How Steve Jobs Built the Apple Store: Big Ideas, Innovation & Leadership with Ron Johnson

Hey everyone, welcome back to Make It Happen Mondays where we talk about sales, business, entrepreneurship, personal growth, mental health, and everything in between with guests who I truly respect and I think make a positive impact on the world around us. Now my guest this week says his very first memory is sitting in the principal's office at four years old. His mom wanted him to start school early so the principal asked him a very simple question which is what color is George Washington's white horse? He said black. What he remembers is not getting it wrong. It's when he walked outside afterwards and his mom bent down, put her hand on his shoulders, and said Ronnie no matter what happens I will always love you.

So his first memory is a mistake and what stuck with him was that she loved him anyways. He calls that a pretty big gift obviously and says so much of life comes down to having self-esteem or someone to fall back on and he had that from his parents and from his whole neighborhood. Ron Johnson turned down Goldman Sachs coming out of Harvard Business School and went into retail instead. At Target he talked a world-renowned architect named Michael Graves into designing housewares for a discount store which nobody had done before and that is why Target has a reputation for design at all. He then built the Apple store for Steve Jobs, then he ran JCPenney which did not go the way he wanted and he owns every bit of that in his new book Shop Different.

He got into the two times he told Steve Jobs no and the one sentence Steve said that got him to say yes, why he believes AI would have talked him out of every single decision that made the Apple store work, and his framework for relationships which is launch, deepen, and restore. So I hope you enjoy this conversation as much as I did. Let's make it happen. Ron Johnson, welcome to the Make It Happen Monday podcast my friend. How are you doing today? I'm doing great. It's good to be here. Thank you, John. Yeah, thanks for joining. I know we're going to get into the book that you're putting out there and it's a real interesting one based on what's happening, I think, in today's world of AI and retail and also just the face-to-face component to this because I think that human connection is going to be so critical moving forward and I know you talk about that.

But before we get into all that stuff, man, you got a real cool background here and we're going to talk about Steve Jobs and all the fun stuff with Apple. But I always like to go back to kind of origin stories, man, because you got a cool one growing up in Minnesota next to one of the first malls and it sounded like you had some incredibly supportive parents along the way. And I always like to know kind of what made you, you, right? So what were those influences early age? So give us a little context on that and let's bring us through the college and then we'll get into the career stuff. Great, John. I'll just rifle through it. I grew up right outside of Minneapolis, Minnesota in a suburb called Edina.

Went to public high schools. Had two amazing parents who loved me to death. I tell the story in the book of the first memory I have. I was in the principal's office as a four-year-old, but it wasn't because I was in trouble. I was trying to apply to see if I could start school early and my mom wanted me to do that. And the principal said, Ron, what color is George Washington's white horse? And I answered black. So I didn't do very well, but I'll never forget walking, walking outside. And I have this picture of my mom, her hands on my shoulders, bent over saying, Ronnie, Ronnie, no matter what happens, I'll always love you. And you think about my first memory, I made a mistake, you know, picked the wrong color for the horse.

But I knew I was loved. You know, that's a pretty big gift. And I think so much of life is having self-esteem or a place to fall back on. And I had that with my parents, with my neighborhood, with everything. You know, I went through high school in Edina public school system. Had the privilege of captaining a couple of athletic teams, the soccer and baseball teams, went to Stanford, play soccer at Stanford, which was really fun. Then I ended up going to Harvard Business School. And so that's my upbringing, kind of public high school, Stanford, Harvard, you know, reasonable schools, you know, not the smartest kid at those schools, but I got by. You worked it through. Let me, let me ask you about your dad, because you said something about your dad that caught me, which is that he told you to do something significant with your life.

First of all, when did he tell you that? And what did that mean when he told you that? Yeah, my dad, he was a really strategic, long-term thinker. And he grew up in that greatest generation. You know, he fought in, you know, World War II, like many people did. He came back, loved politics, ran for the state of Minnesota local legislature, got elected the first year he could as a 25-year-old, worked for a congressman in Washington, D.C. That was a public servant until one of the volunteers on one of his boards said, Vern, you've got to come to General Mills as the head of strategic planning, because he was very clever and smart. So he had a business career, but it was only about 10 years, and then he retired.

But he, just because he didn't start his business career, too, in his 40s. And he liked it, but it never felt important to him as a way to earn a living for his family. And back then, significance was being civic-minded. And so I remember, as I was thinking of careers, especially coming out of business school, he said, Ron, you should do something significant. And I remember going, well, what is significance? He goes, only you can figure that out. Because if you look up the word significance in the dictionary, it's got two supports, has meaning. And then if you look up the phrase has meaning, it says significant. And so I think it's kind of circular, but what I think I learned from that is, what has meaning is something that's unique to each of us.

You know, some of us find our meaning doing podcasts, some teaching, training, some playing sports, some doing business. You know, the question is, where do you find meaning? But my dad, I think the message was, don't do something to make money. Do something you'll love where you can impact other people. And that's what I took from it. And that's where I left Harvard Business School. I went into retail for that reason. That sounds like it, because, you know, you hear a lot of people. I think this is, you know, and this is an alteration of it, a better version. But when people say follow your passion, right? Like, I think that's kind of a bad advice for kids, because you don't know really what your passion is when you're, you know, 15, 16, 18, 20 years old.

So I tell people, you know, find your passion, then follow it. But meaningful, I think, is different than passion. I think, you know, if you find something that is meaningful to you, right? And you have that, it's like Simon Sinek's why, right? Like, you find your why. It's tough to do that, though, as a young kid, right? Because usually, as a young kid, you're just doing. You're just living life, right? Yeah. So were you conscious of that because of what your dad and mom instilled in you? Were you conscious? Well, I think that's a good question. I wanted to find something meaningful to do. And when I came out of business school, I had offers like everyone, a lot of people did at all the investment banks.

