As Steve Jobs, the contemporary gadget god who has influenced
> the information technology, music and multimedia industry like no other,
> went on indefinite medical leave, we thought readers would enjoy this
> fascinating interview of John Sculley, former CEO of Apple who was in
> Mumbai last week. It brings out various facets of Jobs' genius. Enjoy.
gt; Leander Kahney
>
> Steve Jobs was 28 years old in 1983 and already viewed as one of
> Silicon Valley's most innovative thinkers. Apple Inc's board wasn't ready to
> anoint him chief executive officer and picked Pepsi-Cola Co CEO John
> Sculley, famous for creating the Pepsi Challenge, to lead the company.
> Sculley helped increase Apple's sales to $8 billion annually from $800
> million during his decade as CEO, and he also presided over Jobs's
> departure, which sent Apple into what Sculley calls its "near-death
> experience."
> In his first extensive interview on the subject, Sculley tells
> Cultofmac.com editor Leander Kahney in Bloomberg Businessweek's
> October > 25 issue how his partnership with Jobs came to be, how design ruled
>> and still rules --- everything at Apple, and why he never should have
> been CEO in the first place.
>
> (The interview with Sculley was conducted in late 2007. This story was
> timed with the release of the first full transcript of that
> interview.)
>
> Kahney: You talk about the "Steve Jobs methodology." What is Steve's
> methodology?
> Sculley: Steve, from the moment I met him, always loved beautiful
> products, especially hardware. He came to my house and he was
> fascinated > because I had special hinges and locks designed for doors. I had
> studied > as an industrial designer, and the thing that connected Steve and me
> was > industrial design. It wasn't computing.
>
> Steve had this perspective that always started with the user's
> experience, and that industrial design was an incredibly important
> part > of that user impression. And he recruited me to Apple because he
> believed that the computer was eventually going to become a consumer
> product. That was an outrageous idea back in the early 1980s. He felt
> that the computer was going to change the world and it was going to
> become what he called "the bicycle for the mind."
>
> What makes Steve's methodology different from everyone else's is
> that he > always believed the most important decisions you make are not the
> things > you do, but the things that you decide not to do.
> He's a minimalist. I remember going into Steve's house and he had
> almost > no furniture in it. He just had a picture of Einstein, whom he admired
> greatly, and he had a Tiffany lamp and a chair and a bed. He just
> didn't > believe in having lots of things around, but he was incredibly careful
> in what he selected.
>
> Everything at Apple can be best understood through the lens of
> designing. Whether it's designing the look and feel of the user
> experience, or the industrial design, or the system design and even
> things like how the boards were laid out.
> The boards had to be beautiful in Steve's eyes when you looked at
> them, > even though when he created the Macintosh he made it impossible for a
> consumer to get in the box because he didn't want people tampering
> with > anything.
> That went all the way through to the systems when he built the
> Macintosh > factory. It was supposed to be the first automated factory, but it
> really was a final assembly and test factory with a pick-to-pack
> robotic > automation.
>
> It is not as novel today as it was 25 years ago, but I can remember
> when > the CEO of General Motors along with Ross Perot came out just to
> look at > the Macintosh factory. All we were doing was final assembly and test,
> but it was done so beautifully. It was as well thought through in
> design > as a factory as the products were.
>
> Now if you leap forward and look at the products that Steve builds
> today, today the technology is far more capable of doing things, it
> can > be miniaturised, it is commoditised, it is inexpensive. And Apple no
> longer builds any products.
> When I was there, people used to call Apple "a vertically integrated
> advertising agency," which was not a compliment. Actually today,
> that's > what everybody is. That's what [Hewlett-Packard] is; that's what Apple
> is; and that's what most companies are because they outsource to EMS
> ---
> electronics manufacturing services.
>
> Kahney: Isn't Nike a good analogy?
>
> Sculley: Yeah, probably, Nike is closer. The one that Steve admired
> was > Sony. We used to go visit Akio Morita, and he had really the same kind
> of high-end standards that Steve did and respect for beautiful
> products.
