Steve Jobs: Master of Innovation

UPDATED: May 4, 2010
PUBLISHED: May 4, 2010

On a foggy, cool day in January, Steve Jobs and Apple are bidding to change the world again. Jobs sits comfortably in a leather chair in front of a rapt San Francisco auditorium crowd, a large video screen tracking his hand movements on a thin, slate-looking object resting comfortably in his hands. Dressed in his trademark blue jeans, dark turtleneck, and New Balance shoes, the wire-framed Apple co-founder and culture-shaper peppers his speech with “remarkable, awesome” and “amazing” references to his company’s latest new wave—a notebook device called the iPad. This “truly magical and revolutionary product” fills a category need between his company’s successful laptop and iPhone and iPod business lines, Jobs says.

Sterling Performance

Jobs has established a rock-star-like persona around colossal, innovative successes that dwarf a couple of high-profile failures. The 55-year-old is personal, smooth. He exudes, well, a cool vibe.

Before his product announcement, he ticked off some heady numbers: In January, Apple sold its 250 millionth iPod; Jobs’ self-proclaimed “mobile-devices” company now has 284 retail stores that attracted 50 million visitors in the fourth quarter of 2009 alone; its “apps” store offers more than 140,000 software applications for its mobile products (more than 3 billion downloaded in the store’s first 18 months of operation); and Apple revenue makes it a more than $50 billion company.

The company’s iPod and iTunes store “changed the way we discover, play and purchase music,” Jobs says. In February, the company announced that its iTunes store recorded its 10 billionth song download (Johnny Cash’s “Guess Things Happen That Way,” purchased by a Woodstock, Ga., customer).

Those are staggering numbers for a company started by two smart, scruffy Northern California kids in their 20s who lacked any business training or college degrees—particularly since the company in its best years has captured about 10 percent or less of the personal-computer market (although it has historically dominated the high end).

Pursuit of Perfection

The American business success collective has volumes of examples of visionaries who have met pressing societal needs or created rich new markets. Among those pages, Jobs is a tutelary, a rough-about-the-edges company founder who has rattled the world, was banished from the kingdom he built during tumultuous times, and then returned to rescue and take Apple to loftier heights. During the past 34 years, he has overcome ambitious missteps, competitive obstacles and recent health issues to change the way people work, communicate and entertain themselves. Since rejoining Apple in 1996 after an 11-year exile, he has rescued it from near collapse, introduced meteoric products such as the iPod and iPhone, and cemented his role as the oracle of consumer tech gadgetry.

“Apple and Jobs are uniquely capable of defining the ‘whole package’ as they approach a new technology,” Gadi Amit tells SUCCESS. Amit is founder and principal designer of the San Francisco-based NewDealDesign LLC, a strategic industrial design agency that includes Dell, Fujitsu and Nokia among its clients. “They are building a whole experience and culture around that technology. As such, there is no distinction in their thinking between marketing, sales, branding or product development. It’s a coherent offering that has multifaceted value to many.”

In naming Jobs “CEO of the Decade” in November 2009, Fortune magazine said history will remember him as “an individual who relentlessly pursued new opportunities,” chasing “new possibilities without being deterred by whatever obstacles he encountered.” Although he has assembled and trained a formidable management team, his innovative will is deemed tantamount to Apple success. In 2007, Barron’s proclaimed him the most valuable chief executive in the world when it estimated that a Jobs’ departure from Apple would wipe out about $20 billion of the company’s market cap.

His fierce determination and pursuit of product perfection is etched in the company’s DNA. “We’re on the face of the Earth to make great products,” Apple chief operating officer Tim Cook said during a 2009 earnings conference call. Cook, a successor in waiting, ran the company while Jobs was on leave recovering from a liver transplant in early 2009, the latest in a series of medical setbacks that have plagued Jobs since a 2003 cancer diagnosis.

Moving the World Forward

On the same day Jobs announced the details of the iPad, his Apple co-founder Steve Wozniak addressed a smaller, less formal group at the Laxson Auditorium in Chino, Calif. The brilliant engineer spoke about the late 1970s and early ’80s, when he embodied a new way of thinking, far removed from the world of mainframes and minicomputers, when he and Jobs helped birth the personal-computer industry.

