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Businesses The Almighty Buck Apple

How Steve Jobs Solved the Innovator's Dilemma 424

Posted by Soulskill
from the i-bet-it-just-had-one-button dept.
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."
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How Steve Jobs Solved the Innovator's Dilemma

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  • How long... (Score:0, Insightful)

    by Anonymous Coward on Tuesday October 25, 2011 @07:51PM (#37838958)

    ...will the Apple fanboys bother us with their dead guru ?

  • Legacy (Score:4, Insightful)

    by EraseEraseMe (167638) on Tuesday October 25, 2011 @07:58PM (#37839032)

    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.

  • by Spy Handler (822350) on Tuesday October 25, 2011 @08:02PM (#37839086) Homepage Journal
    not to mention, Jobs was only able to take total control because Apple was very close to death.

    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.
  • Ye Gawds! (Score:5, Insightful)

    by DontBlameCanada (1325547) on Tuesday October 25, 2011 @08:03PM (#37839088)

    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.

  • by antifoidulus (807088) on Tuesday October 25, 2011 @08:08PM (#37839142) Homepage Journal
    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.
  • by Anonymous Coward on Tuesday October 25, 2011 @08:09PM (#37839148)

    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.

  • by Divebus (860563) on Tuesday October 25, 2011 @08:11PM (#37839174)

    It's the most misunderstood thing in business - do good work, make the customers happy, create good value and profit becomes a side effect.

  • by Anonymous Coward on Tuesday October 25, 2011 @08:13PM (#37839190)

    Sculley saved the company from Jobs. The share price rose after Jobs ouster because some semblance of sane management was introduced. It started failing in the mid-nineties because it had a crap OS which was useless to people in the real world and no plan to replace it with something useful. In fact Apple only joined the 20th Century in having a pre-emptive multi-tasking OS in the 21st Century.

  • Re:Legacy (Score:3, Insightful)

    by Russ1642 (1087959) on Tuesday October 25, 2011 @08:20PM (#37839270)
    The state of Apple in 10 years will be determined by many things, and imagining how things would have gone if Steve Jobs had survived is simply an exercise in religion. What would Steve do? What would Jesus do? How about looking at the real world instead.
  • by SpiralSpirit (874918) on Tuesday October 25, 2011 @08:22PM (#37839286)
    Indeed. Its funny when you see the difference between an engineer who became upper management, vs an MBA brought in from the pool of MBAs ready to leech off any company that will hire them. Its sadly similar in most marketing and human resources departments as well.
  • Re:How long... (Score:3, Insightful)

    by NeutronCowboy (896098) on Tuesday October 25, 2011 @08:26PM (#37839314)

    Ah, the classic "They make money - they suck!", or the equally entertaining "They used to be good before everyone knew about them."

  • Really? (Score:2, Insightful)

    by pookemon (909195) on Tuesday October 25, 2011 @08:26PM (#37839318) Homepage
    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...
  • Re:Ye Gawds! (Score:3, Insightful)

    by Ethanol-fueled (1125189) on Tuesday October 25, 2011 @08:38PM (#37839420) Homepage Journal
    Especially in this economy. My employer produces the best products in its niche, and neglected its repair/bug fixing apparatus because it could just sell or offer the customer a still-costy exchange for latest model. Now all of the customers not buying or exchanging but are sending in their existing shit to be fixed, and nobody wants to give the repair apparatus the funding it needs because there are too many middle-management bonuses at stake. Internal parasitism runs rampant in corporations, hand-in-hand with short-term profits.

    Also notice that I said, "best products in its niche." That means that our customers have too much invested in our products to launch any credible threat to use our competitors' gadgets. They're stuck. You, our customer, paid tens or even hundreds of thousands of dollars for our products, and we are fixing them with hairpins, duct tape, and bubblegum. We have no engineering support because all of our engineers are either doing jack shit waiting to retire, jumping ship, or are fixing the bugs in our newest product line which is years late and still doesn't work.

    And we're fine with that, because at this point all we care about are our paychecks. We are the ninety-nine percent.
  • Re:How long... (Score:5, Insightful)

    by MobileTatsu-NJG (946591) on Tuesday October 25, 2011 @08:38PM (#37839422)

    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.

  • by Tronster (25566) on Tuesday October 25, 2011 @08:46PM (#37839480) Homepage

    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.

