Note: While reading a book whenever I come across something interesting, I highlight it on my Kindle. Later I turn those highlights into a blogpost. It is not a complete summary of the book. These are my notes which I intend to go back to later. Let’s start!

  • Steve didn’t seem to have a clear answer. I tried to get some of his thoughts about what else was going wrong, but couldn’t even get him to identify problems, much less provide solutions. He seemed to have a set of one-liners and sound-bite answers that sidestepped all questions. Sidestepping is a nurtured skill of politicians (which may in time be Steve’s destiny), but why was he using it on me? He talked enthusiastically about the importance of new ideas, and yet I couldn’t get anything more from him than that he thought voice recognition was a waste of time and networking was important. I continued to toss real-world queries: “Okay, suppose you were CEO tomorrow. What would you do? What would be the first decision you would make and why? What would follow?” And I was getting back those Carson-like one-liners. I began to understand what people meant when they talked about Steve’s “reality-distortion field.” Clearly he wasn’t in my office to sell me on the quality of his strategic ideas based on in-depth thinking about Apple. His pitch added up to, “Apple should make a change, I can lead the change, but I don’t know what the change will be.” Steve has a very different chemistry than I do-he has the ability to charm people. I was looking for a fundamental understanding and some specific plans. Yet I couldn’t help but admire, even envy, his eloquence.

  • Morale is an ephemeral quality, especially skittish when company leadership changes. People naturally struggle with fears over whether their jobs are safe and what the new policies will be. These Apple folks were tired of the beating the company had been taking due to declining market share and gross margins. And the layoff of 1,300 people started by Michael Spindler was still in progress. Clearly they needed to begin hearing some welcome news as fast as possible. So I instructed Satjiv to get some positive momentum going. “l want a press release every day on something positive-a new product, a customer placing a large order, a new concept or an idea about the future from one of our Apple Fellows. Something going out every day.” I wanted his staff working on that until he had a pipeline spewing out upbeat releases. That was, I think, the first business assignment I gave to any of the executives.

  • One of the meetings l arranged to attend that first week was an operations-review session of Apples interactive media group. Kai-Fu Lee, who headed the group, introduced me. When I asked for questions, a manager named Howard Green shot his hand up; like so many of the Apple managers, Howard is a bright guy with a strong educational background (Cornell undergraduate, Stanford MBA). He asked, “What do we have to do in the first 100 days?” The question was in a way prophetic: It was the first time anyone had mentioned that time frame, which has become traditional in American politics as a landmark for the press to measure the achievements of a new president. Perhaps the question stuck with me; it would become a land mine. Since this was a product group, they were probably anticipating a product-oriented or engineering-oriented reply. But my answer to Howard was “Get the cash flow going.” They had to hear that basic truth, because it was the first order of priority. No company can operate without cash, and l knew from reports to the board that the situation was approaching critical. Michael Eisner had issued an edict early in his career at Disney that every unit would become revenue generating; he was also making the point that cash was king. That wisdom was even more valid for the cash-strapped Apple. Word got back to me later that the group had picked up on my use of the term “process”-it was already becoming clear that I’m a process person. But the group had also concluded I didn’t yet know which gears and levers to push at Apple. Hardly surprising at the time; what was surprising was how long that would take and how difficult it would be.

