In 1985 Steve Jobs got booted out of Apple, the company he co-founded back in 1976. In his absence the business plummeted to such a degree that bankruptcy was a distinct possibility. When he returned in 1997, following the acquisition of his company NeXT by Apple, he inherited a business with severe cash flow problems, a rapidly declining market share and a product range of only four computers. The level of competition had increased dramatically too, especially in smart phones, posing new and difficult challenges for the company. Michael Dell, CEO of Dell, said at the time that “he would shut Apple down and give the money back to shareholders.”
Jobs needed to make changes and he needed to do it quickly. He hired a new management team, including several executives from his previous company, NeXT. This team formed the core of the Apple brains trust for the next decade.
Apple needed to generate cash quickly to survive. It cut costs and successfully launched the expensive iMac computer, a ground-breaking all-in-one computer and monitor. This provided the much needed cash and repaired Apple’s shaky balance sheet. With this done and the business now in better shape Apple began to pursue aggressive growth via the launch of new and disruptive technologies.
In the space of 11 months in 2001 Apple launched iTunes (musical download software), the Mac OS X operating system, the first Apple retail store and the first iPod. The stock market didn’t catch on to the significance of these events and Apple’s stock price languished for some time. Jobs knew the strategy was right and he proved it in the next few years. Along the way he radically changed the music, movies and mobile telephone markets. The market capitalisation of Apple was US$5bn in 2000; today it is US$225bn.
Steve Jobs knew that he had to bury the past and move on. He realised that Apple was pointing in the wrong direction and it needed to change course. He made drastic, difficult changes to the business which were hard to implement. He did it because he knew he didn’t have a choice. The rest is history…
It is important to recognise the simple fact, as Steve Jobs did, that some stuff in business is busted; it’s broke; it doesn’t work anymore. It needs to be thrown out. All that really matters is what you do next. You can only spin your wheels for so long. If you have to make changes, drastic or otherwise, then do it. Leave your egos, prejudices and posturing at the door and get cracking. This stuff is irrelevant in a competitive, fast-moving marketplace anyway. Take the pain, bury the past and make the decision to move into a brighter future – prosperity awaits you.
Just ask Apple.