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How Steve Jobs Solved the Innovator's Dilemma
hype7 writes "With yesterday's release of the Steve Jobs biography, a raft of interesting information has come to light — including Jobs' favorite books. There's one book there listed as 'profoundly moving' to Jobs — The Innovator's Dilemma by innovation professor Clayton Christensen. The book explains how in the pursuit of profit, good managers leave their companies open to disruption. There's an interesting article over at the Harvard Business Review that explains how disruption works, and how Jobs managed to solve the dilemma by focusing Apple on products rather than profit."
He can't because he's dead.
...will the Apple fanboys bother us with their dead guru ?
I believe it's part of a 101 class on how a profitable business should be ran.
Jobs must have gone to the same low rent executive training program that we send our executives too because making products people want to buy so that you can make money isn't really earth shattering.
Laying off thousands of people, cutting hundreds of product lines to focus on three main products which are beginning to stagnate is hardly 'innovative'. It's hardly a good idea either. Give Apple another 10 years and we'll see if this "culture of innovation" supposedly created at Apple continues, or it was just one man with a plan that drove their share price.
"Anybody who tells me I can't use a program because it's not open source, go suck on rms. I'm not interested." (LT 2004)
Jobs solved the innovation dilemma by having a lot of engineers circled around him.
"There are some people that if they don't know, you can't tell them." ~ Louis Armstrong
It's very nice if you can run a company and just worry about your products, but unfortunately most senior management can't. The board and the shareholders hold them to stock price and quarterly earnings, and if they don't make the expectations they're likely to be replaced by the board.
Steve Jobs was a bit of an unusual case, because the man had a brand unlike almost any other corporate executive in the United States. Think about how he took most of Apple's engineering staff off of MacBook upgrades and OS X development to create the iPhone. It worked, and created Apple its most profitable product line ever. But what other person, at what other large company, has the political capital to sacrifice development of an existing profitable product line for an unknown?
That's why Apple was so successful under Jobs' tenure: he had the resources of a huge organization, but the political capital amongst employees, the board and the shareholders to make the kinds of decisions that usually only small companies (with small expectations) can manage. It takes technical talent to create great products, but it also takes a management that's willing to let the talent do that. It's unlikely that Apple will be able to continue in the same vein for long, now that Jobs is gone. His successors may be great, but they'll never be Jobs.
What will determine Jobs' perceived success going forward is if Apple continues to innovate, or that it falls apart without his guidance.
A great leader creates success around them. Does Apple in 10 years look the same or worse than it does now? If worse, why? Cook is a capable performer, but was Jobs the lynchpin that kept things moving or did he create his 'legacy' in a stable enough fashion that Apple continues as if he never left.
"Anybody who tells me I can't use a program because it's not open source, go suck on rms. I'm not interested." (LT 2004)
When someone innovates, copy it, make it really shiny, market it extensively, and sell it at a large markup.
Apple managed to turn profits by outsourceing the actual production so they could focus on design.
I think all of us in the tech industry know of or have experienced decisions which make sense only when viewed from the light of "near term profit is the most important."
You know:
- Downsizing skilled engineering teams to cut costs in order to hit profit numbers
- Terminating new products before they've been completed, because some number cruncher couldn't foresee profitability
- Failure to endorse refactoring of software modules engineering states are fragile/non-maintainable because it requires dedication of resources to something that doesn't drive current revenues
- The list goes on
Here we have evidence, finally, that profit at all costs isn't how you run a company.
Macs continue to have an irrelevant markeshare. They have gotten a minor bump by being able to run their competitor's dominant OS on their hardware.
The iPhone is getting destroyed by Android 2.5 to 1 in sales worldwide right now and the rate at which Android is leaving Apple in the dust in the cellphone market is rapidly growing.
The iPad has dropped from some 95 percent of the tablet market down to 65 percent in just a few months as Google does exactly what they did to the iPhone now to the iPad.
The rest of Jobs' products have been miserable failures like Apple TV and others.
