Five things all leaders should learn from Steve Jobs

The announcement from Apple CEO Steve Jobs that he’ll be stepping down from his post is not altogether unexpected, but it does mark the end of an era. Jobs returned to the company he started in the late 1990s when it was in big trouble. The strategic direction was wayward, the products were suffering from lack of innovation, and the stock price– a standard measurement of a company’s health– was beleaguered.

His return was the subject of some controversy, as experts weighed in on both sides of the fence. Some believed he was the only person capable of turning the company around, others thought the company was long past saving. His departure at this point leaves the company in undoubtedly the best position possible: It’s widely considered to be the most innovative business in the world, enjoys record-breaking quarter after quarter, and has essentially re-defined the way most of us interact with each other on a daily basis.

His success with Apple (not to mention Pixar, arguably the most successful film company ever built) leads me to examine what he’s done at the helm and what the rest of us can learn from his example. Five key things come to mind.

Vision matters

When Apple introduced first iPod, a white block of plastic with a black and white screen and a little wheel on the front, Jobs was on stage talking about how people love to take their music with them and were longing to do it again. Cassette tapes didn’t offer the quality, he said, and CDs were just too bulky to manage. At the time, Sony was the de facto leader in the market with their entire line of Walkman products. But nobody else really thought there was anything to gain in this segment. What else could be done? Apple understood that the iPod was a complete game-changer, even before most of us knew what an MP3 player was. I remember thinking, “This is interesting, but who really needs to carry their entire music collection around with them?”

Now, almost 300 million iPods have been sold. Consider all of the consequenses: The music industry was forced to think about a different business model; businesses of all kinds are considering how to build ‘micro-payments’ into their revenue streams because iTunes paved the way; and new industries and countless businesses have been created to support this type of product delivery in a variety of sectors.

A year or so later, he was back on the stage talking about the new line of iMacs. “The PC will be the digital hub,” he said, long before digital cameras were ubiquitous. Encouraged by the sales of all those iPods, he rightly understood that people would need a place to manage those digital files. Apple began thinking about other things that would be digitized: pictures, movies, files, etc. They predicted that people would need one central location to handle all of these things and then built a computer to perform that function, and then built a network of retail stores to support them and teach people how to use them. Another key: when you’re out in front and creating demand (not just reacting to it), you have to teach people how to use the tools you’re providing.

From the moment he returned, Jobs has been communicating his vision relentlessly to anyone who would listen. Employees heard it enough that it became their vision. Consumers heard it enough that has become our reality. Consider this: when he returned to Apple Computer in 1996, the company hovered around 4% market share in computers. They now have almost 11% of the computer market, they dominate the MP3 market, they created (and own) the tablet market, and they’ve taken 30% of smartphones in just three years, making them the wold’s largest smartphone maker by volume.

Vision couldn’t be more important, especially if you can turn your vision into everyone else’s. Which brings me to…

Passion is contagious

Every time Jobs stepped on the stage to deliver his trademark keynote address, millions watched, millions more read live transcripts, and reporters and writers around the globe hung on every word to find out “what’s next.” (A side note: when was the last time you watched the CEO of any other company do a presentation on their latest product announcements?)

He has been maligned and mocked for these turtleneck-clad keynote addresses where he has unveiled products that he calls “amazing”, “ground breaking”, and even “magical.” But the truth is, many of these products were those things and more. Time and again, he showed us things that we had no place for in our lives but found that we wanted (and later, needed) them. He called the iPad “magical” and people chuckled. Then they held one in their hands and understood that it is, in many ways, just that. Before the end of the day, people all over the world were using the exact same word to describe this product.

You have to believe in what you’re doing more than anyone else. You have to allow that passion to flow in everything you do, and say, and write. My friend Michael Allosso calls this being “you on your best day,” every day.

Innovation trumps stagnation

Apple is widely considered to be one of the most innovative companies on the planet. The examples of this abound, but the one that says it all is the iPhone. While working on the iPad (long before anyone knew what it was and while Jobs was still saying things like “there is no market for netbooks”), they were experimenting with touchscreens and gestures. At some point in this process, they realized that the technology would allow them to build a phone without a number pad. This one simple insight opened doors to a new universe of thinking. Without the keypad, they could make the screen larger; with a larger screen, they could present significantly more data; with more presentation room, they could ‘fix’ many of the things that don’t work very well on a phone. They rightly recognized that the smartphones, as they existed in 2006, were essentially broken. They did a whole bevy of things, but none of them very well. But the majority of people using their phones were perfectly satisfied with them. Like a lion born in captivity, they didn’t know what they were missing. So how can you convince people to change when they aren’t feeling any pain?

Apple has a long history of working to control the entire ecosystem of their products. The result of this control is that things “just work” (another of Jobs’ favorite phrases.) So when they decided to get into the smartphone business, they had one request: they wanted to build it their way, without interference from the phone company. Not surprisingly, they had trouble selling this idea to the industry experts. When they eventually convinced AT&T (Cingular Wireless at the time) to come aboard, they also negotiated a fraction of the monthly service contracts in return for iPhone exclusivity for four years. Industry experts scoffed and said things like “nothing like this had ever been done before,” “the revenue sharing model wouldn’t work,” “Apple has no experience building a phone.” But they did build it, and built it well, by building something completely new. Take a look around the smartphone market now and you’ll quickly notice that almost all of them look like iPhones. And that deal with AT&T that “couldn’t work”? With the iPhone, AT&T’s market share increased from 14% to 28% in two years.

It’s common knowledge that most people avoid change. We’re comfortable where we are, thank you, and changing (just about anything) can be such a hassle. In fact, there are probably few things more of a hassle than changing your phone carrier or your operating system. But if the incentive is good enough, people will change. Your job is to create the right hook.

People care about quality, design, and function (more than price)

Behind the scenes at Apple, you should imagine two people standing shoulder to shoulder: They share the same vision, they have the same passion, they believe in innovation, and– perhaps above all– they know that design matters and that people want to buy beautifully built products. Those two people are Steve Jobs and Jonathan Ive.

For nearly every Apple product you’ve held in your hand and thought, “this is a thing of beauty,” Ive has been the principle designer: The iMac, G4 Cube, MacBooks, iPods, iPhones, and iPads were all created under his guidance. While other manufacturers worked to hit specific price points, Apple quietly went about creating things that were beautifully imagined, painstakingly built, and just worked. What they found out is that people will pay the premium to own these things.

What can you do to incorporate this thinking into your world? What product or service can you deliver better, not just better than your primary competitor, but than anyone else? How can you weave quality into everything you do?

Find, develop, and prepare your replacement

At some point, we all need to exit, stage left. How and when isn’t always left up to us. In Jobs’ case, he has always maintained that he would step down as soon as it was clear that he was unable to continue (due to health reasons.) The market will likely take note of his departure and the stock price is almost certain to take a hit. But he leaves his company in great shape. Tim Cook, who has performed brilliantly as COO, will take over as CEO. Ive is still there to lead industrial design. The entire management team is comprised of key people performing key functions very well.

Over the past 14 years, Jobs has been roaming the halls, touting his vision, infecting people with his passion, and challenging people to build the best products in the world. Now his credo has become theirs, and the company is in position to continue doing exactly what it’s been doing for the last decade. Your primary job, over all others, is to perform the same function in your organization: It’s imperative that you build something that can thrive without you. Start today.

Related articles

• 10 Iconic Steve Jobs Moments [VIDEOS] (mashable.com)
• Apple CEO Steve Jobs Resigns, Picks Tim Cook As Successor (fastcompany.com)
• The Beginning of the Post-Steve Jobs Era (time.com)