  • When time came for that part of the meeting, I was stunned to discover that no one had come prepared. The senior management of a Fortune 500 company, and not one of these executives had spent any time getting ready to share a report with the rest of the team. What was I to make of this? The answer, I think, was that every one of the VPs considered their domain as their own responsibility and had no serious interest in letting others address the issues in their area. Again, ‘I am rowing as fast as I can. I don’t have time to tell you where l’m heading.” My reputation describes me as a calm executive, one who can manage without resorting Lo anger. Its a style that comes naturally to me, just as true outside the office as in. But on rare occasions, anger is in order to make a point. Another incident at that first management meeting brought me close to that, in a way that was actually quite unfair to the person involved. Apple had been without a CFO for months (another action item on my crowded list of Lop-priority issues), and Controller Jeanne Seeley had somehow been managing her own job and juggling the CFO drnies, as well. During the meeting, l asked Jeanne to gather certain financial information and provide me with a detailed analysis of the cost of each product, broken into fixed and variable costs. “We’ve never assembled that data,” she said. Thats fundamental information every manager should have. l said so, and said l wanted it. “It’ll take a few weeks,” she said. I replied in a tone of voice nobody in the room could mistake. I said I never again wanted to hear from anyone that information I asked for would take anything like that long to deliver. Later I would find out it wasn’t incompetence, bad organization, or bad management that Jeanne was struggling with, but, of all things, out-of-date information systems. Financial data was being collected on one set of systems in each of the sales regions, processed on different systems at the Apple offices in Austin, Texas, and reports generated by an entirely different computer. The three types used different software, and none could communicate or transfer data with the others. We were a computer company with out-of-date systems and a massive computer headache. An international firm had been brought in to create a uniform business system throughout Apple, but it was an effort of years that was still mostly in the planning stages. The price tag, several hundred million dollars, would prove too expensive; the project would be canceled before it had ever achieved much. What a waste. But at least I found a chance to apologize to Jeanne.

  • Some executives (again I think of Michael Eisner) are successful yet almost reclusive in terms of appearances, rarely showing up at a press conference to do anything more than read a prepared statement. The Eisners just don’t allow themselves to get sucked into the vortex. I used to wonder, Why is Eisner so reclusive? Why isn’t he more visible? Disney is such a wonderful company, why doesn’t he talk about it? My view has changed: I think now that he was simply more aware than I of the dangers lurking just beyond the edge of the spotlight. When Lou Gerstner faced the media on taking over at IBM, he tried to make the case that “I don’t have all the answers yet, I’m working hard on them. When I have answers, I’ll tell you about ‘em.” I tried a similar tack, but dug a hole for myself when I said something about ‘This is only day ten of my first hundred days.” I had inadvertently planted the idea that there was going to be a hundred-day speech, or a hundred-day event, a promise that would rapidly take on a life of its own, carrying with it the inference of problems solved and solutions in place by the 100-day mark. It was symptomatic of how the press can drive your agenda and would prove a painful headache in the making.

  • I’ve always believed that when people strike a deal and shake hands on it (in this case more than figuratively, more even than an actual handshake, since it was put down in writing), people of honor stand by the deal. You can always sit down later and say, “I want to· reconsider the terms with you,” but if the other person says, “I don’t want to make those changes, I want to stick with the original terms,” then you cannot in good conscience insist. This has nothing to do with who could prevail in court, but with traditional notions of honor. Apple’s outside counsel was present on that Wednesday night and raised no alarms; the final board approval was to be a mere formality. l think they had a moral obligation to stand by the agreement; what a disappointment they were to me. I was left still wondering if I had done the right thing in resigning from National. This whole contract episode had been a contest for control. If Ed Stead could veto anything the CEO did, he would position the legal department to wield far greater power than l believe is proper for a technology company. Okay, Ed, l said to myself, if you want to play … Ed was just my first Apple experience of the power in-fighting that employees describe as “too much politics.” l was no novice at corporate power playing, but l was an innocent compared to what l would soon find. My eyes were about to be opened wide.

  • I would meet with one of the vice presidents and we would discuss a particular problem and what needed to be done. We’d agree on a course of action. And nothing would happen. Nothing. It was as if the conversation had never taken place. No follow-through … no explanations … no reports. And these were the top executives of the company. Did Spindler experience this? Did Sculley? How long had this been going on? Someone once disdainfully described the U.S. president as a flea on the back of an elephant-the bureaucracy guided the beast, ignoring instructions from the order-giver at the top. I remembered back when I took over my first sick organization, as its third president in three years. The executives assumed I would be gone as quickly as my predecessors, and largely ignored me. I had used an extreme technique I refer to as “shooting one of the lead buffaloes,” which manages to get peoples attention. Would I need my buffalo gun again? The media prefers to treat the CEO of Apple like a film star, and Apple people enjoy having a media phenomenon in the top position of their company. But it seems to me that Apple management treats their CEO like an airhead celebrity-an icon who is supposed to represent the company in the press and at public forums, but is not to be trusted or respected for the making of business decisions. Were podium skills more valued by Apple people than business acumen? I dread to think this could become the accepted view in business, just as it’s become the view in politics. I was fighting to do my job, when process and follow-through should be the mantras of any manager. I was used to managers who made things happen; the two of you would agree, “We’ve got a problem here,” and the manager would understand his job was to go fix it. Then I was accustomed to a cloud of dust and lots of activity. At Apple, what I got instead were critiques, second guesses, and opinions, but no fixing of the problems.