And I had a chance to, the big one was go to Goldman in their M&A group. And it was exciting because I think 100 kids from Harvard Business School applied, maybe two of us got the job. You know, a lot of status, a lot of money, you know, sexy going to Wall Street. But when I was in business school, it was frequent. You know, we did 800 cases over two years. It was frequent that the CEOs of the companies we studied would come in and attend the class. And at the end, they'd talk for a few minutes. And I admired the people who had spent their lifetime impacting an industry. Because they seem not just smart, they seem to be wise. And wise to me is always smart, but knowing what to do when there's no playbook.

When you've got to chart your own path. And, and, and I thought, I'd like to be wise someday. And so I, I remember taking out all my cases from the first year, making a pile, the ones I loved, that could turn me on for a lifetime and those that I would never have interest in. And there were only about 20. And I think 18 of them were retail cases. You know, those are the things that interested me. And then I thought back to, I loved being in stores. Who knows why? Maybe it's because I grew up a bike ride from the Southdale Mall as you started. But I, the first enclosed mall in the world was two miles from my house. And it was so safe back then. You could ride your bike over. My brother and I would.

And I loved being in stores. I loved, it felt like a place to belong. Because stores back then were. You know, they had the furniture store at Animal Crackers down by the Koi Pond where you get free hot chocolate. And the little discount store had candies on the counter in the jewelry department. You can run and grab some chocolates. And the sporting goods store, I remember in the middle of winter, grabbing a baseball glove and sneaking around with a ball and playing catch. Because you really couldn't do it, you know, outdoors. And that worked fine until we started throwing it over the gondolas and trying to catch fly balls. But the point is, I really enjoy being in stores. And then I looked at the retail industry and I said, hey, very few people with an MBA go into retail.

You know, and it's a young person's business. Mickey Drexler at the time was reinventing the gap. He was 31 years old. And you knew that. And then it was a meritocracy. You know, in retail, if you run a store, you all have the same merchandise. If there's a thousand store managers, the one with the best increases is obviously doing the best job with their team. If you're a buyer, you know, Target has a bunch of buyers. The one with the best increases is probably doing the best job of figuring out what to put in in the store and how to manage that inventory. And so I just felt like if I put my head down, I could maybe become a retailer and ultimately be wise enough to do something meaningful in the industry.

Nice. Love it. And so was Target your first job out of school? Like when you kind of went to school? Yeah, it was a division of Target. Division of Target. At that time, the department stores were kind of king. And the big regional department store in Minnesota was Dayton's, which had acquired Dayton's and Hudson's from Detroit. They were starting to consolidate. And in the late 70s, Dayton's and Hudson acquired a West Coast chain called Mervin's. It was the original promotional department store, kind of like Kohl's is today. And when I went to work for Dayton Hudson Corp, which also had just started Target a few years before, they said, go to Mervin's. That's our fast-growing subsidiary. And it was out right by Stanford where I'd gone to school.

So I started at Mervin's for about five years, but then came back to Target at age 30. Now, you said that everybody at Target kept telling you that your ideas were too much. Like, you talked to me about, like, first of all, what were your ideas from a big-picture standpoint? And why were you facing such resistance at that time? Because that was in the late 90s, right? Yeah. Yeah. Yeah, it was – I joined Target in the early 90s. And I had this simple idea that, you know, when I knew I'd be assigned something to do for a couple years at a time, you know, I bought toys. And then I got to do – lead all the children's merchandise areas. And I got to lead home. And I felt like if I went in there and did what everyone else does, you know, manage a great team, select good merchandise, you know, I could produce good numbers if I – I thought I could do that.

But when I left, the company wouldn't be any better. It just depended on who's the next person leading the category. How do they do? So I always ask the question, is there anything I could do in this category that would permanently change it for the better competitively? So a good example is I joined the kids' teams. And I had all the – I had to run all the girls' and boys' clothing, for example, right? And I looked at it, and Target, when I was competing, was competing against department stores, The Gap, Pennies, and they all had bigger departments. So we had a small assortment. But then I looked at – we had broken our kids' area into two – little kids, four to seven, and eight to 20 for boys and seven to 14 for girls.

And I looked at – the Gap seemed to have these beautiful floors, and I noticed they sized every item they bought from toddler to big boys. Well, I thought, if we got rid of the little boys and big boys and little girls and big girls and had one kid's girls and boys, we could double our assortment. We'd have twice as many choices. And instead of having one little kid's – we'd have one big department. And I thought, wow, you double your assortment, if that's one of your weaknesses, that's going to permanently change no matter what they buy. But to do that was a huge change because the industry didn't work that way. You know, every department store, every Pennies, everyone had little kids and big kids.

But I knew if we were going to compete, we had to make the change. And to do that, though, we'd have to respec every piece of merchandise we had. So we had to bring 1,000 kids into the Edina store one day and measure everybody to develop new standards. We had to figure out how to communicate this. But ultimately, after a lot of persuasion on my part, my team bought into it, and so did the senior management. So we changed the way we sized the department. And that was an example of doing something that would impact Target well beyond when I went there. Because now parents knew everything. If you bought a 4 or 5 for kids, it all fit the same because it was made off the same pattern. And kids grow really fast.

