The Daring Rescue of Apple Computer

The Seductive Power of Values-Based Simplicity: Lessons in Leadership from Apple’s Iconic Comeback

In 1976, Steve Jobs and his business partners, Steve Wozniak and Ronald Wayne, founded Apple in his parents’ garage. The company had almost instant success, first selling assembled computer motherboards, then the Apple I and Apple II personal computers. By December 1980, the company was a Silicon Valley and Wall Street darling. When it went public, Apple’s first-day market capitalization of almost $1.8 billion pushed Jobs’ personal wealth to over $200 million.

But by 1985, the visionary but difficult to work with Jobs was ousted by the board of directors of the company he co-founded. Many analysts will say that during the next 12 years, Apple, without the fiery Jobs, lost its strategic vision, and the company and its stock price suffered greatly as a result. In 1997, Apple, near bankruptcy, wooed Jobs back to Apple’s helm.

When Jobs returned to Apple, he discovered that there was no real product strategy or vision. A random assortment of computers and accessories were being manufactured, including over ten versions of the Macintosh. After one exasperating product review session (amongst dozens), Jobs shouted, “Stop! This is ridiculous. Here’s what we need.” Strolling to the whiteboard, he drew a two-by-two grid. Above the two columns, he wrote “consumer” and “professional” in big letters. He then labelled the two rows “desktop” and “portable.” The team was asked to concentrate on producing four excellent products, one for each quadrant. Business professors credit this single act with saving the company by forcing Apple to make just four computers. Jobs summarized his philosophy by saying, “It’s as critical to eliminate what isn’t on the agenda as it is to define what is. The same principles apply in businesses as well as goods.”

But great products must be matched with great marketing. Jobs also needed to rebuild the company’s marketing, beginning with its brand. Jobs hired the Chiat Day agency to define the Apple brand’s “core value,” which he introduced, and it’s resulting “Think Different” ad campaign at a company meeting. Here are the highlights from the transcript of the speech:

“To me, marketing is about values. This is a very complicated world; it’s a very noisy world. And we’re not going to get a chance to get people to remember much about us. No company is. And so we have to be really clear on what we want them to know about us.

[Redacted]

And the Apple brand has clearly suffered from neglect in this area in the last few years. And we need to bring it back. The way to do that is not to talk about the speeds and fees, it’s not to talk about MIPS and megahertz, it’s not to talk about why we’re better than Windows.

The dairy industry tried for twenty years to convince you that milk was good for you. It’s a lie but they tried anyway. And the sales were going like this [down]. And then they tried Got Milk and the sales are going like this [up]. Got Milk doesn’t even talk about the product — as a matter of fact it focuses on the absence of the product. But the best example of all and one of the greatest jobs of marketing that the universe has ever seen is Nike. Remember, Nike sells a commodity. They sell shoes. And yet when you think of Nike you feel something different than a shoe company. In their ads, as you know, they don’t ever talk about the product, they don’t ever tell you about their air soles and why they’re better than Reebok’s air soles.

What is Nike doing in their advertising? They honor great athletes, and they honor great athletics.

That’s who they are, that’s what they are about.

[Redacted]

… we started working about eight weeks ago [with Chiat Day] and the question we asked was: Our customers want to know who is Apple and what is it that we stand for? Where do we fit in this world? And what we are about isn’t making boxes for people to get their jobs done, although we do that well. We do that better than almost anybody in some cases. But Apple’s about something more than that.”

Apple at the core — its core value is that we believe that people with passion can change the world for the better.

[Redacted]

And we believe that in this world people can change it for the better. And that those people who are crazy enough to think they can change the world are the ones that actually do.”

[Redacted]

And so we wanted to find a way to communicate this and what we have is something that I am very moved by it — it honors those people who have changed the world. Some of them are living and some of them are not, but the ones that aren’t, as you’ll see, we know that if they’d ever used a computer it would have been a Mac.

And the theme of the campaign is “Think Different”. It’s the people honoring the people who think different and who moves this world forward. And it is what we are about. It touches the soul of this company. So I’m going ahead and roll it and I hope that you feel the same way about it that I do.

Jobs uncertain return from exile to rescue Apple resulted in many new victories for the company, including the iMac, the iPod, the iPod nano, the iTunes Store, Apple’s retail stores, the MacBook, the iPhone, the iPad, and the App Store. At the time of this writing, Apple has a market capitalization of over $2.7 trillion.

Insight and Application

By re-imagining Apple’s vision, Jobs saved Apple from bankruptcy and was able to create a remarkable string of successes. At the centre of each of these successes is a great product, but the centre of each great product are great values. Tim Cook, Apple’s current CEO, expanded further on Jobs’ relentless pursuit to embed values into the company, summarized into 7 principles:

1. We believe that we’re on the face of the Earth to make great products.
2. We believe in the simple, not the complex.
3. We believe that we need to own and control the primary technologies behind the products we make.
4. We participate only in markets where we can make a significant contribution.
5. We believe in saying no to thousands of projects so that we can really focus on the few that are truly important and meaningful to us.
6. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot.
7. We don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.

These values-driven leadership principles guided Apple’s revival and shaped the company’s culture and success. By aligning their actions with these values, Apple was able to connect with customers, create iconic products, and become one of the world’s most valuable and influential companies.

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