Profile: Renaissance Manager: John Sculley of Apple is a harbinger of the new digital age. Larry Black reports from New York

A FEW weeks ago, it seemed that John Sculley's name was everywhere. One day the chief executive of Apple Computer would be touted as the next head of the arch-rival IBM, having bought a house in Greenwich, Connecticut, a few minutes from its headquarters. The next, Sculley - a lifelong Republican - would be seen in the gallery of the US Congress, seated next to Hillary Clinton as her husband delivered his first State of the Union message.

Or he would turn up in Hollywood, prompting rumours of a merger with a global communications giant; or on American television, forecasting the emergence of a new trillion-dollar information 'mega-industry'; addressing a conference on US education reform, or offering his thoughts to President Clinton's economic summit. And all the while, Sculley, a tireless promoter, was peddling Apple's computers - the company sold dollars 1bn of its Powerbook laptops last year - and promising 'to reinvent both the telephone and television' with a new product called Newton.

Things have quietened down somewhat for Sculley, the Silicon Valley chief executive who has come to epitomise the Clinton era ideal of the American corporate executive. Tall, fit at 54, his hair a distinguished grey, Sculley gives a good impression of being a sort of renaissance manager, who moves easily between high-minded public policy issues and the rigours of the global technology marketplace.

For the time being, the takeover talk involving Apple has subsided. IBM, for its part, has selected a professional manager as its new chairman - a decision which Sculley, who named himself Apple's chief technology officer three years ago, clearly considers ill-advised, although he refuses to discuss the conglomerate.

But things were nearly very different as far as Sculley and IBM were concerned. Sculley was, for a while, on Big Blue's executive short list. He proposed a radical plan to merge Apple and IBM, sell off IBM's mainframe computer business - once the heart of the group - and create a profitable company with a revenue of about dollars 30bn, compared with the combined dollars 70bn revenue of the two companies independently. It would have redefined the shape of the US computer industry. But IBM was afraid the merger would push its battered share price still lower, and balked at the plan. It still tried to woo Sculley, but without the merger he was not interested.

He says he will not accept a post in Washington either, arguing that he can better serve Bill Clinton's agenda 'as a leader in the private sector than as part of the supporting cast in the public sector'. His collar open, his legs swung casually over the arm of a chair in a New York hotel room, thumping occasionally against a nearby side table, he seems every bit the 'Washington technology wonk' Clinton dubbed him last month.

But beneath the casual demeanour there seems to lie a more formal character. Born in New York, Sculley is no laid-back West Coaster. His talk is heavily larded with jargon which makes it sound strangely formal. His is not a relaxing presence, and those who have worked with him say that he is aloof, demanding and not easy to get along with.

Sculley's enthusiasm for discussing government policy, however, remains undiminished. 'I think we're at an extremely crucial moment in history,' he says. 'I'd rather have a president who has contacts with the business community and asks for our advice than one who is isolated.'

But his involvement in the debate over education, health care, worker productivity or America's information infrastructure is hardly disinterested. For Sculley believes that many of Clinton's pressing priorities represent precisely the markets Apple hopes to target with Newton and the data networks supporting it.

A hand-held 'personal digital assistant' equipped with wireless communications, Newton - the brainchild of a 1987 project called the Knowledge Navigator - has been designed to change the way children are taught, the way doctors treat patients, the way that work in general is organised, and the way the world is entertained and informed. Scheduled to come to market this autumn, Newton will be Apple's initial contribution to the digital communications revolution that Sculley, and many others in the industry, believe is finally going to deliver the promise of the Information Revolution - a change in society that he describes, in the jargon of Silicon Valley, as an 'isoquantic shift'.

'We're going through the change of an entire economic system,' Sculley argues. Mass production, centralised organisations and economies of scale 'are giving way to an economy built around decentralisation, customisation and on the critical judgement skills of workers who are empowered'.

Under Sculley, Apple has committed hundreds of millions of dollars to developing technology based on these ideas. 'If we're right,' he says, 'we'll be well ahead of the rest of the world.'

Sculley's business strategy thus dovetails nicely with the US administration's own beliefs, articulated by such officials as Robert Reich, Labor Secretary, and the White House policy adviser Ira Magaziner, about the likely shape of 'the new economy'. They talk about 're-engineering' the workplace to create a more competitive, higher- wage American economy. Sculley - who praises Clinton as the 'electronic Roosevelt' - clearly agrees; it also doesn't hurt that Apple stands to profit handsomely if its products become the weapons of choice in this transformation.

