How Steve Jobs Solved the Innovator's Dilemma 424
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."
But can he solve the First Post dilemma? (Score:3, Funny)
He can't because he's dead.
Nice if you can do it (Score:5, Interesting)
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.
Re:Nice if you can do it (Score:5, Insightful)
If Scully and the other bean counters didn't screw up as much as they did - and Apple was still a somewhat decent and profitable company - there's no way Job's would've been invited back, let alone go nuts the way he did.
Re:Nice if you can do it (Score:5, Insightful)
Sculley traded Apple's good reputation for short term profits.
I wouldn't exactly call that saving Apple, it's typical MBA idiocy.
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We can argue about how much Apple needed saving from Jobs, but pushing to replace the crap OS was just the kind of thing that got Steve Jobs ousted from Apple.
Of course, it was the same OS he'd been pushing for that they eventually bought back along with Jobs himself when they acquired NeXT.
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in the mid-nineties because it had a crap OS
Well, I made a lot of money using that crap OS in the mid-nineties. It was the worst OS available for things like desktop publishing, graphic design, photo manipulation, and professional audio tracking... except for all the others.
Granted, by the late 90's the unprotected memory was getting to be a bother, and Apple knew it needed a refresh, needed a modern OS. BeOS was an option... but so was OPENSTEP. Unfortunately for BeOS, they didn't have Steve Jobs.
But I'm curious what OS in the 90's you believe w
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In fact Apple only joined the 20th Century in having a pre-emptive multi-tasking OS in the 21st Century.
It's interesting that now, with Grand Central Dispatch, they've got the best pre-emptive multi-tasking in the business on OSX.
And on iOS, they've solved the classic smartphone problem of third party background processes killing battery life.
Re:Nice if you can do it (Score:5, Interesting)
What has always surprised me about Jobs is the amount of risk he was willing to take on. People forget what a huge leap it was to ditch everything that came before (including several up-and-coming products) and focus on OSX. The iPhone also represented a huge effort - a radical departure for Apple and radically different from other cell phones, if it hadn't been an immediate success Apple would only be a fraction of what it is today.
History is littered with the wreckage of companies that decided to change direction, diverting resources from existing customers to look for fresh fields. Apple somehow managed to do it several times to great success.
Another thing that strikes me about Apple is how old-fashioned the corporate culture seems to be (from the outside). They do business by figuring out what people want, and then selling it directly to the public with a minimum of fuss at a price that both parties can live with. Contrast this with their competitors in the computer and cell phone markets, who sell pretty much the same devices encumbered with "special offers", "free malware detection (for 30 days)", or annoying contracts, none of which customers actually desire. I can't see why other manufacturers haven't gotten the hint yet.
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The interesting thing to my mind is not so much the products but the fact they involved making disruptive changes in industries that are notoriously resistant to change. I'm not suggesting that the iPod and iPhone aren't good in themselves but they aren't whole without the music industry getting b
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There are so many things wrong in this sentence.
First, choosing to focus on OS X wasn't a risk for Jobs. OS X was the entire reason Apple brought back Jobs in the first place. OS X didn't start out as an Apple product, it started out as NeXTSTEP [wikipedia.org], the operating system built by NeXT (the company Jobs founded after getting ousted from Apple) for their workstation line. Apple
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MacOS was pretty crusty at that point, and Apple hadn't had a breakout product for years but the company was far from dead when Jobs came back. Apple still had a lot of money in the bank - any other company would have limped along for years and then sold itself to one
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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.
I see no evidence that Apple, a publicly traded company, didn't have the pressures or the expectations that any other publicly traded company has. And for all the political capital that Jobs had when he returned to Apple, he had more when he died.
Re:Nice if you can do it (Score:5, Insightful)
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?
Jobs did that back when Apple had less resources too. He pretty much completely killed the Apple II team to make the Macintosh team. He just got his best people, and put them to work on what he thought was the future product. Take this story [folklore.org] for example. Eventually, the people who remained on the Apple II team were only the engineers he didn't have much confidence on (and by "eventually" I mean before the Macintosh got released, not after the user base for the Mac surpassed the Apple II). Relevant quote:
"No, you're just wasting your time with that! Who cares about the Apple II? The Apple II will be dead in a few years. Your OS will be obsolete before it's finished. The Macintosh is the future of Apple, and you're going to start on it now!".
