Authors at Google: Adam Lashinsky, "Inside Apple"


Uploaded by AtGoogleTalks on 23.03.2012

Transcript:
>>Adam Lashinsky: A couple of caveats I'm gonna steal a line from a telephone executive
who would like to say I know it's common to ask people to shut down their phones but he
liked to hear the sound of ringing and so he encouraged people to leave their phones
on. Rather than ask you to put down your laptops or your Smartphones I will say that if you
are looking into a screen I'm assuming you're gonna be posting to Google+ about how interesting
this is and encouraging people to buy the book and that' s just fine with me.
My other caveat is that although I do have direct comparisons in the book between Apple
and Google and they will be part of my comments and I am happy to discuss them with you in
the Q and A, I didn't spend the last year of my life studying Google, I spent the last
year of my life studying Apple. So beyond the conclusions that I am willing to draw
or the observations that I am willing to make about the comparisons of the two companies,
in particular cultural issues, I don't wanna put too much of the compare and contrast burden
on me for comparing Apple and Google, I'll put that burden on you and I'll tell you about
Apple and leave you to make your own conclusions about the differences between the two companies.
One of my major epiphanies in working on the book and on the article in Fortune Magazine
before it is just how differently Apple does business from the way everybody else does
business. And indeed how the Apple way of doing business is different from what's taught
in business school. And Steve Jobs was quite clear on this, he didn't particularly care
for business school and he didn't particularly care for MBA's in general. And part of the
reason for doing Apple University over the past four years was to as he put it, "To try
to create our own kind of MBA."
And so I'll ask you to keep in mind as I make my points how much Apple differs from everybody
else. The question arises, well if they're so exceptional and they're so unique and they
had this extraordinary one of a kind leader how much can we learn from them? And I would
suggest there absolutely is a don't try this at home aspect to Apple's way of doing business.
Having said that Apple is currently the world's most valuable company and is absolutely crushing
it in a way and growing in a way that no large company does, and maybe no large company ever
has and so I would submit that if they do things differently it's at least worth asking
the question how and why. And I really wish we had one of those set ups where we could
pan the room because I just love people sitting on the floor for a talk –
[laughter]
wonderful.
A moment on what Apple was like in 1997 when Steve Jobs returned to the company. He would
be quoted frequently and in ensuing years talking about the fact that Apple was 90 days
from insolvency when he rejoined the company in 1997. The company was a shambles; it had
too many factories in the United States and abroad, it had too much inventory, it had
too many middle managers, Jobs went on to fire about 4,000 of them. The culture in his
opinion had become infected with people who were more interested in making money than
they were in making beautiful products, and the company was structurally dysfunctional
in a way that he would change.
And the example that I share in the book is that at the time Apple had 16 advertising
budgets. Now the adverting budgets is a good metaphor for fiefdoms; if you were a general
manager in the business and you had an advertising budget that probably wasn't the only budget
that you had, you were an important person in your own right. Jobs wanted to eliminate
that, he wanted to get rid of fiefdoms, he got rid of the whole notion of general manager,
and he wanted to emphasize the notion of one company, one brand, one Apple, and so on.
And in eliminating the advertising budgets he was able to say to people who were responsible
for a product, "If you think your product deserves advertising spend then you'll come
to me and ask for advertizing spend and I'll decide whether or not to give it to you and
we'll make a decision at a central, at a corporate level about how to advertise." And we all
know how that's gone for Apple.
This was not about cost cutting by the way; within short order advertising spending at
Apple increased it didn't decrease and Apple developed this very virtuous circle of tending
to only advertise one or two major things at a time, but there being a halo effect to
the other products that weren't being advertised and this worked particularly well once the
stores were up and running and became a force of their own. Advertise an iPod and people
might come in and buy an iPhone; advertize the iPhone and people have to walk past the
Macintosh's to get to the iMac's or the laptops to get to the iPhone and so on. And so that's
something that Jobs cleaned up in his first few years back at the company in '97.
Leadership is an important topic when thinking about Apple, it's also an example of Apple's
exceptionalism. This is Narcissus the Greek god who was in love with his own image; here
he is gazing into the pond to see his own beautiful self.
And I just wanted to share the work of a psychotherapist and business coach named Michael Maccoby who
wrote a Harvest Business School article and then a book called Narcissistic Leaders. And
as I was reading this article it goes on explaining what a narcissist is first of all, a narcissist
is someone who is visionary, who is charismatic, who has a willingness to bet the company on
his or her vision, who expects to be followed but doesn't necessarily care if they're loved.
And as I was readin' this I was thinking, "My God this person is describing Steve Jobs
without using his name." And then in fact Jobs did appear as an example in Maccoby's
work.
The productive narcissist, and I mentioned that Maccoby was a business coach and a trained
psychotherapist, the productive narcissist is someone who can channel their narcissism
in a productive way and he worked with clients to help them be not less narcissistic but
more productively narcissistic.
