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Sculley was a success at Apple: he took annual revenues from $0.98bn in 1983 to $8.00bn in 1993. After Steve Jobs's Macintosh flopped, Sculley saved it with the

by scholia 11y ago

Sculley was a success at Apple: he took annual revenues from $0.98bn in 1983 to $8.00bn in 1993. After Steve Jobs's Macintosh flopped, Sculley saved it with the Mac II. Jobs rejoined Apple in 1997 when turnover was $7.078bn, after which turnover declined to $5.36bn in 2001 before recovering to $8.28bn in 2004. So Apple did better when Sculley was in charge ($0.98bn in 1983 to $8.00bn in 1993) than in the next decade, when he wasn't ($8.00bn in 1993 to $6.02bn in 2003). What Sculley didn't do was successfully introduce non-Mac products (iPod, iPhone, iPad), which Jobs did. The jury is out on whether Cook can do that too.....

whatever_dude 11y ago
To me there's a fascinating story there. Sculley was working for the today and Jobs for the tomorrow. Doing either by itself is disastrous: living for today means the company doesn't innovate and once its market momentum slows down it'll die (RIM, Nokia?), and thinking too far ahead mean they cannot polish their products and get the most they can of the current market either. Apple without the return of Jobs wouldn't exist - it wouldn't have innovated in anything. But without Sculley to give it some solid ground for a few years, it would probably have gone bankrupt. Next few years will be interesting.
- snowwrestler 10y ago
  Remember that the Newton--which as a product concept was far ahead of its time--was developed and launched under Sculley. So was OpenDoc, the Apple "Advanced Technology Group," Quicktime, Quicktime VR, etc. So I would not say that Apple failed to think about the future under Sculley. It's not easy to understand or describe why Jobs succeeded as wildly as he did in his 2nd tour at Apple. If it was, everyone would be doing it. :-) One thing I rarely see discussed is the importance of the time in which Steve Jobs succeeded. The success we ascribe now, in hindsight, to Jobs' incredible leadership, might be in part the result of just a good match between what Jobs could do, and what could succeed in the market at that time. His principles did not really change that much, actually--he always believed in owning as much of the tech stack as he could, and in producing integrated products with custom hardware and software. That approach was too expensive and inflexible to compete against Microsoft PCs the first time he was at Apple. It failed at NeXT. But it succeeded wildly the second time around, at Apple. Would Apple be doing much better now under Steve Jobs' leadership? I don't think it's entirely clear. Some aspects of Apple's success continue to match up with Jobs' vision, but the areas in which Apple seems to have the most challenges--services and interoperable ecosystems--were never really Jobs' strong suits.
  - basch 10y ago
    >It's not easy to understand or describe why Jobs succeeded as wildly as he did in his 2nd tour at Apple. because iOS and Aluminum. 1) Inertia. The flick page scrolling single handily changed touch. I would bet against the iPhone ever taking off without it. 2) Locked down app store. The OS itself is never taken down or modified by apps. 3) Power management. Apps weren't allowed to stay running, and even now silently kill in the background with little visual indication. Milling computers out of Aluminum was a very innovative decision.
  - whatever_dude 10y ago
    To your last point, I think it's less of a factor of the person in the lead or his ideas, and more about what was expected of that person. Sculley was more of a manager, Jobs was a dictator. Once Jobs was back, he was somehow able to lead the company in a near-authoritarian way, and despite many flukes, it allowed the company to try many things that would not be readily accepted by an all-powerful committee. One authoritarian that is wrong half the time is better than a committee that is not-wrong 100% of the time. The former tries a bunch of stuff, the latter doesn't really try anything. (And to me that's what got RIM and Nokia killed).
    - snowwrestler 10y ago
      I don't know that I would agree that Apple is not trying anything. The Apple Watch, Apple Pay, Swift, HealthKit and ResearchKit, HomeKit--potentially a car... if anything, the critique against Cook seems to be that Apple is trying too many things and losing focus. I agree that Jobs was a special talent who could command the organization. I think Cook is emphasizing collaboration because he knows he can't lead Apple the same way Jobs could. Probably no one can.
  - yuhong 10y ago
