STEVE JOBS

How He Defied the Downturn, Cheated Death, andChanged OurWorld BYADAM

LAS HINS KY

ovember 23, 2009 FORTUNE 57

MAGIC KINGDOMS Jobs. with Disney's Bob 19er. has sprinkled pixie dust on maJzy businesses.

Hof the business world, the "aughts" have been pretty crummy. Since Jan. J., 2000, we've been through two recessions, a spate of major financial scandals (Enron, Madoff), and a banking crisis that inspired comparisons to the Great Depression. And the S&P 500 index is down about 16%.

Then there's Steve Jobs. No major business figure has crushed it the way Jobs has these past lO years .. Even as the rest of business boomed and then crashed, he resuscitated Apple. which, many forget, was in horrific shape at the dawn of the decade, and simultaneously radically reinvented the music. movie, and telecommunications industries.

His influence on global culture cannot be underestimated. On the surface it seems he makes mere amusements: ti ny music players and touchable phones and candy-colored laptops. Yet those things have rocked multibillion-dollar companies and changed

the way the world buys music, accesses information, and designs products m.llging from home appliances to cars. Every day, several times a day, some student, entrepreneur, industrial designer, or CEO looks at a problem and wonders: What would Steve Jobs do?

Oh, he has his flaws. He's stubborn, arrogant, and has inIuriated governance and securities purists. But he also is a wickedly smart, inspiring, inspired perfectionist of a man who has turned much of what he touches imo gold. Other CEOs

and business leaders have had noteworthy runs this decade,

for better or for worse (see box). Some, like Google's youth-

ful, ambitious founders Sergey Brin and Larry Page-both

Jobs fans-may yet top Jobs' achievements. But for the sheer scope of his cultural and business impact. and for the undeniable financial and operational strength he's achieved at Apple, there's no question we've just witnessed what can only be called tile decade of Steve. - Stephanie N. Mehta

The Runners-Up

OTHER BUSINESS LEADERS HAD NOTABLE RUNS THIS DECADE, NOT ALL FOR THE GOOD,

2

3

5

4

7

8

10

LARRY PAGE, WARREN BERNIE CARLOS KEN LAY. JEFF BILL GATES OPRAH MARTHA
SERGEYBRIN BUFFETT MADOFF SLIM The SKILLING, He handed WINFREY STEWART
Google·s After si tli ng Madoff's toe- MeXican tele- ANDYFASTOW off daily duo She folio Uke Jobs. she
co-founders out hedot· good-to-be- commagnale Enron started ties at Mlcro- her TV su lsprcolyou
have had a com boom true investing has ended the lhe decade as soft to focus cess IV LhQ can go home
tremendous (and bust). track record decade as one a star. Then on phllan- magaz e again, return-
10 -yea r ru n. Buffett ress- and auda- ofthe wcrld's 11 became thropy. His and pla'lS Ing to Martha
but their rn- surnedrus crous crime wealthiest cleartha its second act lor her Stewart Living
pact has been position as make him the men. Now leaders were might prove r Omnimedia
mostly lim- Lhe smartest faUenCEOof he's backing cooking the just as sig· after a five-
ited to online Investor 01 the decade. theNewYork books. niflcantas month
advertiSing. our time. Times. ms first. prison stint.
58 FORTUNE November 23. 2009 TheDEC

L) -. -. l:.,~.

By DAM LASHINSIIT

PORTRAIT CREATED BY MEGAN CAPONETTO PHOTOGRAPH BY CHRISTOPHER GRIFFITH

November 23. 2009 FORTU E 61

OW'S 'I'll [8 for a gripping corporate story line: Youthful founder gets booted from his company in the 1980s, returns in the 1990S, and in the following decade survives two brushes with death, one securities-law scandal, an also-ran product lineup, and his own often unpleasant demeanor to become the dominant personal ity in four distinct industries a billionaire many times over, and CEO of the most valuable company in Silicon Valley.

Sound too far-fetched to be true? Perhaps. Yet it happens to be the real-life story of Steve Iobs and his outsize impact on everything be touches.

The past decade in business belongs to Jobs. What makes that

simple statement even more remarkable is that barely a year ago it seemed likely that any review of his accomplishments would be valedictory. But by deeds and accounts, Jobs is back. It's as if his signature "one more thing"line now applies to him as well. After a six-month leave of absence in the early part of this year, during which be received a liver transplant, he is once again commanding a 34.0oo-strong corporate army that is as powerful, awe-inspiring, creative, secretive, bullying, arrogant-and yes, profitable-as at any tirne since he and his chum Steve Wozniak founded Apple i111976.

