Celebrity Chief: Shedding His Shyness, John Sculley Promotes Apple -- and Himself

He Gives Rousing Speeches On Plans, Writes a Book; But Critics Call It Hype

Big Challenge: New Products

By Brenton R. Schlender, Staff Reporter
The Wall Street Journal

August 18, 1988

Dallas -- The grainy televised image of a smiling John Sculley fades from the 20-foot screen, while the real thing, standing at the lectern on the stage below, nods and beams at the crowd. The last clatterings of a standing ovation die down.

Then, as Apple Computer Inc.'s president and chairman leaves the stage, a throng of autograph-seeking educators surrounds him. Some brandish copies of his book, "Odyssey: A Journey of Adventure, Ideas and the Future." All are buzzing about his stirring speech and gee-whiz videos depicting a brave new world for computing and education.

Michael Mount, an Apple regional sales director, marvels at the scene here at the National Educational Computing Conference. "He's a star now, just like Steve Jobs was," he says, recalling Apple's charismatic, mercurial co-founder and previous chairman, who quit after a power struggle with Mr. Sculley three years ago. "An event like this is worth a million dollars to Apple."

Giving rousing speeches, signing autographs and waxing philosophical about how personal computers will change life in the 21st century are all in a day's work for Mr. Sculley nowadays. That is a far cry from five years ago when, as chief executive of PepsiCo Inc.'s Pepsi-Cola unit, he battled Coca-Cola Co. over tenths of a percentage point of market share.

But it is still marketing. In fact, Mr. Sculley's transformation from a shy, somewhat-wooden executive who knew little about computers into a high-profile, high-tech visionary strikes many observers as one of his greatest marketing coups. Besides becoming a glamorous spokesman for Apple's resurgence, the 49-year-old official has become a leader in his industry and a luminary beyond the business world, much like Chrysler Corp.'s Lee Iacocca or major league baseball's commissioner, Peter Ueberroth.

"This is the age of the celebrity CEO, and John Sculley is up there with the best of them," says John C. Dvorak, a newspaper columnist who critiques the personal-computer industry. This fall, in fact, Mr. Sculley and his wife will appear, along with Malcolm Forbes and Elizabeth Taylor, on Robin Leach's "Lifestyles of the Rich and Famous" television series.

To some critics both inside and outside Apple, Mr. Sculley's transformation goes beyond marketing and into the realm of hype. Some cite the egotism suggested by his book and his image-conscious management style. Technical people, including some Apple engineers, doubt the depth of such rhapsodic visions of the future of computing coming from an executive who admits not knowing how to use a financial spreadsheet on his own PC. Others deplore how, in an industry that often promises more than it can deliver, Mr. Sculley relies on slick video dramatizations of imaginary computers to illustrate where Apple's technological prowess might lead.

"There's no question John Sculley has become a business hero, but I worry that the same hype and egotism that got Apple into trouble a few years ago could happen again," says Richard Shaffer, the publisher of Technologic Computer Letter. Apple is selling "yesterday's products with flash and smoke and tomorrow's promises," he adds, noting that the hot-selling Macintosh computer is the legacy of the Jobs years. "We don't know what the 'new' Apple can really do yet."

Nevertheless, Mr. Sculley's emergence has brought much visibility and restored some credibility to the company. It coincides with Apple's own transformation from a troubled supplier of computers to schools and hobbyists into a thriving provider of business computers -- and into one of the industry's most profitable companies. And despite reorganizing Apple to its core, Mr. Sculley has preserved much of the idealism that provides its shine.

"John has managed the difficult challenge of making Apple reassuring and inoffensive to the business world and yet not bland," says Jean-Louis Gassee, Apple's senior vice president for research, development and product marketing. "Inside Apple, he is giving the company a new sense of self after losing its founder."

Celebrity executives, technological visionaries and showboating special effects are nothing new at Apple, of course. Almost from the day Mr. Jobs helped found the company in 1976, he cultivated a larger-than-life public image of the youthful, idealistic entrepreneur bringing high technology to the masses. And it was Mr. Jobs who first jazzed up public appearances with projections of his own image on giant screens, a technique borrowed by Mr. Sculley and ironically reminiscent of Apple's chilling "Big Brother" TV commercial in 1984.

