in a studio, did a few takes, and soon produced a voice track that everyone liked. The idea was that, if they used it, they would not tell people who was speaking the words, just as they didn’t caption the iconic pictures. Eventually people would figure out it was Jobs. “This will be really powerful to have it in your voice,” Clow argued. “It will be a way to reclaim the brand.”
Jobs couldn’t decide whether to use the version with his voice or to stick with Dreyfuss. Finally, the night came when they had to ship the ad; it was due to air, appropriately enough, on the television premiere of Toy Story. As was often the case, Jobs did not like to be forced to make a decision. He told Clow to ship both versions; this would give him until the morning to decide. When morning came, Jobs called and told them to use the Dreyfuss version. “If we use my voice, when people find out they will say it’s about me,” he told Clow. “It’s not. It’s about Apple.”
Ever since he left the apple commune, Jobs had defined himself, and by extension Apple, as a child of the counterculture. In ads such as “Think Different” and “1984,” he positioned the Apple brand so that it reaffirmed his own rebel streak, even after he became a billionaire, and it allowed other baby boomers and their kids to do the same. “From when I first met him as a young guy, he’s had the greatest intuition of the impact he wants his brand to have on people,” said Clow.
Very few other companies or corporate leaders—perhaps none—could have gotten away with the brilliant audacity of associating their brand with Gandhi, Einstein, Picasso, and the Dalai Lama. Jobs was able to encourage people to define themselves as anticorporate, creative, innovative rebels simply by the computer they used. “Steve created the only lifestyle brand in the tech industry,” Larry Ellison said. “There are cars people are proud to have—Porsche, Ferrari, Prius—because what I drive says something about me. People feel the same way about an Apple product.”
Starting with the “Think Different” campaign, and continuing through the rest of his years at Apple, Jobs held a freewheeling three-hour meeting every Wednesday afternoon with his top agency, marketing, and communications people to kick around messaging strategy. “There’s not a CEO on the planet who deals with marketing the way Steve does,” said Clow. “Every Wednesday he approves each new commercial, print ad, and billboard.” At the end of the meeting, he would often take Clow and his two agency colleagues, Duncan Milner and James Vincent, to Apple’s closely guarded design studio to see what products were in the works. “He gets very passionate and emotional when he shows us what’s in development,” said Vincent. By sharing with his marketing gurus his passion for the products as they were being created, he was able to ensure that almost every ad they produced was infused with his emotion.
As he was finishing work on the “Think Different” ad, Jobs did some different thinking of his own. He decided that he would officially take over running the company, at least on a temporary basis. He had been the de facto leader since Amelio’s ouster ten weeks earlier, but only as an advisor. Fred Anderson had the titular role of interim CEO. On September 16, 1997, Jobs announced that he would take over that title, which inevitably got abbreviated as iCEO. His commitment was tentative: He took no salary and signed no contract. But he was not tentative in his actions. He was in charge, and he did not rule by consensus.
That week he gathered his top managers and staff in the Apple auditorium for a rally, followed by a picnic featuring beer and vegan food, to celebrate his new role and the company’s new ads. He was wearing shorts, walking around the campus barefoot, and had a stubble of beard. “I’ve been back about ten weeks, working really hard,” he said, looking tired but deeply determined. “What we’re trying to do is not highfalutin. We’re trying to get back to the basics of great products, great marketing, and great distribution. Apple has drifted away from doing the basics really well.”
For a few more weeks Jobs and the board kept looking for a permanent CEO. Various names surfaced—George M. C. Fisher of Kodak, Sam Palmisano at IBM, Ed Zander at Sun Microsystems—but most of the candidates were understandably reluctant to consider becoming CEO if Jobs was going to remain an active board member. The San Francisco Chronicle reported that Zander declined to be considered because he “didn’t want Steve looking over his shoulder, second-guessing him on every decision.” At one point Jobs and Ellison pulled a prank on a clueless computer consultant who was campaigning for the job; they sent him an email saying that he had been selected, which caused both amusement and embarrassment when stories appeared in the papers that they were just toying with him.
By December it had become clear that Jobs’s iCEO status had evolved from interim to indefinite. As Jobs continued to run the company, the board quietly deactivated its search. “I went back to Apple and tried to hire a CEO, with the help of a recruiting agency, for almost four months,” he recalled. “But they didn’t produce the right people. That’s why I finally stayed. Apple was in no shape to attract anybody good.”
The problem Jobs faced was that running two companies was brutal. Looking back on it, he traced his health problems back to those days:
It was rough, really rough, the worst time in my life. I had a young family. I had Pixar. I would go to work at 7 a.m. and I’d get back at 9 at night, and the kids would be in bed. And I couldn’t speak, I literally couldn’t, I was so exhausted. I couldn’t speak to Laurene. All I could do was watch a half hour of TV and vegetate. It got close to killing me. I was driving up to Pixar and down to Apple in a black Porsche convertible, and I started to get kidney stones. I would rush to the hospital and the hospital would give me a shot of Demerol in the butt and eventually I would pass it.