Superlatives have attached themselves to Jobs since he was a youngman. Now that he's 54, merely listing his achievements is sufficient explanation of why he's Fortune's CEO of the Decade (though the superlatives continue). In the past 10 years alone he has radically and lucratively reordered three markets-music, movies, and mobile telephones-and his impact on his original industry, computing, has only grown.

Remaking anyone business is a career-defining achieve-

ment; four is u nbeard-of. Think about that for a moment. Henry Ford altered the course of the nascent auto industry: PanAm's Juan Trippe invented the global airline. Conrad Hilton internationalized American hospitality. In all instances, and many more like them, these entrepreneurs turned captains of industry defined a single market that had previously not been dominated by anyone. The industries that Jobs has turned topsy-turvy already existed when he focused on them.

He is the rare businessman with legitimate worldwide celebrity. (His quirks and predilections are such common knowledge that they were knowingly parodied 011 an episode of The Simpsons.) He pals around with U2'S Bono. Consumers who have never picked up an annual report or even a business magazine gush about his design taste, his elegant retail stores, and his outside-the-box approach to advertising. CThink different," indeed.) It's often noted that he's a showman, a born salesman a magician who creates a famed reality-distortion field, a tyrannical perfectionist. It's totally accurate, of course, and the descriptions contribute to his legend.

Yet for all his hanging out with copywriters and industrial designers and musicians-and despite his anti corporate attire-make no mistake: Jobs is all about business. He may not pay attention to customer research, but he works slavishly to make products customers will buy. He's a visionary, but he's grounded in reality too, closely monitoring Apple's various operational and market metrics. He isn't motivated by

RECOVIRING Tobs. photographed (It an App/e music event after (I lifesaving liver fransplant

e OnUne exclusive To view a gallery of rarely seen photos of SteveJobs, go to fartune.com/stevejobs

A DECADE OF HITS (AND A FEW MISSES) The Ear'ly Struggles

Jan. 9. 2001 Jobs Introduces the iT unes apptication for organizing and listening to music on computers.

)/(l1'£'1I ~ 1 Apple releases Mac OS X operating system

Ja». t. 200() Jobs, who had been IntenmCEO

of Apple, becomes permanent CEO.

,,jprill9 Appfe announces two-for-one stock split.

TA.KING STOCK OF STEVEif.ifoll inuested SI.OOO ill Apple stoct: 011

Dec. 30. 1999. yUill' iIlVe.l'/III('II/ cr:1I1I/lIlIlly EOllld hare paid I1fTill II 7\ lJigw(Ly(seepage(J6)(if!.era!;IIIIIP.ifs/rl/·/.A 1,000;11 'eS/III!!II/ .. __ ",r ill/he S8,'P:'iOO inder tooutd //(1'11(' disllPpoill/ed

money, say friend Larry ELI i on CEO of Oracle. Rather, Jobs is understandably driven by a visceral ardor for Apple, his first love (to which he returned after being spurned-proof that you can go home again) and the vehicle through which he can be both an arbiter of cool and a force for changing the world.

The financial results have been nothing short of a toundingfor Apple and for Jobs. The company was worth about 5 billion in 2000, just before Jobs unleashed Apple's groundbreaking "digital lifestyle" strategy, understood at the time by few critics. Today, at about $170 billion, Apple is slightly more valuable than Google. Its market share in personal computers was plum meti ng back then, and the cash drain was 0 evere that bankruptcy was a possibility. Now Apple has $34 billion in cash and marketable securities, surpassing the total market cap of rival Dell. Macintoshes make up 9% of the PC market in the U.S. today, but that shar is increasingly beside the point. With 275 retail stores in nine countries, a 73% share of the U.S. MP3 player market, and the undisputed leadership position in innovation when it comes to mobile phones, Apple and its CEO are no one's idea of underdogs anymore. In 2006 Disney paid $7.5 billion to acquire Pixar, the computer animation film studio Jobs had nurtured and controlled. Jobs, in turn, became a Disney director and the blue-chip company's largest shareholder. His net worth, solely based on his stakes in Apple and Disney, is about $5 billion. Other executives have had stellar decades (see "Why Him?") but none can compare to Steve's.

