The Apple effect: How Steve Jobs & Co. won over the world
UPDATE: Steve Jobs passed on Wednesday. In this cover story, first published last month, Alan Webber explores what made Steve Jobs (and Apple) exceptional. Apple knew what consumers didn't want and understood the power of being itself. A look at what the company can teach corporate America.
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First, Apple, which despite its 45,000 employees still seems to many observers to be some kind of upstart operation, briefly topped ExxonMobil as the most valuable company in the world – an achievement almost shocking enough to make the famous "1984" Super Bowl ad look more like a prophecy than a commercial.Skip to next paragraph
In Pictures How Apple won the world
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Second, with the US economy mired in an unrelenting recession and the US government unable to resolve its debt-ceiling woes, the suggestion was floated that Apple, with its huge cash reserves of $76 billion, was actually in a position to bail out the federal government.
And third, there came the announcement from Jobs that he was stepping down (or more accurately, stepping up) from his job as chief executive officer to be chairman of the board. Jobs's announcement, more than the other two events, triggered questions, speculation, and an outpouring of concern for both Jobs and Apple.
Just how serious is Jobs's ill health? What are the implications for Apple of his decision to remove himself from day-to-day operations? How strong are Tim Cook and the rest of the team? Can they keep coming up with the incredible string of magic devices and experiences that Jobs has produced since his return to the company in 1997?
Good questions, all of them.
But there may be another question, even more relevant: As Jobs leaves his CEO post, marking a milestone in the long, strange trip that has always been the Apple journey, what can the rest of American business learn? If we were to use this transition at Apple as a chance to reflect, are there management lessons, lessons of philosophy and practice, that US (and other) companies can benefit from?
After all, in the 20 years since Jobs lauded that HBR article, the US economy and large US companies have come full circle. Back then, as Mr. Rappaport and Mr. Halevi reported, we were worried about the challenge from Japan. Today, it's China looming as an economic rival that dominates the headlines. In 1991, manufacturing jobs were moving overseas and the concern was the hollowing out of American industry. Today, with 9.2 percent unemployment, much of it due to losses in the US manufacturing base, those concerns have become a reality.
We have an economy that seems locked into recession, companies that make huge profits without producing goods or services that amaze and astound customers, and workers who, if they are fortunate enough to have jobs, report overwhelmingly that they hate them (unlike the Apple story, where people love their jobs and customers express their admiration for their other Jobs – Steve).
Once again, it seems, we've come to what legendary former Intel CEO Andy Grove called a "strategic inflection point": a time when a major change in the competitive environment requires a company – or an economy – to make a major adaptation to new circumstances, or risk extinction. Change or die.
So what can Apple teach us going forward – not for Apple's sake, but for ours?
"A better question might be what Apple can't teach American business," says Prof. Bob Sutton. Dr. Sutton has taught at Stanford for 28 years, grew up in the area, and even remembers as a youth delivering pizzas in Silicon Valley before it was Silicon Valley.