> I remember Akio Morita gave Steve and me each one of the first Sony
> Walkmans. None of us had ever seen anything like that before because
> there had never been a product like that. This is 25 years ago and
> Steve > was fascinated by it. The first thing he did with his was take it
> apart, > and he looked at every single part. How the fit and finish was done,
> how
> it was built.
>
> He was fascinated by the Sony factories. We went through them. They
> would have different people in different coloured uniforms. Some would
> have red uniforms, some green, some blue, depending on what their
> functions were. It was all carefully thought out and the factories
> were > spotless. Those things made a huge impression on him.
>
> The Mac factory was exactly like that. They didn't have coloured
> uniforms, but it was every bit as elegant as the early Sony factories
> that we saw.
>
> Steve's point of reference was Sony at the time. He really wanted to
> be > Sony. He didn't want to be IBM. He didn't want to be Microsoft. He
> wanted to be Sony.
> The Japanese always started with the market share of components first.
> So one would dominate, let's say, sensors, and someone else would
> dominate memory, and someone else hard drive and things of that sort.
> They would then build up their market strengths with components and
> then > they would work toward the final product.
>
> That was fine with analog electronics, where you are trying to focus
> on > cost reduction --- and whoever controlled the key component costs
> was at > an advantage. It didn't work at all for digital electronics, because
> you're starting at the wrong end of the value chain. You are not
> starting with the components. You are starting with the user
> experience.
>
> And you can see today the tremendous problem Sony has had for at least
> the last 15 years as the digital consumer-electronics industry has
> emerged. They have been totally stovepiped in their organisation.
> Sony should have had the iPod, but they didn't --- it was Apple. The
> iPod is a perfect example of Steve's methodology of starting with the
> user and looking a the entire end-to-end system.
>
> Kahney: I want to ask about Jobs's heroes. You say Edwin Land was
> one of his heroes?
>
> Sculley: Yeah, I remember when Steve and I went to meet Land. Land had
> been kicked out of Polaroid. He had his own lab on the Charles River
> in > Cambridge. It was a fascinating afternoon, because we were sitting in
> this big conference room with an empty table. Land and Steve were both looking at the centre of the table the whole > time they were talking. Land was saying: "I could see what the
> Polaroid > camera should be. It was just as real to me as if it was sitting in
> front of me before I had ever built one."
> And Steve said, "Yeah, that's exactly the way I saw the Macintosh." He
> said, "If I asked someone who had only used a personal calculator
> what a > Macintosh should be like, they couldn't have told me. There was no way
> to do consumer research on it, so I had to go and create it and then
> show it to people and say, 'Now, what do you think?'"
>
> Both of them had this ability to not invent products but discover
> products. Both of them said these products have always existed ---
> it's > just that no one has ever seen them before. We were the ones who
> discovered them. The Polaroid camera always existed and the Macintosh
> always existed --- it's a matter of discovery. Steve had huge
> admiration > for Land. He was fascinated by that trip.
>
> Ross Perot came and visited Apple several times and visited the
> Macintosh factory. Ross was a systems thinker. He created EDS
> [Electronic Data Systems] and was an entrepreneur. He believed in big
> ideas, change-the-world ideas. He was another one. Akio Morita was
> clearly one of his great heroes. He was an entrepreneur who built Sony
> and did it with great products --- Steve is a products person.
>
> Kahney: You say in your book that first and foremost you wanted to
> make > Apple a "product marketing company."
>
> Sculley: Steve and I spent months getting to know each other before I
> joined Apple. He had no exposure to marketing other than what he
> picked > up on his own. This is sort of typical of Steve. When he knows
> something > is going to be important, he tries to absorb as much as he possibly
> can.
>
> One of the things that fascinated him: I described to him that there's
> not much difference between a Pepsi and a Coke, but we were outsold
> 9 to > 1. Our job was to convince people that Pepsi was a big enough decision
> that they ought to pay attention to it, and eventually switch. We
> decided that we had to treat Pepsi like a necktie.
>
> In that era people cared what necktie they wore. The necktie said:
> "Here's how I want you to see me." So we have to make Pepsi like a
> nice > necktie. When you are holding a Pepsi in your hand, it says, "Here's
> how > I want you to see me."