With Jobs back at the helm of his company, plenty of challenges lie ahead. Will the Goliath role suit him nearly as well as playing David clearly has? How will he re pond to the competition he has awakened, particularly in smartphones, even as the personal computer fades in relative importance? Has he fash-

E

lOI

r

\(}1'. If) Apple beginS seffing the first IPod. which It says can hold 1.000 songs

'1«.'1 If)

First Apple retail stores open In lysons Comer, Va .. and Glendale, Calif.

.tpri! 2.9. 2002 Titamum Power Book G4 hits slores.

'f((!J

New York's MaMA addsa G4 Cube to its desgn collectIOn.

Ipp/, ,fIJl'k 1'1';1'"

ioned an organization that can succeed him? Can he possibly b as dominant in the decade to come as the one that i ending?

THE "OI<J DE" or,' 'TEVI~ actually began in 1997, when he returned to Apple after having been ousted a dozen years earlier. That was a year of triage, of a humbling investment from Microsoft, of paring Apple's product line to a bare minimum of four computers. By the following year Steve's regime had kicked into gear. Jobs completed the hiring of a new management team, which included everal executive from his previous company,

ext. Those top players would form the nucleus of the Jobs brain

rust for nearly 10 years_ Then carne the first Macintosh after Jobs' return, the iMac, a breakthrough all-in-one computer and monitor that heralded Apple's return to health. The success of the pricey iMac, coupled with drastic cost cutti ng, allowed Jobs to build a cash cu hion. By repairing Apple's balance sheet, he prepared the company for big investments to come, a shrewd business move if ever there was one.

Jobs laid the foundation for Apple's leap from stable to stratospheric when things looked darkest. In 2000, Apple missed its financial targets in a September earnings announcement, sending its stock price plummeting in subsequent months to the equivalent of $7 in today's prices. Yet Jobs by this time had set in motion the key elements of Apple's rejuvenation. Over the course of 2001, as global markets fell and the world headed into recession, Apple launched the iTunes music software (in january), the Mac OS X operating system (March), the first Apple retai I stores (May), and the first iPod (November), a 5GB model that Apple bragged would hold 1,000 ongs.

The market didn't catch on quickl to the igniEicance of those events. iTunes was just music-pia ing software embedded into

ovember 23, 2009 FORTUNE 63

J

Neu: Products Ne» Problems

J1oy.'JO

Pixar release~ fish tale Rnding Nemo, which eventually grosses

$864.6 million.

JIm-cil/.9. 2003 Former Vice Presl dent AI Gore loins Apple's board.

,\'('pl. !UJ Oracle cm Larry E III san resign s f mm IheAppleboardof directors

...1)ll"i/211 ITUnes Music Slareopensand rocks the mu sic industry With 99¢ pricing for songs.

June 2.'J

The Power Mac G5 becomes the world's fastest personal computer.

Jan . .2,9. 200-1 Distribution talks between Pixar and Disney's then-CEO MlchaetElsner break down.

T

Jullj.'J1

Jobs undergoes surgery for a rare form

of pancreatic cancer.

Ol'lob('l' Doctors discover a tumor growing on Jobs' pancreas.

Macs and lacked an online store that sold music. The new operating system, though impressive, powered a niche product. The lPod was a snazzy MP3 player in all established market. As the company's stock languished, takeover rumors appeared from time to time, What was never reported was that Jobs seriously contemplated taking the company private with he help of newly formed buyout group Silver Lake Partners. An Apple buyout would have been the deal of the century, but according to people familiar with the talks, Jobs ultimately shut them down,

That was actually the second serious proposal to buy Apple.

In 1997, Jobs' friend Ellison, later au Apple board member, Lined up financing to take over the company on the assumption that Jobs would run it. In a recent interview Ellison said lobs didn't like the idea of being "second-guessed" if it looked as if be' d returned simply to make money. "He explained to me that with the moral high ground, he thought he could make decisions more easily and more gracefully," says Ellison.