  • by binarylarry (1338699) on Tuesday October 25, 2011 @09:04PM (#37839626)

    Sculley traded Apple's good reputation for short term profits.

    I wouldn't exactly call that saving Apple, it's typical MBA idiocy.

  • by LateArthurDent (1403947) on Tuesday October 25, 2011 @09:21PM (#37839734)

    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.

  • by AK Marc (707885) on Tuesday October 25, 2011 @09:29PM (#37839800)

    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.

  • by FyberOptic (813904) on Tuesday October 25, 2011 @09:54PM (#37839978)

    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.

  • by Daniel Dvorkin (106857) on Tuesday October 25, 2011 @10:04PM (#37840026) Homepage Journal

    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.

  • by Toam (1134401) on Tuesday October 25, 2011 @10:22PM (#37840150)

    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.

  • by Karlt1 (231423) on Tuesday October 25, 2011 @10:23PM (#37840156)

    Laying off thousands of people, cutting hundreds of product lines to focus on three main products which are beginning to stagnate is hardly 'innovative'.

    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....

  • by Broolucks (1978922) on Tuesday October 25, 2011 @11:02PM (#37840464)

    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.

  • by mldi (1598123) on Tuesday October 25, 2011 @11:25PM (#37840590)
    Except that if anything, Apple is a marketing machine. They could have sold shit on a cracker.
  • by BasilBrush (643681) on Tuesday October 25, 2011 @11:52PM (#37840728)

    Ideas are ten a penny. It's execution that matters. A touchscreen smartphone in 2007. So what? The finished iPhone? An innovative product and instant success.

    A successful product design isn't a case of an idea. It's a series of difficult questions, answered with good answers, right through the development process. Jobs asked many of those difficult questions, and had the taste to know what were good answers. That was a major part of his role.

  • by iknowcss (937215) on Wednesday October 26, 2011 @12:06AM (#37840814) Homepage
    Let me guess, you've come up with ideas that you thought would have benefited your employer, but the people with a broader perspective of the business decided that they weren't cost effective or viable, right? Ideas are like assholes: everyone has one. It takes an individual with foresight, leadership and determination to consider those ideas, pick the best ones, and apply the right amount of resources in the right places. The iPhone was one of probably hundreds or thousands of ideas Steve heard on a regular basis. He saw the potential and acted on it, effectively changing the entire mobile computing landscape. By the way, no one was stopping employee number 24621 from taking his idea and running with it. He chose to work at Apple because he lacks the skills, resources or connections necessary to bring his idea to life. This is where people like Steve Jobs are important. They bring those skills, resources and connections together to make a successful product.
  • by Nyder (754090) on Wednesday October 26, 2011 @12:13AM (#37840852) Journal

    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.

    Um, no, it's not a surprise.

    When your company is circling the drain, and all your previous products don't cut it, then yes, you bet everything on something new, because if you don't, your out of the race anyways. This is what jobs did with OSX, and led to his other stuff.

    You people talk Jobs up like he was the messiah or something, but he was just a businessman that truely, got lucky. He got lucky by being able to take a company that was dead, give it a new purpose, and then capitalize on it. Now he's dead. Guess that's life for ya.

    And if i'm wrong, and Jobs wasn't lucky, then apple will continue it's domiance in everything it puts out. Which in a small amount of time, we will know for sure.

  • Re:Legacy (Score:4, Insightful)

    by shadowrat (1069614) on Wednesday October 26, 2011 @12:21AM (#37840890)
    Jobs will be revered no matter what happens to Apple. I don't think that anyone can deny apple hasn't been remarkably successful during the era of Jobs. If Apple continues to grow and succeed, Everyone will praise the vision of Jobs. If Apple falters, everyone will point out that Jobs was such a genius visionary and how could any company survive without him?
  • by im_thatoneguy (819432) on Wednesday October 26, 2011 @04:50AM (#37841744)

    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: (Score:4, Insightful)

    by taiwanjohn (103839) on Wednesday October 26, 2011 @08:36AM (#37842764)

    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:

    "The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities; that is, in proportion to the revenue which they respectively enjoy under the protection of the state. The expense of government to the individuals of a great nation is like the expense of management to the joint tenants of a great estate, who are all obliged to contribute in proportion to their respective interests in the estate. In the observation or neglect of this maxim consists what is called the equality or inequality of taxation."

"Consequences, Schmonsequences, as long as I'm rich." -- "Ali Baba Bunny" [1957, Chuck Jones]

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