Odyssey: Pepsi to Apple. - book reviews

Washington Monthly, Jan, 1988 by G. Pascal Zachary

Odyssey: Pepsi to Apple.

Like the turn of the century automobile revolution, the rise of the personal computer has entered American folklore. It is an appealing tale: a group of scruffy young computer hackers led by a couple of college dropouts named Steve (Jobs and Wozniak), set out to create a new industry based on a populist credo--"one person, one computer." The established computer companies, who build the big mainframes that are shared by large groups of users, possessed the technology to transform the computer into a tool for individuals. But these companies--most notably Xerox, which had an entire lab working on personal computers, and Hewlett Packard, which rejected Wozniak's offer to build his first computer--turned their backs on the idea out of a desire to protect their existing products. Rather than seeing the potential of personal computers, the computer establishment saw only the threat. That left the field to business novices like the two Steves to trigger a revolution in personal productivity--and build huge new American industry.

Jobs and Wozniak formed Apple Computer about ten years ago to spread the gospel about personal computers. The company and its cause soon attracted the attention usually reserved for rock stars and royalty, and it has now spawned an unusual corporate memoir by Apple's current chief, John Scully.*

* Odyssey: Pepsi to Apple. John Scully. Harper and Row, $21.95.

After its fast start, Apple ran into trouble, a victim of its own grandiose dreams and the entrance into the personal computer market of the world's biggest computer company, IBM.

To fend off Big Blue, Apple's board of bluechip directors figured the company needed a dose of establishment medicine. For all his creativity and showmanship, Jobs was no manager. Early in Apple's history he had relinquished day-to-day management duties, allowing him to indulge his passion for the Macintosh Division, which eventually consumed Apple's resources.

In from the East came Scully, president of Pepsi-Cola, to tame this wild child and teach it corporate manners. Jobs had personally wooed Scully, challenging him with the question, "Do you want to spend the rest of your life selling sugared water, or do you want to change the world?" Scully, ripe for change, took the bait.

At Pepsi, Scully had measured corporate success in market points and battled fellow executives for the right to succeed the company's revered chairman, Donald Kendel. At Apple, protocol was nonexistent, and Scully, used to Pepsi's elaborate boardroom rituals, was shocked. Recalling his first extended executive meeting at Apple, Scully said of the participants, "Many of them traded insults as often as kids used to trade baseball cards."

Before long, however, Scully was acting like one of the Apple kids himself. Rather than rein in Jobs, Scully permitted his authority to grow, and soon the company was careening out of control as Jobs poured money into the ill-fated Lisa computer project and ignored critics calling for an overhaul of the original Mac. With Jobs running amok, Apple lost its leadership to IBM and was in danger of going belly up.

Scully sobered up in the nick of time. Rediscovering his former pragmatic self, he ousted Jobs from the company in a well-publicized maneuver that serves as the dramatic high-water mark of Odyssey. For Scully, the decision was "personally devastating" but inevitable. When he first suggested that Jobs surrender daily management duties, Jobs responded by trying to depose Scully. Jobs planned to deliver the knockout blow when Scully was traveling in China, but at the last moment, warned off by loyal executives, Scul ly canceled his trip and confronted Jobs about his plans in front of a group of Apple's top executives. The resulting shake-out marked the end for Jobs, who resigned a few months later. That left to Scully the task of revitalizing Apple. In the face of sluggish sales, Scully transformed the organization, shutting plants and laying off hundreds of workers.

After computer sales began to rebound--and he no longer thought the company's survival was at issue--Scully moved to conventionalize Apple, hiring executives from old-line computer companies and dropping the firm's emphasis on consumer sales for an assault on business. The result: a once skeptical business community has embraced Apple's Macintosh family (even the Pentagon has a Mac users group), and Apple is posting huge profits.

Scully, however, is not content with simply retelling the story of Apple's business triumph. He unwisely tries to analyze the nation's economic ills, putting forth Apple as an example of how American companies can better compete globally. "We're trying to build a model corporation for the future," Scully writes. For him, Pepsi is "a company for the rational world . . . a world too consumed with power and competition, a world that rewarded people for building corporate empires, not beauty."

Scully is particularly impressed with how well Apple and other Silicon Valley high-tech firms have tapped individual creativity among their workers. He even goes so far as to compare the valley to "what Florence must have been in the Renaissance."