Not 'One of the Best' but Undeniably THE Best Ever, that is what Steve Jobs was as CEO

(I am still on summer vacation, but I definitely wanted to write my tribute to Steve Jobs.) 

Lots of news stories are covering Steve Jobs now that he has announced he is stepping down from the post of CEO of Apple for health reasons, but will still continue as Chairman. I know I don't know Apple or Steve Jobs's careeer, or the PC industry or the movie industry or the music industry well enough to do full justice to the man. But I do see the stories about him on Bloomberg and CNBC and CNN etc, and I feel Jobs is being slighted, when called one of the great executives. One?

There are many measures of greatness in a business executive. If you join a giant corporation and run it well, like say Jack Welch of General Electric or Henry Ford II with Ford Motor Company or Thomas Watson Jr at IBM, and achieve great success, that is one type of excellence. If you are able to grow your company to be the biggest of your industry, you are certainly one of the greats. But there are hundreds of industries. Just that you beat your rival big corporations does not make you one of the all-time greats. That takes more.

If you are able to produce the world's biggest profits at some point, then yes, you must be considered one of the greats of management. And the real purpose of any CEO of a corporation, ie a publically owned company, is to increase shareholder wealth - if you make your company so good, it becomes the most valuable company on the planet by market capitalization - you are a rare breed, but even so, there will always be one CEO at any one time who can claim that title. And looking through recent history, we will have several great managers in that style of greatness in any one generation.

However, where its relatively easy to come into a well-run company, take it over and run it well, there is a far greater test of management skill. If you come in to rescue a dying company and turn it into a profitable one, that is a particular type of management heroics, such as Lou Gerstner did at IBM or Howard Stringer at Sony (opposite of say what Stephen Elop did at Nokia who was making healthy profits and Elop plunged it into making losses, or say like how Nobuyuki Idei did at Sony or John Akers at IBM). The easier way out when your company is making losses, is to sell your company to a rival like say Sanjay Jha did at Motorola Mobility (or like Stephen Elop did earlier in his career as CEO of Macromedia selling it to Adobe). The hard slog is to turn a loss-maker into a profit maker, the easier road is to sell the company.

But even more challenging than that, I would say, is to found a company and get it to the giants. It takes far more excellence to found a company into an industry of rivals, and overtake those, and bring your company into the Fortune 500 largest corporations of the planet. That is far more depth in management excellence all the way from a start-up to a giant industrial corporation. This is something in the style of say Henry Ford with the Ford Motor Company or Bill Gates with Microsoft or Thomas Watson Sr with IBM or Akio Morita of Sony. These come along rarely, maybe one or two in a generation.

There is management by acquisition, a particular skill certainly and can get you from a small company to a huge one, if you are really good at it - take for example the world's richest man right now, Carlos Slim. He certainly has grown his company America Movil, but much of that growth was from acquisitions of existing telecoms operators abroad, not organic growth from within. Yes, Apple has done its share of corporate acquisitions, but far less than most in tech. Apple grew big 'the hard way' by mostly internal growth, not buying up rivals. This takes longer, but to me, is a sign of far greater leadership.

What most successful managers do at the top, is repeat their success from the past, and most large corporations often find themselves incapable of changing to the new fast enough - witness IBM or AT&T for example. The difficulty in the strategic management by CEO is to foresee a future for the corporation which is different from the current, and to anticipate and prepare for that future. If a company sees its own current business in dramatic change, and a new opportunity emerge, this requires particular type of vision and truly bold leadership, to bravely change the company to face the new opportunities. We saw that for example with multi-conglomerate Nokia when led by Jorma Ollila (making anything from rubber tyres for cars and toilet paper, to home electronics and telecoms) when it shed its other businesses and picked one of its smaller divisions as its sole business - telecoms. We saw it in IBM with Gerstner when it decided the PC hardware business was not where the money was, and sold that unit to Lenovo and shifted to services. This type of leadership vision is rare, it is always a risk, and there is the danger that the new CEO actually implements what he or she knew from the past, shifting the current successful business into something totally different but one that the CEO thinks he/she knows better even if the organization is not suited for that change - a criticism of say Nokia current CEO Stephen Elop or Hewlett-Packard's Leo Apotheker.

To see a new business opportunity in some other industry is far easier for a successful company than to discover the opportunity to disrupt one's own industry. This almost always comes from small rivals who sense the new opportunity and use it to enter the market. IBM wasnt the company to launch the first PC. Sony was not the first company to launch the MP3 player. Toyota wasn't the first to sell an electric car, etc. A 'paradigm shift' of an industry is mostly done by small hungry companies, not the strongest biggest incumbents. For a CEO to correctly see the future where a new technology will cannibalize the current business, and to be the first company then to deploy that, this is almost unheard-of.

But most of all, if you want to consider management excellence, the most difficult management skill of all, is to find world-winning level of success across multiple industries. That is very very rare. Take Henry Ford. He did use his manufacturing and marketing genius to turn Ford Motor Company into the world's biggest car-maker (at one point more than half of all cars sold were Ford Model T cars). Then Ford saw the new airplane contraption coming along, and decided to diversify into airplanes. And in the years between the two World Wars there was a successful Ford airliner, called the Ford Tri-Motor, for a short time the world's most advanced civilian airplane. But very soon it was eclipsed by more advanced models from Douglas and Junkers and Boeing. Henry Ford was not going to be the biggest airplane maker for all his genius in management.

