Why was Steve Jobs fired by Apple's board of directors in 1985?

Why Steve Jobs was Fired by Apple in 1985: Understanding the Complex Causes Behind the Legendary CEO's Departure"

The story of Steve Jobs and Apple is one of the most remarkable corporate comeback tales in history. Jobs, the co-founder and visionary behind Apple, was unexpectedly ousted by the company's board in 1985, only to return 11 years later and lead Apple to unprecedented success. But what exactly happened? Why was Steve Jobs fired from the company he helped create?

Apple was founded in a garage by Steve Jobs and Steve Wozniak, with Jobs focusing on the business and creative aspects while Wozniak handled the engineering. However, both Jobs and Wozniak lacked business experience and sought expert advice by forming a board of directors for Apple. The company quickly gained success by producing innovative computer products under Jobs and Wozniak's leadership. However, Jobs had aspirations of becoming the CEO, which led to a major disagreement with the board.

One of the issues was Jobs' alleged abrasive and authoritarian approach with people. He was known for pushing people too hard and creating a toxic work environment, despite his exceptional vision and creativity in building the company. In 1983, Jobs hired John Sculley, the CEO of PepsiCo, to work for Apple. But this hiring would ultimately accelerate Jobs' departure from the company. Jobs and Sculley clashed when two new products, the Lisa and the Macintosh, failed to meet sales projections. Jobs was then removed from the Macintosh product, which angered him, and he took his grievances directly to Apple's board of directors. This led to Jobs' dismissal or resignation from Apple, depending on different accounts of the events.

Jobs went on to start NeXT, a computer business that manufactured high-end computers, but it struggled to gain traction in the market. In 1996, NeXT was eventually acquired by Apple for $429 million, which brought Jobs back to the company he co-founded.

Looking back, some have questioned whether Apple's board of directors could have done more to retain Steve Jobs in 1985. Sculley himself later acknowledged Jobs' effective leadership and called him "the best CEO ever," admitting that he underestimated Jobs' visionary potential at the time. The firing of Jobs also raises questions about the board's decision-making and overall company strategy. Could they have chosen different approaches or members to better handle the situation?

Answering these questions is challenging, as hindsight is always 20/20. However, it's clear that the board could have benefited from a broader perspective beyond the feud between Jobs and Sculley. The two men were engaged in a power struggle for control of the company, with Jobs advocating for Apple's focus on personal computers while Sculley believed the direction had failed. The board, as the strategic decision-makers, had to consider risk management, which ultimately led to Jobs' dismissal.

This brings us to a crucial point - the importance of a well-prepared and properly trained board of directors. The board's role and commitment should not be solely focused on one individual or short-term financial gains, but rather on the long-term success of the company as a whole. The complex and multifaceted dynamics of boardroom decision-making and leadership should always be carefully considered to ensure the best outcomes for the company's future.

Our Directors’ Institute- World Council of Directors can help you accelerate your board journey by training you on your roles and responsibilities to be carried out in an efficient manner helping you to make a significant contribution to the board and raise corporate governance standards within the organization.