Immediate Vault Immediate Access

Steve Jobs’ Lessons on Risk

The video above re-aired last night on 60 Minutes. It features an in-depth account of Steve Jobs from his authorized biographer Walter Isaacson, whose book Steve Jobs was the second-highest selling non-fiction work of 2011, despite not being published until just before Halloween. (The segment has a Part II you can watch here.)

In addition to being a best-selling author, Isaacson also served as the keynote speaker at the RIMS 2012 Annual Conference and Exhibition in Philadelphia this April. Our editor in chief, Morgan O’Rourke, sat down with Walter before the event to discuss what lessons risk managers can take away from life of Jobs.

Here is that interview in full, first published in our print publication Risk Management.

Morgan O’Rourke: What was it about Steve Jobs that made him, and by extension Apple, so successful?

Walter Isaacson: I think there were certain secrets to his success. The most important was focus. He was able to filter out all distractions. For example, when he comes back to Apple in 1997, they’re making 60 different products. He finally stands at a whiteboard and makes a four-square grid that says: home, office, laptop, desktop. He says, “We’re going to make four computers and cancel everything else.” And that focus really got Apple back on track.

Likewise, simplicity was another one of the lessons. He felt that you had to really understand the depth of engineering of a product to make it simple. For example, with the iPod, he insisted that you be able to get whatever you wanted with only three clicks. The engineers kept saying “we can’t do it,” and he would find ways to show them how it could be done.

O’Rourke: Can other companies duplicate his management style or was it more unique to Jobs and Apple in general?

Isaacson: People mistakenly think that his management style was just about being rough on people. He had rough edges, but the key was that he inspired people. I get frustrated when people say he was such a jerk. They’re missing that he was also compelling, charismatic and inspiring. It’s dangerous to think that being rough on employees is the only way to succeed. Instead, his success came from driving employees to do things that they didn’t know they could do.

O’Rourke: Key person risk is an important concern for many companies, probably none more so than Apple. So how do you think Apple will fare as it transitions to life without Jobs?

Isaacson: I think that a combination of [Apple top executives] Tim Cook, Jony Ive, Phil Schiller, Eddy Cue and others can, in total, bring the passion for product that Steve had, which is why Apple is still doing so well. I think that he ingrained in the company his ability to combine art with technology, and everybody there gets that. They all believe in making beautiful, well-designed, aesthetic products. However, when he left Apple the first time, the company did fine for four or five years and started failing. The danger is not that it will start failing now but will it be strong five to ten years from now?

O’Rourke: For a company that is considered extremely innovative, Apple also seemed somewhat risk-averse in that it didn’t pioneer new technologies like mp3 players or smartphones, but rather followed other companies into the market before eventually surpassing them. Was this strategy emblematic of Jobs’ personal risk appetite?

Isaacson:The risk that he took was in doing things that other people thought would not succeed. Not that he got the technology first, but rather that he put it together and decided that a portable music player, for instance, would transform the music industry when everybody else was saying, “Well, other companies are making mp3 players and they stink.” So it wasn’t like he invented the music player. It is just that he pushed the notion by making them really great so he could transform the experience.

O’Rourke: So the risk wasn’t in creating something new but in making something that already existed better?

Isaacson: Right. He would call it “betting the company” on a strategy. It wasn’t like they were going to make 40 peripheral products and see which one worked. They bet the farm on the iPod, which was the first real peripheral they built, and they bet the farm on the iPhone. He was able to package these new devices in a very artistic and appealing way. Sony was trying to make mp3 players, and Microsoft was trying to make tablets. But none of them had the passion to make them really well and to just bet that if you made a great one you would be able to sell it for more than anyone else and sell more copies.

O’Rourke: In addition to Steve Jobs, you have also written biographies on Albert Einstein, Benjamin Franklin, Henry Kissinger and others. Do you see any similarities between these iconic individuals and Jobs? What can business leaders can learn from them?

Isaacson: What they all do is think rebelliously. They think out of the box. Einstein made the leap that time is relative depending on your state of motion. That’s an out-of-the-box leap. You can’t see it, there is no evidence, and it doesn’t make logical sense at first. But he does it as a patent clerk in 1905, it takes about nine years for the rest of the physics community catch up and it’s a pillar of 20th century science.

Steve thought out of the box by saying let’s not do something conventional, let’s come up with new ideas. Think different, as he put it. That’s what set all of those guys apart was that they had an unconventional way of seeing things. That served them to make imaginative leaps.

Now and then someone will come up to me when I talk about Einstein and thinking out of the box and they will say to me, “I’m like Einstein. I’m a good leader because I think out of the box.” And I tell them it helps to know what’s in the box before you learn how to think out of the box. Sometimes when you do something differently, it’s not going to work. You have to make sure that if you’re doing it differently it will work better, not worse.

Walter Isaacson Talks Innovation and Creativity

Walter Isaacson is a man of many stories. He has written biographies of Benjamin Franklin, Albert Einstein and, most recently, Steve Jobs. His latest is a riveting story of the roller-coaster life and intense personality of Apple’s creative entrepreneur. Isaacson brings a combination of wit, history, drama and humanity to the stories of Jobs, Einstein and Franklin, and their contributions to the world.

