Most members of the board were aghast. Jobs was still refusing to commit himself to coming back full-time or being anything more than an advisor, yet he felt he had the power to force them to leave. The hard truth, however, was that he did have that power over them.
They could not afford for him to storm off in a fury, nor was the prospect of remaining an Apple board member very enticing by then. “After all they’d been through, most were glad to be let off,” Woolard recalled.
Once again the board acquiesced. It made only one request: Would he permit one other director to stay, in addition to Woolard? It would help the optics. Jobs assented. “They were an awful board, a terrible board,”
he later said. “I agreed they could keep Ed Woolard and a guy named Gareth Chang, who turned out to be a zero. He wasn’t terrible, just a zero. Woolard, on the other hand, was one of the best board members I’ve ever seen. He was a prince, one of the most supportive and wise people I’ve ever met.”
Among those being asked to resign was Mike Markkula, who in 1976, as a young venture capitalist, had visited the Jobs garage, fallen in love with the nascent computer on the workbench, guaranteed a $250,000 line of credit, and become the third partner and one-third owner of the new company. Over the subsequent two decades, he was the one constant on the board, ushering in and out a variety of CEOs. He had supported Jobs at times but also clashed with him, most notably when he sided with Sculley in the showdowns of 1985. With Jobs returning, he knew that it was time for him to leave.
Jobs could be cutting and cold, especially toward people who crossed him, but he could also be sentimental about those who had been with him from the early days. Wozniak fell into that favored category,
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of course, even though they had drifted apart; so did Andy Hertzfeld and a few others from the Macintosh team. In the end, Mike Markkula did as well. “I felt deeply betrayed by him, but he was like a father and I always cared about him,” Jobs later recalled. So when the time came to ask him to resign from the Apple board, Jobs drove to Markkula’s chateau-like mansion in the Woodside hills to do it personally. As usual, he asked to take a walk, and they strolled the grounds to a redwood grove with a picnic table. “He told me he wanted a new board because he wanted to start fresh,”
Markkula said. “He was worried that I might take it poorly, and he was relieved when I didn’t.”
They spent the rest of the time talking about where Apple should focus in the future. Jobs’s ambition was to build a company that would endure, and he asked Markkula what the formula for that would be. Markkula replied that lasting companies know how to reinvent themselves. Hewlett-Packard had done that repeatedly; it started as an instrument company, then became a calculator company, then a computer company. “Apple has been sidelined by Microsoft in the PC business,”
Markkula said. “You’ve got to reinvent the company to do some other thing, like other consumer products or devices. You’ve got to be like a butterfly and have a metamorphosis.” Jobs didn’t say much, but he agreed.
The old board met in late July to ratify the transition. Woolard, who was as genteel as Jobs was prickly, was mildly taken aback when Jobs appeared dressed in jeans and sneakers, and he worried that Jobs might start berating the veteran board members for screwing up. But Jobs merely offered a pleasant “Hi, everyone.” They got down to the business of voting to accept the resignations, elect Jobs to the board, and empower Woolard and Jobs to find new board members.
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Jobs’s first recruit was, not surprisingly, Larry Ellison. He said he would be pleased to join, but he hated attending meetings. Jobs said it would be fine if he came to only half of them. (After a while Ellison was coming to only a third of the meetings. Jobs took a picture of him that had appeared on the cover of Business Week and had it blown up to life size and pasted on a cardboard cutout to put in his chair.) Jobs also brought in Bill Campbell, who had run marketing at Apple in the early 1980s and been caught in the middle of the Sculley-Jobs clash. Campbell had ended up sticking with Sculley, but he had grown to dislike him so much that Jobs forgave him. Now he was the CEO of Intuit and a walking buddy of Jobs. “We were sitting out in the back of his house,” recalled Campbell, who lived only five blocks from Jobs in Palo Alto, “and he said he was going back to Apple and wanted me on the board. I said, ‘Holy shit, of course I will do that.’” Campbell had been a football coach at Columbia, and his great talent, Jobs said, was to “get A performances out of B players.” At Apple, Jobs told him, he would get to work with A players.
Woolard helped bring in Jerry York, who had been the chief financial officer at Chrysler and then IBM.
Others were considered and then rejected by Jobs, including Meg Whitman, who was then the manager of Hasbro’s Playskool division and had been a strategic planner at Disney. (In 1998 she became CEO of eBay, and she later ran unsuccessfully for governor of California.) Over the years Jobs would bring in some strong leaders to serve on the Apple board, including Al Gore, Eric Schmidt of Google, Art Levinson of Genentech, Mickey Drexler of the Gap and J. Crew, and Andrea Jung of Avon. But he always made sure they were loyal, sometimes loyal to a fault. Despite their stature, they seemed at times awed or intimidated by
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Jobs, and they were eager to keep him happy.
At one point he invited Arthur Levitt, the former SEC chairman, to become a board member. Levitt, who bought his first Macintosh in 1984 and was proudly
“addicted” to Apple computers, was thrilled. He was excited to visit Cupertino, where he discussed the role with Jobs. But then Jobs read a speech Levitt had given about corporate governance, which argued that boards should play a strong and independent role, and he telephoned to withdraw the invitation. “Arthur, I don’t think you’d be happy on our board, and I think it best if we not invite you,” Levitt said Jobs told him. “Frankly, I think some of the issues you raised, while appropriate for some companies, really don’t apply to Apple’s culture.” Levitt later wrote, “I was floored. . . . It’s plain to me that Apple’s board is not designed to act independently of the CEO.”