The only real success Jobs ever had at Apple was the iPod.
His legacy will be nothing more than a footnote in the history of computing. A prick who sold overpriced consumer electronics to the hipster douchebag Starbucks crowd.
I think this speaks more to how pathetic the leadership of a lot of US companies have become more than it does on Jobs. Love Jobs or hate him, one thing that you cannot deny is that he was one of the few US CEOs that actually gave a shit about what his company makes and sells. Compare Jobs to people like Fiorna or Bob Nardelli whose sole purpose was to get inside a company, didn't' even matter which industry it was, and play games with numbers while gutting the company and enriching themselves in the process. Fiorna didn't give 2 shits about servers, or calculators, or Unix etc. To her they were all just "product", an annoyance that she had to tolerate on her way to stealing from the HP shareholders, employees, and customers.
Now compare that to Jobs, people talk about the reality distortion field, but the only way Jobs could actually create that field was if he actually cared about what he was talking about. He gave such good presentations because in a lot of ways he was like a kid who had just been given a neat toy and was showing it off at show and tell, there was genuine passion there. If companies want to emulate Apple's success the first thing they have to do is hire executives that actually are genuinely interested in what they make and sell.
Monstar L
Seems to me this pretty much boils down to not caring about profit IN THIS QUARTER, but rather, a few years down the line. Also, the issue of cannibalization seems to have been largely sidestepped. The iPod wasn't a threat to Mac sales. The iPhone was not a threat to Mac sales, but was a bit of a threat to iPod sales, but the iPhone could effectively serve as a replacement (and without telephony, it was deemed the iPod touch). The serious threat of cannibalization came from the iPad, but I'm fairly sure by that point, the iPhone was the breadwinner, so it would be far less of a concern than going straight from Mac to iPad.
This is my signature. There are many like it, but this one is mine.
Implementation != Interface. Just because your shitty management used a concept to make poor decisions doesn't mean the concept itself is poor.
There's no -1 for "I don't get it."
is this relevant?
Cue the Apple haters who can't stand an Apple story on the front page of Slashdot. They've been bitching and moaning all week.
Apple's focus on product was obvious when they introduced the iPod nano to replace the iPod mini at the height of the iPod mini's popularity. Few other companies would have stopped selling one of their most successful products or changed the product's name.
If Apple are focussed on their Products rather than their Profit - why are they suing Samsung to protect their profit? Samsung aren't making iPads - so they aren't suing to protect their product... People (Fanboi's) will still buy iPads regardless of whether or not the Galaxy is available...
dnuof eruc rof aixelsid
Golly, can't figure out why the entire computing world despises Apple cult members...
was to return what America used to do and be before MBA's took over.
I prefer the "u" in honour as it seems to be missing these days.
Ford understood it waaaay before Jobs.
http://quotations.about.com/od/stillmorefamouspeople/a/HenryFord2.htm
We sure needed Jobs to show the path again to us, though -- we're lost in this moronic "shareholders first" mindset. Shareholders will never care about anything but money... nor products, nor customers, nor the environment and specially not you.
PS: I'm a foreigner and live in a country with traditional good relations with the USA. Let's say simply this: Ford was an excellent neighbour.
Another thread that will contain 50% posts about how Apple only makes overpriced shiny products that only idiots buy.
Those making those comments never used anything made by Apple or fiddled around with one for less than an hour with their pre-conceived notions about "Apple = teh suck", so they'll never really understand what the fuss is all about.
Let me make that extremely clear for you, both Microsoft and OSS fanboys:
- Too many options = BAD
- Only nerds want to mess around with their gadgets, regular people want to use them.
- Design is part of usability*
* yes, you can deride that stupid "hockey puck" mouse all you want, it really was crap. But it's not here anymore.
Here are some things attributed to Jobs by his official biographer that won't be appearing in any Slashdot stories:
Steve Jobs told President Obama he probably would not be re-elected [because] regulations and unions in the United States were crippling its ability to remain competitive. "You're headed for a one-term presidency," Jobs said to Obama.