To be able to master more than one industry is extremely rare. And when that happens, it tends to be sequentially - a manager of a giant corporation in one industry, becomes CEO of a company in a very different industry and manages to achieve success there as well. It is most rare, I can't think of examples, where a CEO in a leadership position of one industry has shifted his company to enter other industries and during his tenure managed to simultaneously dominate two or three distinct industries. Again, if we look at a GE or Samsung or Sony, they were multi-industry conglomerates so that they now are major players in several industries is not a great sign of their current management. What I'm looking for is for a company that didn't compete in one industry, to enter it, and to come to dominate that new business, while still dominating its original business. That is most rare.

STEVE JOBS IS THE GREATEST

But Steve Jobs was the renaissance man in management. He launched Apple Computer with Stephen Wozniak into the fledgeling garage-industry of personal computers. He did not invent the PC, but he honestly built Apple from the ground up. In less than ten years Apple was the world's biggest computer manufacturer by units of computers sold (this was the Apple II). And Steve Jobs set the world record for fastest company to go from start-up to joining the Fortune 500 (his record was later to be broken by Google).

This alone is reason to consider Steve Jobs one of the greatest managers ever. A world record in speed of growing your company - and essentially all of that growth was, yes, organic growth, not by acquisitions.

TO REVOLUTIONIZE YOUR OWN INDUSTRY

Then we see the total paradigm shift for the computer. The birth of the modern era of computing. The new type of personal computer, so easy to use, so 'intuitive' that for the first time ever, you did not have to go to take PC courses to operate a PC. The modern computer we know today as one that has 'windows' and uses a pointing device like a mouse - while that was invented by Xerox, Xerox didn't think of launching it commercially. That was Steve Jobs. He put the radical new user interface into his new computer called the Lisa, and then in an even more evolved version into his revolutionary Macitosh, and the world was forever changed.

This was not the case that some rival like Dell or HP or Toshiba launched the windowing computers with mouses, and Apple then would copy it to its success. No. Apple - and Steve Jobs specifically - saw the future of computing, and even as Apple as the big maker of PCs, he went onto launch a new era. We do count the PC age in two eras, the era of the geeks who had to 'study' DOS and 'study' WordStar and 'study' WorldPerfect and 'study' visicalc and 'study' Lotus 1-2-3 etc - suddenly on a Mac, all you needed was to point, and it all worked. First time, every time.

This is one of those very very rare instances where the big paradigm shift of an industry was instituted by one of its biggest players at the time. This is visionary leadership.

While Apple did not end up dominating the Windows era, the Macintosh would only have something between 10% and 12% market share at its peak while Microsoft's copy of the Macintosh OS (Windows) would have 80% - Apple was not done and would have its revenge still to come also in the computing industry.

Steve Jobs had his fall-out with the Board of Apple and was ousted. Apple itself went into troubled times and was near bankruptcy by the time Steve Jobs would return.

In the interim, Jobs went back to his roots in computers and started another computer company Next Computer (which would not make profits and was eventually bought by Apple when Jobs was brought back). But then we see the first sign of Jobs's renaissance man capabilities - he bought Pixar and Pixar produced the first chart-topping hot Hollywood movie done with animation: Toy Story. Toy Story was not just a global hit movie, it was the best-selling movie of that year! Jobs had played in a completely different type of industry from computer equipment - the story-telling of Hollywood in the motion picture industry, and achieved huge success there. The bestselling movie of the year!

But we could say, that was 'sequential' excellence, at that time his Next Computer company was not a major player and it was making big losses. So yes, Jobs was able to dominate the PC industry at one point in time, and dominate the movie industry at another time.

RETURN TO APPLE

Lets move on, Jobs returned to Apple. And the company was months or some say weeks from bankruptcy. Yet Jobs turned it around. In a year Apple was back to making profits and then with Steve Jobs in charge, Apple launched the radically designed iMac, which at one point was the world's bestselling PC model. Apple was not yet back to being the world's biggest computer maker, but it had the single bestselling PC model. For a company on the brink of extinction, Jobs was proving a master also at the come-back.

Then came his first proof of exceptional excellence. Sony was the undisputed king of portable music - having invented the Walkman and dominated the portable cassette and other portable media player market from gadgets like the portable CD player to the Watchman pocketable TV sets. And a nerdy PC maker would take on the Japanese consumer electronics giant - at its game - and win. Steve Jobs launched the iPod, a radical new way of consuming music on the go, with the ability for us to have all of our music with us. Sony was trying to sell the world on the idea of recordable digital media in minidisks but Apple's iPod was so much better, it killed off the other digital music player types, and today most portable music players are MP3 players. In a matter of a few years from entering the consumer electronics industry, Apple became the world's biggest portable music player brand. This while growing its sales in the PC industry. Jobs was proving a master at multiple industries, simultaneously - and profitably. And its not just that Apple was able to enter a totally different type of industry and dominate it - Steve Jobs was able to revolutionize that while entering it.

