The board became increasingly alarmed at the turmoil, and in early 1985 Arthur Rock and some other disgruntled directors delivered a stern lecture to both. They told Sculley that he was supposed to be running the company, and he should start doing so with more authority and less eagerness to be pals with Jobs. They told Jobs that he was supposed to be fixing the mess at the Macintosh division and not telling other divisions how to do their job. Afterward Jobs retreated to his office and typed on his Macintosh, “I will not criticize the rest of the organization, I will not criticize the rest of the organization . . .”
As the Macintosh continued to disappoint—sales in March 1985 were only 10% of the budget forecast—Jobs holed up in his office fuming or wandered the halls berating everyone else for the problems. His mood swings became worse, and so did his abuse of those around him. Middle-level managers began to rise up against him. The marketing chief Mike Murray sought a private meeting with Sculley at an industry conference. As they were going up to Sculley’s hotel room, Jobs spotted them and asked to come along. Murray asked him not to. He told Sculley that Jobs was wreaking havoc and had to be removed from managing the Macintosh division. Sculley replied that he was not yet resigned to having a showdown with Jobs. Murray later sent a memo directly to Jobs criticizing the way he treated colleagues and denouncing “management by character assassination.”
For a few weeks it seemed as if there might be a solution to the turmoil. Jobs became fascinated by a flat-screen technology developed by a firm near Palo Alto called Woodside Design, run by an eccentric engineer named Steve Kitchen. He also was impressed by another startup that made a touchscreen display that could be controlled by your finger, so you didn’t need a mouse. Together these might help fulfill Jobs’s vision of creating a “Mac in a book.” On a walk with Kitchen, Jobs spotted a building in nearby Menlo Park and declared that they should open a skunkworks facility to work on these ideas. It could be called AppleLabs and Jobs could run it, going back to the joy of having a small team and developing a great new product.
Sculley was thrilled by the possibility. It would solve most of his management issues, moving Jobs back to what he did best and getting rid of his disruptive presence in Cupertino. Sculley also had a candidate to replace Jobs as manager of the Macintosh division: Jean-Louis Gassée, Apple’s chief in France, who had suffered through Jobs’s visit there. Gassée flew to Cupertino and said he would take the job if he got a guarantee that he would run the division rather than work under Jobs. One of the board members, Phil Schlein of Macy’s, tried to convince Jobs that he would be better off thinking up new products and inspiring a passionate little team.
But after some reflection, Jobs decided that was not the path he wanted. He declined to cede control to Gassée, who wisely went back to Paris to avoid the power clash that was becoming inevitable. For the rest of the spring, Jobs vacillated. There were times when he wanted to assert himself as a corporate manager, even writing a memo urging cost savings by eliminating free beverages and first-class air travel, and other times when he agreed with those who were encouraging him to go off and run a new AppleLabs R&D group.
In March Murray let loose with another memo that he marked “Do not circulate” but gave to multiple colleagues. “In my three years at Apple, I’ve never observed so much confusion, fear, and dysfunction as in the past 90 days,” he began. “We are perceived by the rank and file as a boat without a rudder, drifting away into foggy oblivion.” Murray had been on both sides of the fence; at times he conspired with Jobs to undermine Sculley, but in this memo he laid the blame on Jobs. “Whether the
At the end of that month, Sculley finally worked up the nerve to tell Jobs that he should give up running the Macintosh division. He walked over to Jobs’s office one evening and brought the human resources manager, Jay Elliot, to make the confrontation more formal. “There is no one who admires your brilliance and vision more than I do,” Sculley began. He had uttered such flatteries before, but this time it was clear that there would be a brutal “but” punctuating the thought. And there was. “But this is really not going to work,” he declared. The flatteries punctured by “buts” continued. “We have developed a great friendship with each other,” he said, “but I have lost confidence in your ability to run the Macintosh division.” He also berated Jobs for badmouthing him as a bozo behind his back.