And I think that if you dig into this topic you see that a lot of what makes Apple tick
is because it has been led by this kind of personality. What then you ask happens after
the productive narcissist is gone? Well there's two other categories that Maccoby identifies
as business people and he uses classical Jungian psychological terms for this. The second category
is an obsessive and he talked about productive obsessives, these are people who make the
trains run on time, they're typically a side kick to the productive narcissist, they can
help the visionary realize their vision by executing it.
Tim Cook is a classic, the current CEO of Apple, is a classic productive obsessive and
he's been in that role at Apple as Jobs' sidekick for 10 years and now we'll see how the productive
obsessive can do as the CEO. There are obsessive's as CEO's of other companies, but Apple is
very much characterized by this narcissistic led organization.
There's a third category, by the way, that will be of interest to people in the room
because I noticed that the CEO isn't in the room and that is, unless I'm mistaken then
I apologize Larry.
[laughter]
His third category it's called erotics, an erotic is someone who in the Jungian sense
is someone who does feel a need to be loved, who does not necessarily like to be criticized
and wants approval. This is an excellent person to have on a team, not necessarily the person
that you want running the company.
[laughter]
One of the essential teachings of the modern business era is that business leaders should
empower their people, they should push decisions down into the organization, they should give
people the rope to hang themselves and to execute the strategy of the company. This
is not how Apple does things. Steve Jobs was a classic micromanager and the people beneath
him micromanaged the people beneath them. No detail is beneath their attention.
I know I mentioned that he was a narcissist but he also had obsessive characteristics
as well. And I discussed this with Maccoby by the way, I asked Maccoby what he was and
he said, "Well I'm mostly an obsessive but I've got some narcissistic tendencies to me
as well."
And my example of it I discuss in the book is an exchange that Jobs had with the marketing
executive whose job it was to send out an email concurrent with a keynote launch of
a product. And this person would email Jobs days before the keynote to say, "Here's the
email that will go out." And Jobs would object to the grammar in the email getting down to
the placement of a comma or a semicolon and they would go back repeatedly 17 times until
they got it right. To me this is bizarre behavior but not inconsistent with the micromanagement
that Apple embraces.
I believe, by the way, from my conversations that Jobs' opinion on the placement of the
comma was wrong --
[laughter]
but that doesn't matter and I think that's obvious. He obviously was very interested
in language but not a grammarian as we know from the Think Different campaign.
[laughter]
A major part of my book and my research on Apple is analyzing its secrecy. I've been
able to turn the what was a disadvantage for me in writing a book about a company that
it's very secretive into a thesis point about the company. And my line is that every company
keeps secrets but at Apple everything is a secret and Apple is particularly good at keeping
secrets.
[laughter]
They have a hint of a sense of humor about secrecy; this is an actual T-shirt that you
can buy at the company store in Cupertino which is open to the public, "I visited the
Apple campus. But that's all I'm allowed to say."
[laughter]
I will say it's the one example of a sense of humor that I've been able to find at Apple
--
[laughter]
but I'm appreciative of it, very appreciative.
There is a sense of a culture of fear at Apple, I've heard this from many, many employees
and I'll say in anticipation of a question that I typically get is: who are my sources
for the book? My sources are people typically who worked at Apple at all levels of the organization,
very senior, very junior, and in between, and compared with Walter Isaacson's biography
of Steve Jobs which is very much a view from the top, I think that the perspective of a
junior person, for example, is very valid in understanding how a company actually operates.
And secrecy is so important at Apple that people are afraid to deviate from the secrecy.
And the hallmark of this is new employee orientation which is every Monday at Apple, except as
I was told with a straight face when Monday comes on a holiday. That the security briefing
is part of new employee orientation and new employees are told in a very matter of fact
way, "Secrecy is important here, it's worth money and measured in the hundreds of millions
of dollars from the benefit that we get when a product is launched and retribution will
be severe is you breach the rules of secrecy. Termination obviously, maybe you'll be sued
as well." And this is on your first day of work at Apple.
[laughter]
So why keep secrets? The first one is good basic business in my opinion. You don't want
your competitors knowing what you're doing, you also don't want customers knowing what
you're doing until you're good and ready to tell them. Now this is a debatable topic in
the Internet world and in the Web world and we can discuss it with as much time as we
have, but Apple's very clear on the subject. Customers, the world, but customers in particular,
should learn about products the day that they're released by us and not a moment before then.
And there's good Silicon Valley precedent on this; other companies have fallen afoul
of the basic rule of if you've got products on the shelf in retailer's stores and even
more seriously if you've got product in warehouses, the last thing you want is customers believing
that a new version is coming soon because who's gonna buy a product that's sitting on
shelves when a new version is coming soon?