Then came iTunes. Imagine how unlikely that is. Imagine Dell today launching a movie rental service online or HP offering us a paid cable TV/video service. But that is what Apple did almost ten years ago, a PC maker with no history of music or any content industry, launching an online music store to sell single songs at 99 cents a piece. It is too easy to forget, the iTunes store launched into a music industry on the brink of collapse due to sudden global phenomenon of illegal file-sharing on Napster and Kazaa and other file-sharing sites. Who in their right mind goes into an industry in such peril, and worse, launches an on-line service that is paid music, when free music sharing services had taken the world by storm? Steve Jobs, thats who. Believing passionately that he will make it better, and that people will be willing to pay if its good enough. Today where all other formats of music see a decline, only digital online sales are growing. We liked the iTunes story so much as an example of 'creating new market space' that we made it a case study in the signature book to this blog, Communities Dominate Brands. And yes, today the world's biggest online music store is iTunes. This while his music player electronics gadget sales, and his PC sales were growing. Jobs is a master of three industries.

THEN THE MASTERPIECE: THE iPHONE

And he's not done, then came the iPhone. Apple did not invent the smartphone. Nokia invented the smartphone ten years prior to Apple's first iPhone. But just like Jobs looked at the PC industry, music player industry and the music sales business and invented new and better ways of doing any of those, he then set his eyes on the mobile phone handset industry, the most widely used technology on the planet. And the smartphone of 2006 was a cumbersome beast indeed. And more than that, there had been handset makers who had tried to do touch-screen smartphones, including Nokia, who found that concept not viable. Yet Apple came along, re-invented the smartphone, and created such a radically different, easier and more intuitive device, that we count time in smartphones in two eras, just like we do in the PC world and the music player world. In smartphones, it truly is the time before the iPhone and after the iPhone. No wonder my blog which was first to make that bold prediction in 2007 was the source of the term 'jesusphone'.

The iPhone changed just about everything in mobile. Not just how handsets should be, the iPhone would change our concepts of how internet and mobile content are consumed on a phone - Angry Birds, anyone? The iPhone ushered a modern era for media and advertising, where the modern smartphone was seen as mature enough to handle modern digital content. The iPhone became the ultimate fashion accessory and gadget, taking the role of an expensive watch or jewelry. And then there was the closed, rigidly controlled and expensive ecosystem of most carriers/mobile operators in most countries.

Apple did not invent the app store for smartphone applications. But Apple made it so much better, it became for the first time a viable sales channel for 'garage' programmers, for students, little start-up companies. Previously the approval process to get onto a carrier's ecosystem was cumbersome and costly and time-consuming. Apple's iPhone App Store made it easy (while still maintaining Apple's peculiarities about content approval etc) and Apple brought the 70:30 revenue sharing model, which in most countries was better than what carriers/mobile operators would provide. With Steve Jobs, Apple once again reinvented yet another industry, the mobile data and content and applications industry and still today towers over all other app stores in terms of total downloads and total titles offered.

With the smartphone market, Steve Jobs proved his mettle in probably the most competitive industry ever, if measured by giant global corporations competing in it. I counted that in the year 2006, just before the iPhone, out of the Fortune Global 500 corporations, only 7 were smartphone makers. By year 2010 the number had grown more than 3-fold to 23. I believe this is the biggest number of giant corporations to compete against each other in the same industry, on a global scale. Yes, there are more banks or oil companies but most of those are only local or regional with only a handful of global banks (Citibank, HSBC and a few others) or global oil companies (ExxonMobile, Shell, BP and a few others). But after Jobs brought Apple to smartphones, he would end up fighting against 23 giant global rivals including many far larger companies than Apple, such as Vodafone, HP and Samsung to name but three.

And just like Apple found it easy to capture the musicplayer market from the inventor of the personal portable music player and undisputed king of the category, Sony, so too Apple found it child's play to wipe out Nokia, the inventor of smartphones that utterly dominated that space until Apple's arrival. In exactly four years from launch, the iPhone had become the world's bestselling smartphone brand toppling Nokia. It was like taking candy from a baby. In the previous ten years, Nokia had successfully brushed away any attempts in smartphones from new hungry start-ups like RIM and HTC and Palm, to giant global electronics and tech rivals like Sony, Samsung, HP, Microsoft, LG etc as well as traditional handset maker rivals like Motorola, Ericsson, Samsung, LG and Siemens. When Apple entered smartphones, Nokia sold nearly half of all smartphones on the planet. Yet in only four years, Steve Jobs steered his company right past Nokia and all other pretenders.

And his last triumph which brought the icing onto the iCake was iPad. Again, many tech pundits said tablet PCs were not going to succeed in the market. Apple looked at tablets, reinvented the space, and today sells 75% of all tablet PCs made. Now, tablets are but a small part of portable PCs which themselves are only part of all personal computers, which are no longer even the biggest sector of the computer industry (smartphones now sell more than all types of PCs combined) but the iPad sealed a particular come-back for Apple.

In 2010 Apple returned to be the world's biggest computer manufacturer on the planet, when counting PCs including desktops, laptops, netbooks and tablets; as well as smartphones and PDA-like pocket computers like the iPod Touch.

