Inside Apple

by Adam Lashinsky

  It is no coincidence that the more responsibility Cook took on in the nuts-and-bolts parts of Apple, the more Jobs was freed up for his creative endeavors. Released from worrying whether customer service was operating smoothly or if retail outlets were receiving inventory to match customer demand, Jobs spent the last decade of his life dreaming up the iPod, iPhone, and iPad—and then marketing them. Jobs could make his impossible demands—longer battery life, flash memory where a disk drive had been—and move on to the next task while his orders were being implemented.

  Though not a product designer or a marketer himself, Cook fit in culturally at Apple. In an organization that frowned on talking about money, Cook was extraordinarily frugal. Well after he had sold more than $100 million in Apple stock, he rented a modest home in Palo Alto, a little over a mile from where Jobs lived. (In 2010, Cook finally bought a house of his own, not far from his previous rental, but hardly an extravagant one. Public records indicate he purchased the house for $1.9 million, which in Palo Alto qualifies as a modest abode.) Asked why he lived so humbly, he once said: “I like to be reminded of where I came from, and putting myself in modest surroundings helps me do that. Money is not a motivator for me.” (Motivation or not, upon elevating him to CEO, Apple’s board awarded Cook a million shares of restricted stock, half of which vest in five years and the balance in ten. Assuming Cook stays the full decade, the grant was worth $400 million at the time the shares were issued.)

  In a company chock-full of workaholics, Cook stood out for his all-work-no-play reputation. Single and, as far as any of his colleagues knew, unattached, his idea of a fun vacation was hiking in Yosemite National Park. Cook cycled for recreation and often turned up at an upscale Palo Alto fitness club for 5:30 a.m. workouts. Asked at Apple’s 2011 annual shareholder meeting if he had seen a one-man play in Berkeley, California, that depicted Apple’s outsourcing practices in an unfavorable light, Cook replied: “Unfortunately if it’s not on ESPN or CNBC I don’t see it.”

  Cook took naturally to the requirement that anyone working for Steve Jobs needed to have a low profile. He gave money to Auburn, where alumni association officials noted his lack of a need for recognition. But Cook was allowed to take certain steps that showed he was being groomed for a bigger role. Apple executives generally are prohibited from non-Apple assignments, but Cook joined the board of Nike, seen as a broadening experience for him as well as an opportunity to observe another iconic founder, Phil Knight. Even at Nike, Cook remained low-key. “He never discusses Apple personalities or his accomplishments at Apple,” said John Connors, a fellow board member and onetime chief financial officer of Microsoft. “He’s the General Petraeus of the corporate world, the kind of guy who lets his results speak for themselves.”

  Logistics is in fact a key aspect of military planning, and Cook is responsible for Apple’s operational excellence. For example, when Apple knew it would move away from disk drives in its iPods and MacBook Air notebooks, it invested in billion-dollar forward purchases of flash memory. Cook’s supply-chain organization executed this masterstroke, which accomplished the trifecta of securing Apple’s supply, locking in the lowest price, and hobbling the competition’s access to components. Such back-of-the-shop excellence at a company known for its creative flair is a rare example of what researchers Charles O’Reilly of Stanford and Michael Tushman, a professor of organizational behavior at the Harvard Business School, refer to as “ambidexterity as a dynamic capability.” In other words, it reflects the ability of a top-performing company to be simultaneously efficient and innovative. As noted, Cook’s efficiency is what freed up Steve Jobs to be so innovative. After all, the two ways a company makes money are by growing revenues and cutting costs. Apple does both, and the operations machinery that Cook built is the engine that drives down costs while enabling the products that lead to growth.

  The obvious question about Cook, though, is whether he has the personality to lead an organization created in the image of Steve Jobs. In public, Cook has a winning smile and a dry wit. Back when Apple had to try harder to convince PC users to buy Macs, it added the capability to run Windows on a Mac. Demonstrating the function at a Mac event, Cook displayed the hated Microsoft’s software and deadpanned: “It sends shivers up my spine, but the fact is it’s working.” He once told a group of investors that “the iPhone was just below food and water on Maslow’s hierarchy of needs,” according to Sanford Bernstein research analyst Toni Sacconaghi, who witnessed the quip.