For those paying attention after Jobs' return the CEO was telegraphing Apple's trajectory. "I would rather compete with Sony than compete in another product category with Microsoft," he told Time in early 2002. "We're the only company that owns the whole widget-the hardware, the software, and the operating system. We can take full responsibility for the user experience. We can do things that the other guy can't do." Jobs was convinced that the masses would turn to Apple, but on I y If he could speak directly to them-and not just to faithful Macintosh users, a club that included mainly artists and students. The strategy of building company-owned retail stores, so integral to Apple today, was derided at the time as a risky cash drain. "He did this with a nervous board," says Bill Campbell, a former Apple executive who went on to become chairman of Intuit and an Apple board

64 FOR1UNE November 23,2009

member. "He knew that this is what customers wanted." What's striking looking back is how 1 ittle there was to sell in the original Apple stores. Jobs knew how he'd fill them.

Jobs made it bis business to know everything about Apple.

"He's involved in details you wouldn't think a CEO would be involved in," says Ken Segall, a former ChiatlDay creative director who has worked with Apple on and off for years. Jobs commissioned the iconic "Think different" ampaign, says Segall, well before any of Apple's new products were introduced-or even described to the ad team. "He'd say, 'The third word in the fourth paragraph isn't right. You might want to think about that one. "

The rare pairing of rnicromanagemenr with big-picture vision is a Jobs hallmark. Early in his return to Apple, he recognized that gorgeous design was a differentiator for Apple in a computer industry gripped by the successful blandness of Dell, Microsoft, and Intel. "I cannot COWlt the number of clients who have marched in and said. 'Give me the next iPod:" writes Tim Brown, CEQ of product-design consultant Ideo, in his new book Change by Design. "But it's probably close to the Dumber of designers I've heard respcnd-sunder their breath-s-Give me the next Steve Jobs.'''

Jobs also has a knack for pouncing atthe right moment. The music industry had failed repeatedly to develop its own digitalmusic sales site before Apple came alongwithiTunes, which was by then prepared to become a store for buy] ng music, Jobs cleverly made his pact with the record labels when iTunes worked only on Macs, which in 2002 had a personal-computing market share in the low single digits. Apple's humble position-before iTunes became compatible with Windows, expanding its potential market share to nearly all pes-was a virtue. This made

The Turnaround Takes Hold

H'b.11 Apple announces another two·for·one stockspht

"'('1'1. ; Apple and Motorola announce ROKR. the first cellphcne with lTunes.

Jau.rt, ~005 Apple Introduces the iPod Shuffle. a mini muse player iheseeo apackofgum

iTunes an experiment rather than a destructive paradigm shift. , [don't understand how Apple could ruin the r cord business in one year on Mac," said Doug Morris, the head of Universal Music, according to Appetite for Self-Destruction, a new book about the record indu try's ills by Rolling Stone writer Steve Knopper. "Why shouldn't we try this?" Writes Knopper: "By the time Steve Jobs came around he was the last resort. He was merely smart enough to know it. He played tough, but not any tougher than any lawyer for a major label who had negotiated an artist contra t in recent decades."

A key Jobs business tool is his mastery of the message. He rehearses over and over every line he and others utter in public

Jpril· 'lOO(" Happy 30th birthday. Apple!

L.__

)fa.1f .j

Plxar Issold to Disney for $7.5 billion. making Jobs Dlsney's largest

shareholder

./1111 .. 9.200; Jobs reveals the highty

antiCipated IPhone. which becomes a sensation. he also shows Apple TV device for I Tunes content, which lIops.

•

June 2l) Apple board begms invesugaling options backdatmg

an employee e-mail that was strategically released to news outlets. Similarly he told the world of his recent leave in another employee missive, with no additional comment from him or anyone else at Apple. Nobody in Jobs' sphere speaks without the permission of the company's media relations team, which reports directly to Jobs. Apple declined to make Jobs available for an interview for this article. Itdid bless the participation of som people in Apple's orbit to speak about him, while nixing requests for others.

The secrecy has rankled corporate governance experts, who insist the health of such an indispensable CEO warrants greater disclosure. Jobs was initially mum as well about a stock op-

.\ ke~ .lobs busine s tool is his mastery of the message. II rehear. e 0 er and oyer every lin h "and other. utter in public about Appl .

about Apple, which authorizes only a mall number of executives to speak publicly on a given topic. Key to the lobs approach is careful consideration of what he and Apple say-and don't say. Harvard professor David Yoffie estimated that in the months between announcing and selling the 6rst iPhone in 2007, Apple received $400 million in free advertising by not making any public statements, thereby whipping the media into a frenzy. Jobs himself is careful to avoid overexposure, preferring to speak only when he has products to promote. He didn't disclose his 2004 cancer surgery until after it occurred, and then only in

tions backdating scandal that embroiled the company's former finance chief and general coun el. In an eventual SEC filing, Apple said Jobs was aware that the company had adjusted option grant dates so that the grants were more profitable for employees. Job apologized for the backdating, calling the episode "completely out of character for Apple."

