Apple
BES08 steve jobs 1997
Steve Jobs at Apple headquarters in Palo Alto in 1997

1997: Apple brings back Steve Jobs

Lesson learned: Sometimes boards are too quick to jettison a founder in favor of professional management. But for all a company might gain from bringing in a pro, it risks losing the magic and entrepreneurial vigor that only a founder can bring.

History often applies a gauzy layer of film to great decisions. Take the action by the Apple board of directors to bring back Steve Jobs to the company he had co-founded 20 years earlier.

It is impossible to overstate just how rotten a state of affairs Apple found itself in during its 20th year of existence. In 1996, Apple lost $816 million on $9.8 billion in sales. Then-CEO Gil Amelio convinced the board that Apple needed to purchase a software company to gain the intellectual property and talent to replace Apple's aging operating-system software. The company soon bought NeXT, whose founder was none other than Jobs. Amelio understood the value of NeXT's software and the effect on morale, product vision, and creativity that could come from persuading Jobs to rejoin Apple. Amelio should have been wary of Jobs. He had met with him in 1994 when Amelio joined the Apple board, and Jobs asked for Amelio's help in having himself named Apple's CEO. Shortly after the acquisition, Jobs became an "informal adviser" to his former company and began roaming its halls as if he were the boss.

Apple's newest board member, former DuPont CEO Edgar Woolard, became alarmed about Amelio. He discussed Amelio with Jobs and senior executives at Apple. At the time Apple was in a continual downsizing mode, and Woolard was worried about the company's ability to achieve its plan and about employee morale.

In July 1997, after consulting with Jobs, Woolard spearheaded the decision by the board to fire Amelio. While Woolard had no reason to be sure that Jobs would step in as CEO, he must have sensed that the organization was starting to follow the young man's lead. By firing Amelio, Woolard had made a decision that eventually helped Jobs regain power at the company. In a sense, what he decided to do -- perhaps all he could do at that point -- was remove any obstacles to Jobs' return.

--Adam Lashinsky


- Last updated October 01 2012 10:23 AM ET
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