Macworld Boston, August 1997
The staff memo announcing the repricing of Apple’s stock options was signed “Steve and the executive team,” and it soon became public that he was running all of the company’s product review meetings.
These and other indications that Jobs was now deeply engaged at Apple helped push the stock up from about $13 to $20 during July. It also created a frisson of excitement as the Apple faithful gathered for the August 1997 Macworld in Boston. More than five thousand showed up hours in advance to cram into the Castle convention hall of the Park Plaza hotel for Jobs’s keynote speech. They came to see their returning hero
—and to find out whether he was really ready to lead them again.
Huge cheers erupted when a picture of Jobs from 1984 was flashed on the overhead screen. “Steve!
Steve! Steve!” the crowd started to chant, even as he was still being introduced. When he finally strode
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onstage—wearing a black vest, collarless white shirt, jeans, and an impish smile—the screams and flashbulbs rivaled those for any rock star. At first he punctured the excitement by reminding them of where he officially worked. “I’m Steve Jobs, the chairman and CEO of Pixar,” he introduced himself, flashing a slide onscreen with that title. Then he explained his role at Apple. “I, like a lot of other people, are pulling together to help Apple get healthy again.”
But as Jobs paced back and forth across the stage, changing the overhead slides with a clicker in his hand, it was clear that he was now in charge at Apple—
and was likely to remain so. He delivered a carefully crafted presentation, using no notes, on why Apple’s sales had fallen by 30% over the previous two years.
“There are a lot of great people at Apple, but they’re doing the wrong things because the plan has been wrong,” he said. “I’ve found people who can’t wait to fall into line behind a good strategy, but there just hasn’t been one.” The crowd again erupted in yelps, whistles, and cheers.
As he spoke, his passion poured forth with increasing intensity, and he began saying “we” and
“I”—rather than “they”—when referring to what Apple would be doing. “I think you still have to think differently to buy an Apple computer,” he said. “The people who buy them do think different. They are the creative spirits in this world, and they’re out to change the world. We make tools for those kinds of people.” When he stressed the word “we” in that sentence, he cupped his hands and tapped his fingers on his chest. And then, in his final peroration, he continued to stress the word
“we” as he talked about Apple’s future. “We too are going to think differently and serve the people who have been buying our products from the beginning.
Because a lot of people think they’re crazy, but in that
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craziness we see genius.” During the prolonged standing ovation, people looked at each other in awe, and a few wiped tears from their eyes. Jobs had made it very clear that he and the “we” of Apple were one.
The Microsoft Pact
The climax of Jobs’s August 1997 Macworld appearance was a bombshell announcement, one that made the cover of both Time and Newsweek. Near the end of his speech, he paused for a sip of water and began to talk in more subdued tones. “Apple lives in an ecosystem,” he said. “It needs help from other partners.
Relationships that are destructive don’t help anybody in this industry.” For dramatic effect, he paused again, and then explained: “I’d like to announce one of our first new partnerships today, a very meaningful one, and that is one with Microsoft.” The Microsoft and Apple logos appeared together on the screen as people gasped.
Apple and Microsoft had been at war for a decade over a variety of copyright and patent issues, most notably whether Microsoft had stolen the look and feel of Apple’s graphical user interface. Just as Jobs was being eased out of Apple in 1985, John Sculley had struck a surrender deal: Microsoft could license the Apple GUI for Windows 1.0, and in return it would make Excel exclusive to the Mac for up to two years. In 1988, after Microsoft came out with Windows 2.0, Apple sued.
Sculley contended that the 1985 deal did not apply to Windows 2.0 and that further refinements to Windows (such as copying Bill Atkinson’s trick of “clipping”
overlapping windows) had made the infringement more blatant. By 1997 Apple had lost the case and various appeals, but remnants of the litigation and threats of new suits lingered. In addition, President Clinton’s Justice Department was preparing a massive antitrust case against Microsoft. Jobs invited the lead
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prosecutor, Joel Klein, to Palo Alto. Don’t worry about extracting a huge remedy against Microsoft, Jobs told him over coffee. Instead simply keep them tied up in litigation. That would allow Apple the opportunity, Jobs explained, to “make an end run” around Microsoft and start offering competing products.
Under Amelio, the showdown had become explosive. Microsoft refused to commit to developing Word and Excel for future Macintosh operating systems, which could have destroyed Apple. In defense of Bill Gates, he was not simply being vindictive. It was understandable that he was reluctant to commit to developing for a future Macintosh operating system when no one, including the ever-changing leadership at Apple, seemed to know what that new operating system would be. Right after Apple bought NeXT, Amelio and Jobs flew together to visit Microsoft, but Gates had trouble figuring out which of them was in charge. A few days later he called Jobs privately. “Hey, what the fuck, am I supposed to put my applications on the NeXT OS?” Gates asked. Jobs responded by
“making smart-ass remarks about Gil,” Gates recalled, and suggesting that the situation would soon be clarified.
When the leadership issue was partly resolved by Amelio’s ouster, one of Jobs’s first phone calls was to Gates. Jobs recalled:
I called up Bill and said, “I’m going to turn this thing around.” Bill always had a soft spot for Apple. We got him into the application software business. The first Microsoft apps were Excel and Word for the Mac. So I called him and said, “I need help.” Microsoft was walking over Apple’s patents. I said, “If we kept up our lawsuits, a few years from now we could win a billion-dollar patent suit. You know it, and I know it. But Apple’s not going to survive that long if we’re at war. I know that.
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