[Jobs said] it was too difficult to build a factory in the U.S., which led the company to build manufacturing plants in countries like China.
Jobs also said teachers' unions "crippled" the education system in the United States. Among his requests to Obama were an 11-month school schedule, school days that last until 6 p.m. and a merit-based system for employing and firing teachers.
[Jobs] told Obama that the United States needed to become more business-friendly.
You may now resume your continuously scheduled iSpin.
Someone needs to beat the shit out of losers like you.
The miserable prick is dead, stop trying to suck is cock you fucking garbage.
Jobs solved the innovation dilemma by having a lot of engineers circled around him.
Which itself was a master stroke that made him an outlier (a positive one when it comes to profit) above the average management crop. And if we look deeper, we see him (after he was re-appointed CEO) taking Apple (which was a few weeks short of bankruptcy) and turned it in a way that it is hard to replicate in the business world. That takes more than just having a lot of engineers circling around him.
I think he was an asshole, but you cannot deny the brilliance and determination the motherfucker emanated (or farted, whichever verb appeals to you the most.)
Great to hear that Apple is focusing on their product... Let's face the truth, please.
It's apparently a lie when I saw the commercials try to vilify PC, no matter it's the "Hi, I'm what-so-ever" or the early "x86 snail."
It's not a behavior of "a company focusing on their company."
(I'm not Apple hater, I owned a Powerbook G4. And after Apple drop PowerPC, I cut off from Apple ever since.)
This submission feels like pure PR for a book or two.
The man saw a PSYCHIC to cure his CANCER instead of receiving life saving drugs until it was too late. How much more evidence is needed?
http://uk.ibtimes.com/articles/235295/20111021/apple-co-founder-steve-jobs-stalled-life-saving-cancer-surgery-to-visit-psychic-healer.htm
Yeah, this has been pretty obvious. Read the section on Blackberry in _The Innovator's Solution_ and their suggested approach for Blackberry is what Steve Jobs implemented with iPhone.
If you want to know why the iPhone is so closed when OSX was so open, turn to page 53 (I just made that up, I don't have the book in front of me).
It was published in 2003. The iPhone was released in 2007. Jobs is a solitary genius. Some of these are true.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
Ugh. I haven't been able to take the word "innovation" seriously since... I guess it started when Bill Gates was throwing it around during the Microsoft antitrust trial.
This isn't a rag on Jobs; it's a rag on "The Innovator's Dilemma by innovation professor Clayton Christensen" and blogger James Allworth's repeated repetition of the word. What the fuck? That entire phrase reads like a marketing brochure. Notice that none of the Jobs quotes used contained it: Jobs spoke of products and passion taking priority over profit.
Somewhere along the line, honest words like "invent" and "refine" started getting pushed aside in favor of a weaselly vague new definition of "innovate". Innovation: when you want all the good credit invention used to give, but don't want to be associated with copying. "I didn't steal that idea, I innovated it". It's a cop-out; a generically good word devoid of strong meaning, so you can plaster it everywhere without being forced to back it up with concrete evidence.
I like how he still thought he was an innovator, when he admitted in his own book that another guy came up with the idea for products like the iPhone. That same guy received an award for it. That guy still works for Apple.
Steve Jobs was just the business man who could sell it. This has not only been blatantly obvious from the beginning, but now his own words back it up. So why are we still describing him as an innovator and visionary?
I can however credit him for being a good business man. And that's how he should be remembered. You know, the honest way.
"The board and the shareholders hold them to stock price and quarterly earnings, and if they don't make the expectations they're likely to be replaced by the board."
The problem here is that many of the shareholders are themselves corporations and pension funds who are beholden to their boards on monetary metrics only. Now pile on a few layers and where do more humane considerations enter into the equation.. how about the environment? That's of course where government regulation comes in... but now that the government is influenced so strongly by lobbyists, whose interests are solely those of large business.. well.. now I can see where the Occupy Wallstreet concerns might be focused?
