Return to the Little Kingdom_ Steve Jobs and the Creation of Apple - Michael Moritz [130]
There was also, during the early days, considerable tension between the manufacturing department and the men who monitored the flow of materials and supplies. Mollard recalled that the enmity ran so deep “there were people almost coming to blows in the parking lot.” The butt of the company, the publications department, couldn’t complete manuals until engineers and programmers had stopped tinkering with a device or piece of software and was also battered by pressure from the marketing side who wanted to ship products quickly. For a time, while Apple was still very young, the technical writers developed their own little world. They arranged noon-time madrigal sessions, installed beanbag chairs in their offices, erected walls of cardboard boxes, and armed themselves with Ping-Pong-ball guns to fend off intruders.
By September 1980, three and a half years after the introduction of the Apple II, 130,000 had been sold. Revenues had risen from $7.8 million for the fiscal year that ended on September 30, 1978, to $117.9 million, and profits had risen from $793,497 to $11.7 million. And that fall, thirty-one months after the thirtieth employee had joined the company, and just twelve months after the three-hundredth employee arrived, Apple’s payroll topped one thousand. The company occupied fifteen buildings in Silicon Valley, eleven of which were in Cupertino. There was some manufacturing in Cupertino and San Jose but large-scale manufacturing was conducted at a factory in Texas. Warehouses had been opened in different parts of the United States and in the Netherlands. Overseas there was a plant in Ireland (which was opened by an unemployed plumber, the mayor of Cork) and another was about to open in Singapore. The pyramidal structure was bulging and so Apple moved one step closer to convention and formed divisions.
There was nothing very surprising about the decision. It was one of those penalties of size that emphasized how fast the company had grown. The change in structure also reflected tacit admission that Michael Scott’s hopes of keeping the company small had been scuttled. His dream of limiting Apple to between fifteen hundred and two thousand employees, and of running an enterprise that made only its latest product (while subcontracting everything else), disappeared. Divisions were formed for all the usual reasons: attempts to keep affairs manageable, to pinpoint profit and loss areas, and to delegate authority.
Before the divisions were announced some of Apple’s managers went on inspection tours and tried to do their home-work. They asked senior members of Hewlett-Packard and Digital Equipment Corporation how decisions were made in their companies and then returned to Cupertino to draw up battle plans. One division was formed as an experiment. Its charter was to take care of disk drives. In the fall of 1980 five others were added: the Personal Computer Systems Division to look after the Apple II and Apple III, the Personal Office Systems Division to design and nurse the Lisa system, Manufacturing, Sales, and Service.
There wasn’t, of course, any particular time when the formation of divisions would have been comfortable. At Apple the formation of divisions occurred when there were plenty of other pressing distractions. The decision was made about the same time the directors decided that the company should make its first public stock offering and also during the weeks when a successor to the Apple II was being introduced.
Though most of Apple’s top managers had worked within a divisional structure, none had managed a company that had divisions. There were scarcely enough middle managers to go around and nowhere near enough people to fill all the empty cubicles. The computer systems weren’t installed and procedures weren’t drawn out. It was hard to escape the impression that the creation of divisions was scarcely a masterstroke of planning.
The grand change and dislocation helped