    On the other hand, there was of course QuickDraw GX, PowerTalk etc which was directly affected by turf wars and the like. I wonder if a good VP of engineering would have helped Apple back in the Sculley era.
- nostrademons 10y ago
  a16z puts this as "Founding CEOs are better at finding product cycles, while professional CEOs are better at maximizing product cycles." http://a16z.com/2010/04/28/why-we-prefer-founding-ceos/ http://a16z.com/2010/04/28/why-we-prefer-founding-ceos/ The story plays out over and over again in the tech industry. Larry & Sergey were great innovators but terrible managers; if you ask Googlers who were there in 2000-2001, Larry made some very basic management gaffes that almost destroyed the company. Eric Schmidt's genius was in being able to maximize the value of the Search product cycle while still giving the founders enough latitude to champion innovative new products like GMail, Maps, Android, Chrome, and YouTube. And then he turned the reigns back over to Larry when the Search product cycle was just about maximized, because the industry was facing a period of unusual uncertainty that required the ability to spot new product cycles. With Cisco, the visionary founders were forced out by VCs, and as a result, the company has had to buy innovation by spinning off startups, letting them innovate, and then folding them in through an acquisition process. Microsoft remained undisputed king of the PC industry for decades under Bill Gates, but as soon as he left, innovation basically stopped. Ballmer managed to dramatically increase revenues and has built something like 6-8 billion-dollar businesses, but there were no new product cycles under him.
ardit33 11y ago
Those numbers are very misleading when you understand that the industry/market was expending at such rapid pace, that even a poor/marginal player could do well. If you look more in the way what was possible, Apple was mostly a marginal player, and its peak was in 93. Eventually the market share started declining rapidly even though the industry was still increasing. https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjS9q-hyMDMAhXBCD4KHVAvALsQjRwIBw&url=http%3A%2F%2Fwww.theoligarch.com%2Fmicrosoft_vs_apple_history.htm&bvm=bv.121099550,d.cWw&psig=AFQjCNEA5Ny1edFvnMtYtra1g7UHTvKVYQ&ust=1462456250511865 https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=image...
- scholia 10y ago
  The market expanded much more dramatically in the 1990s, after Sculley left. Of course, that massive expansion was kicked off by Windows 3.1 and then Windows 95. Microsoft's annual turnover went from $3.75bn in 1993 -- less than half Apple's -- to $32.19bn in 2003, which was 5x more than Apple. Dell is perhaps an even better illustration. Its turnover grew from $2.9bn in 1993 to $35.26bn in 2003. Apple's "market share started declining rapidly" after 1995 (when it reached $11.06bn) because it couldn't compete with Windows 95.
  - hollerith 10y ago
    >Microsoft's annual turnover went from $3.75bn in 1993 -- less than half Apple's -- to $32.19bn in 2003, which was 5x more than Apple. OK, but remember that Microsoft's only significant "variable costs" (cost per unit sold) were the costs of stamping CDROMs and providing basic tech support, whereas Apple (and Dell) incurred all the variable costs involved in making whole computers, so Microsoft's "gross margins" (turnover minus cost of goods sold) was much higher than Apple's. Supermarket chains have tremendous turnover, but their gross margins are around 1% in contrast to Microsoft's margins in excess of 30% in the 1990s -- and Apple's sky-high margins of recent years -- and IBM's sky-high margins before they lost their dominance during the rise of the personal computer in the 1980s. My point (since we are talking about CEO performance) is that Microsoft was probably much more profitable than Apple already in 1993 although the ratio definitely increase in the late 1990s as you point out.
kabdib 11y ago
Sculley sucked at Macintosh, too. Around 1991 my parents asked me what Mac they should buy. And I couldn't tell them; there were like 20-30 models, all slightly different and with no way to make clear comparisons. That's just the marketing / planning side of things. He wasn't that great at setting directions for technology, either.
- gkya 10y ago
  That sounds very Samsung to me. What made Apple the thing it is today is their pinpoint and high quality products for each sector they're in, and their willingnes to take initiative and introduce radically different stuff.
__john 11y ago
> after which turnover declined to $5.36bn in 2001 I'm sure the dotcom bubble played a role in this (i.e. Job's leadership however effective or ineffective it was, wasn't solely to blame). *For those (like me) who didn't know, turnover is the net sales generated by a business,