With that, he walked over to my desk, found the power cord to my Apple II, and gave it a sharp tug, pulling it out of the socket, causing my machine to lose power and the code I was working on to vanish. He unplugged my monitor and put it on top of the computer, and then picked both of them up and started walking away. "Come with me. I'm going to take you to your new desk."
Jobs was an asshole in a lot of ways, but it's undeniable that his driven attitude was responsible for his successes. He didn't play it safe, he put his faith in the next product and went ahead full steam. If it doesn't work out, drop the project without a second thought and move on.
Re:Nice if you can do it (Score:5, Funny)
With that, he walked over to my desk, found the power cord to my Apple II, and gave it a sharp tug, pulling it out of the socket, causing my machine to lose power and the code I was working on to vanish. He unplugged my monitor and put it on top of the computer, and then picked both of them up and started walking away. "Come with me. I'm going to take you to your new desk."
Now I understand why OSX has got so good at not losing unsaved user data when unexpected power loses happen. ;-)
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It's unlikely that Apple will be able to continue in the same vein for long
If you're talking about the pace of their innovation, I have to agree... but only because... what the heck else can they do now? A television... and then what? But Apple should do fine with a slowed innovation pace, with minor hw/sw updates at the schedule they are accustomed to, for years to come. They have the best hw, the best sw available for the desktop, the best integration of products... they can focus on increasing the install base... but their success is going to slide out for at least a decade bef
Legacy (Score:4, Insightful)
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.
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Re:Legacy (Score:4, Insightful)
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The iPad, iPhone, and Macbooks weren't really successful? +1? Really??
And you lot wonder where noisy fanboys come from.
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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.
Are you taking the lying Apple-hating stance of "lets compare OSs, not devices, and when doing so, lets exclude Apple devices I find inconvenient, like the iPad.
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.
Ah, you separated it out. Note, Apple still sells more than half of all tablets, and with a much higher margin than Android sellers. A smaller, but more profitable, product share has worked out well for Apple, so no reason to consider 65% share a failure, as you assert.
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And Steve Jobs' Reality Distortion Field is rivaled only by your own. I guess the fact that Apple is the most valuable company in the world, the most valuable company the world has ever seen thus far, and they are tiny compared to the next 9 most valuable companies, doesn't impress you. All the major tech companies seem to hit a wall at some point, and strain under the weight of their dead... Adobe, Microsoft, IBM, RIM, Nokia... they move like slugs. Apple has been running rings around the competition for n
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Apple solved the problem by moving to design (Score:5, Informative)
Apple managed to turn profits by outsourceing the actual production so they could focus on design.
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Made in China. Designed by Apple in California.
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I didn't claim they don't do this. The article is wrong thinking that it was a unique genius of Steve Jobs.
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I didn't claim they don't do this.
He didn't claim you didn't claim they do this.
The article is wrong thinking that it was a unique genius of Steve Jobs.
You presented it as your own idea, and as such, it was an irrelevant one, as every other company does the same. If you wanted to critique the article, then you should have done so, rather than expressing it as a general opinion unrelated to the topic at hand (And a wrong one at that).
Ye Gawds! (Score:5, Insightful)
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.
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I just got my HP touchpad from the firesale that HP held. In my opinion, it is the one tablet that could have challenged the iPad. It just needed to be sold at or near cost to gain a presence. WebOS, after the latest update, is a very capable OS. But HP hired a software guy for a hardware company. And so, they aborted a product that could have had a lot of success.
Not only does a company have to have management who is willing to take chances, it also needs the right management to continue to be innovat
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Sad commentary on the state of US companies (Score:5, Insightful)
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.
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Re:Sad commentary on the state of US companies (Score:4, Insightful)
Also, when doing so on public books, it's no longer math. It's divination, as the books are more cooked than last night's dinner.
Which is why GPP was correct when he said engineering math (or, you know, just math math) is more rigorous than MBA math. In real math, you start with axioms and theorems, and work your way to the conclusion. In business "math," you start with the conclusion, and then adjust the starting conditions to make the conclusion work. This may be difficult, and a lot of work, but it's not rigorous mathematics by any stretch of the imagination.