The name Apple Computer was plucked in part from the fruit in the valley’s remaining orchards.

“I was turned on that little guys were going to do something of more value than the big corporations,” recalls Wozniak, who retired from Apple in 1985. “My friend Steve Jobs… was always interested in doing things that would change the world. He was a move-the-world-forward kind of guy.”

Jobs has always adapted, moved forward. While he dropped out of Reed College in Portland, Ore., because he found the curriculum a poor fit for him, he cites a calligraphy course he audited after dropping out as being instrumental in his career.

“I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great,” Jobs told Stanford University graduates during their 2005 commencement. “None of this had even a hope of any practical application in my life. But 10 years later, when we were designing the first Macintosh computer, it all came back to me, and we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, it’s likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course, it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backward 10 years later.”

Apple Seeds

To fully understand the impact of Apple and Jobs, a bit of time travel is required. Jobs and Wozniak met in 1970; Wozniak was 21 and Jobs 16. Northern California’s Santa Clara Valley (pre-Silicon Valley), where Jobs and Wozniak grew up, was a churning place for engineers and their ilk, fueled by Lockheed’s booming defense business. Computing power was confined to gigantic, expensive machinery outside the realm of most businesses. The most basic of today’s processes—like spreadsheets, inventory control and sales projections, and the basic mathematics used to run all businesses—were time-consuming, paper-and-brain operations.

Wozniak worked for Hewlett-Packard and Jobs at Atari as they scrambled with their groundbreaking work. He and Wozniak met regularly at informal Homebrew Computer Club meetings where locals compared notes and ideas in the bubbling information technology pool, as well as design and production techniques for the nascent computer industry. But they didn’t impress the other engineers and hobbyists who didn’t think much of Wozniak’s initial “cigar box” circuitry that would morph into the Apple I, Michael Moritz explains in his 1984 book Return to the Little Kingdom: Steve Jobs, the Creation of Apple, and How It Changed the World. At that point, not even Wozniak could comprehend where the seeds of his work might lead.

On April Fools’ Day in 1976, Wozniak, Jobs and Jobs’ former Atari colleague Ron Wayne signed papers forming Apple Computer (the name plucked in part from the fruit in the valley’s remaining orchards). Wayne resigned 12 days later because he decided the financial risk was too great. While many other players and backers had a hand in Apple’s rise as a player in the technology sector, it was Wozniak’s brilliance and Jobs’ dogged determination that were the engines. Jobs scavenged for parts and hounded “Woz” to finish the Apple I and then the Apple II, which Wozniak single-handedly designed. It ignited the personal-computer revolution in 1977.

Impact and Timing

“We were in the right place at the time,” Wozniak said in his Chino speech. While the Apple II was a leap forward and introduced color and pixels to the computer, Wozniak says Visicalc, which he calls the first “killer app,” increased demand for the Apple II. Visicalc, a third-party program developed on a loaned Apple II, for the first time enabled users to do budgeting and projections on a computer.

Fortunate timing helped, but it was Jobs’ vision that moved Apple into the vortex of an emerging industry. “What Steve’s done is quite phenomenal,” Microsoft founder Bill Gates said during a rare joint appearance with Jobs at a D5 industry conference in 2007. “If you look back to 1977, that Apple II computer, the idea that it would be a mass-market machine, the bet that was made there by Apple uniquely—there were other people with products, but the idea that this could be an incredible empowering phenomenon, Apple pursued that dream.”

The company’s highs—and some lows—are the stuff of Apple legend. “At the time, we certainly had no idea that a personal computer would someday have enough memory to hold a song or a movie,” Wozniak says today. The company went public in 1980. It reinvented the personal computer in the 1980s with the introduction of the Macintosh.

Jobs’ deftness for impact and timing was never so keen than in his now well-cited pitch in wooing Pepsi executive John Sculley to join Apple as president and chief executive officer in 1983:

“Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world?”

Apple’s stark, groundbreaking “1984” big brother ad at Super Bowl XVIII, although hated by board members when they previewed it, became the standard for high-dollar impact advertising at the annual sports event.

A Devastating Fallout

In 1985, tensions between Sculley and Jobs about the direction of the company culminated in Jobs trying to oust Sculley in a palace coup. It failed, and Sculley stripped the founder of all his operational responsibilities. By September, Jobs was gone. Litigation ensued when Jobs tried to take some employees with him. Jobs sold his Apple stock. Bloodied but not beaten, Jobs recovered from the very high-profile exit.