'It's almost impossible to separate business vision from public policy issues,' he argues. And unlike some of his Republican business colleagues in Silicon Valley, he has no problem with a national technology policy led by a technologically savvy White House.

'To suggest that a nation in the global economy shouldn't practise some form of industrial policy is like saying you're going to run a business without a business plan,' Sculley says. Silicon Valley itself owes its existence to John F Kennedy's decision to put a man on the moon, he notes; Washington underwrote the early development of integrated circuits, which Nasa needed to build lightweight telemetry systems.

Silicon Valley is very different today from what it was 10 years ago, when Sculley, then president of Pepsi, was recruited by Apple's co-founder, Steve Jobs, with the taunt: 'Do you want to spend the rest of your life selling sugar water, or do you want a chance to change the world?'

In 1983 Apple, going it alone with an operating system incompatible with all others, was locked in a David-and-Goliath struggle with IBM. Companies such as Microsoft and Intel were mere suppliers to IBM, which more or less dictated terms to the industry. And Sculley, a marketing expert from New York originally trained as an architect, was definitely an outsider.

Today, Steve Jobs - after a clash with Sculley in 1985 - is long gone. Apple now sells dollars 7bn of computers a year, employs 14,000 people worldwide, and has the highest return on equity and net assets of any manufacturing company in the world.

Driving this success is Sculley, a workaholic who has injected a thoroughly businesslike approach into the laid-back West Coast company. Gone are the peach-coloured walls at Apple; now there is a chief executive who rises at 3.30am to summon employees to sessions on the latest computer technology.

As an outsider to the computer world, Sculley takes his homework very seriously. By sheer hard work, he has turned himself into a technology expert. After his move from Pepsi to Apple, he wrote a book called Odyssey, about the difficulties of such a radical cultural change for a business manager. It became a best-seller.

No one doubts that Sculley got to grips with his new environment swiftly. Meanwhile, competitors have suffered. IBM's personal computers have become commodity items, its near-monopoly destroyed by cloning, price wars and the emergence of software and microchips as the PC's dominant features. Today Microsoft is the industry's Goliath, the target of any number of defensive alliances.

These days, the industry changes shape every six months. 'It's almost like a weather system,' says Sculley. The struggle is no longer within the computer industry itself, but among the many global players brought together by the digitisation of information and communications.

'This eventually will be a gigantic market, much bigger than personal computers,' he adds. 'With both content and communications going digital, we'll have very low-cost, high-volume products that will be able to access lots of information over very inexpensive networks.

'Clearly, no one company is going to dominate the whole thing. It would be absurd to think so. But it will offer a splendid opportunity to a company like Apple that is good at easy-to-use technologies.'

When Sculley first screened his Knowledge Navigator - a video produced by the Star Wars creator, George Lucas - at a trade show in 1987, even people in the computer industry thought he was engaging in pure fantasy. Even a year ago, few understood what the market for something like multimedia was going to do. 'Yet here we are, it's 1993 and you can't pick up a newspaper or magazine today and not see some reference to this idea,' he says.

'This is a very exhilarating time for me. When I first came to Apple I was largely helping fulfil a dream that others had created. This time I get to participate in the shaping of the dream.'

Thanks to his range of experience, Sculley - the former outsider - is uniquely placed to run a company like Apple, whose future suddenly seems so fluid. He has headed a consumer-products company, worked with the entertainment business as an advertiser, is comfortable with high technology, and understands media and publishing as an author and voracious reader.

He has run multinational businesses, and has managed the closest thing America has to a 'virtual corporation', the shifting assembly of ideas, consultants and relationships likely to be more and more typical of hi-tech companies.

Built into what Sculley calls 'the DNA of a Silicon Valley company' is its ability to adapt and change. 'Markets change and conditions change. The more agile ones are able to adapt, and those that don't disappear.' Given the opportunity, he would probably draw parallels with America's competitive position in the global economy. But with the digital revolution upon us, he appears to have his hands full ensuring that the company he runs doesn't itself disappear.

Sculley is in the process of redefining Apple. The Newton and its successors, unlike the Mackintosh, will be manufactured by such companies as Sony, Sharp and Toshiba; Apple, meanwhile, will transform itself into a software and systems designer that sees its mission as making all human information - not just home computers - user- friendly.

'It's highly likely that by the time I eventually retire from Apple, it will be a completely different kind of company,' Sculley predicts. 'But not in terms of its vision and core competency, which is to change the world by making sophisticated technology approachable to normal people.'

(Photograph omitted)