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Even really great people, really brilliant people, churn out mediocre work from time to time. I know I have churned out more than my share of mediocre work.
At the same time, most of us actually have the discriminating ability to look at a piece of work and say, "that is really mediocre." Probably 10 or 20 times a day, I come accross some piece of work - mine or others' - that is mediocre. It's clear that the person who made it was in a rush or didn't care or simply wasn't smart or talented enough to deliver something truly great.
Though we may be able to spot mediocre work, most of us just are not in a position of credibility to do anything about it.
Steve Jobs saw mediocrity the way we do, the difference is he had earned his credibility and could send things back to the drawing board any time he wanted. How did he earn his credibility? He was smart, hard-working, and happened to partner with a rare person who consistenlty churned out great work: Steve Wozniak. Those early ingredients set Jobs down a path where he could tell someone what they were making was not good and that they could do better and those people listened to him and ofen were inspired by that "encouragement."
I believe that was one of Steve's many great gifts.