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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."
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.
If Christianity is any metric to measure this by, we're going to be hearing about Steve Jobs for at least the next 2100 years...
Seven puppies were harmed during the making of this post.
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.
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
It drove more than their share price.
If you're arguing that he made bad business decisions, I think you need to rework your argument.
It's the most misunderstood thing in business - do good work, make the customers happy, create good value and profit becomes a side effect.
Most of the stuff on
Part of a 101 Business class, that is. You know, that class that all the football players ace.
Growing a business, expanding market share, increasing sales revenues in a competitive market place all require taking risks, otherwise known as 'disruption'. Good managers know how to stay focused on the risk, not avoid it. Meanwhile, they minimize unneeded risks, or issues that divert the organization's attention from their primary goal. There is a very good correlation between risk and ROI. No risk means your investors had better be willing to live with T-bill like returns.
You want no disruption? Go into a government bureaucracy or get a job in a large corporation away from the principle line of business*.
* The problem here is that its easy for companies to outsource these tasks. So in the final analysis, you are still exposed to risk. That which involves turning your job over to leaner, more competitive service providers.
Have gnu, will travel.
Uh, no, RMFP, it's actually the "you're part of the problem you're whining about" argument. Slashdot attracts readers to the comments section where they serve ads. If you post about how you hate Apple, you're making money for Slashdot and encouraging them to keep running Apple stories.
But, hey, according to somebody with a mod-point, I shouldn't be pointing this out. Well, if I'm some crazy person, fine. You're welcome to go to apple.slashdot.org and peek at all the recent stories and how many comments they've gotten. After three or for stores with 500+ comments it really is hard to say that people who post on Slashdot don't want Apple stories posted.
"I like to lick butts!" by MobileTatsu-NJG (#32700246) (Score:5, Informative)
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.
This submission feels like pure PR for a book or two.
You know, as a devout capitalist, I've always believed that customers service comes first.
A capitalist of the Adam Smith variety would say that profit comes first, and that good customer service and mutual benefit is a consequence of pursuing profit.
The fact that this doesn't work under a lot of different contexts, particularly the ones that Harvard MBAs get themselves learned in, is the guts of the story.
Don't blame me, I voted for Baltar.
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.
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.
Under Jobs, Apple went from nearly bankrupt to the biggest, most successful company in the world in just 14 years. Congratulations - by claiming that it was all a bad idea, you've just made what must be the stupidest post of the day. And I'm including all the Frist psots! in that.
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.
Tim Cook is going to get 10 million shares of AAPL if he sticks around another 10 years, so they pretty much have him locked down. Tim Cook is a practical man, but he's a true believer.
Jeff Williams is a Tim Cook operations kind of guy, and without a doubt much of Apple's success was because of operations under Tim Cook. Operations will continue moving along quite well for the foreseeable future.
Jonathan Ive is absolutely a true believer, and Jobs set up Apple to give the man free reign of the company. I don't doubt Jonathan Ive is living his dream job, and he'll stick around as long as they let him and he'll keep the Jobs way going. Realistically, much of Apple's success has been a collaboration between Jobs and Ive, not Jobs alone.
Scott Forstall is probably also living his dream job, I doubt he'd jump ship either, and he's certainly a true believer as well. He's also got a reputation as being rather Jobs-like in his aggression, so he'll be a watchdog as well for Apple culture.
I'm sure Eddy Cue, Bob Mansfield, and Phil Schiller will stick around too, and that pretty much rounds out the executive team.
The Apple board let Steve Jobs pretty much do whatever he wanted during his tenure as CEO when he came back, and he used that power to set up a group of managers and culture under him to carry Apple forward as an innovative company. For all the talk of Jobs being a brutal, nasty boss who bludgeoned people into doing things his way, what that really means is he forced people out that weren't, in his mind, Apple material. The only people left are the true believers.
The spreadsheet monkeys won't have an easy time worming their way back in.
-mrxak
Onions Will Kill You
Be it as it may, what it comes down to is that Apple created a product their customer doesn't complain about. And in this time and age, this is already the superior product. Whether you liked it a lot or didn't, Apple made products that "work". They don't crash, they don't lock up, they don't keep their user puzzled how to use them. They made "computer stuff" usable by common folks.
I can see it in my dad and other computer illiterates. They are usually afraid to "poke" at their other goodies, fearing they might "break" something. Not so with Apple. My dad even started trying to find out what this button does, something he would NEVER have done in any other OS he ever had. Reason? He might have changed a setting and wouldn't have a clue how to undo it.
That's what sets Apple apart from the rest. Personally, I consider it an abomination, I just can't wrap my mind around their way of doing stuff, but it seems to work just great with people who have no computer background. And that's what endeared it to those people. And what makes a lot of computer specialists hate it. Not so much the "loss of edge", just that they do things in a way that makes us look stupid instead of the computer illiterates.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.