How Steve Jobs Built a Company That Engaged Its Workers
Nov 6, 2022
The Apple founder created a company where everyone had ownership and shared success.
A good friend sent me a message recently that I haven't been able to forget. We worked together for many years, but there was plenty I didn't know about his life. He wrote: "A rising tide lifts all boats, but it's hard to keep bailing out your dinghy when it's continually being swamped by superyachts."
How many people in our country, and in our world for that matter, feel the same way? As we enter our latest recession, how many employees will be laid off, while corporate executives are untouched or even rewarded? How many dinghies are sinking, while the superyachts sail on?
It's unfortunate how many examples we have of heartless capitalism. In 2019, admittedly a challenging year, General Electric reassigned 5,000 corporate employees and eliminated 2,000 more. Of course, chief executive officer Larry Culp was not one of them. He waived most of his salary and all of his bonus -- but he still scored a total compensation of $73.2 million, almost all of it from potential stock payouts tied to the company's future performance.
Culp and GE are hardly alone. In a Harvard Business Review article called "Run Your Business So You'll Never Need Layoffs," we made the case for a gentler form of capitalism, outlining three industry leaders that have never staged a layoff. As strong as the stories of Southwest Airlines, Canlis Restaurant, and Adams Beasley Remodeling are, we think there is an even stronger advocate for enlightened capitalism.
Steve Jobs built one of the biggest superyachts ever built. Today, Apple's market cap is over $2 trillion, the largest of any company in the world. Yet Apple's picture in our hearts and minds has never been one of corporate greed. If you speak with Apple employees, there are hardly reports of poor treatment; instead, we hear employees that are fiercely proud of their company and grateful to work at Apple. And this pride has continued well beyond Jobs's death more than a decade ago. I see no sign of Apple's success letting up.
How did this superyacht glide so smoothly? And how did it stay afloat without him? It occurred to me that Jobs's enlightenment allowed him to develop a managerial system that was not dependent on him. Our own managerial system, Economic Engagement, has five key components that can be mapped across Jobs's own philosophies:
Customer engagement. We say this is the starting point, as customers define the value of your business. Jobs said, "Some people say, 'Give the customer what they want.' But that's not my approach. Our job is to figure out what they're going to want before they do." This reminds us of how Henry Ford gave customers an automobile, not a faster horse, or how Herb Kelleher gave customers the freedom to fly.
Economic understanding aligns all employees in a common understanding of what defines success for the company. Jobs said, "I don't hire people to tell them what to do. I hire people to tell me what I should do."
Economic transparency enables all employees to see how the company is doing and learn from successes and failures. Jobs told us, "Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations."
Economic compensation gives all employees a shared stake in the results, making them economic partners in the company. Jobs: "Being the richest man in the cemetery doesn't matter to me. Going to bed at night saying we've done something wonderful... that's what matters to me."
Employee participation leads to lower turnover and better relationships between owners/managers and employees. Jobs noted, "My model for business is The Beatles. They were four guys who kept each other's kind of negative tendencies in check. They balanced each other, and the total was greater than the sum of the parts. That's how I see business: Great things in business are never done by one person, they're done by a team of people."
We like to think Apple was and is a great example of the long-term benefits of Economic Engagement. Jobs's impact and perspective transcend business. (A college dropout, Jobs had an interesting perspective on education, as he famously evidenced in his 15-minute Stanford commencement address.) But maybe his most famous quote, and certainly my favorite, is: "Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it."
There's something here. If you spend time doing what you love, even if you're in rough waters, you've still got a reason to smile. And if more entrepreneurs drove superyachts the way Steve Jobs did, we would all be better off. Ask any of us who continue appreciating the legacy of Apple. I hope my friend reads this, and I hope he smiles.