At the same time Apple was the world's biggest computer maker, the world's biggest portable media player maker, the world's most used online music store, the world's bestselling smartphone and the world's most used application store. Only one of those industries had Apple as a participant before Steve Jobs returned to the company: computers. In about a ten year period, he not only turned loss-making Apple into a profitable giant to dominate the computer industry, he simultaneously entered four other industries and not just completely reinvented each of those, he would also see Apple dominating each of them too!

And it doesn't really matter even how you count it. If you count by units sold, today Apple is biggest computer maker, biggest (stand-alone) portable music player/media player maker, biggest smartphone maker, fifth-biggest mobile phone handset (including dumbphones) maker, biggest app store and biggest music store.

If you count by revenues, Apple is second biggest computer maker, biggest music/media player maker, biggest smartphone maker, biggest handset maker including dumbphones, biggest app store and biggest music store.

If you count by profits, Apple is biggest computer maker, biggest music/media player maker, biggest smartphone maker, biggest handset maker, biggest app store and biggest music store. Wow...

This is a renaissance man! This is a management genius, there is no other word for it. Compare to Sony. Sony was once the world's biggest TV maker (lost that to Samsung). It was once the biggest music player maker (lost that to Apple) and is now the world's biggest videogaming console provider (counting both PS3 and PSP). But Sony was not able to dominate those industries simultaneously.

NOT JUST BIGGEST BUT MOST PROFITABLE

And we come to the profits.. In less than 15 years, Steve Jobs turned loss-making Apple into the company with the biggest profits. This is a world record. Yes, Steve Jobs has owned two world records in running a giant corporation! That puts him in a very rare class.

And then what of his businesses? The conventional wisdom said that in the PC industry its the software makers, like Microsoft, who made most of the profits while the hardware manufacturers like Dell for example, would have modest profits. While Apple did make its own operating system, Apple did not sell that to others. That Apple managed far bigger profits out of its computer business by selling primarily the hardware makes his achievement all the more impressive. Understand how unlikely this is. Most of the profits have traditionally been earned in the computer industry on the software side. That is Microsoft's domain. That is why IBM sold its PC business (and why HP's Apotheker now wants to end HP's hardware business). But Jobs makes the biggest profits of any computer industry company now, through selling hardware. Wow.

Same is true of the mobile industry. The handset vendors can make profits but many do not and most of the profits in the mobile telecoms industry are with the mobile operators/carriers. Yet Apple has been producing more than half of the total industry profits for all handset makers recently. I honestly don't know about home electronics, but my gut says it is not typically a high profit industry, at least has not been recently. Not compared to say the petroleum industry. Yet Apple making its money out of (low-profit) PC business, modest profit mobile handset business, modest profit home electronics business, and the new businesses of selling music (a relatively modest sized industry) and smartphone applications (a fledgeling industry) - Apple is now on target to produce more profits than any other company on the planet including those giant oil companies.

And what of the ultimate job of the CEO? It is to increase shareholder value. I just saw on one of the Steve Jobs tributes on 24 hour news, that Apple share value has increased over 7,000 percent since Jobs took over. It is by far the biggest increase in shareholder value in this period of time. I do not know if that is another world record for a similar period in time for any corporation of Fortune 500 size, but I would not be surprised if it is.

Steve Jobs proved himself a great salesman when teamed with Steve Wozniak to launch Apple Computer. He grew that company into a Fortune 500 giant - very few entrepreneurs get to see that in their careers and it puts Jobs not only in a class of great leaders but great entrepreneurs too.

He conquerred his industry making Apple the biggest PC maker once in the 1980s, but far more than that, he reinvented the PC industry and ushered the modern era in PCs. Had he been allowed to pursue his passions with the Lisa and early Macitosh PC, he probably would have achieved his success earlier, but nonetheless, in this new era of computers, upon his return, he also came to dominate the computer industry again, now for the year 2010. That makes him the greatest computer industry tycoon no doubt.

But when we add Pixar, when we add the iPod, when we add iTunes, when we add the iPhone and the App Store, here is a man who went into other industries and led those, dramatically altered them and achieved supreme business success in each of those other five industries as well. Excepting for Pixar and the motion picture industry, the other five industries where he has led - computers, music players, music sales, smartphones and app sales - he achieved leadership in those five simultaneously. This is truly the renaissance man, the manager-extraordinaire, the best business executive of all time. To find another businessman to master so many different industries and lead them and change them, we have to go back in history to Isambard Kingdom Brunel (the great engineer who in the early 19th century changed tunnels, trains, buildings, bridges and ships) to find another who mastered commercially of so many different industries.

LEGEND OF THE BIRTH OF THE iPHONE

So let me tell you a little anecdote about Steve Jobs. I have never met the man, I was not personally involved with this story, but I have heard from a couple of people who were personally involved and I trust they have told me the truth. But I cannot verify this to be true but it certainly sounds like the man, and it fits with the period and what was happening. So rather than claiming this as factual history, lets call this the legend of the birth of the iPhone. But I think it tells very well the particular obsession Steve Jobs had with his vision of exceptionalism and excellence for the Apple brand.

