Steve Jobs – the man was fallible

Steve Jobs at the WWDC 07

Image via Wikipedia

As a student, at Reed College, Steve Jobs came to believe that if he ate only fruits he would eliminate all mucus and not need to shower anymore. It didn’t work. He didn’t smell good. When he got a job at Atari, given his odor, he was swiftly moved into the night shift, where he would be less disruptive to the nostrils of his fellow colleagues.

The job at Atari exposed him to the earliest generation of video games. It also exposed him to the world business and what it meant build up and run a company. Some years later, with Steve Wozniak, he founded Apple in Silicon Valley (of course in a garage) and quite quickly, although just in his late twenties, grew to be a management phenomenon, featuring in the legendary business book by Tom Peters and Bob Waterman “In Search of Excellence”.

But, in fact, shortly after the book became a bestseller, by the mid 1980s, Apple was in trouble. Although their computers were far ahead of their time in terms of usability – mostly thanks to the Graphical User Interface (based on an idea he had cunningly copied from Xerox) – they were just bloody expensive. Too expensive for most people. For example, the so-called Lisa retailed for no less than $10,000 (and that is 1982 dollars!). John Sculley – CEO – recalled “We were so insular, that we could not manufacture a product to sell for under $3,000.” Steve Jobs was fantastically able to assemble and motivate a team op people that managed to invent a truly revolutionary product, but he also was unable to turn it into profit.

When Jobs was fired from Apple – in 1985 – CEO John Sculley took control. Sculley is often described as a bit of a failure, because “nothing revolutionary came out of Apple under his watch”, “he could have done so much more with the company” and especially for “being stupid enough to boot out a genius like Steve Jobs”. However, the years after Sculley took over were some of Apple’s most profitable. The man did something right, and that was focus on exploiting the competitive advantage that Apple had built up.

In management research, following terminology cornered by the legendary Stanford professor Jim March, we often say that firms have to balance exploration with exploitation. Exploration refers to developing new sources of competitive advantage and growth. Exploitation refers to making money out of them. Steve Jobs was “insanely great” at exploration, but not – at the time – at exploitation. Sculley was.

Now Steve Jobs is a legend. And rightly so; our world literally would have looked different without him. However, what Steve Jobs’ legendary status also tells me is that we – mere mortals – are inclined to overestimate the omnipotence of CEOs. We overdo it when we ascribe the failure of an entire company to just one man or woman (e.g. Enron’s Jeff Skilling) but also when we ascribe the entire success of a company to one individual.

Steve Jobs wasn’t omnipotent (John Sculley had qualities Jobs didn’t) and he wasn’t always right (eating only fruits does not eliminate the need for an occasional shower). His day-to-day influence on Apple over the last years must have been limited, given his rapidly and severely deteriorating health. If anything, he simply would not have been able to be around enough to control and take care of everything. Nevertheless, the company did well in spite of his absence. And of course that is his laudable achievement too; he managed to build a company that could do well without him. And perhaps that may prove to be his best business lesson after all: how a great leader eventually makes himself superfluous.

4 Comments on “Steve Jobs – the man was fallible”

  1. stevepostrel says:

    Your general point is well-taken, but in the specifics of Sculley’s impact, you might want to take a look at

    Maximizing NPV and maximizing short-run earnings are not the same thing.

  2. I believe that it was G. K. Chesterton who said that when a man becomes famous, we want to know what kind of dog he has; and the fact that he owns such an animal is now somehow an important element in the circumstances of his notoriety. When Jobs was 20, he was a fruitarian. So what?

    Perhaps the best tribute came from The Onion: Steve Jobs was the last man in America who knew what the fuck he was doing; Jobs had the ability to get up every day, think clearly about his goals, and worked to achieve them. No one else in America seems able to do that. The Onion’s humor and hyperbole being as it is, the grain of truth remains: whatever his foibles, Jobs was a successful visionary. He orchestrated the creation of not just new products, but new media.

  3. Freek Vermeulen says:

    My point was certainly not that Sculley did everything right; I am sure he didn’t (he certainly seemed to think he could have done better – in hindsight).
    My point was also not that Steve Jobs was not a genius; I am pretty sure he was.
    Nor was my point that maximising short run earnings is the way to go; maximising a company’s NPV requires a balance between both exploitation and exploration.
    My point was merely that, in spite of his obvious genius, Steve Jobs did not have the ability to walk on water, i.e. he probably was not perfection personified.
    I have indeed – mostly in private messages – been alerted to the (anticipated) fact that some think that is even a “controversial statement” (to provide a polite translation). Which, I am afraid, strengthens me in my believe that we humans are irrealistically prone to deify successful CEOs.

  4. […] is just one of the comments I received on my earlier piece “Steve Jobs – the man was fallible” (also published on my Forbes blog). Of course, this was not unanticipated; having the audacity […]

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