High Performance Boards, 2nd Edition

CHAPTER 25Fostering Entrepreneurship from the Board^*

The legacy of Apple co-founder Steve Jobs is that of a genius, an innovator of the most creative and visionary kind. But in 1985, the company's board let Jobs go after he got caught up in a fight with then CEO John Sculley. Sales of the second-generation Mac, the Macintosh Office, had been disastrous. Jobs argued for a discounting strategy, but Sculley was firmly opposed, convinced that this would result in an unacceptable loss. The board sided with the CEO and said that Jobs was too disruptive to the company.

Thirty years later, Sculley spoke of his regret. ‘I came from corporate America. There it was kind of secular, there wasn't the passion that entrepreneurs have’, he said. ‘I have so much respect now decades later for founders, for the belief and passion and vision that they have. So to remove a founder, even if he wasn't fired, was a terrible mistake.’¹ Sculley added: ‘I really blame the board. Because I think the board understood Apple before I came, they understood Steve. They knew what my experience was and what it wasn't. And I really believe there could have been a solution to keep me and Steve working together, because we were really good friends up until that point.’²

The conflict between Jobs and Sculley exemplifies the tension at the centre of many boards. With the proliferation of regulation across sectors and an increased focus on compliance, directors dedicate considerable attention to overseeing risks. ...