And so having to buy a 4 one year and a 5 the next, I could buy a 4 or 5 and let them grow into it. And we doubled the assortment. And over a couple of years, we doubled the business, you know, because we competed differently. But that was one example. And then I got to the home area. And, you know, it was a great time to be in home because the apparel stores had led the specialty industry. But this is a time when Crate and Barrel, William Snow, a Pottery Barn, we're having a heyday. Restoration Hardware just launched. And, you know, we were competing heavily with Walmart. And I had this idea that, you know, it's funny. Every product we buy is just functional. And we've got so many similar items.

It's got to be confusing for a customer. And I was on my first buying trip with a home team to London on a rainy day. And I walked into a store to get out of the rain. It was a little boutique in South Kensington, right near Chelsea. And I saw a tea kettle with a whistle on it. It was a beautiful thing. And it made me smile. And I said, wow, that product has a soul. It still would boil water. But it had something more. And it was a designed object. And then it hit me like, what if Target went on design? You know, at that time, we had basics and fashion. And fashion was just kind of, you know, whatever you could find somewhere and knock it off. What if we could find a designer to design products for Target and we use our source and capability source?

Well, that would not only differentiate Target, it would make us preferred. We would have something that Pottery Barn and Crate and Barrel and others don't with our great value. And I remember the CEO at the time, a great CEO who really led Target. He said, Ron, I get the idea. If I were you, I'd do three items and put it on a back end cap. And I said, no, I'm going to do something different. And we launched, we got Michael Graves to design. The guy who did the tea kettle I saw decided he'd love to design for Target. And we went to a store one day and I gave him some Post-its. I said, just put a Post-it on any product you think you can make better. He said, Ron, you didn't bring enough Post-its.

But we launched with 140 items. Holy smokes. We took the two main aisle gondolas and filled it with Michael Graves, redid all the packaging, put out displays, launched at the Whitney Museum in New York, made a big deal out of it. And it in many ways changed Target. That was the first design partnership. Target put out a book a few years ago saying 25 years of design, you know, because that had become a big deal. But again, that was a permanent change that wasn't dependent on, you know, buyer coming in, doing their thing, and the next buyer does something else, you know. And so I think that's where I got pushback because I was always doing things that were really hard to do. And like in this case, a lot of people at Target rightfully were concerned that if we go after design, that will make us feel even more expensive than Walmart, who had lower prices, a lower cost strategy, and that might hurt us.

But it turned out it really worked to help because it just got people who are going to Pottery Barn and Crate and Bar, but also shop Target, to now buy home goods at Target instead of just coming in for their toothpaste, you know, and their toys. But anyway, I'm going longer than I probably should be. Yeah, no, no, that was perfect. Yeah, no, I get it. Because I want to contrast that with Apple, right? Because Target was, you know, a little, I think you're a little crazy here with these ideas, and we're going to, and you kind of push through it. But it sounds like, you know, obviously Steve Jobs was the exact opposite. Did you, did you originally, before you even started, you said that, like, that you wouldn't work for them unless you could build a store for all Americans?

Is that kind of what your pitch was? Yeah, well, no, it wasn't my pitch, but that's the, that's the conversation. So, because of the work I'd done in designing at Target, Steve had come back to Apple, as we all know, in 97, I think it was. You know, they brought him back to the CEO, and the company had 30 days of cash. So, after nearly 25 years in business, half its life, Apple had gained 5% market share, Microsoft had 95, and Apple had 30 days of cash. Not exactly a successful company, however, everyone knew Apple had a great brand. And Steve came back, immediately launched the iMac. He was looking at design just like I was at Target, but he was doing that for the computer. He created this amazing product with Johnny and Phil and a bunch of other people, and it made the cover of Time magazine.

It was a cult hit, but it didn't change the game for Apple. So, Steve felt that if he didn't control the customer experience, you know, through his own stores, he'd never be able to compete. He tried for 25 years, it never worked. Now, this was the time when Dell was winning with stores, Gateway was closing, and they were serving PCs. But Steve felt we should open stores. So, he invited me to come out and talk to him about it. And one night in 1999, in November, we spent three hours chatting about stores. And one of the conversations we had, I said, so, as you do this, who's the customer? How big can it be? And he said, well, Ron, we do great with creative pros. We don't do well with business.

We don't do well with really consumers, but we do great with creative pros. And we've got these great apps coming out to help people make movies and others. And I think if we went after consumers who had creative skills, we could double our market share. And I said, that sounds good. I said, but I don't think I'd leave Target to come to go after 5% of the U.S. market. I said, what I don't understand, Steve, is I live in Minneapolis. We don't even have an email at Target. We don't have computers. I don't know many people who have computers. Only half of America has a computer. Why do you feel like you've lost? You lost the first half. But what about the second half? And you've been telling me about this digital future.

Why don't we try to win that? Why don't we create computers? Why don't we try to sell computers to everyone who hasn't understood the need for a computer yet, or who's fearful of technology because it's too much for them? And so I said, if you want to create a store for everyone, and I just come off of bringing design to all or design to everyone, I said, now that could be really fun to do. And I would consider that. And he quickly said, okay, that's a good idea. Because Steve was very good at listening and asking questions. And, you know, the best idea is always one with Steve. And so I did tell him I wouldn't come. I told him two things I wouldn't come. One was for if you want to just go after creative pros.

And I said, secondly, the board had approved a four-star test. And he said, I've got a four-star test to prove. Let's go. And I said, I'm not coming. I'm not leaving my career for a test. I said, tests never work. I said, no one gets behind a test. It's just you're trying something. You don't. It means there's no conviction. You think it's worth trying, but you're not convicted to it. And then Steve looked at me and said, Ron, I've got $4 billion in the bank. If I could write a billion-dollar check today in 100 stores, I would write that check. And that's when I said, okay, I'm all in. Oh, shit. Yeah. I think you mentioned, like, you know, big ideas, what people pay attention to, little ideas don't, right?

