Steve Jobs wanted customers to understand the Apple store “with one sweep of the eye,” as if gods standing on Mount Olympus. Indeed, the outlets seem to speak for themselves. Bright, uncluttered, and clad in glass, they couldn’t contrast more sharply with the big-box labyrinths they were designed to replace.
Neither could their profit margins. Since launching in 2001, the instantly recognizable stores have raked in more money – in total and per square foot – than any other retailer on the planet, transforming Apple into the world’s richest company in the process. Yet the very transparency of the Apple store conceals how those profits are made.
When we think of “tech”, we rarely think of retail stores, and when we think of “tech workers” we rarely think of the low-waged “geniuses” who staff them. Most media coverage of tech companies encourages us to forget that the vast majority of their employees are not, in fact, coders in Silicon Valley: they’re the suicidal assemblers of your phone, the call-center support staff, the delivery drivers and the smiling shop floor staff who make up the majority of Apple’s workforce.
The Apple store was explicitly designed as a brand embassy rather than a dedicated source of technical knowledge. As Ron Johnson, the former Target executive who came up with the concept, told the Harvard Business Review, “People come to the Apple store for the experience – and they’re willing to pay a premium for that … Apple is in the relationship business as much as the computer business.”
Johnson and Jobs wanted ambassadors whose ostensible role was not to sell products – uniquely, Apple store employees receive no commission – but to create positive customer sentiment and repair trust in the brand when it broke. That was hard to do if your stuff was lumped in with everyone else’s in a big electronics store, overseen by third-party staff lacking any special expertise or interest in what you wanted to sell.
The goal was to take full control of the brand image while humanizing it. The problem, however, was that humans can be rather unruly.
Fortunately for Apple, someone had been hard at work fixing that bug. In 1984, a group of professors at Harvard Business School published a book, Managing Human Assets, aimed at updating workplace organization for a new era. The book was based on the first new compulsory course at the Harvard Business School in a generation, launched in 1981. Ron Johnson started his MBA at Harvard the next year, graduating as the book itself was released.
Previously, the book argued, labor discipline could be achieved in a relatively straightforward top-down manner, but now it required something else. “The limitations of hierarchy have forced a search for other mechanisms of social control,” the authors said. The mechanisms they proposed consisted, at root, of treating employees as nominal stakeholders in business success, but within narrow limits that would increase rather than challenge shareholder profitability.
Johnson put many of these ideas into practice. He found the first cohort of Apple store employees by personally interviewing every manager and offering jobs to upbeat staff working for competitors. He sent the first five managers through the Ritz-Carlton training program to learn concierge skills. Then he developed a training program for the in-house production of “geniuses”. (Jobs reportedly hated the term at first, finding it ridiculous. True to form, he asked his lawyers to apply for a trademark the following day.)
How do you create an engaged, happy, knowledgable workforce that can pass, however implausibly, as an entire battalion of geniuses in towns across the country? More importantly, how do you do all of that without the stick of the authoritarian boss or the carrot of a juicy commission?
Apple’s solution was to foster a sense of commitment to a higher calling while flattering employees that they were the chosen few to represent it. By counterintuitively raising the bar of admission, crafting a long series of interviews to weed out the mercenary or misanthropic, Johnson soon attracted more applicants than there were posts. Those keen enough to go through the onerous hiring process were almost by definition a better “fit” for the devotional ethos of the brand, far more receptive to the fiction that they weren’t selling things but, in an oft-repeated phrase, “enriching people’s lives”, as if they’d landed a job at a charity.
“When people are hired,” Johnson explained, “they feel honored to be on the team, and the team respects them from day one because they’ve made it through the gauntlet. That’s very different from trying to find somebody at the lowest cost who’s available on Saturdays from 8 to 12.”
While not the lowest, the cost of these eager staff was still low – relative to industry averages, to the amount they made for the company, and to the $400m that Johnson earned in his seven years at Apple.
Lower wages also had another, less obvious effect. As Apple store managers explained to the New York Times, the lack of commissions meant that the job didn’t pay well enough to support those with dependents: older workers were functionally excluded from representing the brand without the need for a formal policy – or the attendant specter of discrimination lawsuits that it would raise. Deploying psychology, not the maximizing calculus of economic rationality (money), allowed Apple to turn hiring and wages into managerial props.
The sense of higher calling and flattery doesn’t stop with the hiring process, of course. Make it through the gauntlet and you are “clapped in” by existing workers: given a standing ovation as if receiving a prize. The clapping, according to employees, continues until new hires, perhaps after a confused delay, begin clapping too, graduating from outside spectator to part of the performance – part of the team. Leave the company and you’re “clapped out”.