First we go back to about year 2003-2004 and the iPod. Apple had just come back as a force in the tech industry and the iPod was also driving increasing demand for the Macintosh line of PCs which helped Apple's profitability. And Apple could see the early musicplaying phones coming out of South Korea and Apple knew the iPod would eventually see a challenge from "musicphones". So Apple was meeting all the major handset makers to try to partner to make an 'iPod phone'. I know from my Nokia contacts that these discussions were had with Nokia but we also know the final deal went to Motorola. So we saw the hot Razr taking the mobile handset industry by storm from Christmas of 2004, and then for Motorola's encore for the 2005 Christmas season, the world was offered Motorola's amazing musicphone developed with Apple: the truly underwhelming Rokr.

 

We know since the Rokr was sold in the Autumn of 2005, the development will have started in early 2004 (typically a totally new mobile phone development would take about 18 months). So Apple has been in mobile phone handsets since early 2004. In 2005 we see the Motorola output of the 'partnership' with Apple: the Rokr. What would Apple do out of the partnership? Apple took the lessons but also aimed to do something radically better. Two years after the Rokr, Apple give us the iPhone! Yes, the same partnership and collaboration that one giant tech company could turn into the iPhone, another giant tech company release as the Rokr. That tells you something. But lets dig into how the iPhone then was born.

Apple did launch its own phone project in 2005, as they saw that the Rokr would not be in any way satisfactory to Apple's (read: Steve Jobs's) expectations. I remember the early gossip expected co-branding with the Rokr but by the time the phone came out, it was not allowed to mention Apple or iPod or iTunes. If we count from 2005 for Apple's own phone project (from the time they saw early Motorola prototypes of the Rokr) then an Apple early iPod-phone would be in prototype form around the summer of 2006, ready for Christmas sales for 2006. Several sources have verified there was an internal Apple mobile phone project at the time, predating the iPhone and confirming that the iPhone took much longer than 'usual' in the phones business.

I find the timing also interesting, as we heard from Tim Cook then CFO of Apple, that Apple's mobile phone was developed expressly because Apple had seen the growth of musicphones, led by SonyEricsson's Walkman branded phones, and that Apple projected musicphone sales would exceed iPod sales by end of 2006.. This was what I blogged here on this blog back in October of 2006 (and I was crucified by Apple loyalists), when I argued Apple has to enter the phone market to save the iPod market share.

Meanwhile, now to my sources and the more 'gossipy' part to this legend. As I understand, Steve Jobs was shown an internal prototype of the Apple iPod-phone in the summer of 2006. It was ready to be manufactured and sold for the Christmas season of 2006. The phone apparently was quite conventional in its look and feel, but was "Apple white" and had family cues to the iPod. It was a musicphone, in candybar form factor (not a flip phoen like the Razr). It had a modest-sized screen.. and it had a T9 keypad. So it looked very conventional. It was a musicphone that by its outwardly appearance, could have been made by Nokia or SonyEricsson or even Motorola. But it was not amazing. So Steve Jobs killed that phone project, and sent the team back to the drawing board.

Understand how brave that decision was. Steve Jobs knew that musicphones by SonyEricsson and other handset makers were already cannibalizing the market for the iPod. And in the internal Apple project, surely Apple engineers had designed a phone far superior to the contemporaries, at least as a music and media playing phone. And this Apple iPod-phone was ready for production, it could be sold that Christmas 2006. Yet Steve Jobs knew it was not to the expectation level of Apple fans. They would not be amazed by that phone. So it would be better to wait, make sure they had the definitive new type of phone, go back and redesign, and wait until they had.. the iPhone. Almost any other CEO would have taken the first prototype iPod-phone and sold it in 2006 - no doubt to good success - and then issued what we know as the iPhone as the next year's model. Not Steve Jobs. Its either perfection, or its not done!

So the design team was sent back to the drawing board to redesign it - and told to hurry. So the Apple designers took what they had in some parts, not strictly starting from scrach. and then went ballistic with the cool space-age stuff. They went one-button touch screen (like a design from 2006 from South Korea from LG, which won international design awards for LG that were handed out in late 2006). They sourced the biggest screen conceivable at the time - 3.5 inches - remember how massive the first iPhone screens felt - and used the new capacitive touch screen technology. They didn't bother to make the original iPhone very cutting-edge tech wise in terms of 'traditional' handset design. The original iPhone was not 3G, it was not a proper 'smartphone' and came with a puny camera resolution even for its time (2 megapixels with no flash).

I think these tell the story that this was a rush job, a 2G, featurephone with 2MP camera would have been quite strong contender in 2006 but not by 2007 when Nokia had given the world its first 5MP smartphone (with flash, 3G and GPS) in the N95. But by January 2007 Steve Jobs was able to show the world the iPhone. And then it didn't really matter that this was not even a smartphone, and only did 2G. It was truly amazing. It was an instant hit, iconic design and incredibly desirable. All Apple needed to do, was to do occasional updates to the model and keep the price high, and they'd soon own the premium end of the mobile handset world. Nokia and SonyEricsson and the others didn't stand a chance.

