Real Story Of The Week...

"From Broke, Humble and Stupid to a World Class Company..."

By E. R. Haas - October 30, 2012

"Genius is the talent for seeing things straight. It is seeing things in a straight line without any bend or break or aberration of sight, seeing them as they are, without any warping of vision. Flawless mental sight! That is genius." ~ Maude Adams

A Case Study in Building a Vision on Core Values...

Apple Computer was formed on April's Fool day in 1977 and positioned itself as the inventor of personal computers. From 1977 to 1990, Apple had made itself a household name in the personal computer industry.

By 1996, Apple Computer had gone from wonder-company to a walking corpse in the corporate world... having lost massive market-share and mind-share to Microsoft. By all accounts, it was in complete ruin—broke both financially and technologically.

Almost from the day Microsoft launched Windows 95, Apple started losing customers in droves. It had lost its edge and relevance in the computer industry. Other than a band of loyal Mac zealots, Apple no longer mattered. Gone were the days when analysts and the press heaped glowing praise on their products and management.

By early 1997, all the press was doing was writing Apple's obituary, as it had lost some $2 billion in the previous 18 months, had only $375 million in cash left—with over $950 million in debt—and its revenue growth looked bleak at best.

Its market capitalization had fallen precipitously to under $2 billion while newcomer on the block, Yahoo! (who had just gone public), was worth a billion dollars more than Apple... even though Apple was then 20 years old. Under a restructuring program that was introduced in 1996, Apple outlined a new business model to fix what was wrong with the company, and restore sustained profitability. Apple trimmed its people and operating cost structure, and it refreshed its product line to match the competition in price/performance metrics.

Apple also sold its manufacturing plants to raise capital. Steve Jobs returned as a "consultant" to breath fresh vision and life into his baby. On August 6, 1997, Bill Gates announced that he would invest $150 million in Apple (as a show of support,) giving Apple some much needed cash and breathing room. As important, Bill also announced full development support for the Mac platform, and committed to release a new version of the Microsoft Office for the Mac by the end of 1997.

No question, it was do or die time for Apple.

They had only one shot at survival. They had to create a brand new Vision for people to buy into, and create want-satisfying products that people would see as demonstratably better than the competition.

With Steve back in the marketing seat, he had to create a Vision that would set new direction. Apple needed a new ROLE in the computer industry—a new Mission—or it would simply die from lack of relevance.

What Flavor Computer to You want?

Cherry Red... Lime Green... Bondi-Blue...

Two things that shaped Apple's critically needed Vision was that the Internet was starting to come on strong... and that there was demand for a simple to use, all in one computer to access the net. Apple, quite literally, bet the farm on this little gem: the iMac G-3.

This "internet appliance," dubbed an iMac, was designed for people of all ages—especially kids—who just wanted to do some light word processing and web-surfing.

It was more "consumer electronics" than a powerhouse business computer... even though it had exceptional horsepower for the times.

The Press hated it... Consumers loved it!

Quickly, sales went through the roof, cash improved and new hope returned to Apple. Sales to the educational channel exploded, as schools loved the stability and cost-effectiveness of the weird-looking little machine. People who had never even tried a computer started buying these guys in droves!

While their market share in the computer business continued to decline, they were picking up business in the consumer marketplace. Apple left Dell and Compaq to fight out who would win in the business computing market, while they would make products for hip, young net-savvy users.

This new vision, aligned with a new Role allowed Apple to build a real business on its core VALUES: Cool, Design, Cool, Innovation, Hip, User Sensuality, and more Cool! After all, Steve is nothing if not COOL!

"Only when men are connected to large, universal goals are they really happy—and one result of their happiness is a rush of creative activity." ~ Joyce Carol Oates

By late 2000, Apple was on a huge new Mission: build a world-class consumer electronics company that happens to use computer technology to make cool stuff—and manufacture money.

With the new Vision and perspective of creating want-satisfying solutions for non-computer users—and fully integrating complex technology into a simple to use push-button mentality—Apple ventured out into the world of music.

In 2000, Steve Jobs' candy-colored iMac was leading the charge for Apple's comeback, but to further spur sales, the company started asking, "What can we do to make more people buy Macintoshes?"

Music lovers were trading tunes like crazy on Napster. They were attaching speakers to their computers and ripping CDs. The rush to digital was especially marked in dorm rooms—a big source of iMac sales—but Apple had no jukebox software for managing digital music.

Almost instantly, Apple saw the opportunity to unite millions of songs with a simple player people could carry in their pockets. From the need for Steve to "carry his entire music library in his pocket..." a new VISION and the iPod was born in 2001. (It is rumored that the iPod development team had 100% of Steve Jobs' time—this is both a very good and very BAD thing—for people who know him personally!)

The Press LOVED it... Consumers LOVED it even more!

Billions of dollars were made on that single VISION and propelled Apple to prominence in the consumer electronics industry. They virtually own—to this day—all the market share and mindshare in the digital music industry... an industry that didn't even exist until 2000.

By 2007 Apple was on a roll and rolled out their newest gadget: the iPhone—an instant hit, selling over 6 million units in the first year. It combined all the features of the iPod along with iMovies and of course, the coolest, slickest user interface ever created... in a fabulous cell phone!

The VISION was to make the iPhone the world leader in MOBILE COMPUTING and on-the-go internet access. One year later, on July 11, 2008, Apple announced the second version of the iPhone, that includes GPS, web access at 3 times the speed and thousands of new applications custom developed by third parties.

The BUZZ is BACK!

From Dead Broke to the Top of the World...

No question, it was VISION that was missing at Apple... which led to a fuzzy... ill-defined ROLE in the computer industry... which led to a complete lack of MISSION. Thankfully, Apple never lost its core VALUES.

So, what is the result of this simple VISION? A 50 TIMES increase in shareholder value in 10 years: from under $2 billion to over $100 billion! As of this writing in July 2008, Apple is now worth $180 billion, fueled by the strength of its MISSION: Cool Stuff for Consumers. In fact, Apple Computer is no longer

Apple Computer. On Apple's 30th birthday,

April 1, 2007, it was proudly renamed Apple Incorporated in recognition of the fact that they are no longer just a computer company! Is Apple perfect? No, far from it. It has made many marketing blunders over the years. It has had products that fizzled, not sizzled. But by keeping their VALUES constant... and constantly extending the VISION out into the future... and empowering hot new ROLES in each market they serve, they will always create hot new MISSIONS and remain true to their VALUES.

"Every age needs men who will redeem the time by living with a vision of the things that are to be." ~ Adlai E. Stevenson

Discussion Group Questions...

How strongly do you relate to Apple's case study? Do you have a strong VISION of the future? Do you truly know your VALUES—inside and out—but have a hard time figuring out what ROLE you want to play? Do your VISIONS lead your ROLES, or do you let things go from bad to worse before you take your Visions and Roles seriously?

If you know your Values, but have no Vision of how to live them, can you say you really have a Mission? If you have a compelling Vision that matches perfectly with your Values, but you have no Role to play, can you say you really have a Mission?

Again, give some thought to the broad issues we raised and take a moment to journal your thoughts here, or online at the link below.

My Thoughts and Observations...