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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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"The mantra of reinventing management from Peter Drucker to Gary Hamel has been to preach decentralization and transparency," Sutton says. "And then there's Apple. It's amazingly centralized and nontransparent, not from the outside and not even from the inside. In some ways, Apple has thrived because it's a contrary organization. It's centralized, but the pieces all fit together. Information does come up from the bottom and reaches the top. There's very strong punishment and reward control. It has a narrow product line, so the focus is clear and management isn't overloaded."

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Another false trail that some people follow from Apple: the "cool company" concept.

"Apple's cool, but that's not exactly something others can learn how to do," he says. "And besides, there have always been cool companies, and they always flame out or cool off."

At the same time, Sutton says, so many American companies are so bad – and have deservedly earned their customers' scorn for being so bad – that Apple does provide some practical lessons.

"Do simple things well," Sutton says. "It sounds easy, but it's really hard. Get rid of dysfunctional politics. You can see how that has tormented large American companies, like the auto industry. Let outliers into your organization; welcome diversity. The fact is, Steve Jobs couldn't get hired in most American companies, much less be the CEO. He couldn't pass through the interview screens. Stay curious. Cultivate peripheral vision in your organization. Learn how to reframe your own offerings by looking both broadly and deeply across other industries. Recognize what you don't know and find others who know more than you. Build a team at the top that has real power and talent. And don't underestimate the power of strong cultural control. Find a way to create the old-fashioned unity of purpose."

I call Regis McKenna, the dean of marketing and public relations in Silicon Valley. Mr. McKenna's involvement with Apple and Jobs goes back to 1977, when Jobs hired Regis McKenna Inc. for marketing help on a referral from Intel. By 1977, McKenna had already worked with two semiconductor companies in the valley. One of the first things his firm did for Apple was to design the company's logo – the famous "rainbow" apple with a bite out of it.

"Apple may have been founded in the mid-1970s," McKenna tells me, "but the company and Steve are both children of the 1960s. Bob Dylan may have said, 'Don't trust anyone over 30,' but Steve Jobs said, 'Don't trust a computer you can't lift.' Steve has carried that identification with him, and it's part of the culture. It was the basis of the 'Think Different' ad campaign that featured the iconic figures of the 1960s. Another part of that 1960s sensibility: Apple has always gone beyond the traditional system of commercial values."

The point McKenna is making is a crucial one, because it goes to the culture – the soft stuff – that is embedded in Apple's DNA. The company is built on the proposition that the status quo is the enemy. That big and boring and dull – whether as a description of a company's products and services or as a way of working – are simply bad. Bad for innovation, bad for people, bad for customers, bad for business.

"Apple has always had a rebellious culture, even as it's grown in size and success," McKenna says. "But it has always rebelled in a way that makes it a corporate model based on style and class and design. That also makes them uniquely American, a company that reflects the style and character of this country."

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