The Talent Story of the iPod

At the beginning of every great business success there’s a human capital story, and that’s certainly the case with the iPod. In just over four years, the iPod/iTunes product and business strategy has helped Apple double its market cap, establish over 80% market share in two very profitable industries, and drive almost $3 billion per year in revenue. But the story of the iPod is not just a story about innovation. It’s also a testament to one company’s ability above all others to hire a true visionary. It’s a story that every executive hoping to take their company to the next level should read.

The Story of the iPod

I first stumbled upon this story while I was preparing for a speech I was giving on the future of recruiting in Vancouver, BC. A big focus of my talk was on quality of hire — including the metrics, technologies and processes that could support aligning a recruiting department around quality of hire. But I needed an example that illustrated the value of top talent. I thought for a moment about the great business stories of the last few years, and my thoughts immediately turned to the iPod. In the back of my mind, I assumed that it was an entire team of individuals brainstorming in a board room who built the strategy and laid the foundation for the iPod’s success. But in fact there was one person without whom none of this would have been possible: the founder of the iPod, Tony Fadell.

In the late 1990’s, Fadell began working on a business strategy that would revolutionize digital music hardware and software by combining the two together into one powerful platform. You may be surprised to know that Apple wasn’t the first company to hear about his idea, however. Fadell shopped the idea around to several companies, including RealNetworks and his previous employer, Philips. None of them jumped on it as fast and as hard as Apple, who gave the project the undivided attention and vision of founder and CEO Steve Jobs. The project was completed in under six months, a record for Apple. “This is the project that’s going to remold Apple,” Fadell predicted in early 2001. “Ten years from now, it’s going to be a music business, not a computer business.” And he was right.

Finding the Next Tony Fadell

For any executive with questions about what hiring top performers can do for a company, Tony Fadell is not the only example. You don’t have to look much further than:

  • Omid Kordestani, who helped turn Google, a growing search engine without a significant revenue model, into a truly disruptive online advertising force, with over $5 billion in yearly revenue and a $126 billion market cap.
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  • Steve Ballmer, the business mind behind the Microsoft miracle, and the first head of recruiting at the company. For a long period of time early on, he interviewed every new employee, made offers, and closed deals.
  • Howard Schultz, who’s created a global empire out of a new twist on coffee ó after literally begging for a marketing job at Starbucks in the 1980’s.
  • Dennis Carter, a director of marketing at Intel who created the Intel Inside program, which gave Intel a sustainable competitive advantage, regardless of competitor processor speeds, and catapulted the company into one of the top ten known brands in the world.
  • Theo Epstein, the innovative general manager of the Boston Red Sox, who ended over 80 years of frustration for an entire region of the U.S.

It may scare you to know how easy it was to find Tony Fadell before he changed the game at Apple. Fadell had spent years working for Philips leading up their mobile computing group and at General Magic in various senior engineering positions. He had been featured in a Fast Company magazine article on managing the generation gap in the workplace as early as 1998. He established five public patents at General Magic. His resume was (and still is) posted online. The lesson for every executive that gives a corporate goal of building the next iPod, growing into a retail organization that builds thousands of new stores per year, or revolutionizing the way that companies advertise online, is that great ideas start with great people. There’s no question that, in hindsight, most companies would bend over backwards to go back in time and hire Tony Fadell in 1998, Omid Kordestani in 1999, or Howard Schultz in the 1980s.

Visionary Recruiting Practices

While it may indeed be getting easier to find the next Tony Fadells, I would argue that it’s getting harder to hire them. Reading between the lines of the Fast Company magazine article, you can see how an environment that stimulates creativity is as essential to recruiting top talent as it is to keeping them. So here is a simple five-question checklist for your organization to see if you’re prepared to hunt and compete for top talent:

  1. Are you targeting the right people for your mission-critical openings? Unless you lived down the hall from him in college, it’s not very likely that the next Steve Ballmer will show up at your doorstep. It’s also not likely that he or she will be on a job board, attending a job fair, reading a classified newspaper ad, or viewing your recruitment ad in a trade journal. This person is more likely to be reading blogs, searching for relevant content online, attending industry trade shows, or interacting with other industry top performers (including A players at your company).
  2. Are you building relationships with talent ahead of demand? It’s difficult to impossible to build a deep bench of talent in every area. But for your mission-critical openings — the ones that can be the difference between becoming the next Google or the next — I suggest being very prepared with a slate of people you can contact when the perfect opening becomes available or to get recommendations of top performers. This means getting more systematic and efficient about candidate relationship management in advance of the applicant tracking process, hiring specialists who can “hunt” and sell great talent without requisitions, and using technology to its full potential to augment and scale your efforts.
  3. Are you looking for visionaries with ideas, not just resumes with years of experience? As Seth Godin said best in his best-selling book Unleashing the Ideavirus, in the new economy we’re all in the idea business. The best ideas that can spread the fastest create the most value for companies. Google’s Code Jam is an outstanding example of a company that is directly connecting with the leading technical minds before they start looking for work ó and hoping the idea spreads like a virus (it just has).
  4. Are you rewarding your recruiters for high impact hires? More companies are beginning to tie on-the-job performance to their recruiting teams — in a new economy of ideas, this is crucial. Taking this a step further, if I was a recruiter who hired a person who added billions of dollars to the bottom line, wouldn’t it be reasonable to expect to be compensated for it? If I knew that no matter how big of an impact I made with a hire, I’d be paid the same, well… it might be easier just to keep putting bodies in seats.
  5. Do you have an environment where new ideas can be generated and quickly take flight? Philips got a new building, painted their walls different colors, and broke their standard on-boarding rules to hire a singular talent. Apple only took six months to develop the iPod. Microsoft turned on a dime to start the move from an operating system company to a technology and Internet-leading juggernaut. Boeing has a Chairman’s Innovation Initiative available to all employees, and a “Phantom Works” R&D unit that is pushing them beyond their core businesses. Without the right environment and brand positioning, you can’t recruit top talent or position them to launch the next game-changing idea. You have the power to influence and educate your organization on what it will take to do this.

Your next business success is increasingly dependent on your next human capital success. The next Tony Fadell, Omid Kordestani, Howard Schultz, and Steve Ballmer are all out there. The question is, are you ready to hire them?

Dave Lefkow is currently the CEO of talentspark (, a consulting firm that helps companies use technology to gain a competitive advantage for talent, and a regular contributor to ERE on human capital, technology, and branding related subjects. He is also an international speaker on human capital trends and best practices, having spoken in countries as close as Canada and as far away as Malaysia and Australia. His consulting work has spanned a wide variety of industries and recruiting challenges with companies like Starbucks, Boeing, HP, Microsoft, Expedia, Washington Mutual, Nike and Swedish Medical Center.