Innovation lessons from Apple

Sep 09 2010 by Bill Fischer Print This Article

In the face of increasing shifts in the world economy, and particularly increased competition across markets and company offerings, one of the latest trends in instinctive strategic advice for companies is to become "more innovative."

Yet being more innovative is not necessarily easy. There are dozens of discarded carcases of firms that aspired to be more innovative and couldn't achieve those aspirations. Companies such as Digital Equipment, Pan American Airlines, and Polaroid were innovative leaders in their industries for appreciable periods of time. All are now gone, largely as a result of their failure to sustain innovativeness.

Innovation, it seems, is a very difficult aspiration to fulfil.

For more than a decade, it seems as if everyone's choice for the most "innovative" firm has been Apple. iPhones, iPads and iPods have changed not only industries, but the way we live.

The iPod, which can be seen as the beginning of Apple's forays outside of mainstream personal computing (not counting the unsuccessful Newton of the early 1990s), blew-up CD production and distribution and rattled traditional commercial radio with the introduction of podcasts. It is truly an innovative success story, yet it took only eight months for the Apple team to develop from start to finish.

Clearly, there are some lessons for innovators in this story!

Take motivation from mistakes

Apple was most decidedly not thinking about portable music as the 20th century drew to a close. In the age of mp3 and peer-to-peer sharing of music, Apple was focused on video and developing iTV and iMovie - so much so, that the-then version of the iMac didn't have a CD-burner.

In fact, Apple completely misread the market for music. They were literally blind to the growing importance of music in the lives of personal computer users.

But to their credit, and stung by a $195 million quarterly loss, Apple realized that it had to rethink the way it went to market. Apple not only learned from their mistake, they used it to catapult a new innovation.

Hire for skill

So, if you're Apple, how do you recover? The common advice from most management books on building teams has typically been to: "hire for attitude, train for skills." This model better ensures harmonious work environments and friendly collaborations.

Yet, in the world of innovation, aspirations and attitude aren't enough. In the situation that it found itself in, Apple needed real skills, and so when Steve Jobs compiled the iPod team he loaded the odds in his favor by going with his very best people in hardware, software, and design. A team was assembled because they were the best.

Putting the best skilled on a mission to change the world, drove competition within them, leading the team to perform at peak levels – nobody on that team wanted to be second-best.

Look outside for great ideas

What really sets the iPod apart from all of the other mp3 players, however, is neither the hardware, the software, nor the design – although all are world-class. No, the iPod's real differentiator is the ease with which the customer can access, download, store and upload music and podcasts.

But this "innovation" did not come from within Apple. It came from an outsider – Tony Fadell – who was trying to do this on his own. Apple found him – think about how difficult that is, to find someone with a good idea outside of your firm – and hired him on an eight-week contract! This was not about building a long-term employment relationship, nor about loyalty, but about accessing someone else's good idea.

Creative innovative work zones

Once the team was pulled together, Steve Jobs put them into a common physical space that although not consistent with their hierarchical position, raised the probability of their having effective and fast conversations.

The design team's working quarters have been described as having "very little personal space" – there were no cubicles or offices. By imposing open environments, the creativity and free-flow of ideas were nourished. In the flow of ideas, space matters!

Defining leadership boundaries

When you talk about Apple, you can never avoid mentioning Steve Jobs. What role did he play in the iPod? After developing a top-notch team, Jobs gave them ambitious and clear visions. He charged the team with creating a product that would put 1,000 songs in their pocket; software so easy that their mothers could use it; and a complete product offering that would be in retail outlets in eight months.

What is so exquisite about these objectives is that they are simple, clear and precise, yet broad enough so that the team could get to work without feeling constrained by the way the vision was presented. The team could be totally focused and liberated at the same time! Innovative leaders must provide a clear briefing that organizes a team but which, at the same time, doesn't restrict their talent capabilities.

Be the police, but dress like a cheerleader

Even with a reputation for getting involved in projects, Jobs actually didn't interfere all that much with the iPod project. He was both smart enough to compose a highly skilled team and then to let their skills shine.

Along the way, however, Jobs acted as both a policeman and cheerleader for the project. He imposed an attitude that let the team members know that Apple's win would also be their personally. And, by cheerleading, he was also able to police the parameters of the project, ensuring the team stuck to his briefing goals.

Stand on firm ground

Another Apple product, the iPhone, is now redefining the mobile phone. Yet, this innovation recently posed a threat to Apple when a technical glitch created reception problems for users. Job's response was to display true leadership by giving a message that matched what the Apple culture really is — an engineering company that has repeatedly changed the world for the better.

His message to the public was, "we'll fix the small iPhone problem," and to his competitors, "catch us if you can!"

Apple's success continues with new innovations, the iPad is now the next in place to revolutionize an industry – publishing. Once again, Apple and Jobs have recognized a value chain opportunity that is currently vulnerable to big change, and, using current, not revolutionary, technologies. They have innovatively developed a way to profit from it by "rewiring" the customer experience in the way that they propose to weave the entire value-chain together.

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About The Author

Bill Fischer
Bill Fischer

Bill Fischer is Professor of Technology Management at IMD, the leading global business school based in Lausanne, Switzerland.