Organizations in decline tend to create an imaginary double in which they lock themselves. This double is themselves, but in an idealized version. It is a mask that they create to hide and to insulate themselves from a reality that they refuse, letting the world go without them, even against them. The dissolution of this double, i.e. the acceptance of reality, however unpleasant it may be, is a prerequisite for any recovery. A good illustration of this is provided by the Apple turnaround in 1997.
In August 1996, Apple announced that it was abandoning its Copeland next-generation operating system project. It was a major failure, a bit like Ford announcing that it was unable to create a new engine. This failure comes at the end of a long decline, which started a few years earlier. It accelerated in 1995 when Microsoft launched Windows 95, which made a PC almost as easy to use as a Macintosh. Windows 95 canceled out the advantage of Apple, whose products were still much more expensive. The company, which practically invented the personal computer with the Apple II in 1977, experienced a meteoric growth in the 80s, and then revolutionized the sector with the Macintosh in 1984, was at the end of its rope. It was a shadow of its former self. BusinessWeek, a leading magazine at the time, wrote its obituary and titled it “The Fall of an American icon”.
It was a painful time for the fans of the brand. In the midst of a loss of momentum, with obsolete products and no strategy, Apple refocused on the square of loyalists it was trying to keep mobilized. It asked Guy Kawazaki, one of its marketing managers, to lead a team in charge of “evangelizing its products”; in fact, harassing journalists who criticized Apple. The affair turned into a religion. It was framed as a fight between good (Apple) and evil (IBM, Microsoft, the rest of the world). People prefer to buy a PC? Then they are stupid. A critical article? The journalist is hostile to us, or knows nothing about it. A software developer switches to PC? He’s a traitor. Any good news, no matter how insignificant (a third-rate actor said he had a Mac) was blown up, while bad news was brushed aside or ignored. To talk to an Apple fan at this time was to be confronted with an ideologue, and a desperate one at that, and therefore all the more intransigent. Apple locked itself in a bubble with its last square of faithful while the ship was sinking. The blindness was rationalized. The company was no longer itself; it had created a double and lived in a parallel world. But it was finally caught up with reality. To use the expression of the philosopher Clément Rosset, the double always ends up dissipating at the edge of reality. The edge of reality, for Apple, was the failure of Copeland. It is impossible to sell a computer without an operating system. The king was naked, and now everyone knew it and says so.
The return of Steve Jobs
The company tried a poker move by buying Next, a company that created a modern operating system, but without commercial success. But Next was created by Steve Jobs, who was also co-founder of Apple and who was fired without warning in 1985. It was therefore the return of the prodigal son. Officially, Jobs returned only an advisor to CEO Gil Amelio, but nobody was fooled. He was the one pulling the strings, and he quickly replaced poor Amelio, who was totally out of his depth. The favorite game in Silicon Valley at the time was to guess what Jobs’ strategy would be to relaunch Apple. Press articles and forums were multiplying (this was before Twitter and social networks) with experts giving their opinion on which market Apple should “disrupt” or on the innovation strategy the company should develop. Jobs would thwart all their predictions. Without formulating it in this way, his initial action consisted of dissolving the double at all levels, both through the decisions he makes and through the discourse he holds.
An important episode helps to understand his approach. We are in May 1997, after his first decisions saved the company, at least for the moment. The occasion is the Apple developers’ conference. It brings together those who create and market software for the Macintosh. As much as to say that this group is stricken. Developers are the first victims of Apple’s decline. When Jobs took the floor, the atmosphere was tense, to say the least.
The dissolution of the double
Jobs opens the floor for questions, and the first one is: “What about OpenDoc?” OpenDoc was a very ambitious project for a universal document format, a PDF equivalent. Apple had made its development a central part of its strategy and had asked all developers to integrate it into their projects, which represented a significant investment. When he arrived, Jobs canceled the project, much to the fury of the developers. Jobs’ response is fascinating. He explains that with OpenDoc, Apple wanted to impose a standard, which was unrealistic given how small its influence on the market had become. This was just one of many examples of how out of touch and delusional Apple was. Just looking at the facts – OpenDoc was a good idea, but it was based on bad technical choices, and Apple had no chance of imposing it on the rest of the world – showed that the project had to be abandoned. But observing the facts was not Apple’s forte at the time. What Jobs is imposing is a reality principle. This reality may not be pleasant, but it is the basis for rebuilding something. Let’s stop fooling ourselves and others. At this point, he doesn’t really have a strategy, let alone a vision. But he knows that nothing can be built on illusion; we have to start by dissolving the double and getting back to the real.
Given the situation, he feels that Apple must focus on what is important. That’s why he started by cancelling products and projects before creating new ones. He adds, “Focus is saying no. And you have to keep saying no, no, no. And when you say no, you piss off people, and they go to the San Jose Mercury News [the Silicon Valley newspaper] and write shitty articles about you.” He added: “For the past several months, Apple has taken its fair share of lumps in a very unfair way in the press, but has taken them like an adult, I must say; and I’m proud of that. But we just have to keep our eyes on the prize, take one step at a time, and not get distracted. We’ll explain what we’re doing as best we can, and the press and the course of action will take care of themselves.” Again, a reality check. Let’s focus on what’s important – making good products with our partners.
Truth as a prerequisite for turnaround
No company can be turned around as long as management and employees continue to live through a double, deluding themselves and cutting themselves off from reality. It can, like Apple, wait for disaster to strike – Copeland-like, and it never fails to happen. But it can also, and this is obviously preferable, dissolve the double by itself. This is not easy, and that is why it often requires a change of leadership, but it is necessary because in the end, reality always wins.
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🇫🇷French version of this article here.