Mastering the Art of Disruption
Move over, Jack Welch. From Apple to Pixar, Steve Jobs is showing why he's the model CEO for the 21st century.


(FORTUNE Magazine) - The master of disruption is at it again. With his two remarkable companies -- Apple Computer and animated movie house Pixar -- dominating the headlines, Steve Jobs finds himself in the kind of position that most mad-genius tech wunderkinds can only fantasize about: thrilling consumers while wreaking havoc in multiple industries. Apple sold 100 iPods a minute in the fourth quarter, and its iTunes Music Store could account for 10% of all music sales in the U.S. this year. It's only fitting that the release in mid-January of a new line of superfast Mac computers featuring Intel chips came just as Apple's market cap briefly passed that of rival Dell. The company turns 30 on April 1. Happy birthday, Apple.

The news about Pixar (Research) is, if anything, more dramatic. When word broke that the movie house might link up with Disney (Research)--and that Jobs himself might join the media behemoth's leadership team--jaws dropped from Wall Street to Hollywood to Silicon Valley. If the deal closes and Jobs sells Pixar to Disney, he'll arguably become the most powerful investor in entertainment. His head start on digital animation combined with his burgeoning iEmpire places him squarely in the intersection of Hollywood and high tech--the one figure in position to control the fast-moving evolution of media consumption.

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How he got here may be boiled down to one simple reality: Jobs has proven himself unrivaled in the art of managing disruption. Many entrepreneurs talk about turning ideas into products that change the world. Yet the landscape is littered with first movers who ended up finishing last. In so many cases, being out in front just makes you a target for deep-pocketed rivals. Think back to the early PC manufacturers or the spreadsheet- and word-processing-software makers. Can you recall any of them? Does VisiCalc ring a bell? XyWrite? Probably not. But Microsoft's Excel and Word are still with us. What about portals and search engines? Pioneers like Alta Vista, Lycos, and Excite got steamrollered by Google. More recently NetFlix and TiVo have created hugely popular new businesses in the realm of movies and television, but they are in peril of being usurped by cheaper digital video recorders from cable operators and video-on-demand. Research in Motion's BlackBerry brand has become the Kleenex for remote e-mail, yet the company must shudder at the introduction of each new multifunction cellphone.

At both Apple and Pixar, Jobs has been able to simultaneously harness technology in a way that throws the status quo into disorder and ride that chaos to the front of the pack. What's more, he's established two different models for how to do it. Apple's trick has been not just its game-changing tech breakthroughs (music and computers made easy) but its relentless push to disrupt itself before others have a chance to do so. "The thing that most people don't realize about Steve is that he is not only really good at taking technology and turning it into good-looking, easy-to-use products, he's really good at doing it faster than anyone else," says Paul Saffo of the Institute of the Future in Palo Alto. Think about the iPod here: The first one released four years ago had a monochrome screen and a five-gigabyte hard drive. Now it has a color screen and a 60-gigabyte hard drive at roughly the same price. What other business would obsolete a successful product like the iPod mini after only 18 months to introduce the nano?

With Pixar, Jobs has taken a different tack: co-opting the competition. For many disruptors, it works the other way around: The established players eventually crank themselves up, throw big dollars at a new area, and swamp an upstart. Instead Pixar is exploiting a moment of maximum leverage--when Disney's animation business is lackluster and its lucrative distribution deal with Pixar is up for renegotiation--to step inside a potentially big competitor. In the process, Jobs would get an even bigger landscape to gallop across--and a much bigger horse. Imagine the possibilities for disruption with the resources of both Apple and Disney at his disposal. Overnight the iPod could get deeper access to ESPN as well as the entire library of Disney films and ABC television shows. Can you feel the tremors?

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.