  • Again nothing happened. l moved further down the line, to Mitch Allen, the working-level manager running the project for our next-generation operating system, Copland. Mitch, I discovered-at three degrees of separation from the CEO’s office-was making all the important decisions for the crucial Copland software. He was a highly capable man, but definitely not qualified to be making top-level decisions that would impact the entire corporation. Dave and Ike, two very genuine and smart executives, were responding to action items only on a theoretical plane, but not taking the kind of decisive, hands-on action that was absolutely essential for getting the company back on track. The conclusion I came to was that both were really professors at heart, perhaps with an eye on going back to the campus after gaining experience in industry. lt frustrated me that they weren’t getting the job done; something would have to change.

  • With guidance from me, the executives at the off-site set up a few task teams to address specific issues like developing a road map for entry-level products and formulating a strategy for “crossing the chasm”-keeping the business afloat until new products and programs begin to take hold. I couldn’t help thinking that when politicians want to delay taking action, they form a committee to study the problem; I hoped our task teams would be more than a delaying tactic. But beyond the formation of task teams, the two-day off-site accomplished almost nothing except proving to me that my perception of Apple executive conflict was on target. How would I resolve this fundamental, critical problem?

  • lt has always seemed to me there was a tacit and honorable agreement covering a situation when a speaker doesn’t read from a prepared text. Reporters, l assumed, recognize the informality, understand it, and make allowances for statements that might not come out exactly as the speaker meant them. l expected that members of the media would not literally quote me word for word, but would listen for the thrust and report on the ideas 1 intended to convey. Wrong. My statements were used out of context; much of what appeared in the news was not at all what I had intended. After Seybold I began to evolve from my own casual, trusting style to one of calculated preparation and distinct distance. I resented sorely the fact that I was coerced into becoming highly sensitive about the way I spoke especially to representatives of the media. Charlene urged me not to overreact, not to change the essence of who I am. Her advice was hard to follow when the Apple PR professionals were urging major style changes. Still in my first month, the roller coaster was again picking up speed.

  • In most of life, image is a vain issue to be concerned with. But for any leader-in politics, business, the family, the classroom, church, community service-image seems to impact whether people will follow with enthusiasm or merely because they’re required to. The power of believability and sincerity added up to an image that was attractive to the people of Apple. l needed that, I wanted that, and was delighted to have made it happen.

  • In this conversation months before I became CEO, I said to Mike, “We sit around at these board meetings and hear presentations from management about, ‘We want to do this project, we’re going to launch that new product or feature,’ and each one seems to be a stand-alone idea.” “I know exactly what you mean,’’ Mike said. “And it gets us nowhere.”

  • I firmly believe that grass-roots employees have the keenest perception of whats really going on in an organization. On a Thursday afternoon, about twenty employees gathered with me in the board room for a “coffee-klatch” session-a technique I’ve long used as a way of hearing the views, suggestions, and complaints of those who work where the rubber meets the road. The rules are: just me and them, with no other executives present; no transcription is made; and everything said remains in complete confidence - “Nothing leaves the room.”

  • The main sections of the White Paper were devoted to a mission statement and strategic vision, a set of strategic principles, a section that reviewed Apples past performance (“Looking at Reality”), and “Looking to the Convergent Future,” on where we intended to go. The most extensive part of the document went into details on the new Apple business model, dealing with critical issues like the core markets and target markets we would focus on, the phases for putting the plan into operation, how the company would need to be restructured to carry out the plan effectively, and the anticipated short-term and longer-term impacts on revenues and costs. The paper even included a risky candid (and accurate) prediction that ‘‘This strategy may result in a drop in Apple’s unit and dollar sales volume” and (less accurate, fortunately) “may impact the availability of investment funds.” lt’s been said that a problem accurately stated is a problem half solved. Well, we had said it. The other half would be a great deal harder.