Like, because there's no – they don't get excited about them. Did you kind of foster that on your own, or was that cultivated by Steve, like, with the big idea thing? No, I learned – well, Steve understood that, obviously. But I had learned that at Target. Like, sizing, resizing the kids area was a really big idea, right? Winning on design was a really big idea. And I just have always believed that we all want to do something meaningful, significant. And it's easier to get a team to rally behind a big idea than an improvement. Out of something that's never been done before than something that someone else has done. You know, it's easier to get people to shoot for a North Star than to try to be a little better, you know?

And so I had felt that at Target. And like you said earlier, when I went to Apple, now I'm working for someone, Steve Jobs, who has a much bigger imagination than I have. He has higher standards. He has better understanding of design. Everything that was a challenge, a target, I'm pushing water uphill. People are fighting change. He's saying, let's go faster. Let's go bigger. Have you thought about this, you know? I love it. So I felt like after I met Steve, I knew I had to come work for him, you know, for all those reasons. So for the big idea, though, because – I'm going to skip ahead. We'll get back to Apple in a second here with the stores, but like you went to JCPenney and you had this no-discount pricing strategy.

And that – like that was a big idea for that store. And it sounded like it didn't really play that well. So, you know, the biggest lesson, speed kills. But where do you kind of draw that line of like, hey, we got this great idea and everybody's on board with it. And obviously, you have to buy all in, burn the boats to go because we don't want to do a trial here. But how do you persevere? Like what's your threshold? Well, here's what my instinct is. When you know something in your bones has to be done. Like Steve knew at some point, early days when I got to Apple, the Motorola processor roadmap was done. We had to switch to Intel. And that would require all new apps, everything to be ridden. There was an option.

We had to do that, right? Steve knew we had to move beyond the computer to a device. We did the iPod. It didn't sell very well at the start. But we had to make it work. It wasn't, failure wasn't an option. With the Apple stores, Apple had to control the customer experience to win. So when we opened the stores, we had to figure out how to make them work. You know, I felt the same thing at pennies. When I went to pennies, you know, now the issue with pennies, you know, you're right. I went to everyday pricing from what was 60% off every day. You know, it just lowered the prices. So every day is a good day to shop. But pennies was the problem because it was Ron's idea. It wasn't the team's idea.

It was way too fast for the customer. But what's interesting is our sales went down 20%. We had planned to be down 15. But the NPS was through the roof. You know, the whole goal of the pennies transformation was to move our customer from a 60-year-old, 70-year-old, that's going away, you know, an older customer to a young family, right? And I thought to get to the other side, a big part of that was that honesty begins on the price tag, right? And so you have to persevere. Unfortunately, you know, the board, the employees of pennies had never been through a transformation. They were very comfortable with the business. They were a company bent on trying to improve a little bit every year to survive.

Where I come from, Apple and Target, where we were in battles to win. It was a very different mindset. And I was naive to the cultural nuances. I moved too quick. I didn't take time to get to know the team. They saw me as the Apple guy, not a lifelong retailer. So pennies failed for lots of reasons. I own most of them. And I acknowledge that. The book tells all about it. But I do believe, I try to get back to your question. If you really believe in something, you have to will it to success. It's not easy. But you got to, you know, make the bold decision to get it done and work it, you know, and make it successful. You know, we had to make the Apple store successful. You know, it took a lot of work.

It took three years to get the profitability. And then all of the investment we made paid off. And the stores became the most productive stores in the world. But they didn't start that way. How do you balance that? Let's jump ahead to today in the world of AI and how fast things are moving. And, you know, I just got off the phone right before we jumped on this podcast with a good friend of mine who's, you know, he's in the construction world. He does, you know, contracting and stuff. And he's like about six months ago, he's like, oh, my God, I got this idea to automate this. And, you know, builders can do this. And he's like building and building. And he was excited. But now today he's like, I think I just wasted all my time because now I can just go into ChatGPT and, you know, and it'll give me the answer.

So how do you, like, is there a lens you, so there's, fill it in your bones is, yeah. But, you know, I felt some things in my bones before, man. And who was, were those feelings wrong? Or did I waste a lot of time, you know, going and being so convicted and being like, holy shit. Because I couldn't see the future, obviously, and even as convicted as I was. But now it just seems like things are changing so fast that you could be convicted, convicted on something or convinced to something. And then, you know, a month later, your world gets turned upside down. So is there a lens you look through from a big idea standpoint in today's world different with AI compared to, like, the, and I'm not saying slow.

I honestly, I'll challenge your notion. To me, what AI does, and it's the most amazing piece of technology we've ever had. And almost all technology up until today has improved our world. And I'm an optimist, so I figure AI will as well. But AI lets us get to common knowledge. The entire history of the world, the knowledge that's been gained, is available. Common knowledge is available to anybody. It's democratized knowledge. You don't have to go to Harvard Business School. You don't have to get a science degree. You have a great question. You ask a query. The playing field is level. So the only thing you have to compete on is your inner voice. It's not what's already out there. It's what you believe based on your personal geography.

Each of us have one. And that's what it's always taken to win. Steve Jobs was famous. The reason he was great is he saw unmet needs that no one else could see that he believed in. And he found a way to go after that. Right? And that's what innovation is. Innovation is doing something that's rooted in your imagination that nobody else has done before. Improvement is when you take someone else's idea in another field and you apply it to your industry. That's all good to do. We should improve all the time. But if you want to have breakthroughs, you've got to do something that's unseen, that's never been done before. And Steve did that with movies. You know, how do I take a digital movie and tell a story like that?