And even Apple hasn't been perfect about this; quarter before last they acknowledged that
iPhone 4 sales were hurt because the public expected an iPhone 5. They didn't get it,
they were very disappointed about this, they got the iPhone 4S instead and it hurt Apple
so badly that they went on to sell 37 million iPhones in the last quarter and rang up a
$13 billion profit. But the quarter before that they did acknowledge that the rumor mill
had had a negative impact. But that's among the reasons anyway for keeping secrets to
outsiders.
But what I've realized in studying the company is that Apple takes internal secrecy as seriously
as it does external secrecy. And I've likened Apple employees to a horse fitted with blinders;
you don't look left, you don't look right, you charge forward at Apple and you don't
multi-task by the way. It has been humbling for me when I came to realize how focused
Apple people are because I'm a multi-tasker, I'm constantly doing many things, and at Apple
below a certain level and that level is high you don't do many things, you tend to do one
thing.
I don't know if it's an unintended consequence but a realization that I had on this topic
of internal secrecy is that I've been told over and over and I've come to believe that
below a certain level again there's very little politicking at Apple. And that makes sense
because how can you play politics when you don't have the information with which to play
politics? It is none of your business what I'm doing [chuckles] and it's none of my business
what you're doing so what do we have to talk about?
And I skipped over an example on the outside world; it's my belief from my 15 years in
Silicon Valley that engineers in particular love to talk about what they do. And by the
way journalists love to talk about what we do. And we keep of course we keep secrets
about what stories we're working on, but we can talk ad nauseam about craft and past stories
and whatnot. And my understanding is that this is something that Silicon Valley engineers
enjoy engaging in; Apple people are told not to. And I describe in the book someone I know
who plays in a regular poker game with a group of Apple people and this person does not work
at Apple and when the subject of Apple comes up at the poker table the subject is changed.
And so I've described Apple not only metaphorically as the ultimate need-to-know culture but literally
as the ultimate need-to-know culture. And this manifests itself in interesting linguistic
ways and also in physical ways.
So Apple is a culture of disclosure. I say to you, "Are you disclosed on the following?"
and I have to do a little kabuki if I don't know if you're disclosed on it, I can't exactly
say what it is. But if everyone in a meeting isn't disclosed then not everyone is welcome
at the meeting. And this is true also in a physical sense and I describe in the book
how you'll be working and all of a sudden barriers go up, windows that were clear become
frosted, doors that didn't exist now exist, security badges that once got you in to a
certain area no longer get you into the area. And if you're a typical worker what you know
is that there's a new project underfoot and that's all you know. If you knew you're badge
would get you into that area and it doesn't.
And most interestingly to me I've been told again more than once, people telling me that
their bosses did not have access to the same areas that they had access to for reasons
that they didn't necessarily understand.
This is an org chart that I created first in Fortune Magazine in May of last year, it's
actually highly accurate but you're not expected to be able to read the fine print from where
you're sitting. But the key is this, and I like to say that candidly this was more dramatic
when Steve Jobs, the Sun King, was at the center and the planets were revolving around
him. This is in fact how Apple operates but I think one of the great unknowns is how it
will continue to operate with Cook as the CEO or whoever follows him. But what you can
see from this is what you might expect from Apple an incredibly tight and an incredibly
focused org chart where the CEO, this ring around the inner circle are the vice presidents
of Apple and I've got most but not all of them there. It's a very small number of vice
presidents and the CEO can reach down no more than one layer to really touch just about
everything that's going on at the company.
As part of the culture, by the way, you won't be surprised to learn that org charts are
frowned up at Apple; Apple doesn't create and print org charts. And I was told that
people were visibly nervous having my org chart from Fortune Magazine on their desks
last year.
Apple's famous for sweating the details and the example I give in the book is the packaging
design room where a package designer had hundreds of prototypes of iPod boxes and their sole
mission, and Apple teaches this, this case by the way is an example of attention to detail.
This person's sole mission was to peel off that little piece of clear tape that seals
your box and do this over and over and make sure that the placement was just perfect.
Now it sounds silly except, and I won't ask for a show of hands because it could be incriminating,
but is there anyone in the room who has experienced the joy of peeling off that piece of tape
and opening their iPod or iPhone box and taking the product out and seeing how everything
is laid perfectly and then taking their device out and feeling this sense of joy?
[laughter]
Okay, I do have smiles and chuckles in the room, maybe some nervous laughter. But this
is just one example and this pervades the organization and so you get a sense of why
details are important at Apple.
Jobs was famous for saying that he didn't think that Apple should do customer research
and instead how could customers possibly know what they wanted when they don't know what
the product is that we're going to give them, and we'll give them the products that we think
they should have. By the way, Jobs especially later in life like many of us was famous for
repeating the same lines over and over again and this was one of his favorites because
it resonated so well because it's exactly the opposite of how other people, how other
companies do things.
We now know that integration is key to the Apple's excellence and the integration that
this typically refers to, and it's something that Jobs spoke about, was the integration
of hardware and software. And it's sort of astounding that over the past 15 years really
only Apple has been particularly excellent at integrating its own hardware and software
and its competitors have been bifurcated in hardware and software.
