Corporate Antihero John Sculley

The man who eased Steve Jobs out of Apple talks about the dangers of company cultures and the blind spots of company founders

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It was the hardest thing he'd ever had to do. Not just stripping his friend and sponsor, Steve Jobs, of any operating role in the company Jobs had cofounded. But then laying off 20% of the work force and reorienting the company's single-minded focus from products to markets. In the middle of what became a very public crisis at Apple Computer Inc., John Sculley, as much the gentle philosopher as the tough-minded CEO, found himself reading about theoretical physics -- about the breakdown of the Newtonian system and the role of chaos in producing new and higher orders. If it happened in physics, he asked, why couldn't it happen in business?

Since then, Sculley's mission has been to make a new order at Apple by proving that corporate controls and creativity can coexist at the Cupertino, Calif., campus. Veterans of the Jobs era still occupy many of the top positions, and in the two years since Jobs's departure, they have managed to help the company regain its footing in the all-important business market with the advent of desktop publishing and the introduction of a more powerful and flexible Macintosh II. Profits have doubled, and the price of Apple stock has soared more than 500%.

Sculley's fascination with technology dates to his comfortable childhood in suburban New York City, where as a precocious 14-year-old tinkerer he just missed winning the patent for a new color television tube that later became the basis for the Sony Trinitron. At various times, he set out toward careers in architecture and advertising before landing at PepsiCo, where a series of marketing successes (remember the Pepsi Challenge?) led him to the presidency of the soft-drink division. There he might have spent the rest of his life "selling sugared water to children" if a charismatic Steve Jobs hadn't offered him a million-dollar salary and the chance to "change the world."

This month Sculley breaks his silence about the painful end of his friendship and collaboration with Steve Jobs in an autobiography, to be published by Harper & Row. But far more interesting than any criticism he has for Jobs are the frank admissions of his own mistakes during the crucial transition. Sculley talked about those, and about the inevitable conflicts that arise when entrepreneurs try to professionalize their company's management, with editor Steven Pearlstein and writer Lucien Rhodes.

INC.: When you first took the job at Apple, how did you think things would turn out between you and Steve Jobs?

SCULLEY: Steve was founder, chairman, and largest shareholder of Apple, and at the time was in charge of building one of the most exciting products in the company -- the Mac. And he was only 28 years old. So I felt from the very beginning that it would be naive to assume that he wasn't going to want to run his own company at some point. I viewed my role when I came in really as a coach to a brilliant young founder, someone who would help him develop the skills he was going to need maybe five or six years later. Even though I held the title of CEO, I knew it was a shared leadership title with the founder.

INC.: In hindsight, that must look like a badly flawed calculation.

SCULLEY: Well, remember, the overriding consideration in my mind when I came to Apple was that I genuinely liked Steve and was impressed with his ideas and his company. I felt that he was doing things that were going to change the world, in much the same way that Henry Ford and Thomas Edison had done, and I was inspired and excited about the chance to work with him. I knew there were high risks involved, but I was prepared to accept them -- both because of the strength of our friendship and because of my willingness to step aside as soon as he and the board felt he was ready to take over the running of the company. But that was wrong. In hindsight, I can't imagine the circumstances under which it could have worked.

INC.: It happens all the time: a founder realizes a company has become too large for him to manage, and decides to take the chairman's role and bring in a CEO. Knowing what you know now, do you think that it can ever work?

SCULLEY: No, I don't think it's possible, because if a chairman is a founder, it's very different from a figurehead. A founder has a certain status that goes beyond any other title you may give him, and the founder will inevitably want to make the big decisions. The real choice is for a founder either to learn to grow and change as CEO as the company grows and changes, or to step aside. Anything short of that is not going to work. I don't think a founder can bring in a CEO under him and say, "Just pretend I'm not here." It's not in the nature of the entrepreneur.

INC.: How do you mean?

SCULLEY: Because successful entrepreneurs are almost always convinced of their own invincibility, while successful leaders of high-growth companies have got to admit their vulnerabilities. And that's the catch-22. In my experience, the hardest part of dealing with entrepreneurs is getting them to recognize their own weaknesses. Sometimes they will say they are weak in certain areas, and then try to jury-rig an organizational concept to compensate for those weaknesses. But they really don't mean it -- they don't believe it.

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