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Steve Jobs Knew How to Lead and Motivate Employees. Here’s How He Did It

Steve Jobs Knew How to Lead and Motivate Employees. Here’s How He Did It

By Bill Murphy Jr.

‘Steve, like Napoleon, had two faces. On one side he was a brilliant genius … And the other side … ‘

Let’s talk about Steve Jobs and leadership.

Nearly a decade after his death, Jobs remains one of the most fascinating and iconic business leaders of the past century–and perhaps in all of history.

Recently, I asked readers of my daily newsletter to share stories about the best and worst bosses they’d ever had. A reader named Philippe Bouissou had an unusual experience to share: working for Jobs on an intense project n the late 1990s.

It was “very hard,” Bouissou told me when we talked afterward. “Steve, like Napoleon, had two faces. On one side he was a brilliant genius and a true misfit. And the other side, his lack of care and sensitivity for people, his disrespect and dictatorial behavior, were all real.”

Here’s the context, plus what it was like to work for Jobs, and how Bouissou learned firsthand the unique way that Jobs could inspire and motivate employees.

“A brilliant genius and a true misfit”

Bouissou started at Apple in 1995, while Jobs was in exile, running NeXT. As ?he tells the story, he was an early advocate of e-commerce, and he wanted Apple to try selling its products directly to consumers.

The idea fell flat when he pitched it to Apple’s leadership. (In fairness, this was in the very early days of the consumer internet, when people could hardly imagine inputting a credit card number online.)

But then Apple bought NeXT, and when Jobs became CEO, he enthusiastically embraced the idea. As a result, Bouissou got his crash course in leadership, Steve Jobs-style.

Here’s what he said he learned from the experience:

1. To succeed, focus relentlessly on one or two things.

If you read no further, the most important thing Bouissou learned from Jobs about leading people was the importance of always focusing on the right priorities.

“The first lesson was like, don’t [just] focus but hyperfocus,” he told me. “Think what really matters the most … I think Steve had this unique ability, which I’ve never seen in anybody else. He exhibited an intense and obsessive focus.”

Working on his e-commerce project, Bouissou said, the focus became largely about the user experience and the flow–all of which were new and relatively untried elsewhere at the time.

2. Go to the person who can make a difference.

Bouissou technically had a boss between Jobs and himself, but he said Jobs didn’t seem to care about the organizational chart. He’d go around the bureaucracy constantly.

“Steve’s way of managing people [was] that he basically goes over the boss and goes directly to you,” Bouissou said. “So I had a number of interactions about the design of the online store, the user interface, the front end, and navigation. He was very involved and very picky and very on top of things.”

I’m reminded here of a similar story I wrote last year, from when Jobs decided at the last minute in 2007 that he wanted real glass, not a plastic screen, on the iPhone. He got it done by skipping over all the development and sourcing specialists, and going directly to the CEO of Gorilla Glass.

3. Refine, refine, and refine again.

Having studied Jobs quite a bit, I found it interesting the degree to which Bouissou almost started to sound a bit like him as our interview went on.

This became most apparent when he talked about iteration and refining, so you can identify the one or two most important things to focus on. You do that, he says, on the basis of his time with Jobs, by trying big things and then stripping out the parts that turn out to be unimportant.

“Simplicity is hard,” he said. “I think it takes many, many iterations to peel something to its core, to its most simple and most eloquent form of expression — and really to its truth.”

4. Don’t just make products. Instead, “manufacture delight.”

This is my favorite insight. It’s about the ultimate reason for all that dedication to simplicity and focus. It should theoretically apply to just about any business.

“This is something I derived from working with Steve; it wasn’t something that I’ve ever heard him say,” Bouissou said. “But, if you think about it, what is the difference between Caterpillar, Farmers, Ford Motor Company, Krispy Kreme, or Pixar Animation Studios? All five companies are in the exact same business with the exact same goal and purpose, which is to manufacture and deliver delight.”

With Jobs, he said, manufacturing delight was partially a matter of reacting to products and ideas with all five senses: How would they sound? How would they feel? Even, how would they smell?