But my point is that the whole company is integrated extremely well, Apple is not whimsical
as its advertising might suggest but extremely planned, extremely well organized, things
happen according to a timeline that is written down, and the various parts of the company
work well together in the past by force of will because Jobs made sure that people worked
well together.
But a key to understanding Apple is the importance of design. And again Jony Ive has become famous
as the head of industrial design at Apple, but what's less well understood is just how
important his seat at the table has been. And you can glean this from the fact that
at Apple it would be inconceivable for say a financial person to sit in on the same early
product development meeting where Jony Ive or Jony Ive's people would have a conversation
about what the product would look like. Steve Jobs, at least initially, would have been
completely uninterested in a finance person's opinion of what it might cost to do that or
how we might pay for it or what kind of revenue we might be able to get from it; this is antithetical
to the Apple way of thinking.
I likened it to a corollary to the personal maxim of, "Do what you love and the money
will follow." It's a little corny, I have to refine that but it really does I think
express Jobs' approach to product was, "First we'll think of the product, then we'll think
of how to make it beautiful and how to make it really good, then we'll figure out what
the market is for it." And I would submit to you that's not the normal decision making
process at your typical big company.
A hallmark of Apple's entire way of doing business is the power of saying no, and this
is across the business and across product development. It says no to industries to get
involved in, to who it will sell to, we know that it's been famously uninterested in selling
to big businesses over the years, which by the way has some history. Apple got beaten
up badly in the 80's selling to the enterprise and this scarred Jobs, many things scarred
Jobs including this almost running out of cash at the beginning.
I have to tell you that I showed this slide at Microsoft last week and I --
[laughter]
prepared them and I said, "Please don't take this the wrong way," but I think it's very
telling. What you get when you open your box of a PC that you got at a retailer and what
you get when you open your iMac box.
I wanna do another slide that focuses more on the screen because I think it's in the
book and it's a very important part of Apple's mentality of saying, "No." You know what the
screen on an iMac looks like when you turn it on, I need to show what the screen of a
PC looks like especially if you buy it from a retailer, your screen is littered with what
Jobs referred as, "Crapware." And Crapware are these icons from various vendors that
the retailers or the manufacturers have done a deal with to goose their margin a little
bit. I would suggest that it's nothing short of insulting to the customer to put that on
the screen and it's something Apple wouldn't dream of doing. Apple has faults by the way,
but this is something Apple's very good at.
I could go on about the beauty of saying no; Jobs would say that saying no is more important
than saying yes. This extends to how Apple cooperates or engages with the rest of the
world. Most companies will send its people out to events to interact in the hope that
there might be some intangible benefit from interacting. Apple even killed the trade show
that it was integral to starting although it was its own, Macworld.
And then I just like showing this fanciful slide of an Apple executive being in a chair
at the World Economic Forum in Davos where I was a few weeks ago. It's inconceivable
to think of an Apple person engaging in jawboning and talking about making the world a better
place in Davos.
[laughter]
With what's going on I shouldn't say inconceivable, but it's until now impossible and I think
highly unlikely in the near future. You will know by the way if you see the CEO of Apple
on stage in Davos that things have really changed at Apple.
Apple has this concept of the directly responsible individual. It’s one of these things when
I first heard about it, first of all Apple people have been talking about for years this
pre-dates Jobs' return in 1997, it's not completely clear to me that it was even language that
Jobs was all that familiar with which magnifies its importance to me that it's so important
at Apple. At Apple there will be a list of items on the agenda for a meeting, for example,
and next to the action item will be a name, that name is the DRI; the DRI is the one person
whose job it is to get the job done on that specific task. It's so simple, it's so obvious,
and yet my hunch and I'm gonna try to test this with business school professors, is that
most businesses don't do it. And I know that I, oops, I don't know what that's about. My
Outlook is open, I apologize.
I know there was a period when I was working on the article at Fortune that I started to
become obnoxious within my own company by asking, "Well who's the DRI on that?" This
was often on the telephone because most of my colleagues are in New York, but I could
feel the eyes rolling when I said it.
I think it's unique that Apple is a massively functional organization; this is the corollary
to Jobs' aversion to general management; he did not want jacks of all trades running businesses
within the business, he wanted experts. He would brag that Apple employs the best metallurgists
in the world. And this is the case throughout the organization.
This is I think one of the most important and most controversial aspects of how Apple
does business in that in selected instances it behaves like a start-up. Of course Apples
is not a start-up, I'm not so naive as to think that it is; there are many elements
of the company that behave just like any big business anywhere. But where it's relevant,
where Apple decides that it's going to create something new and do something fresh, it manages
to hive off an area and let a relatively small group of people behave as if they are at a
start-up. And I've likened this to a bunch of rich kids in that they're off in a corner
doing their own thing, but they have a very wealthy parent funding their research, and
in Apple's case this is a nearly $100 billion balance sheet funding their research.
