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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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  • by Anonymous Coward on Tuesday October 25, 2011 @07:49PM (#37838922)

    He can't because he's dead.

  • by jpmorgan (517966) on Tuesday October 25, 2011 @07:55PM (#37838986) Homepage

    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.

    • 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.
    • by AndrewStephens (815287) on Tuesday October 25, 2011 @08:19PM (#37839260) Homepage

      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.

      • 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.

        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

      • People forget what a huge leap it was to ditch everything that came before (including several up-and-coming products) and focus on OSX.

        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

    • by khallow (566160)

      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.

    • 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 BasilBrush (643681) on Tuesday October 25, 2011 @10:55PM (#37840418)

        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. ;-)

    • 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)

    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.

    • Re: (Score:3, Insightful)

      by Russ1642 (1087959)
      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.
    • 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 Hentes (2461350) on Tuesday October 25, 2011 @08:01PM (#37839066)

    Apple managed to turn profits by outsourceing the actual production so they could focus on design.

    • Apple outsourced production because assembling electronics in a 3rd world country costs you bubkes. Its funny that you think outsourcing is the cause of their success. They're good at polishing products, and their marketing machine has built a powerful brand image. Thats why they're successful.
  • 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.

    • 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

    • Re: (Score:3, Insightful)

      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
  • 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.
    • Re: (Score:3, Insightful)

      by SpiralSpirit (874918)
      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.
    • 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.

    • by Fozzyuw (950608)

      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.

      • by mvdwege (243851)

        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 this pretty much boils down to not caring about profit IN THIS QUARTER, but rather, a few years down the line. Also, the issue of cannibalization seems to have been largely sidestepped. The iPod wasn't a threat to Mac sales. The iPhone was not a threat to Mac sales, but was a bit of a threat to iPod sales, but the iPhone could effectively serve as a replacement (and without telephony, it was deemed the iPod touch). The serious threat of cannibalization came from the iPad, but I'm fairly sure
  • Really? (Score:2, Insightful)

    by pookemon (909195)
    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...
  • was to return what America used to do and be before MBA's took over.
  • Cherry picking Jobs (Score:5, Interesting)

    by Anonymous Coward on Tuesday October 25, 2011 @08:48PM (#37839504)

    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)

    by slasho81 (455509) on Tuesday October 25, 2011 @09:31PM (#37839810)
    This submission feels like pure PR for a book or two.
  • 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.

  • 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.

    • 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.

      • 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

  • by Animats (122034) on Wednesday October 26, 2011 @01:08AM (#37841052) Homepage

    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.

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