Although Mr. Sculley is neither a computer nerd nor an entrepreneur -- he is an architect with an M.B.A. from the University of Pennsylvania's Wharton School -- he felt he had no choice but to become an industry leader after Mr. Jobs left in 1985. "What's different about heading Apple is that you are not an icon for just Apple but for the whole world of technology and computing beyond Apple," he says.

Mr. Sculley took his time stepping into the spotlight, however. At first, he explains, "I was perceived as a bad personality, if anything," held responsible for many of Apple's failings as well as for dumping Mr. Jobs. Moreover, "I still didn't know enough about the computer industry to feel comfortable talking about it" as a major spokesman, he concedes.

An advertising man recalls watching Mr. Sculley at a news conference shortly after Mr. Jobs left. "You could almost see the muscles move from the tension when he answered more-technical questions," says Steve Hayden, an executive vice president in charge of the Apple account at BBDO International Inc. "Then, somebody asked him about the Coke Classic and New Coke controversy, and he lit up like he'd met an old friend."

Only last year did Mr. Sculley assert himself as an industry leader. By then, Apple's sales and profits were growing again. In addition, the company had introduced two new Macintoshes and a novel program called Hypercard, a pet project of Mr. Sculley's that expanded the Macintosh's information-handling capabilities. Explaining the change in his approach, Mr. Sculley says: "It was like learning a new language. Suddenly, it all came together -- my understanding of the technology, some new products with my imprint, and my book."

The book, written with the help of a Business Week editor, was the main vehicle for Mr. Sculley's coming out. "Odyssey" was part autobiography, tracing his experiences at Pepsi and Apple, and part treatise on management theory and future technology, expounding on "third-wave corporations," executives as "technology impresarios" and multimedia computers.

"Odyssey" also smacked of marketing and image-building, some contend. "There was a bit of a gilding of the lily in that book," says Victor Bonomo, PepsiCo's retired executive vice president, who adds, "John has always done a very good job of promoting himself." Mr. Bonomo says, and others at Pepsi agree, that "he took too much credit for some things that many people had a hand in," including the "Pepsi Challenge" marketing campaign in the 1970s that helped catapult U.S. Pepsi sales past Coca-Cola's.

"But what struck me most about the book was the way he laid his guts out on the matter of his showdown with Jobs," Mr. Bonomo adds. "That was very uncharacteristic of John, who I've always known to be a very private person."

As a publishing venture, it wasn't exactly a blockbuster. It drew mixed reviews and so far has sold fewer than 100,000 copies in the U.S., plus more than 7,000 purchased by Apple for its employees. Lee Iacocca's "Iacocca," in contrast, has sold about 6.5 million copies world-wide. People close to Mr. Sculley say he was hurt by the reviews and disappointed by the sales. "I'm not so sure if he knew then what he knows now that he would've written it," says Albert E. Eisenstat, senior vice president, company secretary and Mr. Sculley's closest friend on Apple's executive staff.

Mr. Sculley still maintains that writing the book "helped me focus my thoughts and ideas," especially regarding Apple's future. He believes, however, that the book would have sold better had it been marketed differently, and he implies that it was a lack of egotism -- not a surplus -- that hurt sales. For one thing, "I didn't allow the publishers to put my picture on the cover because I didn't want it to look like just another CEO's ego experience," he says. "In hindsight, it probably would've sold better if we had." (His picture covers the back of the dust jacket.)

Nevertheless, some critics think Mr. Sculley let his egotism show when he had Apple buy copies for its employees. And recently, he had the company distribute copies of a Fortune magazine that featured his picture on the cover and a flattering synopsis of his views on the industry. The cover photo reflected Mr. Sculley's penchant for favoring imagery over reality: He is holding a plastic mock-up of the "Knowledge Navigator," a futuristic, multimedia lap-top computer.