Real math has given us pretty much every technological advance that makes the modern world a better place to live than it was a couple of hundred years ago. Business "math" is the tool of people who are trying to drag the world back a couple of hundred years more, to the days of a small noble class living on the backs of a mass of starving peasants. It's not hard to figure out which one is more useful.
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Also, when doing so on public books, it's no longer math. It's divination, as the books are more cooked than last night's dinner.
Which is why GPP was correct when he said engineering math (or, you know, just math math) is more rigorous than MBA math. In real math, you start with axioms and theorems, and work your way to the conclusion. In business "math," you start with the conclusion, and then adjust the starting conditions to make the conclusion work. This may be difficult, and a lot of work, but it's not rigorous mathematics by any stretch of the imagination.
Real math has given us pretty much every technological advance that makes the modern world a better place to live than it was a couple of hundred years ago. Business "math" is the tool of people who are trying to drag the world back a couple of hundred years more, to the days of a small noble class living on the backs of a mass of starving peasants. It's not hard to figure out which one is more useful.
“The success of mathematical physics led the social scientist to be jealous of its power without quite understanding the intellectual attitudes that had contributed to this power. The use of mathematical formulae had accompanied the development of the natural sciences and become the mode in the social sciences. Just as primitive peoples adopt the Western modes of denationalized clothing and of parliamentarism out of a vague feeling that these magic rites and vestments will at once put them abreast of
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I think this speaks more to how pathetic the leadership of a lot of US companies have become more than it does on Jobs.
Blame the large institutional shareholders who demand quarter-to-quarter accountability, as well as the litigious society that suffers preposterous shareholder lawsuits for having the audacity to manage with an eye beyond this quarter.
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Side note, Carla Fiorna and Bob Nardelli where also not engineers. Lets not forget, Steve Jobs might have been a CEO but he was also an engineer first. Those others where business majors. That could help explain things. Of course, there was Woz too.
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Excuse me? Rewriting history much? Jobs was not an engineer. Except for a short interlude as 'technician', he always was a designer and salesman. But his gift for self-promotion, the modesty of his engineer partners (especially that other Steve), and his Legion of Faithful obviously managed to hide that fact and turned Jobs into the God-Engineer.
"Of course there was Woz too". Fah. Fanboys.
Seems to me... (Score:2)
Really? (Score:2, Insightful)
So, what he did.... (Score:2)
Cherry picking Jobs (Score:5, Interesting)
Here are some things [businessinsider.com] 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.
PR? (Score:5, Interesting)
Textbook _Innovator's Solution_ (Score:2)
Yeah, this has been pretty obvious [slashdot.org]. 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.
Ridiculous fanboyism (Score:5, Insightful)
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.
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This has not only been blatantly obvious from the beginning, but now his own words back it up.
"Now"? It's been obvious for several _YEARS_. He never claimed to have invented the iPhone. Pretty much everyone with a clue knows the story of an engineer walking into his office with an early version of the iPad, showing it to Steve, who was enormously impressed but put the prototype on a shelf and said "we can make this into a phone." I've known that story for a very long time so, perhaps, your version of "now" is a bit later than the rest of us.
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Steve regularly took credit for things which other people did all the time. The people who came up with those things didn't like it very much, either.
The point is, though, many Apple fanatics have thought and continue to think that Steve Jobs was single-handedly responsible for designing most of the products at Apple. When the guy died, it was even more evident how misinformed the average person was. His book, however, can now finally help set things straight. Sure, the average Apple user will likely ne
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Perhaps your Apple history needs some refreshing.
Jonathan Ive designed almost all of the products Apple is famous for. He designed the iMac, for example. He worked at Apple long before Steve Jobs came back. Only his job position changed around the time of the infamous return. Nice timing, eh?
But the question is, how exactly was the iMac an innovative product? It was literally no different than the beige boxes that came before it. It literally ran the exact same bland, unstable operating system. In no
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No, you seem to not understand Steve Jobs' role. And how that role was pretty much nothing.
Jonathan Ive's role was designing the iPhone. All of it, essentially, down to the materials that were going to be used to make it look as pretty and shiny as it does. Of course an actual engineering team designed its guts, but they already knew what to put in it.