When Isaacson was working for Time is when he first met Jobs. “I remember siting with Steve and watching him and thinking about what a passion he has for making great products,” said Issacson to RIMS attendees. “But I also saw the other side of Steve Jobs. He’s impatient, petulant, sometimes can be rude, unkind, pushy. But I came away from that meeting still liking him.”

It was that passion, brains and curiosity that attracted so many to Jobs, regardless of his personality flaws. But how does Steve Jobs relate to risk management?

“For me, the first lesson that Steve can teach in terms of risk management is to pay attention — even to the parts unseen,” said Issacson. “Pay attention even to the things that other people aren’t going to see. And you know that that is the key to making a great product and it also plays out in the world of risk.”

Jobs vehemently believed that paying attention to the parts that no one sees is what  makes products perfect. For risk managers, this is a part of their daily job.

Risk managers also possess an ability to have complete focus on the risks at hand. Jobs mastered this skill with his products. “He had a great ability to focus, to filter out distractions,” said Issacson. “I think it came from his time in India — the zen focus.”

Perhaps most importantly in terms of Apple’s success, Jobs knew what people thought were high-risk products or initiatives, and he knew he could eventually get these people to embrace the risk. “He knew how to bend reality at times,” said Isaacson. “That’s why he had a reputation for driving people crazy. But he could also drive people to do things they thought were impossible. He knew how to know what people thought were high risk, but he knew it could work and got these people to believe and achieve the impossible.”

He would’ve made a great risk manager.

Walter Isaacson signs copies of his recently released Steve Jobs biography at the RIMS 2012 Conference & Exhibition.

April Issue of Risk Management Now Online

The April issue of Risk Management is now online here. Along with this month’s columns and features, it also includes a special RIMS 2012 Conference & Exhibition Preview.

Included are features covering:

This issue’s columns cover:

If you enjoy what you seen online, you can subscribe to the print edition to enjoy even more content.

Please let us know what you think in the comments below. And stay tuned to the blog for even more coverage in the future. Lastly, you can follow the magazine on Twitter, “like” us on Facebook and join our LinkedIn group.

Steve Jobs: The Passing of an Icon

The passing of Steve Jobs is a watershed event for the today’s digital world. He may not have invented the computer or the MP3 player or mobile phone or the tablet, but his innovations revolutionized the way we interact both with our technology and with each other. His impact cannot be understated. As President Obama said in response to Jobs’ death, “There may be no greater tribute to Steve’s success that the fact that much of the world learned of his passing on a device he invented.” Similarly, I’m typing this on a Mac and I’m sure many of you are reading it on your own Macs, iPhones and iPads. As one writer put it, he now joins the pantheon of American innovators like Henry Ford and John D. Rockefeller. For many, he was and will remain a hero.

Back in 2005, Jobs delivered the commencement address at Stanford University. As was his style, it was a direct and inspiring address. The YouTube video is below and the transcript can be found here. Many quotes stand out but I wanted to highlight a couple that resonated for me. The first came after he told the story of how he was fired form Apple in 1985:

Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. 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. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.

The next came after he spoke of his fight with pancreatic cancer:

No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because death is very likely the single best invention of life. It is life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma — which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

Coincidentally, I also wrote a bit about Steve Jobs and his departure from Apple in the Preface of the October issue of Risk Management. In it I talked about Apple’s next steps in light of their founder’s departure. The article is not available online, so I share it here:

When Apple CEO Steve Jobs announced his retirement in August, the internet exploded as countless Apple fanboys wondered about the future of their beloved company. The unenviable task of replacing Jobs now falls to Tim Cook, who formerly served as Apple’s COO. He certainly has his work cut out for him. During Jobs’ 14-year tenure as CEO, Apple’s stock has risen more than 9,000%, taking it from a tech start-up on the verge of bankruptcy to a firm that now vies with Exxon Mobil for the title of “most valuable company in the world.” Perhaps more importantly, Jobs was the visionary behind such innovations as iTunes, iPods, iPhones and iPads that have not only changed markets but helped transform the way people interact. Talk about a tough act to follow.

Despite the size of the shoes he has to fill, it is unlikely that Apple will suffer with Cook at the helm. After all, he has been with the company for 13 years and even served as acting CEO during Jobs’ medical leaves. It is, however, a different world than it was when Jobs took over Apple in 1997. Hacking is no longer simply a hobby for basement-dwelling computer geeks. Now it is big business. And what better target than the products of the world’s most valuable company? Malware and viruses that were once virtually nonexistent on the Mac platform are already starting to proliferate as motivated hackers have become more creative. Case in point: hackers recently discovered a vulnerability in MacBook batteries—a place no one ever thought to look—that would allow them to take over the computer or even set it on fire. Based on this, perhaps Apple’s new CEO will need to focus less on growing the company and more on protecting it.

As I read through various message boards about Jobs, I came across a quote shared by many people in one variation or another that shows the impact he had on so many people. “Three apples changed the world forever. The first once seduced Eve, the second fell on Newton and the third was offered to the world by Steve Jobs.”

Modern society is typically given to hyperbole that is, in many cases, unearned. Steve Jobs is not one of those cases. It is the rare CEO that can inspire devotion and admiration beyond the products or services their company sells. But as the many tributes you are likely to see in the coming days will attest, Jobs was no ordinary businessman. He was a visionary and an icon and he will be missed.

Rest in peace, Mr. Jobs.