Since the publication of "Odyssey," Mr. Sculley has spent more and more time in his public role. In recent months, he personally delivered a Macintosh to Moscow for Mikhail Gorbachev and another to the King of Thailand; he called on scientists such as Paul Chiu, who won a Nobel Prize last year for his work on superconductors; and he cruised the South China Sea on Mr. Forbes's yacht to film the episode of "Lifestyles of the Rich and Famous."

In between, he has stepped up his flashy, multimedia appearances at trade shows, universities and events such as the educational-computing conference in Dallas. He was appointed by the Soviets to an international commission to explore peaceful uses of high technology and has become an outspoken advocate of educational reform. Recently, however, he got away for a much-publicized six-week "sabbatical" granted to all Apple employees after five years of employment.

All this leads some of Mr. Sculley's peers in the computer industry to suggest he may be spending too much time away from the job of running the company.

Of course, others think that Mr. Sculley's public roles are nothing more than good, free publicity for Apple. "I think he's doing exactly what's needed," says Marc Canter, the president of MacroMind Inc., a Chicago vendor of animation software for Macintosh computers. "Apple needs to be perceived as having a grand vision."

"I'm a marketing person," Mr. Sculley explained following his speech to the educators in Dallas, "and whenever I do this, I'm marketing Apple. The way we look at it, everything and everybody at Apple can be marketed if it helps the company."

The same goes for his crowd-pleasing, special-effects-laden video featuring the Knowledge Navigator, which Mr. Sculley asserts "isn't a product announcement but isn't science-fiction, either." Nor is it an original idea. It draws liberally from the brainstorms of Alan Kay, an Apple computer scientist who is one of several people credited with pioneering the idea of the personal computer in the late 1960s.

The video depicts a college professor using the Knowledge Navigator to pull together a last-minute lecture, complete with animated visual aids, merely by speaking to it. Meanwhile, the device also handles the professor's telephone calls and reminds him of a surprise birthday party for his father. Apple is planning a series of public premieres of Navigator videos in what it terms "vision rollouts," as opposed to product rollouts. At a Boston trade show for purveyors of Macintosh-related products last week, Mr. Sculley unveiled a video featuring a fictitious future business computer he calls the "Grey Flannel Navigator."

"Sure, things like the Knowledge Navigator are pure show business," concedes Alan Brightman, Apple's education marketing manager. "But I don't care if people hoot at it. They'll remember it."

Nobody can hoot at Apple's corporate performance, though. In the three years under Mr. Sculley's undisputed control, Apple has stormed back to the forefront, by most measures, of the personal-computer industry. Its competitors -- even International Business Machines Corp. -- are scrambling to replicate the Macintosh's snazzy graphics and ease of use. Apple's gross margins, consistently above 50%, are the envy of the industry. And few multibillion-dollar high-tech companies can match Apple's nearly 50% annual growth rate since 1986; in the fiscal year ending Oct. 1, the company's revenue will total about $4 billion. Since mid-1985, the price of Apple shares has grown nearly sixfold.

Along the way, he reorganized the company twice. He hired a slew of seasoned executives from rival computer companies to complement a handful retained from the Jobs era. And he brought discipline to product-development efforts that previously had relied mainly on engineers' adrenalin to get products out.

"Most people underestimate the difficulty of changing the direction of a company," says Edward Esber, the chief executive of Ashton-Tate Co., a big PC-software concern. "John is leading Apple on a second wave, forging alliances with other companies -- all with the end of having Apple become a company that has something to offer to business customers. They're not just trying to kill the Blue giant {IBM} anymore."

He gets high marks as a manager, too. He is at his best one-on-one, learns quickly and has a remarkable memory for details, colleagues say. Despite rumors about problems with highly independent managers, such as the outspoken Senior Vice President Gassee, he finds ways to defuse personality clashes. "Jean-Louis likes to talk in poetry and metaphors," Mr. Sculley says. "One of the secrets to get me and him on the same wavelength was to get him to write down his thoughts instead of talking."