I think by now since I wrote about it last May it's become well known that Apple thinks
a lot about the notion of small numbers. The British anthropologist Robin Dunbar referred
to the Dunbar's number as being about 150 or smaller, that most humans really can't
relate to a group of people much bigger than about 150. He was looking at primates in the
wild, by the way, but he decided that that was applicable to humans as well.
And in fact for years Apple has been having this ultra top secret retreat of about 100
people whom Jobs characterized as the people he would want to take with him if he were
to leave Apple, the 100 or so most important people. Very interestingly to me, by the way,
this was not a rank thing with Jobs it was not a status thing it was who he literally
thought were the most important people, not necessarily by title.
The stories about the top 100 are legendary and typical Apple; Jobs would require everybody
attending the meeting to be bussed down to the Santa Cruz or Monterey area in a bus from
Cupertino. And I had this image of certain senior executives who had attained great wealth
being forced to get on a bus and drive for an hour and a half or a couple of hours because
the boss didn't want them driving their own car. He would sweep the room for bugs beforehand,
legitimately paranoid that the competition might try to find out the secrets that were
going to be revealed at a top 100 meeting. And indeed products for the next 18 months
or so have been revealed at top 100 meetings. Given how secretive Apple is Jobs thought
that it was important for a slightly larger group than the 10 or so person executive team
to be exposed to what was coming down the pike. The rest of the company was not invited
to the meeting and would not be exposed.
One of the fascinating elements of this secrecy that I've learned, the sales people at Apple
are particularly frustrated because they don't find out about what's going on at the company
in terms of new products any sooner than the rest of us do. And if you think about again
how different that is from any normal company which obviously wants to prep the sales force
so they can sell the product that's coming.
On the subject of exclusion, I'm also told that Apple people to this day will gather
in a cafeteria to watch a closed circuit television broadcast of the major keynotes whether it's
at Moscone or on their own campus because, and I think this is so interesting, they’re
learning about the product that's being revealed for the very first time at the same time the
public is, at the same time journalists are. This includes people who worked on the product
because they typically will only have seen the feature or the part of the feature that
they worked on.
Apple's marketing I think it's fair to say is brilliant; one of the premises of the marketing
at Apple is staying on the script. I hope I'm not gushing too much and suggesting that
“1,000 songs in your pocket” is one of the more brilliant marketing lines in the
history of consumer electronics marketing. Obviously MP3 players existed before the existing,
the incumbent's stressed storage capacity of their devices, Apple did talk about storage
capacity in terms of pricing, but “1,000 songs in your pocket”, who can't understand
that and who can't repeat it over and over? And that's another important that you'd think
would be normal in business but I think Apple does it better than most.
I've described how first of all very few people at Apple are allowed to speak publicly; it's
a discreet, finite number that is defined in preparation for a product launch and the
language that they will use is preapproved and agreed upon. And so I quote an executive
who was approved on the iPhone who explained to me in giving speeches on my book I can
understand the mentality that when you give this message over and over the intellectual
or human tendency is to change up your delivery because that's how you keep yourself entertained.
But he said, "No when you're pitching an Apple product you deliver it over and over exactly
the way we agreed it was gonna be delivered. Why? Well because the listener's hearing it
for the first time and what we want is for the listener to repeat it to their friends
and for their friends to start repeating it and pretty soon it's being repeated back in
the marketplace exactly the way we wrote it." And it's a very pure and very understandable
approach when you think about it that way, but requires a ton of discipline.
Sometimes I've described Apple as a company of paradoxes because on the one hand Apple
is described to me, Apple people describe Apple as being resource constrained. I came
to understand what they're really referring to is people; it's very difficult to get enough
of the right people on a project. But when Apple decides to make a product or market
a product they will spend whatever it takes for seemingly trivial expenditures. And so
the story I tell in the book is of Jobs' desire to illustrate iMovie HD in 2005, the first
launch of the high def version of iMovie. And there weren't a lot of HD cameras or HD
televisions in the marketplace at the time so he decided they should do a wedding because
he knew that people used iMovie to shoot weddings. So they shot a wedding, it was an Apple employee;
it was a beautiful, elegant affair at the Officers Club at the Presidio in San Francisco.
Only when Jobs decided his opinion was it was too elegant, it was too stuffy and he
said, "I want a beach, I want feet in the sand, I want a tropical setting, Hawaii would
be good." He was fond of Hawaii.
This was three weeks before Macworld. And to make a long story short, finding a beautiful
actress who was getting married on Maui right before New Years', the team got its image
at tremendous expense and the expense was really irrelevant; this was for a 30 second
or so clip at Macworld; they were able to show iMovie HD in beautiful, emotional terms;
the money wasn't what mattered.
So just to drive home the point, this is a replica of an actual wall in a marketing building
at Apple; if you're in this marketing group after you go in the door in the morning you
walk around this wall every single day on your way to work to remind you what your approach
to marketing should be at Apple. Only this isn't exactly how the wall appears, this is.