Given that Jobs didn't seem to have much interest outside of the company(?) I'm not sure my argument carries much weight though....
J780Jones5543
If that were true Itunes wouldnt exist...
You mean to tell mean a mobile telephone didn't exist before the iPhone?
âoeThere is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.â - Henry Ford
It seems somewhere between Ford and outsourcing everything we can to india and china, industrialists became looters.
Actually it's that some business schools taught their students to be parasites on successful businesses:
1) Find a company with some sound guts that's fallen on temporary hard times.
2) Get hired on as CEO with big blocks of stock options and rules approved for bonuses that condition them on short-term bottom line.
3) Bring in your cronies on similar terms, replacing the upper layer with people loyal to you rather than the company, its shareholders, or its workers.
2) Cut investment in the future to make the bottom line good short-term, for a few quarters. Stop the research, fire the personnel that design the future products. Replace the local personnel that build the PRESENT product with cheaper offshore people (who have no loyalty, lore from the company's past, or connections to the company's remaining local engineering).
4) After a few quarters, announce you've turned the company around. Declare victory. Move on to the next sucker and cash out. (Profit!)
5) Let your successors take the blame when the house of cards to which you've reduced the company finally collapses.
These aren't the "industrialists" who built the enterprises. These are the predators who take it down and get the first and best chunk of meat from the still-struggling carcass.
Some time after Henry died, Ford Motor Company fell prey to such, and started to deteriorate. But the Ford family still had controlling interest. Eventually they saw what was happening, threw out the jackals, installed some better heads, and turned the company around again. Soon Ford products were better than the best Japanese and European imports. Come the recent economic troubles, while GM and Chrysler went down and got taken over by the government, Ford didn't need any bailouts and is still prospering.
Bantam Dominique roosters crow a four-note song. Once you've heard it as "Happy BIRTHday" you can't NOT hear it that way
"I'll keep it short and sweet. Family, religion, friendship. These are the three demons you must slay if you wish to succeed in business. When opportunity knocks, you don't want to be driving to a maternity hospital or sitting in some phony-baloney church." C. M. Burns
and had support from other MBAs in the industry and market.
One thing about Steve, while he was alive, the truth was out there ... never to be apprehended. I'm really enjoying the tidbits about what really made him tick, as opposed to the crap he pushed onto small minds.
Perhaps part of his genius was the invisibility field lurking behind his potent reality distortion field. I'm from the dull quadrant that regards the truth as cool, and hardly anything else, so I was destined to be an outsider on this pageant since day one.
He didn't solve a dilemna. This argument is completely set up from the start. For one, Apple is one of the richest companies in the world. iTunes is a huge part of their success, but also their Apple branded products. Being as how insanely expensive the majority of it is by comparison, and how much of a choke-hold they had on profit margins whenever their products were sold, I'd say profits was a very large business goal and not just a "side effect". Not that that's bad or anything, it just makes Jobs out to be some kind of saint that was only in it for the inventions when he was actually just one helluva marketing guy. The innovator in Jobs was only a step to where Apple ended up.
If you aren't suspicious of your government's actions, you aren't doing your job as a responsible citizen.
I'm sure Apple isn't concerned one little bit about profits. That's why they have the largest profit margin on their products in the entire IT world. Oh wait....
In Capitalist US, the commerce controls the Government.
You're all missing the point here. When Jobs returned to Apple, what resulted was a set of more or less "meh" Mac machines, a detour through the PowerPC, and a kludged up version of the Next OS. Apple desktop market share remained in single digits through that period.
What worked was the iPod. The reason the iPod was successful was deals with music labels. Jobs was good at deal making in Hollywood. As CEO of Pixar, he was a studio head, at the top of the Hollywood food chain. The labels had to listen.
That's what made the iTunes store go, which is what really drove the product. The hardware was secondary.
but http://www.holacracy.org/ has come up with a system to focus and steer an organization towards purposes other than share holder value.
