Steve Jobs - Product Review

STEVE JOBS BRILLIANT BUSINESS MIND

From the book "Steve Jobs"


Product Line Review

One of Jobs's great strengths was knowing how to focus. "Deciding
what not to do is as important as deciding what to do," he said.
"That's true for companies, and it's true for products."
He went to work applying this principle as soon as he returned to
Apple. One day he was walking the halls and ran into a young
Wharton School graduate who had been Amelio's assistant and who
said he was wrapping up his work. "Well, good, because I need
someone to do grunt work," Jobs told him. His new role was to
take notes as Jobs met with the dozens of product teams at Apple,
asked them to explain what they were doing, and forced them to
justify going ahead with their products or projects.
He also enlisted a friend, Phil Schiller, who had worked at Apple
but was then at the graphics software company Macromedia. "Steve
would summon the teams into the boardroom, which seats twenty,
and they would come with thirty people and try to show
PowerPoints, which Steve didn't want to see," Schiller recalled.
One of the first things Jobs did during the product review
process was ban PowerPoints. "I hate the way people use slide
presentations instead of thinking," Jobs later recalled. "People
would confront a problem by creating a presentation. I wanted
them to engage, to hash things out at the table, rather than show
a bunch of slides. People who know what they're talking about
don't need PowerPoint."

The product review revealed how unfocused Apple had become. The
company was churning out multiple versions of each product
because of bureaucratic momentum and to satisfy the whims of
retailers. "It was insanity," Schiller recalled. "Tons of
products, most of them crap, done by deluded teams." Apple had a
dozen versions of the Macintosh, each with a different confusing
number, ranging from 1400 to 9600. "I had people explaining this
to me for three weeks," Jobs said. "I couldn't figure it out." He
finally began asking simple questions, like, "Which ones do I
tell my friends to buy?"
When he couldn't get simple answers, he began slashing away at
models and products. Soon he had cut 70% of them. "You are bright
people," he told one group. "You shouldn't be wasting your time
on such crappy products." Many of the engineers were infuriated
at his slash-and-burn tactics, which resulted in massive layoffs.
But Jobs later claimed that the good engineers, including some
whose projects were killed, were appreciative. He told one staff
meeting in September 1997, "I came out of the meeting with people
who had just gotten their products canceled and they were three
feet off the ground with excitement because they finally
understood where in the heck we were going."

After a few weeks Jobs finally had enough. "Stop!" he shouted at
one big product strategy session. "This is crazy." He grabbed a
magic marker, padded to a whiteboard, and drew a horizontal and
vertical line to make a four-squared chart. "Here's what we
need," he continued. Atop the two columns he wrote "Consumer" and
"Pro"; he labeled the two rows "Desktop" and "Portable." Their
job, he said, was to make four great products, one for each
quadrant. "The room was in dumb silence," Schiller recalled.

There was also a stunned silence when Jobs presented the plan to
the September meeting of the Apple board. "Gil had been urging us
to approve more and more products every meeting," Woolard
recalled. "He kept saying we need more products. Steve came in
and said we needed fewer. He drew a matrix with four quadrants
and said that this was where we should focus." At first the board
pushed back. It was a risk, Jobs was told. "I can make it work,"
he replied. The board never voted on the new strategy. Jobs was
in charge, and he forged ahead.
The result was that the Apple engineers and managers suddenly
became sharply focused on just four areas. For the professional
desktop quadrant, they would work on making the Power Macintosh
G3. For the professional portable, there would be the PowerBook
G3. For the consumer desktop, work would begin on what became the
iMac. And for the consumer portable, they would focus on what
would become the iBook. The "i," Jobs later explained, was to
emphasize that the devices would be seamlessly integrated with
the Internet.

Apple's sharper focus meant getting the company out of other
businesses, such as printers and servers. In 1997 Apple was
selling StyleWriter color printers that were basically a version
of the HewlettPackard DeskJet. HP made most of its money by
selling the ink cartridges. "I don't understand," Jobs said at
the product review meeting. "You're going to ship a million and
not make money on these? This is nuts." He left the room and
called the head of HP Let's tear up our arrangement, Jobs
proposed, and we will get out of the printer business and just
let you do it. Then he came back to the boardroom and announced
the decision. "Steve looked at the situation and instantly knew
we needed to get outside of the box," Schiller recalled.
The most visible decision he made was to kill, once and for all,
the Newton, the personal digital assistant with the almost-good
handwriting-recognition system. Jobs hated it because it was
Sculley's pet project, because it didn't work perfectly, and
because he had an aversion to stylus devices. He had tried to get
Amelio to kill it early in 1997 and succeeded only in convincing
him to try to spin off the division. By late 1997, when Jobs did
his product reviews, it was still around. He later described his
thinking:

If Apple had been in a less precarious situation, I would
have drilled down myself to figure out how to make it work.
I didn't trust the people running it. My gut was that there
was some really good technology, but it was fucked up by
mismanagement. By shutting it down, I freed up some good
engineers who could work on new mobile devices. And
eventually we got it right when we moved on to iPhones and
the Wad.

This ability to focus saved Apple. In his first year back, Jobs
laid off more than three thousand people, which salvaged the
company's balance sheet. For the fiscal year that ended when jobs
became interim CEO in September 1997, Apple lost $1.04 billion.
"We were less than ninety days from being insolvent," he
recalled. At the January 1998 San Francisco Macworld, Jobs took
the stage where Amelio had bombed a year earlier. He sported a
full beard and a leather jacket as he touted the new product
strategy. And for the first time he ended the presentation with a
phrase that he would make his signature coda: "Oh, and one more
thing..." This time the "one more thing" was "Think Profit." When
he said those words, the crowd erupted in applause. After two
years of staggering losses, Apple had enjoyed a profitable
quarter, making $45 million. For the full fiscal year of 1998, it
would turn in a $309 million profit. Jobs was back, and so was
Apple.
..........

Don't you just love a story of "return" - "turnaround" - "from
loosing to winning" - I sure do, and this is one of them, Steve
Jobs back with Apple and turning things around and for the
better.

Keith Hunt