“A remarkable man”

The e-commerce project was a success, but Bouissou told me working for Jobs took a significant toll.

“You either stay married with me, or you marry Steve,” his wife told him at once point. “I’m not going to go on like this.”

By 1998, he’d moved on, but he found himself thinking about the experience.

Then, when Jobs died in 2011, he said, he went by the former CEO’s house in Palo Alto, California, where he marveled at the array of “hundreds of artifacts and drawings and apples and poems and things” that people had left as a memorial.

“He was a remarkable man,” Bouissou said. “He was an exceptional man. I never met anybody like him.”

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Term: Activity Ratios

What Is an Activity Ratio?

An activity ratio is a type of financial metric that indicates how efficiently a company is leveraging the assets on its balance sheet, to generate revenues and cash. Commonly referred to as efficiency ratios, activity ratios help analysts gauge how a company handles inventory management, which is key to its operational fluidity and overall fiscal health.

Key Takeaways

  • An activity ratio broadly describes any type of financial metric that helps investors and research analysts gauge how efficiently a company uses its assets to generate revenues and cash.
  • Activity ratios may be utilized to compare two different businesses within the same sector, or they may be used to monitor a single company’s fiscal health over time.
  • Activity ratios can be subdivided into merchandise inventory turnover ratios, total assets turnover ratios, return on equity measurements, and a spectrum of other metrics.

Understanding Activity Ratios

Activity ratios are most useful when employed to compare two competing businesses within the same industry to determine how a particular company stacks up amongst its peers. But activity ratios may also be used to track a company’s fiscal progress over multiple recording periods, to detect changes over time. These numbers can be mapped to present a forward-looking picture of a company’s prospective performance.

Activity ratios can be broken down into the following sub-categories:

Accounts Receivable Turnover Ratio

The accounts receivable turnover ratio determines an entity’s ability to collect money from its customers. Total credit sales are divided by the average accounts receivable balance for a specific period. A low ratio suggests a deficiency in the collection process.

Merchandise Inventory Turnover Ratio

The merchandise inventory turnover ratio measures how often the inventory balance is sold during an accounting period. The cost of goods sold is divided by the average inventory for a specific period. Higher calculations suggest that a company can move its inventory with relative ease.

Total Assets Turnover Ratio

The total assets turnover ratio measures how efficiently an entity uses its assets to tender a sale. Total sales are divided by total assets to decipher how proficiently a business uses its assets. Smaller ratios may indicate that a company is struggling to move its products.

Return on Equity

A performance metric knows as return on equity (ROE) measures the revenues raised from shareholder equity. ROE is calculated by dividing net income by all outstanding stock shares in the market.

Asset Turnover Ratio

A metric called the asset turnover ratio measures the amount of revenue a company generates per dollar of assets. This figure, which is simply calculated by dividing a company’s sales by its total assets, reveals how efficiently a company is using its assets to generate sales.

Activity Ratios Vs. Profitability Ratios

Activity ratios and profitability ratios are both fundamental analytical tools that help investors evaluate different facets of a company’s fiscal strength. Profitability ratios depict a company’s profit generation, while efficiency ratios measure how well a company utilizes its resources to generate those profits. Profitability ratios may help analysts compare a company’s profits with those of its industry competitors, while also tracking the same company’s progress across several different reporting periods.

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Term: Cutoff Point

What Is a Cutoff Point?

The cutoff point is the point at which an investor decides whether or not a particular security is worth purchasing. The cutoff point is very subjective and will be based on the personal characteristics of the individual investor. Some examples of personal characteristics that may determine the cutoff point include the investor’s required rate of return and their risk aversion level.

Key Takeaways

  • A cutoff point is a subjective point at which an investor decides whether or not a security is worth buying.
  • Cutoff points vary widely among investors and can be dependent upon the investor’s risk aversion level or desired rate of return.
  • By setting a cutoff point, an investor can protect their gains or limit their losses if the price of a security drops.
  • Setting a stop-loss order is a common way investors establish a cutoff point when investing in stocks.