You know, it's not unlike The Odyssey right now. It's a movie shot in this new, you know, camera in IMAX, the whole film. And that was a bold move and really expensive. But wow, look at the response to that. Only one person saw Christopher Nolan, that you could do that. And I'm sure there'll be a lot of movies made that way that we charge a higher price for. Steve saw things that others didn't. And so I look at, if you look at Steve's life, the one thing about Steve, many things about Steve I think are unique. He was never in a hurry. And he was taken from us way too young. You know, he died at, I think, 57. But he was never in a hurry. And he created the first personal computer. He revolutionized the music industry.

He invented the smartphone with his team. Right? You look at all the things Steve did, never being in a hurry. You know, we'd start products and we sometimes wonder, would they ever come out? Because Steve wasn't going to bring them out until he thought they were ready. You know, the phone took a lot longer than we thought. It was three, four years after the iPod went to Windows. Six years after the first iPod. You know? Sony had lots of products. Everyone else had lots of products. We had a computer and a music player for six years. And then we finally brought out a phone. And three, four years later, we brought out an iPad. In three or four years, we brought out a watch. But Apple was never in a hurry.

Right? We wanted to do great work. And so there's a sense that the world's moving so fast, I've got to hurry. But at the end of the day, technology moves quick. People don't change that quickly. Right. And they're the ones that have to buy the products. Yeah. So look at online shopping. You know, people, when the online shopping started in the late 90s, the dot-com boom, everyone said, oh, stores are going to go away. It's going to end retail as we know it. Well, it's been 30 years. And exactly 30% of things are bought online. 70% are bought in stores. We're at a point now where stores are growing just as fast as online. So online shopping behavior changed about 1% a year for 30 years. Every year, one out of 100 sales went online.

And today, 85% of all revenue is done through physical stores and their online counterparts. Walmart is worth eight times today what it was in 2000 when Amazon and the dot-com boom really took off. Well, Walmart should have been killed by Amazon. They both carry the entire world, the biggest assortments at the lowest prices. Didn't happen. Right. That's because people get in the way. Individuals, people buy things. Right. And we all shop differently. My sister buys everything online. I buy everything in stores. You know, that's a solid problem. AI is going to improve how we shop. It's not going to change where we shop, in my opinion, at all. It'll make stores better. It'll make online shopping better.

I don't think it'll fundamentally change where we shop. Well, if AI is moving fast and these models are coming, but it doesn't change where we shop, how many industries are like retail? So if I want to launch a new retailer, take your time. Find a niche. Do it well. Open that first store. Maybe start online and then open your store. But I think the idea is that, you know, AI is democratized knowledge, but innovation still is going to be something completely new. And that takes time. How do you get the team on board with a big idea, right? Because you talk a lot about culture, and even with the genius bar, for instance, you, you know, instead of hiring sales reps and paying commissions at these stores, you hired teachers, you hired people that were, and so there was a slightly different culture when it came to just the service of the customer.

But, but, but there's a culture around big ideas to get people bought in and, and you said the JCPenney example was a good one because they just weren't bought in. It was somebody else's idea and they were implementing it and it was like, so how do you take that big idea that you have in the boardroom and, and paint that vision for the employees and then make sure that they're there? Because some of them bought it, some of them started at this store, at this location, at this, what, when they, you know, with this expectation, like, Hey, I started this job here and now you're painting this scary vision that I've like, what, where did this shit come from? Right. How do you, do you like give people the out of like, Hey, if you're not on board here, it's okay.

Or do you really try to get everybody bought into this to, so that you're all, you gotta, you gotta, you gotta get everyone wrong in the same direction. You know, Steve used to have these top 100 meetings that they still have, where you put the top 100 employees in a room and maybe do it once a year and you get them all rolling in the right direction and you gotta talk it through. But I think to get people on board, there are companies that are built to innovate and there are companies that are built to compete or improve, you know, so Apple has always, ever since Steve was there, you know, think different. With this idea, we are going to innovate, right. And so when you have that kind of culture, people are looking for the next idea.

They want to know what's next and they want to help you deliver it now. Now you still have to communicate and persuade, why are we doing this? But like at Apple, people have high trust in their leaders. You know, when Steve said, we're going to the moon, we all said, okay, let's get on board. You know, Steve, it wasn't just that it was influence, influence, he had a great communicator. He had a great track record. Yeah. So people trust his intuition. People trusted Tim's intuition as an operator. You know, and Apple maybe was a little more operating intensive during Tim's reign than innovation intensive during Steve's reign. But both worked well because the nature of the hardware product cycle was that Apple didn't miss anything.

You know, the phone is still the most important device. That might change soon, but it hasn't changed yet. And Tim did an amazing job of innovating within the phone format through displays and chips and software and app stores. Right. But some companies are designed to be innovative. Others, like when I went to Penny's, they're not accustomed to change. They've never done it. And so you don't hire people that want to change the world. You hire people that want to just keep improving, you know, get a little better every year. Nothing wrong with that. But if you're going to innovate, you probably have to have a culture that embraces innovation or it's really hard. Yeah, it's really hard. Yeah, that was kind of like my little jaunt in that was my little $10 million company got bought by Staples, like a $20 billion organization at the same time at the time.