Job's stated at UBS bank in NYC in 1993 that his focus was on whether it was possible to embody human ideals into the inanimate products through design. The Innovator's Dilemma published 2003, ten years after. The book had zero influence on Job's product focus at Apple.
It probably held insights into innovation for Job's, reaffirming and validating his own beliefs. At best.
macrobiotical
Does anyone know Dennis Ritchie's or John McCarthy's favourite books?
Thought not.... :-(
are we talking about the same universe?
Apple, especially in the middle-years under John Sculley released a lot of crippled computers to prevent direct competition between Apple's product lines. The LC / Performa Macs come to mind. I think this product-differentiation strategy annoyed most customers and was one of the reasons Apple almost tanked, because it put blatently profits before usability and expandability. Now days, Apple has much more subtle ways to pull in the money.
The iPad didn't disrupt the iMac. Newer models of Apple computers don't distrupt the old ones. Enhancements to existing technology aren't disruptive. Businesses love these. They sell a similar but better product to the same people. And ultimately the iPhone is still an evolution of the iPod, that Apple can sell for more money and sell apps for.
The actual disruptive businesses are the ones where Apple followed. DRM free music suddenly made iTunes/iPod less desirable, and Apple had to drop DRM from iTunes. Android offers the choice of hardware vendors that Apple can't offer. Apple actively resists certain technologies, such as third party enhancements for their existing products. Hell, they don't even want to make it easy to program for the iPhone outside of their set of languages. Think Flash would be desirable? Apple doesn't want it disrupting their marketplace.
The reason this hasn't caused a problem is that none of these technologies is important enough to displace their existing tech. Should someone produce a killer app that works in Flash, and Flash becoem so good that it can compete with the App Store Apple will have this same dilemma as any other innovator.
Billions made off child labor in other countries, and they do not care - they continue and build more to get more labor.
because you don't rack up nearly a hundred billion dollars in reserves if your not trying to make money. They can claim all they want " it is about the items and not the bottom line " but if that were the case they would not be exploiting the price points they are using.
Face it, it goes with the mystique but somewhere under the layers there is the truth and of course there is that near one hundred billion dollars.
* Winners compare their achievements to their goals, losers compare theirs to that of others.
Why are apple users so happy with there products. From what I can think of they all involve a lack of buttons or ports, all involve a very high price for what really are pretty blah stats and there shinny. It's like marketing to 5 year old boys "It's shinny and I want it cause it's big mommy" Thats about all apples good at doing. However it works, stupid people will always buy before they think and an Apple user will buy before they can afford to eat.
... build your products in China and charge 10x the manufacturing costs to your customers.
I8-D
... patents and lawsuits?
At least just a few news around, there is this shitty news:
http://yro.slashdot.org/story/11/10/26/0414206/apple-granted-patent-for-slide-to-unlock
Unless you guys are just blindly thinking (out of fanboyism perhaps) that Jobs does not have anything to do with Apple suing everyone?
A lot of modern capitalists seem to misunderstand Adam Smith. Yes, he said that individual ambition serves the common good, but he never said that "profits come first." In fact, Smith defined "wealth" not as money, but in a more holistic way: "the annual produce of the land and labour of the society."
Also, those who argue for lower taxes on the rich and on corporations are certainly not following Smith's advice:
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
Instead, he created a new "Innovator's dilemma":
What crap patents does my invention infringe upon? How many legal fees will I have to pay to get my product to market?
If Pandora's box is destined to be opened, *I* want to be the one to open it.
How so? Smith argues for proportional taxes and doesn't say anything about their height. Heck, most western nations have tax systems with progression steps. How is that "equality of taxation"? Percentual tax rates are pretty an expression of "in proportion to their respective abilities". You're right that Smith wasn't some kind of radical libertarian but you can't really argue that he would propose high corporate or personal tax rates.
It is motivation 3.0. The academic world has discovered the FACT that people do not create or innovate based on a motivation of profit (financial rewards). They do it because it brings them joy to be a part of something and create things--expressing themselves. Outlined in Daniel Pink's book, Drive; is the concept that you cannot offer financial rewards (carrots) to creative people--it backfires! This has been documented through various scientific and case studies. I think most of us programmers/developers/designers already know this. Much of our problem with management is their assumption that we must be compelled (extrinsically) to work, just like a laborer.