Over the past 34 years we have witnessed a legendary CEO perform at his peak, setting world records in giant corporation management and mastering multiple industries. Our lives have become the better because of Apple and Steve Jobs. More than any other company, the one who turned the micro processor revolution that gave us the PC and the microchip, sparked by the Apollo program by the USA to go to the moon, was Apple - and only those years of Apple when led by Steve Jobs. Grandparents would not be comfortable using a PC today to go to YouTube or Facebook if it were not for Apple's Mac (and Lisa). There is no way an evolution of Microsoft's DOS and the ever more complex and cumbersome software of the 1980s would be where we are today, were it not for Steve Jobs's vision of user-friendly computing. And those same grandparents would not be using a smartphone today, were it not for the iPhone. A game like Angry Birds would not be a global hit played by preschool age kids against their grandparents on some iPhone or Android smartphone today, were it not for the App Store. And the music industry? It might have collapsed were it not for single-track digital music sales, invented by.. Apple.

There are many great business leaders. There have been many generous articles writing about Steve Jobs. But I want to make it very clear, if we look at Steve Jobs objectively, against the best metrics and measures of greatness in business management, his list of accomplishments at the top stands unparalleled. Not only in tech. Not only in the modern era. Of all time! Even Isambard Kindom Brunel was not able to turn all of his technically brilliant ventures into commercial successes (the biggest of his, The Great Eastern steamship was also the biggest commercial failure of all time up to that point, and inflation-adjusted is likely to be the biggest commercial failure of all time). Steve Jobs was simply the best. We had the privilege to witness the greatest business executive of all time. Congratulations Steve Jobs and here's to hoping you'll still live a very long and rewarding life as you transition to a less intense role at Apple and beyond. Thank you for the excellence and the new benchmarks for ultimate excellence. And to all at Apple - keep the Steve Jobs spirit alive, make products that will amaze your customers and you will continue his legacy. Don't care what we pundits write about, don't succumb to mediocrity. Pursue that excellence and you will be fine. The world loves you and your products. As long as you continue to delight and amaze your customers, they will come back and buy anything you choose to make.

Comments

[Roo_44]

It will not be the success of Apples last 20 years the will define Jobs greatness as CEO but Apple's success over the next 20 years. Did Jobs, like William McKnight at 3M, create be a company that turned innovation into a systematic, repeatable process? I would bet yes.

[SVE]

Tomi, you've redeemed all your crazy articles of the past year with this magnificent post on the Steve Jobs era. One minor complaint is you've overlooked his affect on the electronics retail industry with his Apple stores. He revolutionized how product is displayed and sold. And now I believe they have the highest per square foot revenue of any store including Tiffanys.

[Vikram]

Tomi, I have totally disagreed with you regarding Elop and Nokia but I must say that you are 100% correct about Steve Jobs. Great post.

[Vikram]

of course I have one quibble :) and that is regarding the iPhone - Jobs himself has said that they were working on the iPad years before the iPhone and chose to do the phone first after an engineer showed him inertial scrolling which he realized would be perfect for a phone.

My pet theory on the Rokr which was so terrible is that Jobs purposefully did that to throw off the scent to competitors who were underwhelmed when they saw it and were not expecting much from the iPhone. Of course that is my own conspiracy theory and likely wrong but would be funny if it were true.

[khim]

Roo_44: Did Jobs, like William McKnight at 3M, create be a company that turned innovation into a systematic, repeatable process? I would bet yes.

Don't bet just yet. Apple is almost ready to repeat the story of Microsoft. Under Bill Gates it was fast growing corporation. Then he stepped down and suddenly it was stagnating. What happened? Was Ballmer REALLY the problem? Nope. Microsoft's problems of XXI century are directly related to Bill Gates management of XX century. While Microsoft was growing it actively backstabbed it's own partners and users. Eventually dissent grew to such a degree that other companies adopted "anything but Microsoft if at all possible" tactic in many cases (think smartphones, for example). This meant that Microsoft's advanced were slow and crippled at this point.

Apple under Steve did the same thing. The only difference here is the fact that Steve left (because of health reasons) before he was able to alienate all other players, so some friends still remain. Thus Apple probably have 2-3 more years left before stagnation period.

It does not mean Steve is not great - he is! No doubt about it! Steve is great executive, but to say that he's so far above all others... not enough time passed. Future will tell... Remember that Microsoft had market cap $642 billion at some point.

[Vikram]

"Remember that Microsoft had market cap $642 billion at some point."

That happened when the Nasdaq was also over 5000 and Microsoft had around $25B in revenues. It is half that now, around 2500, and Microsoft did about $70B in their latest fiscal year. Market cap is based on other people's perceived value which can be wrong. Apple is now nearly 50% bigger in revenues that MSFT and the gap is growing. Apple did $100B in the last 12 months.

The beauty of Apple is that they don't rely on other companies like Microsoft does and Google does with Android. Apple goes its own way and does its own thing.

[Afewgoodmen]

A beautifully written piece. Steve Jobs is truly the greatest. In the Tech world there're few CEOs that can match the drive, determination and resolute brilliance thatnisnthe almighty Steve Jobs.

