25 years ago Steve Jobs performed a miracle and saved Apple from going bust – let’s look at how
“You never achieve what you want without falling on your face a few times.”
Steve Jobs – 1985
Keeping busy
Apple could have had a very different course had it not been for the return of Steve Jobs in 1997.
Those years spent away from Apple were some of the toughest of his professional life – not that you’d have guessed it. Jobs was not one for sitting around licking his wounds.
Showing his trademark tenacity and dogged determination he built another great tech company, NeXT, along with several team members from his original Macintosh project. He also invested $10 million in this tiny little fledgling animation company you may have heard of called Pixar!
At the time of his departure, Apple was in pretty dire straits. Apple’s hopes of trying to maintain the all-important 55% profit margin on its desktop sales were dashed – mainly due to IBM stacking high and selling cheap, and with Microsoft taking a lion’s share of the market.
Miracles do happen
Steve Jobs’s heart was always with Apple – it was his baby. When the opportunity arose for him to return, he grabbed it without hesitation. NeXT had not performed as well as he’d hoped and Apple was where his attention was once again focused.
But the task assigned to Steve’s return was herculean. The board set Jobs the mission of making Apple profitable once again – and somehow he did it too. Within one year he turned the company around from losing $1.04 billion to making a profit of £309 million.
Those twelve months set Apple on the way to becoming the company they are today and the ways he went about it could offer a lot of today’s tech CEOs a lesson.
Here are five key techniques he used to turn around the fortunes of Apple forever.
1. The clarion call
Steve recognised the importance of focusing better on the core values that Apple was once known for.
He was shocked to find on his return that Apple had developed this culture where there were businesses within the business. Each mini business had its own profit and loss sheet to balance and its own agenda. This bred an unhelpful culture of in-house back-stabbing and competitiveness that was unhelpful to the company as a whole. He went about eliminating the need for managers to compete with one another for resources and profitability for their little bit of the Apple pie.
Instead, he installed a culture of all fighting for the same cause – they were once again a cohesive team that was laser-focused on the overall financial health of the company. In-fighting was a thing of the past.
The new feeling and mentality didn’t take long to permeate through the veins of the company and there was once again a unified feeling at Apple. Without everyone looking out for themselves their focus was healthier which ultimately led to better company-wide decision-making.
2. The long game
When in troubled waters, those at the helm have to make some tough decisions. It comes with the territory.
Having taken a long hard look at the company on his return, Jobs wasted little time in cancelling around 70% of the product lines – they had become disjointed and flabby. The culling didn’t end there though – he also dramatically reduced the size of the various management teams too – he found they were top-heavy. Lean and mean throughout was his mantra.
Whether facing near bankruptcy or making it through a recession CEOs are faced with some very unpalatable decisions. Cost-saving measures have to be put in place, budgets slashed and layoffs made.
But, it’s how these tasks are presented and implemented that matters most. Although unsavoury at the time, the long-term goal has to come first. If everyone understands that the measures are for the good of the company it helps morale even through the long dark days.
Jobs was a class exponent of that. He had a way of winning people over. They believed in him and wanted him to win the day.
3. Trim the fat
As I mentioned, Jobs took title time in reducing the expansive product line-up. He had created the vision of what Apple was meant to represent. On his return in ’97 though he found those core values had become disjointed and shambolic.
Once he finished with the re-structure of Apple they were left with just four products; two desktops and two portable Macs. There was a professional lineup and a consumer lineup – that was it.
The decision-making for the buyer was made simple and the Macs on offer represented what Apple was about.
4. The customer matters most
Steve returned during a recession. In a recession, whilst making the cuts I’ve already mentioned, the priority then has to be focusing on what the customer expects and wants. You need to have total clarity on who it is you are trying to satisfy.
With only four products available the sole criteria for success needed not to be measured in short-term profit. A period of calm was needed – let the products seed themselves in the marketplace and in the consumers’ minds.
That team spirit Jobs had fostered within the walls of Apple had to seep out to the buyers of Apple’s computers. The consumers had to have total faith in what they could come to expect when they bought an Apple device.
That message remains clear to this day and Apple is probably one of the finest exponents of brand loyalty.
5. The enemy within
The last trick up Jobs’s sleeve was one he had realised quickly on his return to Apple – the need to collaborate.
Sure competition is healthy, but sometimes he understood the need to stand back and bring in the enemy – once again to make the company stronger. It stands to reason that each company will have its individual strengths and weaknesses. Jobs knew there were certain things he needed to make Apple stronger – and in areas, it would have too long and cost too much to develop.
Jobs reached out to Bill Gates Microsoft. It was a shrewd move that cemented a healthy cash flow injection for Apple and at the same time would guarantee Microsoft’s commitment to making better software for Macs – and in turn, making the user’s experience better.
Again don’t forget that Jobs was fixing an ailing company through a recession. What he realised was the strength of collaborations to not only create a healthy passive stream of income but to make the Mac or Apple experience the best it could be for their customers – that was at the heart of all the tough decisions he made.
Get it right for the customer and they’ll be loyal and come back to you for years to come. Unlikely partnerships or collaborations can often be found in the most unlikely situations.
Wrapping up
Clearly, I have simplified the business genius of Steve Jobs here.
Although the techniques that I’ve highlighted here helped make Apple into the company they are today, deep in a recession as were are again now, there are lessons for others to learn from.
Many tech companies are facing tough times right now, and looking closely at their management techniques ‘a la’ Jobs may not be a bad idea.
When he resigned from Apple in 1985 no one would have guessed the legendary success he would go on to achieve, but it does offer some insight, right?
To read more about the life of Steve Jobs check out the Make Something Wonderful book which is free to download from Apple Books here.
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