“I was lucky—I found what I loved to do early in life,” Jobs said during the Stanford commencement address, which is hailed as one of his best and certainly most personal speeches. “Woz and I started Apple in my parents’ garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4,000 employees. We had just released our finest creation—the Macintosh—a year earlier, and I had just turned 30. And then I got fired.

“How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our board of directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.”

Certainly, founders losing control of their creation is a common and painful endgame in American business. Jobs talked about how he thought about fleeing the valley because of his very public failure, but he slowly realized he still loved what he did. He decided to start over.

A New Day

“I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.”

Jobs started NeXT Computer Inc., which failed in its attempt to sell elegant, expensive black computers to the business market, and by 1993, shifted its focus to the sale and development of its Nextstep operating system (which would evolve into Mac OS X). In 1986, however, Jobs stepped deeply into the entertainment world when he purchased the Pixar computer animation studios from George Lucas for less than $10 million, and then immersed himself in this new work.

In 1991, Pixar and Disney agreed to form a filmmaking partnership under which Pixar made the movies and Disney distributed them.

The same year, Jobs married Laurene Powell, whom he met when he spoke at a class at Stanford business school, where she was getting her MBA. They now live in Palo Alto with three children and Jobs’ daughter from a previous relationship.

Meantime, Jobs’ work got faster and more furious. By 1993, Sculley resigned from a beleaguered, battered Apple. Disney released Pixar’s first movie, Toy Story, in 1995, which was an astounding success and leap forward in animation quality. In December 1996, Apple bought NeXT for $430 million in a move full of intrigue, bringing Jobs back into the fold. In July 1997, former National Semiconductor chairman Gil Amelio, brought in to right a sinking Apple ship, resigned after a rocky 500 days on the job. By September, Jobs became iCEO (interim), and returned the company to profitability by January 1998.

“Apple was in very serious trouble,” Jobs has said about the period when he returned. “Apple had to remember who Apple was because they’d forgotten who Apple was.”

The Comeback

Part of that remembering included clearing out some of the storied past. One of the first things Jobs did upon his return was to pack up the internal Apple museum—all the company’s papers and old machines—and send the materials to Stanford University for archiving.

“[We] cleared out the cobwebs and said, ‘Let’s stop looking backward here,’ ” Jobs explained at the 2007 conference. “It’s all about what happens tomorrow. Because you can’t look back and say, ‘Well, gosh, you know, I wish I hadn’t gotten fired, I wish I was there, I wish this, I wish that.’ It doesn’t matter. Let’s go invent tomorrow rather than worrying about what happened yesterday.”

When Apple launched its first iMac in 2001, its personal-computer market share had dwindled to 2 percent (the company began using “i” before its product in 1998 to represent its visionary shift to the Internet and personal devices, the individual). In 2001, Apple introduced the landscape-changing iPod, iTunes and its OS X 10.0 operating system, signifying its return as a champion innovator. Apple, once again, proved that reports of its demise were greatly exaggerated. In a strategy shift, Apple also opened its first retail store in Maclean, Va.

“Steve gave a speech once, which is one of my favorites, where he talked about, in a certain sense, ‘We [Apple] build the products that we want to use ourselves,’ ” Microsoft’s Gates said in 2007. “He’s really pursued that with incredible taste and elegance that has had a huge impact on the industry. And his ability to always come around and figure out where that next bet should be has been phenomenal. Apple literally was failing when Steve went back and re-infused the innovation and risk-taking that have been phenomenal.”

Jobs returned to the top of the business world, but life held another challenge for him. His diagnosis, treatment and recovery from pancreatic cancer in 2004 reinforced his will to be, in co-founder Wozniak’s words, a “move-the-world forward” visionary.

‘Follow Your Heart’

“Your time is limited, so don’t waste it living someone else’s life,” Jobs recounted in the Stanford address in 2005.

“Don’t be trapped by dogma—which is living with the results of other people’s thinking.