And, you know, and I just didn't fit. I didn't fit in the corporate world. And so eventually, you know, I like they let me go. And I went to my CEO at the time and I said, look, we're still fighting this fight that we're still us. Right. Because it was the company that was Thrive Networks. And, you know, it was us against them. Like Staples had bought us. And, you know, we were like this little scrappy little team. And we were and then it but it was, you know, we were still Thrive. Right. And we weren't Staples. And after I got let go and I was part of the problem. But when I got let go, I told my CEO, I go, look, you need to have a real conversation with this company right now and tell them, look, everybody, here's the vision.

Because I don't think what they did, they didn't paint the vision for where this new world was going. And I always tell leaders, if you want somebody to do anything other than their job, you have to paint them a vision of where you're going and how they fit into it. And so you need to stand up in front of this team and say, look, everybody, here's the deal. We are Staples now, whether you like it or not. I know a lot of you didn't sign up for this, but we are Staples and this is where we're going. Now, if you didn't sign up for this, I'm totally OK with that. Let's figure out a nice transition here. Right. And we'll part friends. But if you do buy into this, then please, let's stop with the bickering.

Let's stop with the complaining because this is where we're going and we can't get there without that. And he never did that. And it just ended up still ripping the company apart and everybody was miserable. And then they ended up selling it back off to another private equity. And it was a disaster. But it's like that vision. And I think that's what Steve was obviously incredible at was painting that vision and getting people bought into it. But it was also the people that he hired. Like, what was the profile? Because did the profile change at all while you were there at Apple as far as how they hired? No, not. No, Steve wanted to hire really smart, interesting people. He didn't care too much about their people skills.

He said, you got to get the best. But the other thing he wanted was believers. He didn't want skeptics. That's a big one to me. Well, that's interesting. You know, there are people that are believers and there are people that are skeptics, right? The glass is half full. The glass is half empty. You know, and I bet I never asked Steve this, but if someone asked me, if I had a company of a thousand employees, how many believers would I want? And how many skeptics would I want? And, you know, my honest answer would be I'd want about five to ten skeptics. That's it? No, I'd want my CFO. Yeah. You know, maybe my head of ops or someone. You know, you need someone to ask the tough questions. Right.

Yeah. But at the end of the day, to do something great, you got to have belief. You got to have everyone on the board. The moment people are kind of being, you know, oh, this is what I want to work. This won't work. That won't work. Blah, blah, blah. You never innovate. It just gets mulled down. And then the pure ideas get watered down. You know, Steve, when we created something at Apple or when Steve created something, it was the purest expression of what he believed. You know, even that decision with the iPhone, you know, the, to, to do a smartphone without a keyboard, you know, and we had one option was a scroll wheel like the iPod, but BlackBerry was winning. Everyone was buying BlackBerrys and these communicators, but Steve wanted to do an all screen phone without a keyboard, a touch display.

And people thought it was crazy. I know I did. But it was funny, even on the, even on the interface, Steve, I remember once at ET said to Tim, Tim, how many weeks in advance do I have to decide what the keyboard is going to look like? How it's going to work? You know, how do you, we lay it out a lot of ways on that screen. And Tim said, well, I need probably three weeks to load all the software for the launch. So he said, great. I've got till three weeks before the product launches to decide. And he spent, you know, a better part of a year looking at options for the keyboard. And eventually the one they picked is the same one it used today, which supports what Steve always believed that if you thought through any problem hard enough, you'd come to the right decision.

And everyone agreed we got to the right answer. You know, and that's about going slow again. You know, this idea like Facebook, you know, just get it out there, throw it out there, see how people react and change the product all the time. Well, that might work with software. It doesn't work with hardware. You know, it doesn't work with cars. It doesn't work with most things. You got to think them through and create it. It doesn't work with buildings. I bet it doesn't work very well with space shuttles, you know, or what Elon's doing. Probably not. You know, there are a lot of things you have to get a team of believers together, you know, who are going to, you know, take us to the moon, if you will, or to Mars, you know.

And so I think you need believers if you're going to innovate. So that's the interesting, if you want to win on innovation, you got to like, a lot of things, you got to have a culture that wins on innovation, how you work together, you got to have people that want to innovate. You got to have finance teams that understand how to finance and support and learn from innovation. You got to recognize that you're never going to have a setback, but you're going to have a heck of a lot of learnings. You know, when something doesn't go well, a setback sounds pretty negative. You know, you really have is learning. That didn't work. Let's try something else. But we're going to Mars, if that makes sense.

Yeah. But that's, I really think you need that. I'm exaggerating. You need that kind of mindset, if that makes sense. No, I agree. I think there's, if you ever want to do anything special, right? Let's talk, let's finish up, because you have a framework in the book. And a lot of this, I'm curious, you know, you talk about service being the best sale. And you talk about, you know, fixing a bad experience is a much longer term, you know, better thing than, you know, creating an initial good experience. So the framework launching, deepening, and restoring relationships. Could you walk us through that kind of mentality and how that applies to, you know? It's really, it's so simple. It's just a very simple idea.

Like when we launched the Apple stores, Apple had 25 million customers. Today, Apple has, by last count, nearly 2 billion devices in work, right? But each of those customers were added one at a time. You know, you got to look at the macroeconomics is 2 billion devices. The microeconomics is we've got to get one person to buy their first Apple product. And that's when you launch a relationship. So to me, like the stores were there to launch. We're in the relationship business. The first thing they do is launch a relationship. And that's when they buy their first Apple product. Or we meet them when they come to the store and we welcome them back. Then when they buy another product, or they come in to learn how to use it for a training class, we're deepening their relationship with their product and with Apple.