by scholia 11y ago

whatever_dude 11y ago

To me there's a fascinating story there. Sculley was working for the today and Jobs for the tomorrow. Doing either by itself is disastrous: living for today means the company doesn't innovate and once its market momentum slows down it'll die (RIM, Nokia?), and thinking too far ahead mean they cannot polish their products and get the most they can of the current market either. Apple without the return of Jobs wouldn't exist - it wouldn't have innovated in anything. But without Sculley to give it some solid ground for a few years, it would probably have gone bankrupt. Next few years will be interesting.

snowwrestler 10y ago
Remember that the Newton--which as a product concept was far ahead of its time--was developed and launched under Sculley. So was OpenDoc, the Apple "Advanced Technology Group," Quicktime, Quicktime VR, etc. So I would not say that Apple failed to think about the future under Sculley. It's not easy to understand or describe why Jobs succeeded as wildly as he did in his 2nd tour at Apple. If it was, everyone would be doing it. :-) One thing I rarely see discussed is the importance of the time in which Steve Jobs succeeded. The success we ascribe now, in hindsight, to Jobs' incredible leadership, might be in part the result of just a good match between what Jobs could do, and what could succeed in the market at that time. His principles did not really change that much, actually--he always believed in owning as much of the tech stack as he could, and in producing integrated products with custom hardware and software. That approach was too expensive and inflexible to compete against Microsoft PCs the first time he was at Apple. It failed at NeXT. But it succeeded wildly the second time around, at Apple. Would Apple be doing much better now under Steve Jobs' leadership? I don't think it's entirely clear. Some aspects of Apple's success continue to match up with Jobs' vision, but the areas in which Apple seems to have the most challenges--services and interoperable ecosystems--were never really Jobs' strong suits.
- basch 10y ago
  >It's not easy to understand or describe why Jobs succeeded as wildly as he did in his 2nd tour at Apple. because iOS and Aluminum. 1) Inertia. The flick page scrolling single handily changed touch. I would bet against the iPhone ever taking off without it. 2) Locked down app store. The OS itself is never taken down or modified by apps. 3) Power management. Apps weren't allowed to stay running, and even now silently kill in the background with little visual indication. Milling computers out of Aluminum was a very innovative decision.
- whatever_dude 10y ago
  To your last point, I think it's less of a factor of the person in the lead or his ideas, and more about what was expected of that person. Sculley was more of a manager, Jobs was a dictator. Once Jobs was back, he was somehow able to lead the company in a near-authoritarian way, and despite many flukes, it allowed the company to try many things that would not be readily accepted by an all-powerful committee. One authoritarian that is wrong half the time is better than a committee that is not-wrong 100% of the time. The former tries a bunch of stuff, the latter doesn't really try anything. (And to me that's what got RIM and Nokia killed).
  - snowwrestler 10y ago
    I don't know that I would agree that Apple is not trying anything. The Apple Watch, Apple Pay, Swift, HealthKit and ResearchKit, HomeKit--potentially a car... if anything, the critique against Cook seems to be that Apple is trying too many things and losing focus. I agree that Jobs was a special talent who could command the organization. I think Cook is emphasizing collaboration because he knows he can't lead Apple the same way Jobs could. Probably no one can.
- yuhong 10y ago
  On the other hand, there was of course QuickDraw GX, PowerTalk etc which was directly affected by turf wars and the like. I wonder if a good VP of engineering would have helped Apple back in the Sculley era.
nostrademons 10y ago
a16z puts this as "Founding CEOs are better at finding product cycles, while professional CEOs are better at maximizing product cycles." http://a16z.com/2010/04/28/why-we-prefer-founding-ceos/ http://a16z.com/2010/04/28/why-we-prefer-founding-ceos/ The story plays out over and over again in the tech industry. Larry & Sergey were great innovators but terrible managers; if you ask Googlers who were there in 2000-2001, Larry made some very basic management gaffes that almost destroyed the company. Eric Schmidt's genius was in being able to maximize the value of the Search product cycle while still giving the founders enough latitude to champion innovative new products like GMail, Maps, Android, Chrome, and YouTube. And then he turned the reigns back over to Larry when the Search product cycle was just about maximized, because the industry was facing a period of unusual uncertainty that required the ability to spot new product cycles. With Cisco, the visionary founders were forced out by VCs, and as a result, the company has had to buy innovation by spinning off startups, letting them innovate, and then folding them in through an acquisition process. Microsoft remained undisputed king of the PC industry for decades under Bill Gates, but as soon as he left, innovation basically stopped. Ballmer managed to dramatically increase revenues and has built something like 6-8 billion-dollar businesses, but there were no new product cycles under him.