Jonathan Ive received the award for the iPhone, and for most of the other Apple products, because he actually deserved it. Steve Jobs on the other hand re
It was all about dealmaking (Score:5, Interesting)
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.
Re:How long... (Score:5, Funny)
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I wanted to wait until his next biography to find out if Zombie_Jobs rises again.
...it's been more than three days.
We need to wait 75 years for someone to promulgate a resurrection + subsequent disappearance/ascension myth. Maybe a little longer, given current lifespans. Preferably, the promulgator will be someone with admin access to archive.org in order to "tweak"/"harmonize" historical accounts. The promulgator can also publish three different accounts under different pseudonyms to give the appearance of corroboration of the "historical" account.
4 bonus internets if the promulg
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~Moses 2.0
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I'm gonna wait for the autobiography ;-)
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Ah, the classic "They make money - they suck!", or the equally entertaining "They used to be good before everyone knew about them."
Re:How long... (Score:5, Insightful)
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.
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That's... exactly what the story is saying Jobs didn't do. It wasn't "if the big will eat it, I'll give it to him", it was "if we make a really cool interesting meal, not just pigs, but humans too will eat it".
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Slashdot is ad-driven and Apple brings a lot fo comments, both good and bad.
Think about that next time you whine about too many Apple stories floating around.
It's a common explanation. But there's a more straightforward one. AFAIKS getting story on slashdot is a 3 step process. A story is submitted. People vote for it or against it on firehose. An editor picks it,theoretically with some regard to how it was voted on firehose.
The number of Apple stories on Slashdot may simply relate to how many are submitted and how they are voted on in the firehose. It doesn't require that were being trolled for comment quantity by the editors.
Either explanation could be true. A
Re:Jobs must have went (Score:4, Insightful)
It drove more than their share price [ycharts.com].
If you're arguing that he made bad business decisions, I think you need to rework your argument.
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One thing they attempted to do is keep the product line simple. This helps people find what they want easily and also keeps production manageable. There are some companies that have product lines that are so confusing with too much mediocre selection and badly written specs, that I simply turn away.
Sometimes limited choice is actually better for business and for your customers. You just need to be sure what the best median is.
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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.
That depends on the people who took over from Jobs and how well Jobs judged their abilities. If they think like him the company will prosper. If the spreadsheet monkeys move in they'll piss away everything Jobs achieved inside of 10 years... tops.
Re:Jobs must have went (Score:5, Interesting)
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.
Re:Jobs must have went (Score:4, Insightful)
That's the real miracle of Steve Jobs.
It's not that Steve Jobs is particularly exceptional. What's exceptional is that someone like Steve Jobs got into a position of power and authority.
If Steve Jobs was Steve Jobs the designer he would have probably been fired for not playing politics and that would have been the end of it... hell it even happened once! The only reason Steve Jobs was able to be Steve Jobs was because Apple failed miserably and they were desperate. With nothing to lose someone with above average creativity and common sense was able to purge the Excel Jockeys.
Re:Jobs must have went (Score:4, Insightful)
making products people want to buy so that you can make money isn't really earth shattering.
Making things people want to buy isn't earth shattering. Finding out what people want before they know *is*. People didn't want the iPhone before it was out there. People have wanted printers since Gutenberg. So HP making a printer to make money isn't earth shattering. But making a phone in a crowded phone market that people wanted, really wanted, *is* earth shattering. Why didn't anyone else do it first? Why have phones been around for 20 years before that happened. It's not just the "find a need and fill it" marketing you are referring to, it was "find a desire and make a product that generates a "need" when none existed before. It's unlike the CEO training classes that are almost exclusively common sense.
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iPhone and iPod weren't that different. Both of them were copies of existing products, but with much better execution than the competition. There were other MP3 players before the iPod came around; remember the famous Slashdot posting which called it "lame" because it had a FIrewire port and no USB. Then Apple came along, took the concept, and made their own version with the clever and easy-to-use click-wheel, and it took off. Then they added the iTunes store and it took off even more. Somewhere along
Re:Jobs must have went (Score:4, Insightful)
Pixar, a company run by SJ
http://www.geekosystem.com/how-pixar-bosses-saved-their-employees-from-layoffs/ [geekosystem.com]
http://www.theregister.co.uk/2000/10/14/no_layoffs_at_apple_steve/ [theregister.co.uk]
And if by "stagnate" you mean year over year growth that vastly outpaces the industry you're right....