And when something doesn't go well, when a product breaks, what's broken isn't the product. It's their faith in Apple. Then we have to restore the relationship. And that's what the Genius Bar did, right? But I would tell the teams a few things. Number one, never be in a hurry. Number two, the most important person is the one in front of you. So if someone came to the store, hey, John, welcome to Apple. Nobody comes in the store without a reason. What brought you to the store today? And when you said what it was, I would take whatever time it was to solve that itch or that need. And then when I'm done, thank you. Come back. Hope to see you soon. And I'll go on to the next customer. But never be in a hurry.

Launch, deepen, restore. That's what you do. Now, what I would tell the teams, though, is that when a customer was disappointed, that's the next customer you have to serve. So if we ever got, if I received a note from a customer, like on an NPS form where they write in, you know, I had a really terrible experience, such and such happened, I would send out to the store a leader. And that would be their next obligation to reach out to that customer and make it right. Because at the end of the day, you're going to have to resolve the issue. The faster you respond, the easier it is to resolve. And all day long, you're taking care of customers. The Apple store, when I left, had a million visitors a day to the store.

How do you prioritize? Well, you prioritize the one that you failed. That's number one, because then you restore that relationship. And they love that. And they'll tell so many people, you know. But at the end of the day, you got to figure out who do you prioritize. I almost felt we didn't earn the right to serve another customer until we took care of the one we already had. So that was our priority is when we let someone down, we made it right as our next order of business. It just seemed logical. Well, that's why it always cracked me up. Like, let's go to the phone carriers, right? Like, you know, they always offer these great deals to new clients. And you're sitting there. I'm like, I've been a Verizon customer for 10, 30 years at this point.

I haven't gotten a good deal since I joined the company. But yet, should I cancel my phone now and re-sign up as a new customer here? And it's almost like the psychology around that, too. It's like, wait a minute. You're spending so much time on finding new. And that relates to also what I'm seeing right now in the tech industry, in the SaaS specifically, is there's a huge focus on customer success and customer because your existing customers and retaining them. And NRR is like the new metric to say, like, not especially with AI. Like, anybody can buy some AI slop out of the gate with all the promises that it gives. But the question is, is does that renew? Like, will that renew? And so I'm doing a lot of sales training now for customer success teams to better service the client because it's so much easier to maintain and repair those relationships than it is to find net new right now.

That makes sense. No, I think this model of launch, deepen, restore, it works for your personal life and your friendships. Yeah. When you meet someone new, you're launching a relationship. You go to coffee another time, you're deepening. Yeah. If you fail your kids, you got to restore it. I think it works for work. It's a really nice framework to think about life because at the end of the day, we're all in the relationship. We're in the people business. And I think with AI, we're going to end up connecting more. There's evidence that the younger generations are connecting a lot more. Young kids today, they're the ones going to movies. They're the ones shopping in stores. They're going back to the malls.

They're joining the running clubs. They're seeking people. I love this idea that we thought forever convenience is a transaction. Well, the root word of convenience is convene. So I think people are convening more. And that's really what's going to happen because there's no doubt AI allows you to do work so much faster. So what do you do with that extra time? Well, it's weird because yes and, right? Like what my experience is, and maybe it's just because I'm in the mode of creating and building and everything else. But, and I don't think I ever will get out. I don't know if I'll ever get out of it. But, you know, yes, it creates efficiencies. But then it opens the door for something else. So I'm stuck in this just because I can doesn't mean I should scenario because I can build and create anything.

So the time back I get from doing this thing allows me to do something else that I then fill that time. So I'm actually busier now than I've ever been because I'm like, ooh, I can do that. I can do that. I can do that. And I still think we're in the kind of, quote unquote, efficiency phase of AI right now. I don't think we're necessarily in the results phase of AI. Yeah, but here's what I think, John, and I don't know. I think every time AI gives you some common knowledge, take the time to challenge every darn assumption it provided. Yeah, yeah. And the reason I say that, if I had had AI when I created the Apple stores, it would have disagreed with 100% of the things we did. It would have said open stores, you know, in a remote parking lot, they're going to buy every five years.

We ended up going to the most expensive high street malls because we wanted to get customers. It would have said you're not going to get much traffic, Gateway doesn't have traffic, get commissioned salespeople, people who know technology, that know how to close. You know, we hired teachers and firefighters and grandparents. AI wouldn't have said that. No way. You know, display, you know, oh, it's too hard to maintain operating displays and you have internet on the thing. People are going to be looking at porn in the store and you'll never be able to maintain it. There's no way you can do that. Just tell them how it's going to work, you know, but nothing, you know, service, put it, hide it. Don't let anybody know that, that the technology might not work.

You know, like a lot of people have, they had service centers off to the side adjacent to the store, but we created a genius bar and put it in the center of the store, you know. But the point is you got to challenge what, because AI tells you what people do today, what's commonly accepted wisdom. But wisdom, like we talked earlier, is something you decipher that's never, that's addressing an issue that's never been done before. And that takes, you'd have to challenge the assumptions. And so that's my only point is when you get something quickly from AI, don't just accept it. You know, just think it through, do I really believe this with every bone in my body? In which parts of it that just maybe aren't the right way to go?

Yeah, and I think that's the right way to use it, especially with context and experience. And you can call it, my fear is a little bit is the younger generation who doesn't have that context, doesn't have the experience to kind of call the BS on AI. And they're taking it as gospel, right? Because we went from this search engine to an answer engine. And for those of us that are curious, it's fantastic, right? Tell me more about this, give me a different perspective, where'd your source check this? But for people who are lazy, it's a, it's a scary, it's a, it's a replacement because I, like, if you're just going to copy paste that and send it to me, what, why do I need you? And that's the challenge of AI.

