Chapter 21 Section 5 Crisis Comes

It was not until October 1984 that Sculley vaguely realized that Apple's success in the past year had brought great confidence to the entire company on the one hand, and on the other hand, it had also inflated Jobs' desire for power. Before Sculley arrived, Markkula and Scott carefully controlled the power of founder Jobs, even keeping Jobs out of his beloved Lisa project.Sculley was not as worried about Jobs' naivety and recklessness in management as Markkula, and he often acquiesced in Jobs' participation in company decision-making.Sculley felt that Jobs would one day mature and grow into a qualified business manager.

But the success of the Macintosh made Jobs full of confidence. He began to talk in the tone of the CEO at the company's top management meetings, and frequently intervened in things outside his scope of responsibility.At the same time, the already crisis-ridden interdepartmental relationship has become one of the things that make management scratch their heads the most. The success of the "1984" ad made Lisa and the Apple II team feel like they were the least valued group of people.Jobs talked about the success of the Macintosh everywhere in the company.He said without hesitation that the Macintosh team is the highest-level group of people in the company and deserves the best support and treatment.Individual members of the Macintosh team even openly called people from other teams idiots.

On one occasion, employees of the Macintosh team and the Apple II team actually fought a "group fight".Two groups of people each occupied a table in the room and attacked each other. The people from the Macintosh team shouted: "We are the future!" The people from the Apple II team responded loudly: "We are the profit!" Then, the two groups of people used the "gentle" fighting method only available to engineers, throwing pens and paper balls at each other , the scene was chaotic. Sculley had been holding a wait-and-see and tolerant attitude before. It was not until October that Sculley discovered that this connivance might be a mistake, because things were developing in an uncontrollable direction.

At the annual financial planning meeting in October, Jobs revealed his desire for power for the first time in front of all senior managers.While discussing departmental budgets for the coming year, Jobs made a proposal for a change in the budgeting approach.He believes that each individual department, such as the Macintosh team, Apple II team, etc., should be accounted for separately, and each department should have the power to control the profits it creates, rather than being a part of the entire company and subject to the company's rules and regulations. some sort of proportional distribution.

In the eyes of professional managers such as Sculley, this suggestion is extremely naive.There are differences in the value created by different departments, but this difference should be reflected in the incentive mechanism, not in the financial budget.Otherwise, the divisions of the company will be in dire straits, and the competition and competition for resources will intensify. Jobs himself apparently didn't realize how naive this suggestion was.In the way he is good at selling products, he eloquently introduces the advantages of the new budget method in front of management.Few of the company executives present here agree with Jobs' point of view, but in the face of Jobs' exaggerated gestures and language, no one is willing to stand up and stop him.Some people whispered below, they speculated that Jobs was trying to use this method to gain more benefits for his team because of the strong sales momentum of the Macintosh department.Everyone looked at Sculley with pleading eyes, hoping that he would come out to smooth things over and end Jobs' poor performance.

Sculley chose to tolerate. He knew that Jobs needed to be restrained and cultivated, but because of the relationship between himself and Jobs, he was unwilling to stand up in person.As Sculley left the room between meetings, he heard someone mutter behind his back: "Why didn't Sculley shut that guy up?" There were also differences of opinion between Jobs and Sculley regarding the direction of Macintosh sales.Sculley hoped that the Macintosh would focus on business customers like the IBM PC, but Jobs was unwilling to neglect ordinary individual consumers. Shortly after the release of the Macintosh, Apple held a sales meeting on Waikiki Beach in Hawaii.At the time, Sculley had just hired 2,500 salespeople worldwide to promote the Macintosh computer to business customers.Jobs felt that Sculley's main sales direction was wrong, but it was difficult for him to convince Sculley.On the first night in Hawaii, the two had a heated argument over dinner over this incident.