ardit33 11y ago

Those numbers are very misleading when you understand that the industry/market was expending at such rapid pace, that even a poor/marginal player could do well. If you look more in the way what was possible, Apple was mostly a marginal player, and its peak was in 93. Eventually the market share started declining rapidly even though the industry was still increasing. https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjS9q-hyMDMAhXBCD4KHVAvALsQjRwIBw&url=http%3A%2F%2Fwww.theoligarch.com%2Fmicrosoft_vs_apple_history.htm&bvm=bv.121099550,d.cWw&psig=AFQjCNEA5Ny1edFvnMtYtra1g7UHTvKVYQ&ust=1462456250511865 https://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=image...

scholia 10y ago
The market expanded much more dramatically in the 1990s, after Sculley left. Of course, that massive expansion was kicked off by Windows 3.1 and then Windows 95. Microsoft's annual turnover went from $3.75bn in 1993 -- less than half Apple's -- to $32.19bn in 2003, which was 5x more than Apple. Dell is perhaps an even better illustration. Its turnover grew from $2.9bn in 1993 to $35.26bn in 2003. Apple's "market share started declining rapidly" after 1995 (when it reached $11.06bn) because it couldn't compete with Windows 95.
- hollerith 10y ago
  >Microsoft's annual turnover went from $3.75bn in 1993 -- less than half Apple's -- to $32.19bn in 2003, which was 5x more than Apple. OK, but remember that Microsoft's only significant "variable costs" (cost per unit sold) were the costs of stamping CDROMs and providing basic tech support, whereas Apple (and Dell) incurred all the variable costs involved in making whole computers, so Microsoft's "gross margins" (turnover minus cost of goods sold) was much higher than Apple's. Supermarket chains have tremendous turnover, but their gross margins are around 1% in contrast to Microsoft's margins in excess of 30% in the 1990s -- and Apple's sky-high margins of recent years -- and IBM's sky-high margins before they lost their dominance during the rise of the personal computer in the 1980s. My point (since we are talking about CEO performance) is that Microsoft was probably much more profitable than Apple already in 1993 although the ratio definitely increase in the late 1990s as you point out.

kabdib 11y ago

Sculley sucked at Macintosh, too. Around 1991 my parents asked me what Mac they should buy. And I couldn't tell them; there were like 20-30 models, all slightly different and with no way to make clear comparisons. That's just the marketing / planning side of things. He wasn't that great at setting directions for technology, either.

gkya 10y ago
That sounds very Samsung to me. What made Apple the thing it is today is their pinpoint and high quality products for each sector they're in, and their willingnes to take initiative and introduce radically different stuff.

__john 11y ago

> after which turnover declined to $5.36bn in 2001 I'm sure the dotcom bubble played a role in this (i.e. Job's leadership however effective or ineffective it was, wasn't solely to blame). *For those (like me) who didn't know, turnover is the net sales generated by a business,