  • One of the strengths of the White Paper, I thought, was that a lot of data had been pulled together and boiled down to show how poorly the company had done in the past. Presenting that hard information in black and white would surely wake people up like an icy shower. l wanted these managers to know the extent to which we hadn’t done well and needed to think about what we had to do better. Yes, I know that the best way to lose a friend is to give him some advice for his own good. ln a similar way, the “Looking at Reality” section of the White Paper, although intended as a motivational tool, lost me their support. What I expected was that each middle manager would take this document, read it carefully, and then put some heavy-duty thought into designing the tactical plans for his or her unit that would light a rocket. l needed them to ask: “How does this apply to my group? Can I implement this both in spirit and in substance so my people can be aligned to the effort of the corporation?” lnstead, these managers read rhe report, handed out copies to their people, and then put it in a drawer. The sum total of their support began and ended with passing out copies. As individuals, beyond finding fault with it, they weren’t willing to think about it and they weren’t even going to discuss the new strategies at their meetings. This vital document was treated with as little attention as a New Yorker pays to the siren of a police car. I was beyond anger at this lack of support.

  • I would actually have felt better if the leadership had expressed their annoyance and disagreed with the strategic decisions, resisting because they were unwilling to buy into my new directions. But that wasn’t the case at all; shoulder-shrugging is hard to respond to. What was their problem? Did these brilliant and experienced Apple people now expect a detailed marching plan? Were they waiting for the thinking to be done for them? I would have expected them to be demeaned if issued tactical orders in the style of Step One, Step Two, Step Three …. It appeared we had a major problem in the middle-management ranks. Their attitude was, “Gee, this is a nice paper, but it doesn’t tell me what I’m supposed to do.” These were people fully capable of designing and planning the work that would support our new strategy. They learned how in the best schools, and most were well experienced. And they were neither lazy nor recalcitrant. I concluded they had never been asked to think at this level. Instead, they wanted to be handled in one of two ways. Either they wanted you to do the thinking and then tell them precisely what they should do-or they didn’t want you to bother them at all, they wanted to be left alone to do whatever the hell they thought happened to need doing today. In any well functioning organization, the managers would have each analyzed the White Paper and carefully thought out a list of three or five or ten goals for their own group in line with the goals of the Paper. Then they would have called their people together and said, “Here are the new goals for the group, and here’s how they support the new goals of Apple. Now we need to plan the specific things we’re going to do in order to move in this new direction.” And they would have prodded, cajoled, cracked the whip as necessary to make sure everybody was falling into line. Could they have demanded that kind of shift in work processes without trodding on the freedom of action and independence that were among Apple’s greatest strengths? l would have been Lying to myself if I had answered with an unequivocal yes. Asked individually, any Apple person would quickly acknowledge that changes were needed, but now it was time to start changing, and … nothing. It was becoming evident that without some remaking of Apple attitudes and style, we were not going to get the company onto a healthier course.

  • I came to recognize the fault lay not with the individual executives, but with the culture. They had learned over the years to view the CEO as a person who went out and made speeches, and left them alone to run (or ruin) the company. God forbid the CEO should try to make a real business decision that they hadn’t cooked up and put on his plate. I believe they had come to the conclusion that an Apple CEO was just another user-friendly icon-a figurehead who shouldn’t interfere \vith hard business decisions that one of them hadn’t initiated. Problems are solvable. Thats what people do much of their time at work-solve problems. Hearing forthrightly about what was happening would have been reassuring, even enjoyable. Instead we were playing a childish game of hide-and-seek. I had been at Apple for months and the real work hadn’t yet begun; we were still shadowboxing. Only very gradually were they beginning to understand that I was a different breed of CEO-one to whom they could bring problems, a CEO who intended to get and stay close to the action. I’ve learned the hard way that changes don’t happen overnight … but it may well be that I was far too patient. Telling myself I would hang in there and lead them toward change, I was hanging myself and didn’t know it.