  Still, in the manner that Maccoby categorizes business executives, Cook is a classic obsessive, someone who ensures that things get done rather than providing a vision of how things should be. He so thoroughly avoided the spotlight while Jobs was alive that it’s almost a given he will share it, as he indeed did at his first public event after becoming CEO, the launch of the iPhone 4S. This is certain to endear Cook to his executives. His fans insist he can in fact inspire as well as direct. “If you believe that charisma is authenticity, he has it,” said John Thompson, vice chairman of the search firm Heidrick & Struggles, which recruited Cook to Apple. “He doesn’t overstate. But he doesn’t understate, either. When you listen to him, you think, It’s highly likely this guy is telling the truth.”

  When he was healthy, Steve Jobs would often be seen in the Apple cafeteria at lunchtime dining alone with Jonathan Ive. Called “Jony” by friends, colleagues, and design geeks, Ive, who is forty-four, is the one personality at Apple other than himself that Jobs tolerated having a public profile. (Presumably Jobs put up with Ive’s public renown out of genuine affection as well as a desire to keep Ive happy.)

  Ive once starred in an Apple video on manufacturing the aluminum uniframe body for the MacBook Air. He speaks at the occasional design conference. He lends his name to designs of famous Apple products on display at the Museum of Modern Art in New York and the Pompidou museum in Paris. In 2006, Queen Elizabeth II made him a Commander of the British Empire, one step below knighthood.

  Though many assume Jobs somehow created Ive, the designer predated Jobs’s return to Apple. A graduate of Newcastle Polytechnic (now Northumbria University) in the UK, he and a business partner founded Tangerine, a design shop whose projects for clients included combs, power tools, and, just before he left, a toilet. Tangerine did some work on nascent laptops for Apple, which landed Ive a job in California in 1992 and a promotion to the head of industrial design four years later, all while Jobs was still in exile. Jobs took an immediate liking to Ive upon his return in 1997 after seeing the prototypes Ive had built in his work area. Shortly afterward Ive led the design for the iMac, the brightly colored computer-in-a-translucent-monitor that saved the company.

  Ive meanwhile proceeded to assemble a tight-knit and loyal team of about twenty designers, size and longevity being among the key attributes of the group. “I’m part of a very small team, and we’ve been together for a very long time,” Ive said in a 2006 interview at the Radical Craft design conference. “One of the things about that is that there is a very particular energy and a very special sort of momentum you enjoy when you learn stuff as a small group.” Many of his industrial-design colleagues hail from Britain and elsewhere outside the United States. In fact, the industrial design team, along with other creative design units, has its own globe-trotting recruiter, Cheline Jaidar, whose appearances at far-flung design schools are treated like royal visits. Ive himself has a fondness for Japan, where he has gone to observe how samurai swords are crafted. For a while he wanted to hire a painting engineer from a Japanese automaker to improve the coatings on Apple’s devices.

  Ive’s friends use words like sweet and nice and humble to describe him—all words rarely attached to Ive’s mentor, Steve Jobs. His sweetness doesn’t make Ive any less circumspect about talking about Apple, though. (His assistant, in a posting on the professional profile site LinkedIn, listed two characteristics of his service to Ive: first, “Manage Mr. Ive’s calendar, correspondence, security, gifts, events, travel, home, office, a
nd approvals”; and second, “Exercise utmost discretion.”) But his celebrity in the design world gives him license to wax poetic about Apple’s design, if not the inner workings of the company. “We love taking things to pieces and understanding how things are made,” he said in the 2006 design conference interview:

  We will figure something out that seems relatively interesting and … spend some time in Northern Japan, talking to the master about how you can form metal in a certain way. As you truly understand that, that obviously informs your design, rather than it just being an arbitrary shape, that you annotate. The product architecture starts to become informed by your really understanding that material. That’s an example of one of the reasons we don’t do lots and lots of stuff, because that’s time consuming and demanding.

  Ive is describing what any good design student would understand as the basics of the craft. But his words are noteworthy for the two signature Apple notes he hits. The deep study and annotating are classic Apple. The implication is that the product will be ready when it’s ready. Who will tell a samurai-sword master there’s a ship deadline? Then there is his invocation of why “we don’t do lots and lots of stuff.” This is Apple’s focus and its persistence in saying no, and it starts with the artist running industrial design.