Jobs manages the money, the message, the deals, the design, and more. Consider the case fairly made that the long-ago enfant terrible of the computer industry has built up impressive business chops and that his company is peerless. But if nothing else, his

ovembcr z3. 2009 FORTU E 65

•

J tcto'ry Is Steve's

ocr. :J Apple denies rumor that Jobs has had a heart attack

.J« JI. ts: 20011 Jobs unveils the wolld's thinnest notebook. the Mat Book Air

"'t'jJf.16· Tenth anniversary 01 Jobs' return to Apple

Oct. rr

Jobs says Apple Will open IPhone up to application developers In Feb ruary 2008,

.... ('1'(.9

Jobs, noticeably Skinnier, flashes slide reading,

• Repor ts 01 my dea t hare greatly exaggerated" al a n Apple event.

APPLE GROWERS

fit tile pas! 10 .lIears annual sales of Apple products have soared as its retail stores have proliferated.

iPods sold UNITS

.Ip,.i/

Jobs undergoes Iwer transplant surgery In Memphis,

.'lfm·~,lJ Jobs returns to wor~ alier transplant.

.I,tII, J I. 2(JO.9 Jobs announces leave of absence, names Tim Cook to run day-Io-dayoperatlons,

.\f'pl.9

Jobs, in hiS first public appearance '-_-----, Since Iransplanl,llosts an Appl e muse evenl

iPhones sold UNITS

A ppl e sto res TOTAL

150

24 million

300

12

2000

recent illness is a reminder that Steve Jobs is mortal. When he's gone, how long will his company thrive without him?

TIU PAST 'EPTEMBlllR" when Steve lobs made his triumphant return to the publ ic eye, be thanked precisely one Apple executive by name: Tim Cook, Apple's chief operating officer. At an event to introduce anew line of iPods, Jobs first informed a crowd of journalists, analysts, and Apple developers that he now possessed the liver of a "twentysometbing liver donor who had died in a car crash." Then he thanked Cook and the rest of the management team for "ably" running Apple in his absence. Cook, in turn, led a standing ovation for Jobs, his arms raised over his head from the front row of a San Francisco auditorium.

With Jobs back a work, the conversation has been postponed as to whether Cook, or anyone else, is prepared to fiJJ Jobs' shoes, "At Apple the hierarchy is determined by who Steve calls," says a former Apple executive. "There's a lot of value in 'Steve said.''' Larry Ellison, a CEO known to dislike the topic of succession, says of his friend, "He's irreplaceable. He's built a fabulous brand. He's got a wealth of products. Whenever be leaves, J bope he retires in good health and he's sailing off in his yacht in the Mediterranean But they're going to miss him

66 FORTUNE November 23, 2009

terribly, because it's a consumer products company. The product cycle is so fast,"

There ale signs that Jobs has j nculcated the troops enough to last awhile without him. "The organization has been thoroughly trained to think like Steve," says someone with contacts among the Apple executive team. "That's why the six months went so smoothly. People could envision, 'This is what Steve would do,"

Jobs, Infact, inspires far beyond Apple. Larry Page and Sergey Brin recently told The New Yorker that lobs is their hew. When Jeff Bezos released Amazon.com' smooth, shiny Kindle 2, the lobs envy was obvious. Venture capitalist Marc Andreessen, who co-founded Netscape, says he often evokes Jobs in his advice to entrepreneurs. He says, "The threshold for the release of the first product should be, 'What would Steve Jobs do?'"

Looking out on the next decade, Jobs may well be asking himself a variation of that very question: After creating more than $150 billion in shareholder wealth, tran-sforming movies, telecom, music, and computing (and profoundly influencing the worlds of retail and design), what should Steve Jobs do next? Given his penchant for secrecy and surprise and his proven bri lliance it's a fa ir bet that he'll let us knowwhen be's good and ready, I]

F6ED.BACK ala~hinsky@forrllnemail.cOm

REPOR,.n ASSOCIA'rE Doris Burke