  • The 100-day report card, inadvertently initiated by me in that offhand remark at the first press conference back in February, had taken on a life of its own, becoming almost a feeding frenzy among reporters. Articles began appearing about “What is Gil going to say?” Even some editotial writers speculated in print on how Apple was faring and what plans I might announce. I was bedazzled by the fact that so many people were interested.

  • My questions didn’t phase him. “I know I have that reputation. It came up when l was at Tl, and now I really understand the issues.” He insisted that he had changed and with grace blamed his volatility on his Mediterranean heritage. “I just get excited sometimes, but I can rise above this and it won’t be a problem.” ‘Td be putting a lot of trust in you,” I said. “As COO, you’d have to be able to carry my message forward. You’d have to be extremely loyal to me from day one. I can’t be sitting here looking over your shoulder all the time to check up on your behavior. The whole purpose of a COO is to relieve some of the pressures that are channeled to the CEO.” He said, “Give me six months on the job. If that time rolls around and you think you’ve made a mistake, just tell me and I will politely step aside and leave.” A very effective sales technique, the equivalent of ‘Try this used car for two weeks, and if you don’t like it, you can bring it back.” Only the foolish can be won over by a charming smile and a personable manner; I had one of my foolish days when Marco came to town.

  • Why were we doing such a rotten job in product quality? I may not have followed up on how flowers were brought into my office, but I sure wanted to know what had caused the sorry state in the quality level of Apple products. We had approximately 650 people throughout the company working on quality, we were budgeting vast amounts of money to be the quality leader, and it felt like we couldn’t ship a single product that wasn’t plagued by either design or quality difficulties. Companies normally expect to spend about 1 or 2 percent on quality. Not even counting warranty costs, we were spending on average 5 or 6 percent.

  • I had included the term “DSUV”-Distinctly Superior User Value-in the original strategy White Paper, adapting it from a similar term l had used at National Semiconductor and hoping it would become a catchphrase to express the product values that the company needed to embrace. I explained DSUV by saying, “There are five things we have to do as well or better than anyone else.” Those five were: User experience-which had to do with stability of the system, product quality, and quality of the service and support. Performance-which would have to be equal to or better than our competitors. Connectivity-meaning how easily the machines could be hooked up into networks, which are becoming the dominant feature of the way people use computers. Industrial design-keeping alive the Steve jobs ideal of producing great-looking machines. And compatibility-which meant accepting that we lived in a world dominated by another standard, and doing whatever we had to do so that our customers wouldn’t be frozen out when they chose a Mac. If the company could intensely focus on these five areas, with the goal of being best-in-class in each area, I was sure a comeback and transformation of Apple would be achieved. At the end of my tenure we were only partway there, but the people of Apple had made enormous strides in each of these areas. With some trepidation, l tapped Cynthia Cannady to run the task force on DSUV-trepidation because this was a highly unusual choice: Cynthia is an attorney, and in the business world, attorneys are not typically asked to do this sort of business assignment. But I had sized her up early on as a high-energy person. Cynthia became convinced that the DSUV concept would be the salvation of the company, and she turned into a single-minded evangelist. That plus her articulate skill as a seasoned lawyer made her very effective as the task force leader.

  • Graziano showed up at board sessions dressed in the very high style of a GQ ad; Michaels persona was in sharp contrast and carried the Apple nonconformist attitude of “to hell with how I look.” Joe sported the image of a prosperous clotheshorse, while Michael gave the impression he’d forgotten a barbers appointment and had tossed on a shirt that had just come out of a suitcase. The images conveyed that Michael was preoccupied with important business concerns while Joe didn’t have a care in the world. At the time, I simply noted the differences as superficial observations and drew no conclusion. Shirts and shoes would turn into important clues to a series of misbehaviors the board was soon to witness.

  • Why was it that when it came time for financial reports, Joe, the CFO, didn’t do them? He’d have Jeanne Seeley present the controller perspective, and Mary Ann Cusenza would be asked to handle the treasury aspects. Joe would calmly listen with the detachment of a board member as though the reports vveren’t a personal reflection on him. At first l chalked up this laid back behavior to an individual management style, but gradually came to conclude that Joe was in fact not on top of the financial details and wasn’t fulfilling his CFO responsibilities. He had, l decided, virtually retired, leaving Apple’s financial duties to his direct reports. It became all too obvious to me that Graziano’s preferred function for Apple was as a board member and that his primary interest was the money he’d make from stock options when the company was sold. He was pushing for a sale to IBM, I now believe, because he expected they would pay the heftiest price. l thought, No wonder he’s holding on to the CFO title. No wonder he keeps pushing so hard to get the company acquired by IBM.