Re:Jobs must have went (Score:5, Informative)
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.
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Because that strategy works! As long as everyone else is doing the same thing. If the entire market is made up of average-to-bad products, everyone winds up competing on price, and the way to win on price is to cut as many corners as you can possibly get away with, which leads to more average-to-bad products.
Moreover, in many cases like that, one competitor will try to break away from the pack with a superior
Re:MBAs Prevent Disruption (Score:5, Insightful)
It's the most misunderstood thing in business - do good work, make the customers happy, create good value and profit becomes a side effect.
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Mod parent funny.
--
BMO
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Re:MBAs Prevent Disruption (Score:5, Informative)
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.
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Considering how much profit Apple makes by staying customer-focused, one could argue they're both the same thing. It's just that some companies don't realize that the best way to get profit is focus on the customer experience. In other words, they focus on making profits but don't have a clue how to get them.
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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.
My CEO, who tries very hard to be one tenth as successful as Steve Jobs (and that he failed so far is not his fault, but Apple's), says: "If you look after your customers, and you look after your employees, the stock will look after the shareholders just fine by itself". And that has worked quite well in the last years, for the customers, the employees, and the shareholders.
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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:
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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...
Re:MBAs Prevent Disruption (Score:4, Interesting)
If it was only marketing, wouldn't everybody be doing it? Or are you just saying that only Apple has an advertising budget?
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Not necessarily. The point of marketing is to make you want it. It doesn't have to be great, you just have to believe it's great.
How is "cool' not what people believe is great?
But yes, the point of Apple (under Jobs) was clearly not merely marketing.
Re:MBAs Prevent Disruption (Score:5, Interesting)
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.
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Its a bit of a mix. If you are profit driven and already have good products, you'll be fine until the products are superseded by something else that is more attractive.
This is where apple was between say 1984 and 1997 - gradually sliding downhill with no direction in a race to the bottom - and losing.
However... Eventually, you need to put quarterly earnings calls aside, and figure out how to make something people don't even know they want, rather than race to the bottom against everyone else building
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It's the most misunderstood thing in business - do good work, make the customers happy, create good value and profit becomes a side effect.
If you read the book, you'll see that this is where the danger lies. This is what a good, normal managers would do. But customers don't always know what they want, and you leave yourself open to attack from adjacent areas. Two of the examples in the book - computer hard drives and construction machines - show how companies by doing what you say ("doing everything right, by the book") eventually come under attack from adjacent market sectors and die.
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... which is why Asian companies kick the American's asses. Long range thinking in the US is having a 5 year plan. In Japan, they have 100 year plans [allbusiness.com] [and a dozen other links].
Re:MBAs Prevent Disruption (Score:5, Informative)
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.
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And if someone does the same to you in reverse, tie em up in the courts for so long that their product is obsolete before it reaches the hands of consumers.
Re:Buncha Apple Fanbois (Score:4, Insightful)
That's one piece of the puzzle.
Two of a few examples that come to mind...
How did he get some of the best talent to work for Apple; especially in the late 90s when engineers knew it was nearing bankruptcy and the dot.com boom was paying top dollar for talent in a variety of interesting projects?
How did he get a good number of the consumer populous to think of Apple as being "THE" computer worth having; especially when it offered similar or only slightly better performance and features to what established big dogs (i.e., Dell, Compaq, and HP) were offering?
I grew up idolizing engineers like Woz & Carmack for their engineering skills; it wasn't until years of participating in group projects, and taking leadership positions on teams of 6 - 12 people have I realized how underrated amongst the technically proficient are the humanistic contributions that go into any project of a significant size. The larger the project, the more likely it will fail without stellar leadership. (e.g., Take a look at what Longhorn claimed and what it became when released as Windows Vista.)
I truly believe Steve cared about his products beyond the profit; he knew a great product, marketed the right way, would bring the profits. I wish more companies used this mentality.
