Dylan Reid

Companies: Apple (NASDAQ: AAPL), Yahoo! (NASDAQ: YHOO)

I’ve always lived under the assumption that doing what you love should be exciting. The sages tell us, “find your passion and success will follow…do what you love and you will never work a day in your life.” What the sages neglect to mention is that pursuing your passion can be hard and turning what you like into what you do can be a long and arduous process… filled with, at times, more bad days than good. While the stoics among us may be able to overlook momentary discomfort in sight of a larger prize, for me this has always been a struggle. In the face of difficulty and discomfort it is easy for even the most self-actualized among us to lose focus and direction. Operating under the assumption that an impassioned life is an easy one only makes it easier to justify changing course when its not.

I’ve been thinking about this a lot lately and what it might mean for me in the new year — what guidance I may be able to offer myself for taking on the new challenges that lie ahead. I’m reminded of something a friend once said about the subtle differences between deciding what to focus on and what to not focus on. Of course, any decision requires both and on their face the distinction may be negligible, but as a framework for approaching life, the implications are quite profound. The decision of where to focus your attention engages the realm of all available opportunities, it is to contemplate the full spectrum of possible outcomes, to envision a different future. Deciding what to not focus on is instead about limiting opportunities, approaching decisions through analysis rather than intuition, through logic rather than reason. As a result, creative people tend to fall for the former which often works against the discipline that is a prerequisite of sound strategy.

Finding the balance between creativity and discipline is of course, not a new concern…nor is it limited to individuals. Organizations are often judged on their ability to manage innovation and strategy; to both lead the way and stay ahead. Clayton Christensen describes this brilliantly in his book The Innovator’s Dilemma which makes a compelling case for why both organizations and people need to adopt different (and at times contradictory) ways of thinking to succeed.

The poster child for Christensen’s book had to have been Apple Computers (now Apple, Inc.) The unequivocal pioneers of personal computing in the 1980s, they were, by the mid-1990s teetering on insolvency. As Walter Isaacson recollects in his fantastic biography of Steve Jobs, “when Jobs came back to Apple in 1997, the company was less than ninety days from being broke.” Apple’s heroic turnaround from the brink of bankruptcy to being the world’s most valuable tech company has long been Silicon Valley legend, but what Isacsson’s book so skillfully illuminates in how its ousted founder was able to return the company to glory. While his vision certainly played a roll, Isaacson suggests it was Job’s intense focus that was ultimately the decisive factor. Returning to the company after nearly a decade in exile, Jobs first move as CEO was to reduce the number of activities that Apple engaged in. Cutting profitable but distracting ties to vendors and slashing the company’s product line, he reduced Apple’s workforce and operating costs by over a third. The strategy, of course, worked and has allowed Apple to focus its attention on creating the exceptional products, marketing and distribution it has ever since.

No victim to the allure of creation myths, Isaacson acknowledges that circumstance played a major role in Apple’s recovery and is careful to qualify the success of Job’s leadership against the dire straights that Apple was in. His reign over Apple required a tyrannical grasp that he was unable to maintain when he led  the company through better times. After a fight with the governing board in 1998, for instance, Jobs effectively fired all but two of the directors and replaced them with his personal friends. Thus the story of Apple exemplifies the truism that transformation is often easiest when things are at their worst. When Job’s returned to Apple as CEO, the company had little left to loose and pressure mounting from all sides. That pressure turned out to be essential to Steve’s ability to lead.

Today the title of poster child might go to Yahoo! which has been in the news lately after an embarrassing management shake-up in September and the appointment of a new CEO earlier this week. A pioneer in search and digital media, the once-mighty Internet giant has fallen in recent years to, more or less, irrelevancy. Seventeen years after its beginnings in a Stanford research lab, Yahoo! has come to resemble, in many ways, the Apple of the late 1990s. Unfocused and over-extended, pushing fat budgets behind sub-par products with seemingly no connection to each other or logic between them, Yahoo!, like Apple, has lost its way, falling tragically behind the curve it helped create. In light of these similarities, one might reasonably expect the company to pursue a similar strategy. However, one important detail may mean a fundamental difference for the futures of the two technology giants. While Apple’s dark days brought it to the brink of bankruptcy, Yahoo! remains relatively flush (due mostly to the popularity of its homepage and the success of niche products like Yahoo! Finance.) With shares closing at $15.52 on Friday, its market cap of nearly $20B is more than enough to keep the lights on and its employees well-fed. Even as its stock bottoms out, Yahoo! is far from rock bottom, making it difficult for management or senior leadership to head the call and commit themselves or the company to the change. In effect, Yahoo!’s positive balance sheets mean it will be harder to cut projects and reign in the companies excessive spending or scattershot product line.

In this sense Yahoo! represents a very different problem from Apple: not how to avoid the fast and fatal decent into failure but how to curb the lingering decay of mediocrity, less a question of how to survive than how to be great. Their story reminds us of another truism, that the opposite of success is not failure, but mediocrity. Applied to the level of the individual, the story of Yahoo! offers some instructive advice. It is easy to become complacent and, unless things get very bad, it is difficult to see yourself out of the hole, to commit yourself to change. To do so requires not only vision but focus which if not motivated by necessity calls on a kind of discipline from within. A discipline which may just begin with the decision to not focus on a few things this year.

Happy New Year!