> We did some research and we discovered that when people were going to
> serve soft drinks to a friend in their home, if they had Coca-Cola in
> the fridge, they would go out to the kitchen, open the fridge, take
> out the Coke bottle, bring it out, put it on the table and pour a glass in
> front of their guests. If it was a Pepsi, they would go out into the
> kitchen, take it out of the fridge, open it, and pour it in a glass in
> the kitchen, and only bring the glass out.
>
> The point was people were embarrassed to have someone know that they
> were serving Pepsi. Maybe they would think it was Coke because Coke
> had a better perception. It was a better necktie. Steve was fascinated
> by that.
> We talked a lot about how perception leads reality and how if you are
> going to create a reality you have to be able to create the
> perception.
> We did it with something called the Pepsi Generation. I had learned
> through a lecture that Margaret Mead had given that the most important
> fact for marketers was going to be the emergence of an affluent middle
> class --- what we call the baby boomers, who are now turning 60. They
> were the first people to have discretionary income. They could go out
> and spend money for things other than what they had to have. When we
> created [the] Pepsi Generation it was created with them in mind.
>
> It was always focusing on the user of the drink, never the drink.
> Coke always focused on the drink. We focused on the person using it.
> We > showed people riding dirt bikes, waterskiing or kite flying, hang
> gliding --- doing different things. And at the end of it there would
> always be a Pepsi as a reward. This all happened when colour
> television was first coming in. We were the first company to do lifestyle
> marketing. The first and the longest-running lifestyle campaign was
> and still is --- Pepsi.
>
> We did it just as colour television was coming in and when large-
> screen > TVs were coming in, like 19-inch screens. We didn't go to people who
> made TV commercials because they were making commercials for little
> tiny > black-and-white screens.
> We went out to Hollywood and got the best movie directors and said,
> "We want you to make 60-second movies for us." They were lifestyle movies.
> The whole thing was to create the perception that Pepsi was No. 1
> because you couldn't be No. 1 unless you thought like No. 1. You had
> to > appear like No. 1.
>
> Steve loved those ideas. A lot of the stuff we were doing and our
> marketing was focused on when we bring the Mac to market. It has to be
> done at such a high level of perception of expectation that he will
> sort of tease people to want to find out what the product is capable of.
> The product couldn't do very much in the beginning. Almost all of the
> technology was used for the user experience. In fact, we did get a
> backlash where people said, "It's a toy. It doesn't do anything." But
> eventually it did as the technology got more powerful.
>
> Apple is famous for the same kind of lifestyle advertising now. It
> shows > people living an enviable lifestyle, courtesy of Apple's products. Hip
> young people grooving to iPods.
> I don't take any credit for it. Steve's brilliance is his ability to
> see something and then understand it and then figure out how to put into
> the context of his design methodology --- everything is design.
>
> An anecdotal story: A friend of mine was at meetings at Apple and
> Microsoft on the same day. And this was in the last year, so this was
> recently. He went into the Apple meeting --- he's a vendor for Apple
> and as soon as the designers walked in the room, everyone stopped
> talking because the designers are the most respected people in the
> organisation. Everyone knows the designers speak for Steve because
> they > have direct reporting to him. It is only at Apple where design reports
> directly to the CEO.
>
> Later in the day he was at Microsoft. When he went into the Microsoft
> meeting, everybody was talking and then the meeting starts and no
> designers ever walk into the room. All the technical people are
> sitting > there trying to add their ideas of what ought to be in the design.
> That's a recipe for disaster. Everyone around him knows he beats to a
> different drummer. He sets standards that are entirely different than
> any other CEO would set.
>
> He's a minimalist and constantly reducing things to their simplest
> level. It's not simplistic. It's simplified. Steve is a systems
> designer. He simplifies complexity.
>
> If you are someone who doesn't care about it, you end up with
> simplistic > results. It's amazing to me how many companies make that mistake. Take
> the Microsoft Zune. I remember going to (the Consumer Electronics
> Show) > when Microsoft launched Zune and it was literally so boring that
> people > didn't even go over to look at it.