Don’t let the noise of others’ opinions drown out your own inner voice. And, most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.” Since his return to Apple, Jobs has enforced more company information control and limited his interviews (Apple did not participate in this story). “There used to be a saying at Apple, ‘Isn’t it funny, a ship that leaks from the top,’ ” he has said. “That was what they used to say about me when I was in my 20s.”

In 2005, Apple introduced the iPod Nano, the Video iPod and the iPod Shuffle. In January 2006, Jobs sold the award-winning Pixar group to the Walt Disney Co. for about $7.4 billion in Disney stock, making him its largest shareholder and earning him a spot on its board. In 2007, Apple launched the iPhone, followed by its Apps store in 2008. Those products vaulted Apple from turmoil into one of the world’s largest and most respected companies. For the third year in a row, Apple topped Fortune’s 2010 “Most Admired Companies” list, based on annual businesspeople surveys.

“Steve Jobs is a singular persona in our culture,” says NewDealDesign’s Amit, who writes an industrial design-focused blog. “He, more than anyone else, made utilitarian digital technology merge into a rich cultural experience. Without him, most of the tech world would have relegated culture to a decorative role, rather than a substantive element of product and service innovation. His impact is so profound on our culture, our way of thinking and our approach to smart technology, that I would consider him one of the most influential cultural creators of the past century.”

Redrawing Boundaries

Entrepreneur and author Guy Kawasaki, whose latest venture is the Internet aggregator Alltop, had two stints with Apple (1983-87, 1995-1997) as a company “evangelist” or product super-advocate. Though no longer connected to the company, he remains a product loyalist and observer. Kawasaki maintains it is Jobs’ extraordinary vision that allows Apple to keep redrawing industry—and modern culture’s—boundaries.

“He sees what should be before others,” Kawasaki tells SUCCESS. “And now, he has such a track record that even if he sees wrong, he’ll be right. It’s an upward spiral.”

In presentations, Jobs is skilled at helping the audience see the world his way. He sets out what’s wrong with the status quo before introducing his solution.

“Jobs is a magnetic pitchman who sells his ideas with a flair that turns prospects into customers and customers into evangelists,” writes Carmine Gallo, a communication skills coach who wrote The Presentation Secrets of Steve Jobs—How to be Insanely Great in Front of Any Audience, published this year by McGraw Hill.

“Over and over again he has turned his eye and his energy—and at times, it has seemed, his entire being—to what might be gained by creating a new offering or taking an unorthodox strategic path,” Harvard Business School professor and author Nancy F. Koehn wrote in Fortune in 2009. “That puts him in the company of other great entrepreneurs of the past two centuries, men and women such as Josiah Wedgwood, John D. Rockefeller, Andrew Carnegie, Henry Ford and Estée Lauder.”

A Large Dose of Cool

The art of the deal seems as important to Jobs as the product itself. “Design is the fundamental soul of a human-made creation that ends up expressing itself in successive outer layers of the product or service,” he has said in differentiating his approach to product design. In other words, he seeks a large dose of cool to accompany ease of use.

“We’ve always tried to be at the intersection of technology and liberal arts,” Jobs said during the iPad announcement. He credited this combination for Apple’s ability to create intuitive and magical products. When Apple can find partners who do what it’s seeking to incorporate into its products—think map search engines—the company joins forces with them. If it sees a need that no one can fill better than Apple, then the company develops that business itself. “If you look at the reason that the iPod exists, and Apple’s in themarketplace, it’s because these really great Japanese consumer electronics companies who kind of own the portable music market… couldn’t do the appropriate software, couldn’t conceive of and implement the appropriate software,” Jobs has said. “Because an iPod’s really just software. It’s software in the iPod itself, it’s software on the PC or the Mac, and it’s software in the cloud for the store. It’s in a beautiful box, but it’s software.”

Whether the iPad will provide another big splash or be just a ripple in Apple’s pool of innovation is almost irrelevant at this point. You can be sure that Jobs and Apple are already working on the next thing. It’s hot-wired into their genetics.

“When Bill and I first met each other and worked together in the early days, generally, we were both the youngest guys in the room,” he said during that 2007 joint appearance with Gates. “And now, I’m the oldest guy in the room most of the time. And that’s why I love being here.”

Three years later, Jobs hasn’t gotten any younger, but arguably the biggest innovator of his generation clearly plans to keep stirring the pot.