Former Apple CEO discusses AI, leadership and experience marketing

Former Apple CEO John Sculley is no stranger to innovative marketing: He was tapped by Steve Jobs himself to lead the tech giant after a stint at Pepsi that saw Sculley implement the "Pepsi Challenge" -- a revolutionary consumer-experience-centered marketing campaign. During a recent phone interview, Sculley, who is now vice chairman of RxAdvance, discussed how technological advances are causing huge changes to the way that companies interact with customers. In part one of this two-part Q&A, Sculley explains how disruptive technologies and ideas are influencing the digital evolution of business processes such as customer experience marketing.

How has marketing changed as technology has become more ubiquitous? Are there any particular techniques that have proven successful for digitized companies and their customers?

John Sculley: I was so involved with the earlier generation of building big brands back when television was the primary media. Coke and Pepsi and McDonald's and a number of other companies, big automobile companies and so forth, were brands that came with hugely powerful marketing campaigns behind them. One of the best examples of how branding and marketing has changed is Amazon Prime, because Amazon Prime says that in this era of unstructured data analytics, cloud computing, mobility, that we're able to do things we never could have even dreamed of before.

First of all, we can personalize the message to the individual -- that's very different than the mass market of a big brand name. The second thing we can do is we can market experience. I remember back when Steve Jobs was recruiting me from Pepsi, he was fascinated about the Pepsi Challenge and how we were able to take Pepsi, that was outsold 10-to-1 in half of the U.S., and win up against at that time the world's most famous consumer brand: Coca-Cola.

I said "Steve, Coke owned reality; we have to own perception." Perception is about experience. Amazon Prime is all about experience marketing. It's the perfect evolution of a Pepsi Challenge-type experience, where you get the consumer intimately involved with the product, or in this case, service.

John Sculley

With Amazon Prime, they focus on how it's an easy way to order, it's an easy way to personalize what your behavior is, what you might like, it gives you 360-degree services like giving you free shipping and getting it to you in a matter of a few hours. It builds a relationship with you. The possibilities of what you can do with marketing and building brands is very, very different than anything we saw in earlier decades. It all happens much faster because we're living in exponential time, not in linear time. What used to get done in four years gets done in four months.

What used to be expensive now becomes incredibly affordable in terms of what you can build, from digital brands to websites to podcasts to blogs -- all of those things which reinforce experience marketing. It's different, but the possibilities are far more exciting than the things that I got to work on many years ago.

What do you think is the future of mobile technology? Is there any particular piece of tech that CIOs should be thinking about now so they are not caught by surprise like they were in 2007 when the iPhone started working its way into corporate America?

Sculley: AI is the new OS. It's that big. I gave a keynote at Money2020 in October of last year, and was talking about machine learning and artificial intelligence for a company that I'm the vice chairman of called Lantern. At that time, that was big news. It's only a half a year later and everybody is talking about machine learning and AI. It has gone mainstream in less than a year. That's a perfect example of how we're living in exponential time where things are happening so, so rapidly.

Running disruptive entrepreneurial businesses is not about running things more efficiently, it's about breaking new ground.

Kodak invented digital photography. It was the largest photo printer in the world, and in the same year that Steve Jobs put a phone chip in the iPod and created the iPhone, Kodak doubled down and made a major investment into vertical integration of film processing to compete with Wal-Mart that was selling a single-use film camera that was eroding Kodak's market share. No one would have expected, back in that era, that Kodak would be filing for bankruptcy just a few years later and that Apple would have redefined the world with the iPhone.

Things happen very quickly -- I'd say machine learning is clearly on that path of revolutionizing things. Look at Alexa, the voice assistant that was introduced by Amazon. Now Google has one called Google Assistant, and Microsoft has one called Cortana, and of course Apple has one called Siri. Those things are only to get more powerful as voice assistants, and they're going to get integrated into mobile products. There's even speculation now as to whether the smartphone will be the form factor of choice five or seven years from now, or will there be something else that uses artificial intelligence, and maybe augmented reality and things of that sort. The answer is, why not? It's definitely a possibility, because there's so much precedent of it happening before.

What did you learn from experiences at Apple and with Steve Jobs about working alongside other high-level, strong-minded executives that might not have the same business vision? Do you have any advice for IT and other executives about how to handle those relationships?

Sculley: What I was to learn, and I didn't know this when I first joined Apple, is that founders are different. They deserve to have more freedom to be able to shape things in ways they think are going to dramatically change industries. Running disruptive entrepreneurial businesses is not about running things more efficiently, it's about breaking new ground. It all starts with a visionary leader who is able to articulate something that becomes incredibly inspiring, that attracts other talented people to want to join that individual leader. You have to recognize that the best entrepreneurial leaders set what seem like impossible goals and many then don't achieve it. But the few that do really do create entirely new industries.

When I came from Pepsi, I was used to being in an industry that was long established. Coke and Pepsi competed with each other, and we ended up becoming the largest selling Consumer packaged goods in America. I thought that was how you measure success. When I was sitting around Bill Gates and Steve Jobs one evening a couple of months after joining Apple, they were talking about their noble goal to change the world one person at a time by building tools for the mind. I suddenly realized that they were thinking about leadership in ways that had never crossed my mind, which was not how to improve your market share within the boundaries of an established industry. How do you actually create entirely new industries with entirely new ways of thinking? That is the type of leadership that I find most inspiring.