However, I also believe that Apple would stand the test of time and remain viable for at least decades to come. Because that is the only thing that can show how great a man Steve Jobs is if his creation can live long after the living legend is gone.

Please get well, Mr. jobs!! And kick some more Tech Asses!

[Decade]

One minor quibble:

Xerox did not invent the computer with windows operated with a mouse. That was Douglas Engelbart and the Augmentation Research Center at Stanford Research Institute. It's important to remember this because it's still early days in the computer revolution, and something better may still be built.

I know, it's hard to imagine, since the Windows-Icon-Menu-Pointer paradigm from Xerox as refined by Apple has been copied by everyone else. It's interesting to watch Microsoft attempt to de-emphasize the menu with their new Ribbon interface. And Apple has de-emphasized the desktop part of it with iOS. But I would not be surprised if something even more amazing is revealed.

[Mikko Martikainen]

Good writeup, a fresh breath of air compared to your last postings. As already pointed out, Steve Jobs and Apple also entered the retail business and currently make more per square foot than anybody else (I believe $5600 per sq.ft.) Another minor correction: Sony PS3 and PSP are not the best selling video game consoles, Nintendo Wii and DS + 3DS are. Other than that, very good article.

[Robert]

Jerry Garcia of the Grateful Dead left this quote:
"You do not merely want to be considered just the best of the best. You want to be considered the only ones who do what you do."

Steve Jobs must have been listening.

[HCE]

@khim

Microsoft is not stagnating because of anything that Ballmer has done - they've been playing hardball with competitors and partners for years with no ill effects. Microsoft is stagnating because they pretty much completely missed a couple of major trends.

First they completely missed the music-player plus online music store trend which Apple kickstarted with the iPod. Microsoft should have come out right away with a competitor for both iTunes and the iPod. Instead, they wasted time with their PlaysForSure strategy and finally, in 2006, figured out what they should do and brought out the Zune. By that time it was too little, too late.

Then, they missed the biggest trend of all - the mobile explosion. Apple succeeded because they realized that the key to success in mobile was to use their strength in software to come out with a user experience that blew everyone away. Why didn't Microsoft do this? They were in the smartphone market long before Apple, their software team is every bit as skilled as Apple's. If any of the Microsoft leadership had any vision they would have been the first to come out with an iPhone-like device. Even after the iPhone came out, they didn't bother moving in that direction for quite some time. It seems no one there at any inkling of how big this could be. Google, on the other hand did what Microsoft should have done. They recognized at once that the iPhone pointed the direction in which the mobile market was going to be heading and immediately re-oriented their mobile efforts. Early Android prototypes look more like Blackberries than iPhones - but they were able to turn the ship around and come out with an iPhone-like device by the end of 2008. Had Microsoft done what Google did, it might be Windows Phone and not Android sitting on top of the mobile market. Instead they took their own time and finally brought out a competitive OS at the end of 2010. By that time the mobile ship had sailed and WP7, while a competitive operating system, has lost all mindshare to Apple and Google. It remains to be seen if they can win some of it back with the Nokia deal.

And then there's tablets. Microsoft has been touting tablets for years - way, way before the iPad (from the time Bill Gates was in charge). However, no one there had the vision to come out with a compelling design for one. There have been Microsoft-based tablets on the market for years - but they were clunky and hard to use and no one bought them. Then came the iPad and it was a big hit. Microsoft had *yet* another opportunity to come out with their own design and be a strong number 2. However, once again, they are late and if there is a #2 in this market, it's going to be Google again. Looks like yet another trend Microsoft is missing out on.

We don't need to look anywhere else for the reasons for Microsoft's stagnation. Their leadership has displayed a complete lack of vision. Had they even gotten on to one of these trends early, they'd be doing a lot better and partners would be flocking to them (regardless of how upset they were with Microsoft's double-dealing). About the only thing Microsoft has done right in this time frame is in gaming - the Kinect is a truly groundbreaking product. Let's see if they can use it to become the dominant player in that space.

That is what sets Apple and Microsoft apart. It isn't the quality of the engineers - it's the lack of vision of the leadership team. Assuming that Jobs isn't the only one with vision at Apple, they should do fine. Once you are as big as Apple (or Microsoft or Google), you don't need to originate trends to be successful. All you need to be able to do is to recognize early that some product area is going to be hot and quickly jump on the bandwagon.

- HCE

[KPO'M]

Excellent post. Steve Jobs is one of the greatest businessmen and creators of all time. He is named in 313 patents, including one on a glass staircase. He was the first and so far one of the only tech company CEOs to truly appreciate industrial design.

[peter]

Steve Jobs is the mountain;
Steven Elop is the flea

[peter]

@Baron95,
Steve Jobs is the greatest visionary;
Bill Gates is the greatest copycat.

[peter]

Jorma Olilla's fate will be more like Ken Lewis or Kenneth Lay. He is doomed if he can not fire Elop before he steps down.

[Peter]

@Baron95,
Steve Jobs is the greatest visionary;
Bill Gates is the greatest copycat.
Tim Cook will buy nokia at 70% premium.

[Timo]

Apple is one man show and without that one man, it will soon collapse like all the other bullshit overhyped yank companies so many times before. Like it already did once in the 90's.

