Apple is one of the most admired brands in the world and its financial turn around over the last half decade has probably been the most notable in modern American corporate history. Under Steve Jobs’ leadership, Apple has managed to remap not one but three major industries: personal computers, digital media players and smartphones. Year after year, Apple comes up with well-designed products that are the envy of consumers. So it’s no surprise that other companies are eager to hire Apple alumni in hopes of acquiring some of that design and management stardust to turn around their own houses.
Does it work? Consider three prominent alumni who left Apple after the return of Steve Jobs in 1997:
John Rubinstein at Palm
Long-time Jobs’ colleague from NeXT days, John Rubinstein ran Apple’s hardware engineering and later headed the new iPod division. He retired from Apple in 2006 and later joined Elevation Partners (co-founded by former Apple CFO Fred Anderson), which bought 25% of Palm Inc., in 2007. Rubinstein became Palm’s executive chairman and began leading all of Palm’s research, development and engineering. Rubinstein also recruited Mike Bell from Apple, where he was VP of CPU Software.
One of Rubinstein first major acts at Palm was the cancellation of Foleo a year ago, shortly before the introduction of Apple’s MacBook Air. Foleo (which the Palm founder Jeff Hawkins considered “the best idea I’ve ever had”) was a $499 “smartphone companion” laptop looking for a problem and the cancellation forced Palm to write off $10 million in R&D expenses.
Palm’s next major product to launch under Rubinstein was the Centro. Accused of lacking any significant innovation, at $99 Centro targeted the lower end of the smartphone market with sales fraction of the iPhone’s and at much lower profit margins.
Tim Bucher at Dell
When John Rubinstein took over the new iPod division in 2004, his replacement for Macintosh Engineering was Tim Bucher. Only six months later, however, Bucher was abruptly fired and he sued Apple for wrongful termination in turn. Subsequently, Bucher co-founded Zing Systems. Zing wrote the software that allowed SanDisk to launch the Wi-Fi enabled MP3 player Sansa Connect which hooked up with Yahoo! Music to take on Apple’s iPod.
In 2007, Dell, still under pressure to create a rival to the iPod, purchased Zing where Bucher remains as the chief product officer. BusinessWeek thus described Bucher’s mission at Dell:
Now Bucher is again squaring off against his former company. He’s spearheading an ambitious plan at Dell to break Apple’s dominant hold on the digital entertainment market. He won’t challenge Apple head on, with iPod knockoffs or a Dell version of the iTunes music store. Instead, Bucher’s 120-person team is trying to create a potent alliance among Apple’s many rivals, from cell-phone makers and record labels to online music sites.
Tim Schaaff at Sony
After he returned to Apple, Steve Jobs often referenced Sony as a company to be admired and emulated in his early keynotes. Over the ensuing decade, however, the fortunes of Apple and Sony have reversed, perhaps not coincidentally.
So much so that in 2005 Sony CEO Howard Stringer wooed Tim Schaaff, Apple’s Vice-President of Engineering for Interactive Media Group, as Senior Vice President of Software Development, responsible for “developing and deploying a unified, intuitive Sony ‘look and feel’ to user interfaces and functionality across our entire product line.”
What’s holding them back?
In each case, Palm, Dell and Sony acquired Apple executives with the conviction that they’ll be able to turn around their beleaguered companies. The assumption was that there was something in the Apple process that could be isolated, translated and transplanted. There are many facets to the “Apple way,” but these three explain why teleportation of former Apple executives is not one of them:
• Focus. Take Palm. What OS does it run? Palm, once a 3Com subsidiary, owned both hardware trademarks and PalmOS. In 2003, Palm separated from 3Com, then spun off the hardware division to PalmOne and the OS to PalmSource. PalmSource then changed its name to Access Systems, selling the rights to the “Palm” name back to Palm, Inc. PalmOne then became Palm, Inc., again. Palm soon introduced WinCE based Treo 700 phones thereby confusing everyone as to whether it even supported its own PalmOS. Access, in the mean time, moved to a new Linux-based OS. Its PalmOS 6 was thus left at the alter, ready to ship but nobody, not even its parent Palm, willing to support it. Incidentally, during these roller-coaster years, the CEO of PalmSource was none other than David Nagel, former head of Apple’s R&D.
In contrast, Apple has had one principal OS over the last decade for its desktops, servers and now mobile devices. Apple just became the most popular handset marketer to consumers in U.S. with a single model sold by a single carrier in less than two years. Steve Jobs is often described as a “control freak” but is there anything Rubinstein at Palm needs more than focus?
• Integration. Take Sony. Sony Corp has over 185,000 employees in 1,006 consolidated subsidiaries worldwide, with operations in audio, video, music, movies, chemicals, insurance, semiconductors, cellphones, games, banking, leasing and a thousand other industries. Faced with this obscene lack of focus, Sony CEO Howard Stringer took on “synergy” between hardware and software divisions as the new mission of the company. The ex-Apple Tim Schaaff was hired to create the framework for all Sony divisions to pull in the same direction.
Three years into the “synergy” journey, though, there’s very little to show for it. Many inside and outside Sony remain skeptics, says BusinesWeek:
“[Schaaff] came in lecturing everybody, saying ‘Well, we did it this way and this way at Apple,’” says one executive in Sony’s consumer electronics division. Others grouse that Schaaff has demonstrated little of Jobs’ take-charge attitude. “To expect a storm-the-castle, everyone-pulls-in-the-same direction attitude, forget it,” says another executive who has worked with Schaaff.
Sony has a bewildering array of subsidiaries and world-class hardware and content businesses like no other company in the world. What Sony doesn’t have is a way to integrate them, the way Apple’s desktops, iPods and iPhones are intertwined with iTunes cloud services and music, video and app stores. Schaaff may have brought his Apple pedigree to Sony but it doesn’t seem all that valuable at a conglomerate that remains hopelessly disjointed.
• Design. Take Dell. The enterprise-oriented Texas company has never really had any success in competitive consumer markets. One of its most spectacular failures has been the quick death of its iPod-killer DJ Ditty MP3 player. Last year, Dell began to reposition itself as the new anti-Apple and a “cool” brand, while simultaneously selling $700 PCs at Wal-Mart. Shortly later, Tim Bucher was brought in to inject a megadose of Apple innovation magic.
Unfortunately, other than supply chain management and direct online sales, Dell has no other core competencies. Its R&D operations are minuscule. Unlike Apple, Dell’s corporate life never depended on continuous design innovation.
Steve Jobs famously said, “It’s not just what it looks like and feels like. Design is how it works.” At Dell — with no OS of its own and no UI or application expertise at all — design is still a veneer. At the very moment Dell bought Bucher’s Zing to compete against iTunes, it also hired Ed Boyd from Nike to spruce up the top of its laptops with funky designs.
Tim Bucher or no, Dell just doesn’t get design. So it’s no surprise that Dell is abandoning its Zing quest in digital music, according to Wall Street Journal.
Lipstick on a pig
Under Steve Jobs, there hasn’t been any significant exodus of talent from Apple to competitors. For these three alumni, it’s been a difficult journey: so much is expected of them in corporate environments without an integrated, pervasive and focused design culture, which makes Apple the envy of the tech industry and system design such an elusive endeavor.