Despite the grueling schedule, the more that Jobs immersed himself in Apple, the more he realized that he would not be able to walk away. When Michael Dell was asked at a computer trade show in October 1997 what he would do if he were Steve Jobs and taking over Apple, he replied, “I’d shut it down and give the money back to the shareholders.” Jobs fired off an email to Dell. “CEOs are supposed to have class,” it said. “I can see that isn’t an opinion you hold.” Jobs liked to stoke up rivalries as a way to rally his team—he had done so with IBM and Microsoft—and he did so with Dell. When he called together his managers to institute a build-to-order system for manufacturing and distribution, Jobs used as a backdrop a blown-up picture of Michael Dell with a target on his face. “We’re coming after you, buddy,” he said to cheers from his troops.
One of his motivating passions was to build a lasting company. At age twelve, when he got a summer job at Hewlett-Packard, he learned that a properly run company could spawn innovation far more than any single creative individual. “I discovered that the best innovation is sometimes the company, the way you organize a company,” he recalled. “The whole notion of how you build a company is fascinating. When I got the chance to come back to Apple, I realized that I would be useless without the company, and that’s why I decided to stay and rebuild it.”
Killing the Clones
One of the great debates about Apple was whether it should have licensed its operating system more aggressively to other computer makers, the way Microsoft licensed Windows. Wozniak had favored that approach from the beginning. “We had the most beautiful operating system,” he said, “but to get it you had to buy our hardware at twice the price. That was a mistake. What we should have done was calculate an appropriate price to license the operating system.” Alan Kay, the star of Xerox PARC who came to Apple as a fellow in 1984, also fought hard for licensing the Mac OS software. “Software people are always multiplatform, because you want to run on everything,” he recalled. “And that was a huge battle, probably the largest battle I lost at Apple.”
Bill Gates, who was building a fortune by licensing Microsoft’s operating system, had urged Apple to do the same in 1985, just as Jobs was being eased out. Gates believed that, even if Apple took away some of Microsoft’s operating system customers, Microsoft could make money by creating versions of its applications software, such as Word and Excel, for the users of the Macintosh and its clones. “I was trying to do everything to get them to be a strong licensor,” he recalled. He sent a formal memo to Sculley making the case. “The industry has reached the point where it is now impossible for Apple to create a standard out of their innovative technology without support from, and the resulting credibility of, other personal computer manufacturers,” he argued. “Apple should license Macintosh technology to 3–5 significant manufacturers for the development of ‘Mac Compatibles.’” Gates got no reply, so he wrote a second memo suggesting some companies that would be good at cloning the Mac, and he added, “I want to help in any way I can with the licensing. Please give me a call.”
Apple resisted licensing out the Macintosh operating system until 1994, when CEO Michael Spindler allowed two small companies, Power Computing and Radius, to make Macintosh clones. When Gil Amelio took over in 1996, he added Motorola to the list. It turned out to be a dubious business strategy: Apple got an $80 licensing fee for each computer sold, but instead of expanding the market, the cloners cannibalized the sales of Apple’s own high-end computers, on which it made up to $500 in profit.
Jobs’s objections to the cloning program were not just economic, however. He had an inbred aversion to it. One of his core principles was that hardware and software should be tightly integrated. He loved to control all aspects of his life, and the only way to do that with computers was to take responsibility for the user experience from end to end.
So upon his return to Apple he made killing the Macintosh clones a priority. When a new version of the Mac operating system shipped in July 1997, weeks after he had helped oust Amelio, Jobs did not allow the clone makers to upgrade to it. The head of Power Computing, Stephen “King” Kahng, organized pro-cloning protests when Jobs appeared at Boston Macworld that August and publicly warned that the Macintosh OS would die if Jobs declined to keep licensing it out. “If the platform goes closed, it is over,” Kahng said. “Total destruction. Closed is the kiss of death.”
Jobs disagreed. He telephoned Ed Woolard to say he was getting Apple out of the licensing business. The board acquiesced, and in September he reached a deal to pay Power Computing $100 million to relinquish its license and give Apple access to its database of customers. He soon terminated the licenses of the other cloners as well. “It was the dumbest thing in the world to let companies making crappier hardware use our operating system and cut into our sales,” he later said.
Product Line Review
One of Jobs’s great strengths was knowing how to focus. “Deciding what not to do is as important as deciding what to do,” he said. “That’s true for companies, and it’s true for products.”
He went to work applying this principle as soon as he returned to Apple. One day he was walking the halls and ran into a young Wharton School graduate who had been Amelio’s assistant and who said he was wrapping up his work. “Well, good, because I need someone to do grunt work,” Jobs told him. His new role was to take notes as Jobs met with the dozens of product teams at Apple, asked them to explain what they were doing, and forced them to justify going ahead with their products or projects.
