business

Apple's Unlikely Saviors: Gil Amelio and Jean-Louis Gassee

By Paul Carroll

My Steve Jobs story:

I met Jobs when he came by the New York offices of the Wall Street Journal and made perhaps as grand an entrance as anyone can make in a small setting. He was there in, I believe, 1991 to have lunch with the mucketymucks at the WSJ to try to sell the paper on some favorable coverage of his struggling education-workstation startup, Next. Jobs walked in wearing a tailored suit that clearly cost many thousands of dollars — this was long before he adopted his uniform of Levi jeans and a black T-shirt. He took off his suitcoat and looked around for somewhere to hang it. Not seeing a hook or a hanger, he balled up his coat and tossed it into a corner. The message was: “Yes, I’m insanely wealthy, and I have exquisite taste, but who cares?”

His famed “reality-distortion field” was working well that day. After lunch, the CEO of the WSJ’s parent company, Dow Jones, and the managing editor — both ferocious and skeptical journalists — pulled aside the two of us who were there as computer-industry beat reporters and asked if we shouldn’t write a front-page piece on Jobs and Next. The other reporter and I explained that much of what Jobs had discussed was widely available, not unique to Next. Many of the capabilities that he had talked about in the present tense wouldn’t reach the market for years. Others might as well have been science fiction — they could become available in 10 or 15 years, or never. The idea of a story was dropped.

To be clear: The Next computer was a brilliant concept and beautifully designed. Was Jobs capable of anything less? Tim Berners-Lee used a Next computer when he developed the World Wide Web in 1990 and has said the computer greatly simplified the process, enabling him to write in a matter of mere months the code that gave birth to the Internet age.

Still, that lunch at Dow Jones should have meant the end for Jobs in the computer industry. (Pixar is another story.) It’s not that those of us at the WSJ had all the power, but we represented a pretty good test of the prospects for Next, and they were grim. Schools didn’t have the money to buy the expensive Next machines, and competition in other parts of the workstation market was already too entrenched, even for Jobs. Next should have stayed on its glide path into the ground, and Jobs should have been relegated to an important but limited role in the history books as the popularizer of personal computers. No company other than Apple would have hired him after his firing, given his lack of managerial success and his reputation for mercurial behavior. Even if, on his own, Jobs had come up with the idea for the iPod, the iPhone or the iPad, he would not have been able to bring them to market without the backing of a major company like Apple.

Then Gil Amelio rode to the rescue. Amelio is the largely forgotten executive who took over as CEO of Apple in 1996, at a time when Apple was under so much pressure that Sun was negotiating to buy it for a song and the Wall Street Journal (mistakenly) wrote a front-page story that was essentially an obituary for Apple. Amelio became the third CEO in the space of four years and lasted little more than a year in the job, yet it was Amelio who had Apple buy Next for $430 million in 1996 and brought Jobs back to Apple as an adviser. Amelio bought Next entirely out of desperation, after internal attempts at a next-generation operating system had failed and Apple needed to look outside its walls for technology.

Amelio had been close to buying Be Inc. and building off its operating system, but Jean-Louis Gassee saved the day that time. Gassee, a former Apple executive who was the CEO of Be and who was never known to lack for self-confidence, demanded far more for the company than Amelio was willing to pay. Only once negotiations with Be fell apart did Amelio turn to Next and Jobs. (Amelio said, “We choose Plan A instead of Plan Be.” Be’s assets were purchased a few years later for just $11 million.)

With Jobs back in the fold, Apple’s board soon forced out Amelio and named Jobs interim CEO, at which point the company was off to the races. Apple changed the way people live — one of my teenage daughters says, “My iPhone is my life” — and soared to the highest market capitalization of any company in the world.

But in the midst of all the encomiums for Jobs — and they are well-deserved — I find it fascinating that his successes of the past 15 years occurred on a razor’s edge. Without Amelio’s desperation and Gassee’s overreaching, the Jobs legacy would be far less than it is. Despite what was clearly genius, many of his breakthroughs came so close to not happening.

We should all just be thankful that they did.
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( Posted on Harvard Business Review : October 7, 2011 11:49 AM )
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