Strategic Realignment
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Steven Jobs always gets the easy jobs.
- Create a new industry with the personal computer.
- Implement new technology for the first time with the MacIntosh computer.
- Battle with a CEO - and lose - in his battle with John Sculley.
- Return to a broken company with the aim of turning things around.
In the first quarter of 1996, Apple Computer lost $69 million, laid off 1,300 staffers, fired their CEO, and, finally, brought in Gil Amelio as the new CEO. Amelio continued to cut out the pork in Apple's operation by reducing the number of projects from three hundred to about fifty. Amelio needed a new operating system for the Mac so he bought Jobs' NeXT computer because its operating system was up and running and perfect for the Mac. Apple had forty different product lines, a confusing, unfocused array that needed culling.
After a series of losing quarters, the Board asked Amelio to leave and hired Jobs as CEO (Kahney, 22).
When Jobs came on board, Apple had forty product lines. His job: reduce the forty to the profitable few. Make a profit. Now. How'd he do it?
Job's Seven Key "Realignments" (Kahney, 26-33)
- Replace most of the Board with tech industry allies, including Larry Ellison from Oracle.
- Resolve the suit with Microsoft about similarities between Apple's operating system and Microsoft's. Persuade Mircosoft to invest in Apple to show good will.
- Hired a new marketing company - TBWA/Chiat/Day - to create a new, bold marketing campaign.
- Dump the clone business relationships. No more non-Apple computers shipped with the Apple operating system.
- Simplify the pipeline. Just four products for the company: Consumer Portable and Desktop and Professional Portable and Desktop. Every thing else got dumped, including a very profitable printer business.
- Refocus the suppliers (IBM and Motorola) so they provided concessions he wanted and supported Apple going forward.
- Finally, he re-focused on the twenty-five million current customers of Apple. They were the foundation for the re-emergence of Apple.
The biggest change of all: Jobs focused the company on the four product lines, trimmed any remaining fat and began again, all without all the bravado and temper tantrums he was known for.
The iPod and the iPhone were in the future. The initial steps of focus in 1997 and 1998 laid the groundwork for future success.
Reference
Kahney, Leander. Inside Steve's Brain. Portfolio. 2008.