He also enlisted a friend, Phil Schiller, who had worked at Apple but was then at the graphics software company Macromedia. “Steve would summon the teams into the boardroom, which seats twenty, and they would come with thirty people and try to show PowerPoints, which Steve didn’t want to see,” Schiller recalled. One of the first things Jobs did during the product review process was ban PowerPoints. “I hate the way people use slide presentations instead of thinking,” Jobs later recalled. “People would confront a problem by creating a presentation. I wanted them to engage, to hash things out at the table, rather than show a bunch of slides. People who know what they’re talking about don’t need PowerPoint.”
The product review revealed how unfocused Apple had become. The company was churning out multiple versions of each product because of bureaucratic momentum and to satisfy the whims of retailers. “It was insanity,” Schiller recalled. “Tons of products, most of them crap, done by deluded teams.” Apple had a dozen versions of the Macintosh, each with a different confusing number, ranging from 1400 to 9600. “I had people explaining this to me for three weeks,” Jobs said. “I couldn’t figure it out.” He finally began asking simple questions, like, “Which ones do I tell my friends to buy?”
When he couldn’t get simple answers, he began slashing away at models and products. Soon he had cut 70% of them. “You are bright people,” he told one group. “You shouldn’t be wasting your time on such crappy products.” Many of the engineers were infuriated at his slash-and-burn tactics, which resulted in massive layoffs. But Jobs later claimed that the good engineers, including some whose projects were killed, were appreciative. He told one staff meeting in September 1997, “I came out of the meeting with people who had just gotten their products canceled and they were three feet off the ground with excitement because they finally understood where in the heck we were going.”
After a few weeks Jobs finally had enough. “Stop!” he shouted at one big product strategy session. “This is crazy.” He grabbed a magic marker, padded to a whiteboard, and drew a horizontal and vertical line to make a four-squared chart. “Here’s what we need,” he continued. Atop the two columns he wrote “Consumer” and “Pro”; he labeled the two rows “Desktop” and “Portable.” Their job, he said, was to make four great products, one for each quadrant. “The room was in dumb silence,” Schiller recalled.
There was also a stunned silence when Jobs presented the plan to the September meeting of the Apple board. “Gil had been urging us to approve more and more products every meeting,” Woolard recalled. “He kept saying we need more products. Steve came in and said we needed fewer. He drew a matrix with four quadrants and said that this was where we should focus.” At first the board pushed back. It was a risk, Jobs was told. “I can make it work,” he replied. The board never voted on the new strategy. Jobs was in charge, and he forged ahead.
The result was that the Apple engineers and managers suddenly became sharply focused on just four areas. For the professional desktop quadrant, they would work on making the Power Macintosh G3. For the professional portable, there would be the PowerBook G3. For the consumer desktop, work would begin on what became the iMac. And for the consumer portable, they would focus on what would become the iBook. The “i,” Jobs later explained, was to emphasize that the devices would be seamlessly integrated with the Internet.
Apple’s sharper focus meant getting the company out of other businesses, such as printers and servers. In 1997 Apple was selling StyleWriter color printers that were basically a version of the Hewlett-Packard DeskJet. HP made most of its money by selling the ink cartridges. “I don’t understand,” Jobs said at the product review meeting. “You’re going to ship a million and not make money on these? This is nuts.” He left the room and called the head of HP. Let’s tear up our arrangement, Jobs proposed, and we will get out of the printer business and just let you do it. Then he came back to the boardroom and announced the decision. “Steve looked at the situation and instantly knew we needed to get outside of the box,” Schiller recalled.
The most visible decision he made was to kill, once and for all, the Newton, the personal digital assistant with the almost-good handwriting-recognition system. Jobs hated it because it was Sculley’s pet project, because it didn’t work perfectly, and because he had an aversion to stylus devices. He had tried to get Amelio to kill it early in 1997 and succeeded only in convincing him to try to spin off the division. By late 1997, when Jobs did his product reviews, it was still around. He later described his thinking:
If Apple had been in a less precarious situation, I would have drilled down myself to figure out how to make it work. I didn’t trust the people running it. My gut was that there was some really good technology, but it was fucked up by mismanagement. By shutting it down, I freed up some good engineers who could work on new mobile devices. And eventually we got it right when we moved on to iPhones and the iPad.
This ability to focus saved Apple. In his first year back, Jobs laid off more than three thousand people, which salvaged the company’s balance sheet. For the fiscal year that ended when Jobs became interim CEO in September 1997, Apple lost $1.04 billion. “We were less than ninety days from being insolvent,” he recalled. At the January 1998 San Francisco Macworld, Jobs took the stage where Amelio had bombed a year earlier. He sported a full beard and a leather jacket as he touted the new product strategy. And for the first time he ended the presentation with a phrase that he would make his signature coda: “Oh, and one more thing . . .” This time the “one more thing” was “Think Profit.” When he said those words, the crowd erupted in applause. After two years of staggering losses, Apple had enjoyed a profitable quarter, making $45 million. For the full fiscal year of 1998, it would turn in a $309 million profit. Jobs was back, and so was Apple.