>
> The Zunes were just dead. It was like someone had just put aging
> vegetables into a supermarket. Nobody wanted to go near it. I'm sure
> they were very bright people, but it's just built from a different
> philosophy. The legendary statement about Microsoft, which is mostly
> true, is that they get it right the third time. Microsoft's philosophy
> is to get it out there and fix it later. Steve would never do that. He
> doesn't get anything out there until it is perfected.
>
> Kahney: That drives some people a little bit crazy. Did it drive you
> crazy?
>
> Sculley: It's OK to be driven a little crazy by someone who is so
> consistently right. Looking back, it was a big mistake that I was ever
> hired as CEO. I was not the first choice that Steve wanted to be the
> CEO. He was the first choice, but the board wasn't prepared to make
> him > CEO when he was 25, 26 years old. They exhausted all of the obvious
> high-tech candidates to be CEO ... Ultimately, David Rockefeller, who
> was a shareholder in Apple, said let's try a different industry and
> let's go to the top headhunter in the United States who isn't in high
> tech: Gerry Roche.
> They went and recruited me. I came in not knowing anything about
> computers. The idea was that Steve and I were going to work as
> partners.
> He would be the technical person and I would be the marketing person.
>
> The reason why I said it was a mistake to have hired me as CEO was,
> Steve always wanted to be CEO. It would have been much more honest if
> the board had said, "Let's figure out a way for him to be CEO. You
> could focus on the stuff that you bring and he focuses on the stuff he
> brings."
>
> Remember, he was the chairman of the board, the largest shareholder,
> and > he ran the Macintosh division, so he was above me and below me. It
> was a > little bit of a façade, and my guess is that we never would have had
> the > break-up if the board had done a better job of thinking through, not
> just how do we get a CEO to come and join the company that Steve will
> approve of, but how do we make sure that we create a situation where
> this thing is going to be successful over time?
>
> I made two really dumb mistakes that I really regret because I think
> they would have made a difference to Apple.
> One was when we were at the end of the life of the Motorola processor
> ... we took two of our best technologists and put them on a team to go
> look and recommend what we ought to do.
>
> They came back and they said it doesn't make any difference which RISC
> architecture you pick, just pick the one that you think you can get
> the best business deal with. But don't use CISC. CISC is complex
> instruction set. RISC is reduced instruction set.
> So Intel lobbied heavily to get us to stay with them ... [but] we went
> with IBM and Motorola with the PowerPC.
>
> And that was a terrible decision in hindsight. If we could have worked
> with Intel, we would have gotten onto a more commoditised component
> platform for Apple, which would have made a huge difference for Apple
> during the 1990s.
> So we totally missed the boat. Intel would spend $11 billion and
> evolve > the Intel processor to do graphics ... and it was a terrible technical
> decision. I wasn't technically qualified, unfortunately, so I went
> along > with the recommendation.
> The other, even bigger failure on my part was if I had thought about
> it better, I should have gone back to Steve. I wanted to leave Apple. At
> the end of 10 years, I didn't want to stay any longer. I wanted to go
> back to the East Coast. I told the board I wanted to leave, and IBM
> was trying to recruit me at the time. They asked me to stay. I stayed and
> then they later fired me. I really didn't want to be there any longer.
> The board decided that we ought to sell Apple. So I was given the
> assignment to go off and try to sell Apple in 1993. So I went off and
> tried to sell it to AT&T, to IBM and other people.
>
> We couldn't get anyone who wanted to buy it. They thought it was just
> too high-risk because Microsoft and Intel were doing well then.
> But if I had any sense, I would have said, "Why don't we go back to
> the guy who created the whole thing and understands it? Why don't we go
> back and hire Steve to come back and run the company?"
>
> It's so obvious, looking back now, that 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.
>
> I'm actually convinced that if Steve hadn't come back when he did
> --- if they had waited another six months --- Apple would have been
> history. It would have been gone, absolutely gone.
>
> Kahney: People say he killed the Newton --- your pet project --- out
> of revenge. Do you think he did it for revenge?
>
> Sculley: Probably. He won't talk to me, so I don't know.
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