It is the fancy designs and gimmicks that makes you marketing types so gaga when it comes to Apple, ignoring the real makers and shakers in this world.

Apple is small potatoes compared to real Megas, like Siemens, 50000 vs. 400 000 workers or ThyssenKrupp with 200K.

[@rodrigottr]

Tomi

I believe that is the first time me and you disagree but I have some words to say about how to judge a good or bad CEO.

And those words are about leadership and master-disciple relationship.

Nietzsche on Also Sproach Zaratustra said some words about the master-disciple relationship. He said that if the disciple doesn't surpass its master then he has failed on learning, and also his master on teaching.

Its also said that a good leader is able to create good successors. So that it doesn't makes the others depend on him and that his work, values, cause, organization can live on after his work and contribution.

Until now we can't judge by sure how was SJ's work on that task. But is possible to say that succession is one of Apple's weakest points.

That is even more preoccupying when a vision change is needed by Apple. And I don't want to write about it here but I would like very much if you read my words on my blog:

http://apitoemercado.blogspot.com/2011/09/apples-situation-and-why-it-tends-to.html

Anyway I think it is to early to say he was the best CEO ever when the results of his work are not entirely known yet as they will remain for very very long.

My belief, and I believe it is very easy to understand why, is that one of the most important tasks a leader can do is preparing better successors. Also as one of the most important things on a mans life is to raise well his kids. That is how a man can have a legacy and live eternally otherwise his life and passage through the world can be pointless or forgotten. Well, of course some people can think different but I believe this metaphor explains how important is on a leader life to prepare successors that is comparable to raising kids for a father and his family.

And on that task, on my guess, is were SJ failed.

[Mikko Martikainen]

@rodrigottr

I understand your point about creating successors. I read your blog post as well. However, I disagree with your interpretation of the situation. Do you know what has been done at Apple to prepare for the day when Steve Jobs is no longer around? I don't, apart from a few tidbits, and that being the case I can't say that Steve didn't do enough. I know that they have created "Apple University" ( http://www.yalealumnimagazine.com/blog/?p=9974 and http://www.macrumors.com/2011/05/07/steve-jobs-reaction-to-mobileme-launch-and-other-anecdotes/):

"Steve Jobs hired dean of Yale School of Management Joel Podolny to run the Apple University, an internal group also featuring business professors and Harvard veterans that are writing a series of case studies to prepare employees for the life at Apple after Jobs. These case studies focus on Apples recent business decisions and internal culture, they are exclusive to employees and taught by top executives like Tim Cook and Ron Johnson."

Also, Tim Cook has been at the helm for a considerable amount of time already during the sick leaves, running the company and actually making the decisions. So, at least these two tidbits paint a picture where Steve Jobs has done considerable work to ensure the future success of Apple. I also think it is possible that the immense cash reserves Apple have is another one of Steve's succession plan details: Apple is in a position to fulfill practically any vision the new leadership has without fear of going under.

Of course, replacing a leader and visionary like Steve is not an easy task. If we look at his accomplishments, as Tomi did in his post, it is very likely we will not see a leader of the same caliber during our lifetime. Is it, then, his fault that he couldn't "raise genius leaders" to follow his footsteps? Is it the fault of every genius (Einstein, Tesla, Galilei etc.) that they do/did not produce a following of geniuses of equal capacity? I do not think so. I think it is most important for each person to act to his or her full potential, and to pass on as much as possible. But certain things are not as easily transmitted as some others, and creativity is certainly one of the really difficult ones.

For a slightly different view, The Ad Contrarian:

http://adcontrarian.blogspot.com/2011/08/advertising-and-future-of-apple.html

[@rodrigottr]

@LeeBase @Mikko

Of course is too early do say SJ failed on that. But is also too early to say the opposite. That is why I said that is just my guess. I was just saying that is too early to tell he is the best CEO ever when the results of his work are not entirely know yet. And one of the most important results that is his legacy.

But I had that guess based on how Apple showed itself about succession. All the buzz and anxiety around SJ succession when everything else on Apple usually happens like a clockwork. Then the delay on iPhone 5. Then the choice of Tim Cook. I believe Tim Cook is an evidence that SJ failed on creating visionaries like him. My impression about Tim Cook is that he is a Ninja as a execution kind of person. But not a creation kind of person. When all we like and expect from Apple is about creativity. About reinventing things.

And I'm a bit skeptical about this speech of "is not his fault if there are no genius like him"

What if it is?

We all know SJ is obsessive about control. Even the fact that he is still on work even if he looks more like a walking dead shows how he is obsessive about control. Controlling Apple seems more important than his last years of life for SJ. (I really don't believe he can live more then 5 years)

Now what about how controlling kind of people stimulates creativity on his subordinates?
Creativity is also about contesting the current way of thinking. Now, how good are SJ subordinates on contesting SJ's way of thinking? Does SJ shows himself open to be contested or humiliates those who think different them him?

What we know about SJ is that he always had that tyrant style. If he tyrannizes even his consumers with that iTunes crap we imagine his coworkers.

So the speech "it is not his fault if there is no other genius" can't be entirely true when this genius has an EGO that castrates other genious around him.