  • Under the smoke screen of reorganization, l did something much too long in coming: I maneuvered several executives out of their jobs or out of the company. With one exception, these were all people I admired and genuinely liked. They had been unswervingly devoted to Apple and had given the company their very best efforts. Perhaps their inadequacies were merely a lack of needed skills and experience, but to some degree they were too deeply imbued with an arrogant Apple style that needed to change, yet they were unwilling or unable to relinquish. I had to face it: the most serious failing was mine-in not acting sooner. It’s unfortunate to have to replace a top executive, even worse when it’s done a year late.

  • As I play back my relationships with people, I’ve observed my own behaviors and realize chat I need to pay attention to whether, over time, my esteem for a person is rising or falling. lt now seems to me that’s a much more reliable way of measuring than first impressions; perhaps I need to sec a trial period or, say, three months, and see how our relationship works out. l continue to think about this issue because, although I’ve always considered myself an accurate judge of people, the Apple experience has shaken my confidence in that area. In short order, four executives were replaced, a formidable step to take all at once, but one I was not willing to delay any longer.

  • Steve jobs, a master at the politicians gambit of diversionary statements, may seem to agree with or endorse a position, but in fact he’s answering a totally different question, which effectively serves to mask his real intent. Many of Steve’s forthright-sounding answers only give a Houdini-like illusion of reality. l would become excruciatingly aware of his magic with words.

  • From the day Steve had been violently torn from Apple’s womb by the board, he must have become obsessed with the notion of again taking over the company. How else explain that visit to me at National Semiconductor? So one of the strategies he could be expected to pursue was arranging to get people loyal to him placed into key positions and shoving out or moving aside people who weren’t willing to accept “Stevie Wonder” as their maximum leader. Its possible to read the history of those few months exactly that way, and there are journalists and Apple folks who will tell you that this is just what happened. l don’t see it like that. Steve did, in fact, pressure me very hard to put Avie Tevanian in charge of all software. He said, “Look, when you bought NeXT, one of the assets you bought was Avie. He’s been with the company for nine years, almost the entire life of NeXT. And if you had to pick five people who are the best systems software engineers in the world, his name would certainly be on the list.” All true. “It just seems to me,” Steve argued, “that the smart thing for you to do is put him in charge of the software program.” Anyone buying into the scenario of Steve scheming for control would have viewed Avie as a pawn that Steve wanted in a critical position.

  • Businessmen seem quite capable of conducting autopsies of other businessmens performances, but are seemingly incapable of analyzing their own. Finally, I was in control of my schedule, and with time set aside for reflection, I decided to review and analyze in an orderly way what appeared to be my mistakes. In my 500 days at Apple, we managed to get the transformation process well under way, and I’m proud of the success on several fronts. The biggest mistake I had made-I would list it as the fatal mistake was allowing myself to be hammered into predicting when Apple would become profitable. I knew better. I continue to wonder who I was at that moment in time to let people like Ed Woolard convince me to do what I had never done before. I shouldn’t have made a commitment; the company was not yet the well-oiled machine that could carry us forward with any assurance. By yielding to pressure from the board, I set in place a false expectation and an inaccurate yardstick to measure my performance; I would be judged according to a false forecast instead of on my transformation of product quality, organization, and the system software solution. By yielding to the board’s pressure, I had created the beginning of the end. My list of mistakes also includes the delayed launch of a muchneeded, aggressive ad campaign that I should have started months earlier; I should have pushed much harder against the board’s resistance for budget to support it. l should have moved much earlier to tackle the deep underlying management problems-the passivity, insubordination, and the rest. We had begun a mid-management training effort of a kind I had used successfully at previous companies, but it had taken too long to design, had started too late, and even then we weren’t doing it well enough to have much impact. And I berate myself, as well, over the fact that I never found an effective way to halt the loss of irreplaceable talent.