And that's, it's funny because I'm sure, you know, Guy Kawasaki, right? Yeah. So I had Guy on the podcast a while back, and this was about a year and a half ago. And, you know, he had created a Kawasaki GPT. And because he was at Google, he had done his interview at Google. And so, and he said in the interview, if you interview Kawasaki GPT, because he put every book and everything on it, right? He said, if you interview Kawasaki GPT, you'll get a better answer than if you ask me. And so I was like, all right, well, game on. So the night before my interview with him, I interviewed his GPT. And then the day of the interview, I didn't tell him. And I interviewed him, like, with the exact same questions.

And at the end, I go, hey, Guy, I know you're a huge AI fan. I'm like, I just got to let you know, man, I've already had this conversation with you. And he was like, what? I was like, yeah, I go, you're GPT. And I go, I got to be honest, man. You were right. Your answers last night were better, right? And he starts laughing. He's like, because he had just come off of surfing, right? And he's like, well, then why am I not still surfing? I was like, actually, that guy, that's the question I wanted to ask you, is that if I can get better answers from your GPT, I'm like, what's the point of this conversation? And he had said, well, you know, legacy. And I go, no, no, no, no, no, that's for you. I go, for somebody like me who's trying to learn something from you, what's the point of this conversation?

And when he didn't have a great answer for me, I knew me personally as somebody who makes money of giving, you know, transferring knowledge for cash effectively. I was like, oh, I got to, I got to find a way to, to adjust here because now that knowledge is, is in, you know, palm of your hand effectively for the world, how do you now, you know, translate that from a, from a, you know, thought leader standpoint and how do I evolve? And that, you know, and I'm there, you know, curiosity and all this fun stuff and, you know, challenging the assumptions and coming up with different ideas, new ideas versus the past ideas is, is critical, but it's a, it's a weird world out there right now with AI. Now that's a really interesting, that's a really interesting point.

You know, I, I've seen Reed Hoffman do the same things. He's imitated of Reed and they sure sound articulate and it is, it is things Reed has said before, but you know, we're constantly evolving. There are things I believed years ago that I probably don't believe today. Yeah. You know, so you gotta somehow, I don't know, but I really think chat, I think this AI is a really good thing for most people and it makes us more efficient. It speeds up our thought process, but you've got to recognize that, that it speeds you up to a playing field where now you can really think deeply. Yeah. You know, you just, you, you can't be lazy. No. You got to use this, you know, imagine you spent the same time you did in the past, but AI got you a head start.

Yeah. You know, most of the great thinking, think of all these people that are in the science business that are researching new things, right? They spend most of their time imagining what experiment can I run? Well, you know, it's going to speed so quickly, you know, the early ideas and then you'll have time to really think deeply about what you haven't thought about yet. And I think that applies to science, but it also applies to the humanities, you know, in a store, you know, way back when the smartest people in the room were the philosophers. You know, it was before we had basic science stuff and they thought deeply about these questions of the world. And then that became kind of passe to think about that stuff, you know, but maybe we'll get back to that and our values will come back and society will get better.

You know, who knows? I hope so that it's that optimistic view. I think my optimism is for the creators, is for the curious, is for the critical thinkers, right? Because I think right now is the golden age. If you are curious, if you are, I think, and I've honed in on curiosity specifically, like if you are curious, I think, and the world is your oyster right now because you have something that if you use it right, oh my Lord, you can do anything you want to do. But if you're not, if you're just somebody who's trying to kind of get by and be player and kind of not cause too many waves and not doesn't like change, you know, never read the who moved my cheese book and all that fun stuff. Like those are the ones I'm worried for.

Those are the ones because, because that's the one that AI is just going to run over like a truck. And so optimism for a group, but unfortunately, pessimism for another. And I'm trying to figure out how to get that other to wake up a little bit. That's great. It sounds like you believe in the crazy ones. I do. Oh, absolutely. I, you know, I'm, I'm not like the, I always say I'm never the bleeding edge. I'm a leading edge and you know, I'm not an ultimate risk taker, but I'm a calculated risk taker. So I'm, I'm not on the edges. I'm on the inner side of those edges usually. Um, but I'm definitely not in the middle. I'll tell you that. Uh, good for you. Good for you. Uh, Ron, I think we'll, let's wrap it up here.

We're coming up on time. It's been an absolute pleasure. Where can we tell people the book's coming out? Where do you want people to go and find out more about you? Yeah. The book comes out September 22nd. Cool. If you enjoyed this conversation, you'll enjoy the book. It's a, it's kind of like a story. And, uh, there's a lot of, I think it's a quick read from people who've read it. It's breezy, but the lessons will, uh, will emerge. And I think you'll pick up something from you'll enjoy. Um, it can be bought anywhere you want to pre-order your books, all your favorite bookstores. I have a website, ronjohnsonshopsdifferent.com. You can go there, you can order it there, learn more about it. But I just appreciate you letting me on the show, John.

And I enjoyed speaking with you. Yeah, I appreciate you coming on, man. It's been a fun conversation. So I wish you luck with the book and everything else. So thank you. And everybody hopefully enjoyed the conversation as much as I did. And like I always say at the end of all these podcasts, go out there and make somebody smile today because no matter how bad your day is going or how bad you think it went, if you make somebody smile today, you know, you had a good day and the world needs a lot more of that right now. So thank you all very much. And I will see you on the other side. Hey, thanks again for listening to the show and for all your support throughout the years. This is one last reminder to check out my training programs at jbarrows.com or leave a five-star review on your favorite podcast platform or G2 if you've already gone through my training or sign up for my newsletter.

Any of those will help ensure I can continue to bring you free content and great conversations like the ones you just heard without having to annoy you with sponsors. Again, let's make it happen in 2026 together.