Jobs, always full of new ideas in his mind, clearly disliked the traditional sales and distribution model that Sculley was good at.Once, when Jobs had dinner with FedEx founder and CEO Fred Smith, Smith mentioned that IBM was considering using FedEx as an intermediary to establish a new direct sales model from factories to customers.After hearing this new idea, Jobs' eyes lit up.He immediately approached Sculley and came up with a bold idea: build a dedicated airstrip for FedEx directly next to the Apple computer production plant, and Macintosh computers that have just come off the production line can directly board the plane at the fastest speed. Fly to the hands of every customer in the world.Jobs felt that his idea was a genius idea, which would save the huge amount of money required to maintain a huge distribution channel.Sculley felt that Jobs was full of strange things in his mind!Sculley said: "How is this possible!"

For the differences and power disputes between the two, members of the board of directors, including Markkula, gradually became worried. At the beginning of 1985, when the board of directors reviewed Sculley's work in the past year, he said frankly to Sculley: "You have done a very good job, except for one thing-you don't seem to be managing the company alone." The real crisis is still on the Macintosh computer.Both Sculley and Jobs were dazzled by the early success of the Macintosh, and did not see the crisis hidden in the depths. Apple has no shortage of sane minds.One of the computer scientists invited from Xerox, Alan Kay, who had proposed the concept design of a laptop computer (Dynabook) as early as 1968, was one of them.Alan Kay carefully analyzed the shortcomings of the Macintosh computer and left a note directly on Sculley's desk.Alan Kay told Sculley that the design of the Macintosh is very good, but the memory configuration is seriously insufficient, and the single floppy drive design is inconvenient to use, just like a Honda car that can only hold 1 liter of oil. You go around the block to the other side of the block.Insufficient memory even restricts software development on Macintosh. Developers must use Lisa to easily develop applications on Macintosh.Compared with IBM PC, Macintosh seriously lacks the support of office software and is not compatible with IBM PC.All these deficiencies will one day be exposed, affecting Macintosh sales.

Of course Jobs was aware of these technical limitations, but he always seemed to disapprove of them.Sculley saw Alan Kay's note, but he felt that marketing and sales were the top priority, and improving the Macintosh hardware and software was not so high a priority. At the same time, the sales department also reflected the Macintosh's weakness in marketing to Sculley. Macintosh does not support all kinds of expansion devices like Apple II. At the same time, the operation of Macintosh is very intuitive and does not require much training.But in fact, selling expansion equipment and providing training services were the two major sources of profit for computer retail stores at that time.Because of this, a strange practice has become popular in computer retail stores: first use beautiful and fashionable Macintosh computers to attract customers to the store, and then sell them to customers as cheaper, more practical, and more profitable for the store. Illustration of the IBM PC.

The turning point appeared in Sculley and Jobs' sales forecast for the second half of the year. In mid-1984, Jobs found Sculley and drew a continuous growth curve on the whiteboard based on the sales growth trend of the Macintosh in the first few months.Jobs affirmed: "According to the current growth trend, by the Christmas season at the end of the year, about 80,000 Macintosh computers can be sold every month. In this way, adding the figure of Apple II, Apple's sales in a Christmas season can reach 1 billion US dollars." "Tell me," Sculley said skeptically, "why do you believe that the current sales growth momentum will continue into the Christmas season?"

"Of course," Jobs said in an unquestionable tone, "there is only one key word for global computer sales in the past two years, which is 'growth'. Computers are truly penetrating into the lives of ordinary people. Nevertheless, the number of computers sold , is pitifully small compared to the number of households that can afford a computer. Undoubtedly, personal computers will maintain stronger growth in the next few years." "Well, that's the right trend," Sculley said. "But even with overall sales growth, the competition is still fierce. Why must the Macintosh win?" "Does this still need to be asked?" Jobs said, "Compared with the IBM PC, the Macintosh is a whole generation ahead. Why do users choose an outdated IBM PC instead of a computer that is one generation ahead?" Although Sculley had some doubts about Jobs' self-confidence, he generally agreed with it.Aside from the few things Alan Kay worried about, there seemed to be no reason for the Macintosh to lose out to its competitors.But if Jobs' forecasts of sales growth are assumed to be correct, another thorny issue must be resolved.Apple simply does not have the ability to produce 80,000 Macintosh computers a month. "How? For the forecast of monthly sales of 80,000 units, let's give it a go, expand investment, and increase production capacity?" Sculley asked Jobs cautiously. "Of course! Of course we have to give it a go!" Jobs said firmly.