But occasionally, things boil over, as in the messy falling out with Mr. Jobs. Last fall, Nanette Buckhout, Mr. Sculley's secretary of more than 10 years, both at Apple and Pepsi, abruptly quit. It was surprising. Mr. Sculley had warmly praised her in his book as "an important confidant and partner" who had "provided the sanity and balance that helped me through some of the most difficult moments" at Apple. He even escorted her down the aisle at her wedding in 1986.

Insiders say Mr. Sculley's wife, Leezy, had trouble dealing with Ms. Buckhout. (Leezy, who previously was married to another Pepsi executive, is Mr. Sculley's third wife; she doesn't give interviews.) Mr. Sculley tried to reassign Ms. Buckhout to another job, but she declined, and she is said to have received a generous severance package for dropping a threat to sue. Mr. Sculley says only that her resignation was "one of those things."

Mr. Sculley's strength still lies in marketing. Despite delegating a lot of day-to-day responsibility for other aspects of Apple's operations, he still plays an active role in formulating advertising campaigns, frequently vetoing specific packages and making detailed suggestions. He also has tinkered a lot with Apple's marketing division. Since joining Apple in 1983, he has hired and then reassigned four different marketing vice presidents. The last reorganization, earlier this year, put product marketing in Apple's research and development organization rather than leaving it a stand-alone division. It is an unusual arrangement that acknowledges the primacy of product-development teams at Apple despite the company's penchant for slick marketing.

Mr. Sculley, the management theorist, probably will continue putting his imprint on Apple's organizational chart. The executive staff is busy planning a comprehensive reorganization aimed at preparing for Apple's next major revenue milestone -- $10 billion a year -- sometime in the early 1990s.

"Apple has no vice president of strategic planning because we're all expected to do that now," says Deborah A. Coleman, the chief financial officer. "But John has been the invisible hand. Apple is being reinvented through his leadership."

Although Mr. Sculley may be reinventing Apple, it isn't clear whether his organizational changes and newfound vision will result in new breakthrough products. So far, the company has been making the most of the Macintosh and Apple II lines, both offspring of the Jobs years. However, Mr. Sculley has been adept at "repositioning" the Macintosh for business users.

"There's more to being a visionary than seeing the future and having the vision," cautions Stewart Alsop, an industry consultant who publishes PC Letter. "To be truly successful, you have to have both the vision and the ability to implement it -- to know how to get from here to there. Jobs was enough of an engineer that he knew what the technology would allow, and could tell people what had to happen and in what order to come up with great computers," Mr. Alsop continues. "I'm not so sure Sculley can do that."

Most high Apple executives expect Mr. Sculley to stick around until the $10 billion revenue milestone is met, and that should be long enough to find out whether he can indeed shepherd innovative products into the marketplace. Mr. Sculley says he isn't interested in running any other company or in public office. He earned $2,140,000 in salary and bonuses last year, and he has options on 767,000 shares of Apple stock at $7.75 a share, for an indicated profit, at the $42-a-share close yesterday, of about $26 million. He now owns 158,771 shares.

"My ultimate goal, if there really is one beyond what I'm doing now," he says, "is to be an Apple Fellow" -- a title granted to a few well-known computer scientists who get free rein and lots of money to explore new technologies. "I'm not trying to pretend I'm an engineer," he adds, "but I feel comfortable being with engineers and talking about technologies."

Apple's best-known Fellow, Mr. Kay, doesn't think that goal is too high. "John is someone who can rise to any occasion, and that doesn't mean he's a phony," he says. "He has a first-class brain, he has a more inquiring mind than most engineers, yet he likes to build structures that work. He could be a terrific computer scientist."

Mr. Kay, who meets weekly with Mr. Sculley for freewheeling discussions on topics ranging from music to art to education to computer graphics, believes that the executive has only begun to leave his mark on Apple. "What drives Apple is basically romance. Everybody here wants a CEO who believes that," he says. "The great thing is, that even after making this a more businesslike company, John has come to embody the spirit and romance of Apple even more than Steve did."

Copyright Dow Jones & Company Inc