Understanding a Cutoff Point

Because cutoff points are largely subjective, they will vary widely among investors. For example, if an investor has a lower required rate of return, they will likely pay more for the same security than a person with a higher required rate of return. This translates into a higher cutoff point for the first investor.

A cutoff point may also be considered a good “rule of thumb” when considering particular securities, as it may help the investor make more consistent investment decisions. Understanding and setting their personal cutoff points when purchasing securities can help investors protect their profits or limit their losses if the price of the security falls.

Cutoff Points and Stop-Loss Orders

Cutoff points are often acted on by an investor by using a stop-loss order. Unless a trader or investor has extraordinary discipline, using a stop-loss is the easiest way to act on a strict cutoff point. An investor places a stop-loss order on a trade before they enter into it. If the stock declines past this cutoff point, a stop-loss order instructs the investor’s broker to sell immediately. By using a stop-loss, an investor can limit their losses and be more disciplined in their trading methodology.

If an investor continues holding a stock on its way down without implementing a stop-loss to enforce the cutoff point, the value could continue to fall, and the pain could be severe for that investor.

While investors typically use stop-losses to protect a long position, they can also use them to protect a short position in the event the security gets bought if it trades above a defined price.

Types of Stop-Loss Orders

The percentage an investor sets as their stop-loss is their effective cutoff point. There is more than one type of stop-loss order. A standard stop-loss is set as a percentage below the price paid for the stock. For example, an investor may purchase a stock and place a stop-loss at 15% below the purchase price. If the stock price falls 15%, the stop-loss will trigger and the stock will sell as a market order.

A trailing stop loss, by contrast, is established against the previous day’s closing price. The trailing stop can be expressed as a percentage of the stock’s current price. Because trailing stops automatically adjust to the current market price of a stock, they provide the investor with a way to lock-in gains or limit a loss.

Special Considerations

Investing experts suggest setting a stop-loss percentage at 15% to 20%. Any less would cause a stock to be sold on temporary dips. If trading on smaller, more volatile stocks, a stop loss is suggested to be set at 30% to 40%.

Some traders will set two trailing stop-losses. If the stock hits the lower percentage stop-loss, it could be a warning, and a stop-loss could perhaps be set to sell half a position. At the higher percentage stop-loss, such a strategy would liquidate the entire position.

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Term: Social Networking Service—SNS

What Is a Social Networking Service?

A social networking service (SNS) is an online vehicle for creating relationships with other people who share an interest, background, or real relationship. Social networking service users create a profile with personal information, photos, etc. and form connections with other profiles.

These users then use their connection to grow relationships through sharing, emailing, instant messaging, and commenting. Social networking services may also be referred to as a “social networking site” or simply “social media.”

Understanding Social Networking Services

The first SNS, SixDegrees.com was started in 1997 and was soon followed by Friendster, MySpace, and Facebook. Today there are a wide range of SNS and approximately 80% of Americans have SNS profiles. SNS range from sites where users have general interests to those where users have very specific interests.

Key Takeaways

  • A social networking service (SNS) is an online vehicle for creating relationships with other people.
  • Social networking services are more commonly referred to as “social networking sites” or “social media.”
  • Social networking services business models are based on online advertising.

Successful specialized SNS include YouTube, Instagram, Twitter, LinkedIn, Reddit, Snapchat, Tumblr, Pinterest, and TikTok. SNS profiles are very popular across the globe.
Facebook alone boasts over 2.4 billion users worldwide.

The social networking service business model is based on online advertising, either through targeted advertising that utilizes an individual’s personal information, search habits, location or other such data, or by selling the personal information to third parties. Ubiquitous mobile technologies, such as smartphones and tablets, have helped the growth of social SNS adoption and use.

Social Networking Service Characteristics

While social networking services may take many forms, they share several characteristics, such as all utilizing the internet. Other similar characteristics include:

  • User-generated content, such as photos, videos, and posts that inform other users about the activities and interests of the poster.
  • The ability to connect individuals from all over the world, though some platforms recommend that individuals know one another in real life before connecting online.
  • They are free. Their business model is based on breadth of membership, therefore charging for use would be counterproductive. Still, the possibility remains that if a network grew large and useful enough, charging a fee may be possible.
  • They connect people with common histories, such as school attendance, work colleagues, or people who share a common interest.
  • They may help forge and develop relationships between people who share a profession or business network.
  • They may be used to help individuals find information, products, services or resources that are relevant to them.