Products are clapped, customers waiting overnight to buy them are clapped, their purchases are clapped, claps are clapped. Clap, clap, clap. “My hands would sting from all the clapping,” said one manager. Claps, cheers, performances of rapturous engagement provided, by design, a ready-mixed social glue to bind teams together, reaffirming both the character of the brand and employees’ cultish devotion to it.
It might be expected that Apple store employees are, as their name implies, tech gurus with incredible intellects. But their true role has always been to use emotional guile to sell products.
The Genius Training Student Workbook is the vaguely comical title of the manual from which Apple store employees learn their art. Prospective geniuses are taught to use empathetic communication to control customer experience and defuse tension, aiming to make them happy and relax their purse strings.
One of the techniques the book teaches is the “three Fs”: feel, felt, found. Here’s an example from the book, meant to be role-played by trainees:
Customer: This Mac is just too expensive.
Genius: I can see how you’d feel this way. I felt the price was a little high, but I found it’s a real value because of all the built-in software and capabilities.
When customers run into trouble with their products, geniuses are encouraged to sympathize, but only by apologizing that customers feel bad, lest they implicate Apple’s products as the source of the trouble. In this gas-lit performance of a “problem free” brand philosophy, many words are actually verboten for staff.
Do not use words like crash, hang, bug, or problem, employees are told. Instead say does not respond, stops responding, condition, issue, or situation. Avoid saying incompatible; instead use does not work with.
Staff have reported the absurdist dialogues that can result, like when they are not allowed to tell customers that they cannot help even in the most hopeless cases, leading customers into circular conversations with employees able neither to help nor to refuse to do so.
Apple’s “geniuses” perform on a stage that’s as carefully managed as they are. Jobs and Johnson wanted to control every aspect of the Apple stores, down to the specific color of the bathroom signs. Almost every detail is trademarked, from stairs to display tables to storage racks. Even the supposedly “intuitive” layout, so obvious that it can be understood by all, is considered unique enough to warrant a suite of intellectual property protections.
In part to counter the falling sales volume of a saturated market, Apple has spent the past two years overhauling its stores to work even harder. Potted trees have been added to give a green splash to the signature grey and, in a move so ridiculous it’s almost certain to be a hit, the Genius Bar has been rebranded the “Genius Grove”. Windows are opened to blur the distinction between inside and outside, and the stores are promoted as quasi-public spaces.
“We actually don’t call them stores any more,” the new head of retail at Apple, former Burberry executive Angela Ahrendts (2017 salary: $24,216,072), recently told the press. “We call them town squares.”
The town square. It’s an almost-quaint symbol of participatory civic life – a world away from the big-box sprawl that characterized the retail imaginary of the late 20th century, or even the digital isolation of the 21st. Apple’s goal has been to create spaces for people to just hang out in, extending the original insight that focusing on everything other than cold hard cash will paradoxically be the best way to rake it in.
In Ahrendts’s vision, “the store becomes one with the community”. But the real hope seems to be closer to the opposite, that the community will become one with the store.
After Apple recently won the race to surpass a $1tn valuation, CEO Tim Cook emailed staff to explain, “Financial returns are simply the result of Apple’s innovation, putting our products and customers first, and always staying true to our values.”
While seductive, this story is, like the Apple store itself, a managed fiction.
Apple’s system of operation is less the result of genius than of capture and control. Semiconductors, microprocessors, hard drives, touch screens, the internet and its protocols, GPS: all of these ingredients of Apple’s immense profitability were funded through public dollars channeled into research through the Keynesian institution called the US military. They are the basis of Apple’s products, as the economist Mariana Mazzucato has shown.
The company’s extraordinary wealth is not simply a reward for innovation, or the legacy of “innovators” like Steve Jobs. Rather, it flows from the privatization of publicly funded research, mixed with the ability to command the low-wage labor of our Chinese peers, sold by empathetic retailers forbidden from saying “crash”. The profits have been stashed offshore, tax free, repatriated only to enrich those with enough spare cash to invest.
But, as the public well from which it has drawn past innovations runs dry, the company’s ability to repeat the success of the iPhone is evaporating. Federal funding for scientific research is in deep decline, and Apple isn’t likely to make up the gap.
To keep profitability high, Apple is moving to ever-more-luxury price tags for ever-more-marginal improvements (like the iPhone XS Max) and expanding its ability to extract rent by controlling the creativity of others (through Apple Music or the App Store, both impossible to sign out of without landing in pop-up purgatory). All the while its brand embassies sell a different story with a smile.
A longer version of this article first appeared in Logic, a new magazine devoted to deepening the discourse around technology.
Jonny Bunning is a PhD student in the History of Science & Medicine program at Yale. He tweets @bunnjey.