Apple has an interesting relationship with the press and that includes me and I think
there's a profound business point here; there's only one subject generally that Apple views
worthy of it discussing publicly and that's its products; doesn't wanna talk about how
it does business which is the subject of my book, it doesn't wanna by and large with the
exception of Steve Jobs it doesn't wanna talk about personalities, it doesn't wanna get
involved in lifestyle issues of Apple, of Apple people, and so on. So it keeps the press
at arm's length with two kind of amusing exceptions and that's David Pogue at the New York Times
and Walt Mossberg at the Wall Street Journal. Apple will go to great lengths to keep the
two of them happy and I encourage you to read the section in my book where I discuss that.
Apple also, by the way, is very tuned into the importance of celebrity and that celebrities
play an important role in your image. And I describe in the book the day that Harry
Connick, Jr. emailed Steve Jobs because he had a problem with his monitor and this is
called an escalation. Jobs emailed Cook, Cook emailed a senior executive in the supply chain
organization who emailed a junior executive in the supply chain organization, who got
Harry Connick, Jr. his new monitor in a matter of a half hour or so.
[laughter]
And my very last point, and this can sort of serve as a jumping off point to discuss
the future of Apple, one of these paradoxes about Apple is that it behaves in quite an
entrepreneurial way and the risks it's taken and the new products it's come out with in
the last 15 years have been a triumph of entrepreneurialism I would suggest. However, one of the sort
of glaring realizations I made toward the end of writing the book is that really the
great entrepreneur at Apple was Steve Jobs and in fact his family listed entrepreneur
on his death certificate.
The most important remaining members of the executive team are not entrepreneurs. I mean
Tim Cook bled IBM Blue for gosh sakes for the first 10 plus years of his career. He
loves Apple but he's not an entrepreneur. Scott Forstall who runs the mobile software
has only worked for two companies in his career and both of them were headed by Steve Jobs;
the first was NeXT. Jony Ive has been quoted publicly saying that when he ran his own design
consultancy in London it was called Tangerine, and I think it's really interesting that the
two great companies of his career are Tangerine and Apple.
[laughter]
Commented that he didn't really care for the business aspect of running Tangerine, he wanted
to design and boy has he done a great job of designing. [chuckles]
But I leave you to think about what will be the meaning of an Apple that isn't led by
someone who identifies as an entrepreneur.
I invite you to look at my brand new Website and as well as I put my Twitter handle up
there and I would love to see some engagement on my Google+ profile as well and I'm happy
to do that with you and to take your questions for 15 minutes.
There's a mic right there.
So thank you very much.
[applause]
>>male #1: Hello. Hey Adam thanks a lot for the talk. So I actually have two questions:
one question is like on your second slide you mentioned like everything Apple did is
like quite contradict to what we learned in business school, so does this mean like, I
don’t think, like, people, me, like what we learned in business school is wrong or
like Apple is just like absolutely by chance it's a great success, so what things we can
learn from the success of Apple from both like say in academia or in business world
so what thing we can really take from Apple?
>>Adam Lashinsky: Sure. So, thank you, so first of all I think that I am saying that
in Apple's opinion some of the things that you learn in business school are in fact wrong.
But I'm not suggesting that that's an absolute, and I think that companies and people have
to go down the list and consider each one and say, "Is this something that my company
or that I can emulate at Apple or is this something that's unique to Apple?"
And I'll give you one example of one of these teachings that I think that all companies
can think about. I mean some companies have to be revenue optimizers that's just the way
they're set up, they've gotta think about cash flow because maybe that's their best
bet, but other companies can take an approach that thinking about the revenue first is the
wrong way. I also think that there isn't a company out there of any size and in any industry
that can't ask itself the question, "Are we saying no often enough? Have we said no in
each instance where it might have made sense to say no instead of yes? That's one example
I think.
>>male #1: Yeah. Thank you. One more question about like how I remember you have one slide
about the integration. So we know like Apple is, uh…very few company that like do everything
in a single chain within one company for example from the design, manufacture, operating system,
and retail, and marketing. So what's the reason do you think like they did a great job in
operation and management for like integrate every parts like become a world leader not
only in every area but also integrate very well in every part?
>>Adam Lashinsky: So I'll give you, I'm gonna give you two answers and the first one is
sort of cynical and is the conventional wisdom. The answer to your first question, why are
they so good at integrating? You can answer in two words: Steve Jobs. And there's a very
strong current of thought within Apple including people who believe that the company will not
fare well going forward that he was completely responsible for this integration through sheer
force of brutal will and that that will be far more difficult after he's gone, with him
gone. And then the more hopeful response is that he developed a system where the culture
of the company includes this integration run by the executive team and the CEO and that
this is a process at Apple. And I think this is, this will be one of the great questions
of the next call it five years that will be answered: will they be able to integrate as
well without him or not?