  Ive has an independent streak as well. Stocky, bald, and given to dark T-shirts, he is the only executive-team member to commute from San Francisco, where he lives with his wife, Heather, and twin sons. (Apple designers as well as many of its younger engineers and employees who work for the music-influenced iTunes group tend to be urban dwellers, not suburbanites.) Press accounts list famous friends who are design-oriented celebrities in their own right, often British, including the music world’s DJ John Digweed and fashion designer Paul Smith. When the British screenwriter Alexander Chow-Stuart emailed a friend of a friend of Ive’s in 2011 to ask if Chow-Stuart might say hello on a visit to Cupertino with his school-aged son, Ive not only obliged, but also gave the boy an iPod and arranged for a tour of the Apple campus. (Chow-Stuart lovingly recounted the visit on his personal blog.)

  For a time it was fashionable for outsiders aware of his fame to speculate that Ive would replace Jobs as CEO. Apple insiders never took such talk seriously given Ive’s avowed ignorance of business. After all, he’d had one taste of being a businessman running his own firm in London, and it didn’t suit him. “I was terrible at running a design business, and I really wanted to just focus on the craft of design,” he said. He clearly got this wish.

  If Ive was never taken seriously internally as a potential CEO, one executive emerged in the last years of Steve Jobs’s tenure at Apple who seemed he might have the critical elements needed to take the reins. His name is Scott James Forstall, a forty-three-year-old software engineer who specializes in user-interface design and has spent his entire career working for the two companies founded by Steve Jobs. User interface refers to the way computer users can manipulate what’s on their screen. In many ways, the UI constitutes what’s fun and useful about computers. Many consumers don’t even notice UI, but the ease, elegance, and wit with which Apple users interact with their products is a key bond, hence the importance of Forstall’s specialty.

  Forstall, who is lean and swarthy, wears zip-up sweaters, and has a shock of black hair he styles to stick straight up in the air, grew up a naval brat in Washington State. He went to Stanford, where he studied symbolic systems as an undergraduate and earned a master’s in computer science. He joined NeXT directly out of school. He moved to Apple in 1997 and worked for various senior Apple software executives over the years, developing a reputation as a smart and ambitious engineer, impatient to move up the ladder.

  It wasn’t until the development of the iPhone, though, that Forstall got his chance to shine internally. A team Forstall headed modified the software used by the Macintosh, OS X, to run on the iPhone. He ultimately became head of mobile software, an increasingly powerful job given the runaway success of the iPhone and the iPad. (Together with the iPod, these handheld devices accounted for almost 70 percent of Apple’s revenue in 2011, compared with 20 percent for Macs.) In Apple’s caste system, iOS devices are at the top of the heap. For example, more effort goes into modifying Macintosh applications like iLife for the iPad than for the Mac these days, adding to Forstall’s institutional capital.

  Forstall is praised for being brilliant, tough, a stickler for details, and unflappable. He keeps a jeweler’s loupe in his office so he can look at every single pixel on every icon to make sure it’s right. Simplicity in user-interface design is one of Forstall’s great strengths. “He groks Steve’s vision that way,” observed an ex–Apple executive. (Grok is a slang term that first appeared in Robert Heinlein’s sci-fi novel Stranger in a Strange Land. It means “to understand deeply through intuition or empathy.”)

  If there is a knock on Forstall, it’s that he wears his ambition in plainer view than the typical Apple executive. He blatantly accumulated influence in recent years, including, it is whispered, when Jobs was on medical leave. He also accumulated the trappings of a captain of industry. For years he drove a beat-up Toyota Corolla, but with the wealth that came to all top managers at Apple in the 2000s, he eventually bought the same exact silver Mercedes coupe that Jobs drove. (Forstall could relate to Jobs in a more serious way, too. In the mid-2000s, he had a serious health scare, contracting a nasty stomach condition that forced him to be hospitalized, but from which he made a full recovery.)