I hope whatever qualities Steve possessed, that allowed Apple to be successful during his oversight, are able to persist amongst his successors.
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I truly believe Steve cared about his products beyond the profit
If this were true, Apple wouldn't be suing Samsung over who owns the rectangle.
Re:Buncha Apple Fanbois (Score:4, Insightful)
Why not? Caring more about products than profits does not mean you don't care about profits. It means that your first priority is to create great products, and then you minimize the costs of fabricating them, you maximize your profit margin, and you obstruct competition as much as possible.
Getting parts built in sweatshops and suing others on spurious grounds is perfectly consistent with prioritizing product quality. What it isn't consistent with is being a decent human being.
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Spurious grounds: opinion, not yet held up in court. I was around for the first Look n Feel lawsuit, and I didn't have skin in the game like Jobs... once you've been burned by the legal system like that, you're an idiot if you don't learn SOME sort of lesson.
sweatshops: tarring Jobs with that is a cheap shot. My Tevas' manufacture went overseas. Ditto every other bit of outdoor gear I buy. Design in america, make in (insert cheap nation). Congressmen get tens of thousands of dollars per cycle from Samo
easy tiger (Score:3)
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
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He also had top industrial designers. The computer has moved into the same phase the automobile moved into over 60 years ago, whereby having the best engineering is not enough. Sure it will attract the geeks and the spec seekers, but most people are interested how good the product looks and feels, while doing the job they expect from it. Would a Ferrari be the same car without the exterior design?
Too much IT hardware feels as if it was designed on the outside by the people who are doing in the inside. Even
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You're going to have to define "Apple is losing". Market share? Maybe. Profit share? No fucking way.
http://www.asymco.com/2011/07/30/the-profitphone-x-phones-sold-chart/ [asymco.com]
Or this, which shows that the iPhone has MORE REVENUE THAN ANY LINE OF BUSINESS AT MICROSOFT.
http://www.asymco.com/2011/07/30/the-profitphone-x-phones-sold-chart/ [asymco.com]
Or this, which shows that the iPhone is ABOUT AS PROFITABLE AS ALL OF MICROSOFT.
http://www.asymco.com/2011/10/02/ios-vs-microsoft-comparing-the-bottom-lines/ [asymco.com]
How do you like them
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I don't think he was ever interested in "dominating" the ecosystem. Domination in the sense you are describing dilutes profit margins, dilutes brand control and recognition, and the heterogeneity of the platforms you have to support makes it more difficult to offer a stable, consistent experience. Making your own locked down device, on the other hand, drives brand recognition and allows you to get much higher profit margins.
In other words, Apple could license OSX or iOS, but it's not clear they would reap l
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Jobs solved the innovation dilemma by having a lot of engineers circled around him.
The fact that no other corporate CEO surrounds himself with engineers, designers and implementors should be instructive. I mean you make it sound easy but why on earth are most of the other tech companies led by the nose by their sales and marketing people?
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“There 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.”
Henry Ford
It seems somewhere between Ford and outsourcing everything we can to india and china, industrialists became looters.
Ford got zorched by MBAs, too. But recovered. (Score:4)
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.
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Sure they're Apple haters, and you're not an Apple fanboi? Reality gets skewed a bit once you drink the flavor-aid... but I have to say, your post is a new extreme. I am completely tired of Jobs stories. This is worse than the usual Apple fanboyism; it seems anything at all even remotely related to Steve-baby gets on the front page, no matter how irrelevant or pointless. Look at how many stories there are about the marketing mogul Jobs (sorry, no time to count), and how many there are about REAL computer pioneers like John McCarthy (1) and Dennis Ritchie (also 1). Slashdot has fallen far when someone like you can be modded up for whining about "Apple haters" not likely a Jobs-a-day story, while ignoring actually important people and their contributions. You make me sick.
Famous people who contributed a lot are ignored every single day, and pretty much for the exact same reason. Take your "flavor-aid" example of John McCarthy and answer one question about him; what has he done for me lately?
Current relevance makes all the difference in the world in recognition. And in the ADD-riddled world we live in where everything must be summed up in a tweet-sized post for people to take more than 17 seconds out of their precious day to give a shit, this should come as NO surprise to y