Social Networking Service Risks

Some users worry about the security of SNS profiles, as seen in the March 2018 revelations about how Cambridge Analytica, a political information firm, illegally harvested information from roughly 50 million profiles of U.S. users to target for highly politicized content.

In addition to potential leaks of personal information, including tax and personal identification information, SNS users who are not careful about their privacy settings find that strangers can track their movements or see questionable photos.

This is especially a concern for job seekers whose potential employers might search for their profiles as part of the hiring process. Social networking service overuse may lead to depression and anxiety. Such services may also facilitate bullying and other risks to child safety.

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Term: Composite Index of Coincident Indicators

What Is Composite Index of Coincident Indicators?

The Composite Index of Coincident Indicators is an index published by the Conference Board that provides a broad-based measurement of current economic conditions, helping economists, investors, and public policymakers to determine which phase of the business cycle the economy is currently experiencing.

KEY TAKEAWAYS

  • The Composite Index of Coincident Indicators is a composite estimate of current economic performance in the U.S. published monthly by the Conference Board.
  • The Index is made up of components that reflect employment, household income, industrial output, and business revenue.
  • Investors, businesses, and policy makers watch the Index as a tool to gauge current economic conditions to inform business and investment decisions.

Understanding the Composite Index of Coincident Indicators

The Composite Index of Coincident Indicators comprises four cyclical economic data series. These reflect (respectively) the useful employment of labor, income received by households, the industrial activity, and revenues received by businesses:

    1. Useful Employment of Labor: 
      The number of employees on nonagricultural payrolls, as released by the Bureau of Labor Statistics. This statistic is often commonly referred to as “payroll employment.” It counts both full-time and part-time workers, whether they may be permanent or temporary. Economists view this evaluation of net hiring and termination of a large segment of the industries that make up the labor force as a critical piece for determining the health of the economy.
    2. Income Received by Households:
      The aggregate amount of personal income excluding transfer payments. Economists use this figure to determine how much people are actually earning. This figure is adjusted for inflation and covers income received from most earned sources of income. It excludes income received from Social Security payouts and some other government programs. Economists watch these numbers closely because income represents a basic dimension of economic health. Moreover, when people have more income with which to buy products and services, it benefits business, industry, and employment of the labor force.
    3. Industrial Activity: 
      The Index of Industrial Production, published by the U.S. Federal Reserve, which measures the real output of mining, manufacturing, and utilities and represents the health of the industrial sector of the economy.
    4. Revenues Received by Businesses: 
      The level of manufacturing and trade sales. Economists rely on these figures, which are adjusted for inflation, to provide a true representation of actual spending. These statistics are pulled from National Income and Product Accounts calculations performed by the Bureau of Economic Analysis to calculate Gross Domestic Product (GDP). An important distinction of the figures used for those calculations is that some listings are counted more than once, which is why this total figure is generally higher than the GDP.

These four components are standardized to account for their magnitudes and volatility, and then they are combined into a composite index with the average value of the index for 2016 set equal to 100.

The Composite Index of Coincident Indicators and Other Indexes

Businesses and investors of all kinds, as well as many others, commonly use the Composite Index of Coincident Indicators to judge the economy’s current position in the business cycle. This is important because when combined with other indicators it provides valuable insight to help make appropriate investments given the condition of markets.

This index is often used also as a confirmation tool in conjunction with the Composite Index of Leading Indicators. The Conference Board also produces the Composite Index of Lagging Indicators. By looking at this trio of indexes as a whole, investors and analysts can get a more comprehensive picture of the overall economy and the state of its health.

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Cyril Ramaphosa announces measures to combat coronavirus pandemic

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Walmart cuts store hours until further notice in response to coronavirus pandemic

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