>>male #1: Thanks.
>>Adam Lashinsky: Thank you.
>>male #2: Hi, I had a question about Pixar. I wonder if you got any chance to compare
the way Apple as a corporation is run compared to Pixar which is also I guess like Steve
Jobs' --
>>Adam Lashinsky: Sure.
>>male #2: step child.
>>Adam Lashinsky: So relatively little, I mean I read a very fine book called The Pixar
Touch by David Price which is a great history of the company, very precise in terms of going
over what happened for Pixar to become Pixar, including the fact that when Jobs bought Pixar
the Pixar assets from George Lucas neither he nor anyone else had any clue that it was
gonna be an important feature film company down the road; that was an accident which
he absolutely deserves credit for recognizing.
But I didn't study Pixar for my book and this question has come up so my only observation
would be that Jobs was never the day-to-day CEO of, number one of Pixar, he was the CEO
for a time but he never spent all his time there. And number two the culture of Pixar
for the culture of Pixar, Ed Catmull and John Lasseter are extremely important to the way
the company operates and the way the company thinks in the way that Jobs was for the '97
to '11 period at Apple. But that's as deeply as I can go on Pixar.
>>male #2: Okay, thanks
>>Adam Lashinsky: Thanks.
>>male #3: So this might be a controversial question --
>>Adam Lashinsky: Good.
>>male #3: if you look at the top management of Apple it's glaring that it's only white
male. And unlike other beta companies there are no Indians and no Chinese, there are no
women, there are no African Americans, no one. Is it part of the culture of secrecy
that intends a white male to become a top of top manager versus --
>>Adam Lashinsky: I understand your question; all I can tell you is that I haven't had that
question before which suggests to me only that it's not a top of mind conversation at
Apple. I have had the question about the paucity of female executives, there are no female
executives on the executive team, there are quite a handful in the vice president level,
but I don't know how that would compare statistically, I actually think it would compare probably
comparably to statistics in corporate America, but obviously not the college graduate education
by any means. So I'll just give you, so I don't have anything great to say about it.
I'll give you a tangential point that I make in the book and this is in contrast as I understand
it to Google, Apple is a headquarters centric, face-to-face meeting oriented company where
meetings happen with people looking at each other not over teleconference or video conference;
people travel but they come back to Cupertino for the important meetings.
So now I'm theorizing, if a face-to-face headquarters culture engenders homogeneity that may be
your answer, but I'm not gonna state it in any sort of declarative way 'cause it's neither
something that I've studied nor have a strong opinion on.
>>male #4: Thanks for all the fascinating insights, when are you gonna do your book
on Google?
[laughter]
>>Adam Lashinsky: Well two very fine writers Ken Auletta and Steven Levy have written Google
books in recent memory, so I'll let their insights die down before I consider the fresh
insights.
>>male #4: That was actually my joke questions. But --
[laughter]
>>Adam Lashinsky: Oh.
[laughter]
>>male #4: this could be serious, but --
>>Adam Lashinsky: I have other reasons why that's not gonna be my next book.
>>male #4: we're all Googlers here but from your non-Googlers perspective how would you
compare and contrast Google versus Apple?
>>Adam Lashinsky: Well culturally I've described the companies as the opposites in almost every
single way so from a --
[laughter]
cultural perspective as stated by its own beliefs and I believe practices, Google believes
in openness, Apple does not [chuckles]. Google is predicated on the World Wide Web and ancillary
technologies, Apple is not. There is a subtle similarity I believe in the way I've heard
Larry and Sergey describe the graduate school environment of bitter arguments over substantive
issues in getting to the best answer. That also characterizes Apple and I quote somebody
in the book saying, "You bring your arguments about product, you bring your data about product
into an argument at Apple and if you're data is the best thing for the product you win."
It's not a beauty contest in that regard or a popularity contest. So I would say those
two are similar but where the debate happens, I think the debate is a much more senior level
closed debate at Apple and a broader, more inclusive debate at Google.
And then there's this fundamental product difference in orientation and I describe it
in the book and I came to realize that this description of Google was based on a blog
post that a departing engineer wrote about how Google would make, or how Google did make
decisions about color pallets for example on a webpage, which was to try several shades
of blue for example and then analyze the click through rates on a million clicks on google.com
to choose the right shade. And I believe this person was expressing frustration but I'm
not gonna criticize that because I think it is a fundamental difference and an important
way, an important aspect of decision making at Google.
And at Apple over the last 15 years the way the color pallet decision was made is that
people would show Steve Jobs various shades of blue and he would choose the one --
[laughter]
that he thought was right. Very, very different and we could go on for three hours on the
differences.
Thank you.
>>male #5: So I saw earlier that you don't use a Mac, are there any Apple products that
you do use and were there any that you started to use after you wrote the book that you didn't
before?
>>Adam Lashinsky: I'm ready for this one.