  Like Ive, Forstall has a life beyond Apple. He and his wife, Molly, a corporate lawyer, are huge fans of American Idol and have traveled to Los Angeles for the popular TV show’s finale. Forstall is a rabid San Francisco Giants fan as well as a season-ticket holder for the Stanford women’s basketball team. Toward the end of Jobs’s tenure, Forstall began to get an increasing amount of airtime at Apple events, and ex-colleagues praise him as a top-notch speaker. In a company where so few executives even get the opportunity to show themselves to the public, Forstall’s appearances were read by longtime Apple-watchers as having the same political significance that Cold War Kremlinologists ascribed to whoever was standing near Brezhnev on Lenin’s Tomb. Forstall also has a leg up on his nerd colleagues with little public-speaking experience: He was an actor in his youth, having appeared in an Olympic High School theater troupe called Lalapalooza Bird that performed in several elementary schools in his hometown of Bremerton, Washington. As a senior, he played the title character in the Stephen Sondheim musical Sweeney Todd. He also has serious nerd cred in a town where Stanford engineers are the cool kids. As an undergraduate, Forstall was in the same fraternity, Phi Kappa Psi, as future Yahoo! co-founder Jerry Yang.

  Eight years younger than Tim Cook, Forstall easily could be a CEO-in-waiting, especially if Apple’s board decides it needs a CEO more in the image of Steve Jobs. Already he has had opportunities to move in influential Silicon Valley circles in a way that previously only Jobs would have. Because the ecosystem around iPhones and iPads has become so lucrative for Apple and the companies developing apps for it, Apple has grown increasingly willing to engage with the entrepreneurial world seeding those companies. Forstall, for example, spoke in 2011 to a group of mobile application companies funded by Kleiner Perkins, the influential venture capital firm. Matt Murphy, the Kleiner partner who runs its mobile applications–focused iFund, praises Forstall’s “boyish enthusiasm” as well as his willingness to listen to suggestions from the entrepreneurs Murphy funds. The entrepreneurs seem to appreciate Forstall too. “He is a sharp, down-to-earth, and talented engineer, and a more than decent presenter,” said one Kleiner-backed entrepreneur who has interacted with Forstall. “He’s the total package.”

  A small handful of other senior executives completed the rest of the package under Jobs. Jeff Williams, Tim Cook’s top lieutenant, took over as head of operations when Cook moved up. Williams is in many ways a doppelgänger for Cook. Both hail from the South. Both built their careers at IBM. Both received nightti
me MBAs from Duke. Tall, lean, and gray-haired, like Cook, Williams was said by Apple executives to look so much like his boss that from behind they could be mistaken for each other. Bob Mansfield, who runs hardware engineering, is a stocky engineer who joined Apple in 1999 when the company where he worked, graphics chips maker Raycer Graphics, was purchased. Mansfield is quieter than his peers (though on par with Cook, his longtime boss), and though his title long was senior vice president of Mac hardware engineering, Mansfield is responsible for the guts of all devices, including iPods, iPhones, and iMacs.

  The final product-oriented member of the executive team is Eddy Cue, long Apple’s deal-making executive, but also the head of Internet services and for years Jobs’s go-to guy for fixing problems. Cue led the initial negotiations with AT&T for the iPhone, for example. When Jobs needed a change atop Apple’s MobileMe email service, he turned to Cue. Yet Jobs never promoted Cue to the top echelon of Apple. Elevating Cue was Cook’s first publicly announced move—signaling that under Cook a “deal guy” could reach the inner circle of a product-oriented executive group.

  What these people have in common is their length of service at Apple. The Apple culture is so tough that newcomers face long odds. Bob Mansfield has the shortest tenure, twelve years at the company. Scott Forstall worked with Steve Jobs since Forstall was fresh out of graduate school. If newcomers can succeed in the company’s highest reaches, there isn’t any recent evidence to prove it, and the one data point to consider suggests the contrary: the short, unhappy Apple career of Mark Papermaster.

  In October 2008, Apple announced that it was hiring Papermaster, a veteran of IBM, to run the group that manufactured iPods and iPhones. Papermaster would be replacing Tony Fadell, the executive who ran the iPod team. Back then, Fadell had recently left Apple after repeated clashes with Jobs, among others. It seemed odd that Apple would turn to IBM for talent, and IBM was none too happy about Papermaster’s hiring. It sued to try to prevent his joining Apple. It took until the following January to resolve the litigation, which allowed Papermaster to begin his work at Apple at the end of April, six months after he was hired.