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By Root 517 0

with the challenge of managing a fast growing company in an increasingly competitive business, the Board of Directors of Apple, were faced with the most important task that confronts any board: selecting a person to run the company. Mike Markkula, who had joined Jobs and Wozniak in 1976, had made no secret of the fact that he had little appetite for life as Apple’s long-term CEO. Thus the Board, which included Steve Jobs, had to decide what course to take. This decision—and three similar decisions over the ensuing thirteen years—shaped Apple’s future.

Only in retrospect have I come to understand the immense risk associated with hiring an outsider—let alone a person from a different industry—to run a company whose path has been heavily influenced by the determination and ferocity of its founder or founders. It is not an accident that most of the great companies of yesterday and today have, during their heydays, been run or controlled by the people who gave then life. The message is the same irrespective of industry, era or country and the name can be Ford, Standard Oil, Chrysler, Kodak, Hewlett-Packard, WalMart, Fedex, Intel, Microsoft, NewsCorp, Nike, Infosys, Disney, Oracle, IKEA, Amazon, Google, Baidu or Apple. The founder, acting with an owner’s instincts, will have the confidence, authority and skills to lead. Sometimes, when the founder’s instincts are wrong, this leads to ruin. But when they are right, nobody else comes close.

When corporate boards start to have misgivings about the condition of a company or the ability of the founder and have no plausible internal candidate, they will almost always make the wrong move. They usually need to make a decision about a CEO when a company is barreling towards a fall, emotions are raw, testosterone levels are running high and, particularly in a company as visible as Apple, when every employee, analyst, smart-aleck and naysayer is ready to dispense advice. At Apple in 1985 the Board’s decision was complicated by the fact that there was no obvious successor within the company. Jobs was considered too young and immature, and for his part, he knew that he needed help if Apple was to achieve the $10 billion sales level he had already started to dream about. The oppressive weight of conventional wisdom tilted the quest towards a résumé dripping with impressive-sounding titles and credentials. But experience—particularly when it’s been acquired in a different industry—is of little use in a young, fast-growing company in a new business that has a different pulse and unfamiliar rhythm. Experience is the safe choice, but is often the wrong one.

After a lengthy search, Apple’s board announced that John Sculley would be the company’s new Chief Executive. Sculley was unknown in Silicon Valley, which was hardly surprising since he had spent his entire business career at Pepsi Cola where, in his final job, he had run its soft-drinks business, PepsiCo. Sculley’s arrival in Cupertino was greeted with the demeaning commentary that Apple (and Jobs) “needed adult supervision.” This is the very last thing that rare and wonderful founders need. These rare sorts of people may require help, they will certainly benefit from assistance and there may be plenty of things that are new or foreign to them. But the appearance of a boss, particularly one with little experience of technology and the brutish rough and tumble of a company in its formative years, will almost certainly end in misery.

At Apple, Sculley was greeted like an archangel and, for a time, could do no wrong. He and Jobs were quoted as saying that they could finish each others’ sentences. In hindsight it is fairly easy to say that it would be almost impossible for a man like Sculley, reared within the confines of an established East Coast company selling soft drinks and snacks, to flourish in a business where product life cycles are measured in quarters, if not months, and where cowing to convention marks the start of the death rattle. It is easier for a founder, particularly when surrounded by people with different experiences, to