I object to power without constructive purpose. --Spock
That should be a valuable lesson to boards and shareholders.
...and they won't believe you that this is anything but profiteering over design
Apple's market position is in absolutely no risk so long as all potential competitors think that their success is all about 'marketing'.
You've now proven that you know nothing about both business and technology. Presumably you are good at something else? gardening maybe?
If a CEO thinks "making money" is what the company is all about, he should sell all the assets and turn it into a hedge fund. Once you acknowledge that you're going to make money by making some product, then by all means do a good job at making that product. Or providing a service or whatever.
"We have always been shameless about stealing great ideas. Good artists copy; great artists steal." --Steve Jobs
IIRC, Smith said taxes should be "easy," which doesn't necessarily mean small or large. Sorry, I didn't mean to imply that he would advocate "high" taxes, just that he favored progressive tax rates. In the current (US) political climate, a lot of people are talking about a flat tax, or other regressive schemes, and justify this on the theory of "supply side" economics. You know, we can't "punish the job creators" and all that... Smith would have laughed at such talk.
Basically, we had a very progressive tax system from WWII through the 70's. And that period was a golden age for the USA, just as Smith would have predicted. Rich people still had their mansions, yachts, and limos (or "opulence" as Smith might have put it), and the government managed to build infrastructure, provide services and offer inexpensive education, all without running up massive debts and deficits. And (except for women and minorities) everyone was pretty happy with the situation. Businesses thrived, workers enjoyed generous pensions and health benefits, and opportunities abounded.
Since then we've dabbled with various levels of less progressive schemes. (The income tax is progressive, but when you consider sales tax, gas tax, property tax, etc., the total tax burden is still highest on the middle class.) The idea was that "job creators" would have more money, and therefore they would create more jobs. But they didn't always do that. Increasingly they found it easier to "gamble" their extra cash on stocks and securities. So while the government was running up historic deficits, there was an excess of "hot money" in the markets, leading to speculation and bubble formation.
Oh, and let's not forget deregulation... another exaggeration of Smith's ideas, which gave us the S&L crisis in the 80's and the "Great Recession" of 2008.
But that's a whole 'nother kettle of fish...
XML is like violence. If it doesn't solve your problem, you're not using enough of it. --AC
Is that what you are implying? I think Sony is an excellent example for the point of the article. When Sony developed their walkman they were focused on maximizing customer value with a great product, and the profit followed. After that, the MBAs took over and they (a) stagnated, and (b) focused on customer lockin--and the profit went away.
They probably toyed with the idea of creating a iPod-like thing, but refused to do it because they didn't want it to cut into CD sales.
"I'm not a driven businessman, but a driven artist. I never think about money. Beautiful things make money. "
-- Lord Acton
Why not make parents pay for it? Up until 2010 high school in Japan was not 'free'. Take a typical class of 30 kids charge them $2k/year for extended hours. That is $60,000 per avg. class size. Even with a 50% attrition you still have enough money to pay for that 30% increase. Its not a panacea but it would do the job.
Student apathy is the major player in this; and parents whom want their kids to learn or kids that NEED that time could surely see a difference. Recently I've heard rumblings about Chicago (CPS) wanting to SHORTEN the school week to 4 days. While the mayor is getting huge pushback from the union about wanting/imposing longer school days.
...when he returned? When they call you "interim", it ain't cause you got a lot of political capital. I recall a lot of skepticism when he first returned, though I'll admit he probably had some leeway because Apple was so desperate. But if he hadn't started hitting home runs right off the bat, he wouldn't have lasted long.
Never let a lack of data get in the way of a good rant.
correction: "we have to become..."
Table-ized A.I.
What is with the ****-ton of posts criticizing people for not saying FUCK FUCK FUCK lately? I've seen at least 5 in the last month.