[laughter]
First of all I do use a Mac, I'm just not using one today and I will have this presentation
in Keynote, I just don't have it yet in Keynote, long story, details aren't interesting, the
details are not interesting.
Yeah, I have an iMac at home, I have an iPhone that's turned off sitting over here, I have
an iPad, I have an iPod and in fact, and I'll tell ya I have no problem telling you the
thing that keeps me with a PC is Outlook. Being a journalist the information's very
important to me and my Outlook is extremely important to me and everyone criticizes Outlook
on the Mac as being an inferior product and so I'm scared to go over to it full time.
But however, there's a serious point here and I make it toward the end of the book which
is that when I joined Fortune, actually Fortune editorial is a Mac shop and the business side
is a PC shop and I insisted on having a PC, this was 10 plus years ago because I was not
a Mac guy and I didn't wanna go through the pain of shifting to a Mac; 10 years ago it
was a lot harder than it is now. And over the years I've started using Mac products,
starting with iTunes and iPod and so on, and I maintain that the reason Apple is a $400
billion plus company today, it's great success, is because of people like me not because of
the enthusiasts who were gonna buy Apple products no matter what. This is their great success
is in selling me stuff.
>>male #5: I have one other question: now you say that Apple, I mean you can't be like
Apple, but who do you see as the next Apple, and I don't mean the next Apple --
>>Adam Lashinsky: Yeah.
>>male #5: trying to be like Apple, but being as wildly successful doing things their own
way, is there anyone on the horizon?
>>Adam Lashinsky: Well we could make up a list of startups which I'm loath to do because
I think it's too risky and you end up looking foolish talking about startups that could
be like Apple or doing things their own way because they might be gone soon, although
I do get into this in the book, I have some fun examples about how --
>>male #5: Sounds like I should buy the book.
>>Adam Lashinsky: I would hope so yeah.
[laughter]
I would wish you would buy five, but --
[laughter]
I'll give quick examples and then I'll answer your question.
Ness Labs is very interesting run by an ex-Apple executive and they are certainly doing some
very Apple-like things. So is Tesla, its showroom strategy is not like Apple retail, it is Apple
retail and it's run by an ex-Apple retail guy.
And I think the big company right now that has the most similar characteristics to Apple
is Amazon. I could list a bunch of things, the thing that is most similar is the way
Amazon truly does not give a damn about what people think of its short term strategy; Amazon
is very invested in the long term and I didn't say it out loud today but Apple's a very long=term
oriented company.
Thanks, yeah.
>>female #1: From your research and experience what makes Apple employees happy and what
makes them stay in the company?
>>Adam Lashinsky: Thank you.
There was a period in my reporting, in particular for the magazine article, where I would go
and ask people, "Are Apple employees happy?" And the standard response would be, "Apple
people tend to buy into the mission of the company." And I'd say, "Yes, but are they
happy?"
[laughter]
And the response would be, "People take great pride at Apple" [laughs]
[laughter]
in seeing their products used all over the place," and so on.
And so I think it's not trivial or an understatement to say that it helps, everyone want to be
on a winning team and you're willing to overlook quite a bit to be on that winning team. And
I am not, I don't wanna suggest that Apple is a joyless place because some people have
drawn that conclusion from some of the stuff in my book about Apple as a workplace, but
I think it's fair to say that joy and fun is not at the top of the list. And I think
again now trying to be non-judgmental about this there's a certain purity about this from
a shareholder perspective or from a customer perspective, would I settle for a little bit
less in ease of use, for example, in exchange for a little more joy from the workforce?
[laughter]
I don't know.
Should I take one more Bernadette or am I done?
One more please. Yeah.
>>male #6: Sorry I don't have a chance to get over to the microphone. Would you say
that Apple's experience with Foxconn in China is a result of their corporate strategies
and focus and the like or is that sort of anomalous having to do with labor conditions
in general in China, does it come from Apple or is Apple just sort of a semi-willing participant.
>>Adam Lashinsky: So the question is, is Apple's experience at Foxconn in China, essentially
I'll recraft your question, is it exceptional, is it different from the industry? And I have
not gone deep on this topic so my superficial understanding first of all is that no their
experiences in China are similar to everybody else's experiences. And if anything, and I
am neither excusing them nor criticizing them for what goes on in China, but am observing
that Apple culturally is unused to being the top dog; they're unused to the scrutiny of
being number one; they identify with being the underdog, so I think they were shocked
that they were being singled out. We'll find out if they're better or worse than everybody
else but I think if you look at the New York Times' article that has put this back on the
agenda or has elevated this on the agenda, the Times went to great length to suggest
that the article that it did on the situation at Foxconn could have been written about any
of the big consumer electronics manufacturers who used contract manufacturers in China,
which is all of them. And you saw today that Apple has hired a third party auditor to audit
themselves again and so we'll see how that goes.
>>Bernadette: Thank you so much Adam. Please again join me in thanking Adam for coming.
[applause]
>>Adam Lashinsky: Thank you.
[applause]