Steve Jobs Solved the Innovator’s Dilemma

  • Posted: 25 October 2011 10:21 PM

    Steve Jobs Solved the Innovator’s Dilemma

    By James Allworth

    (W)hen John Sculley took over ? Steve Jobs described one fundamental root cause of Apple’s problems. That was to let profitability outweigh passion: “My passion has been to build an enduring company where people were motivated to make great products. The products, not the profits, were the motivation. Sculley flipped these priorities to where the goal was to make money. It’s a subtle difference, but it ends up meaning everything.”

    (Jobs) transitioned the focus of Apple away from profits. Profit was viewed as necessary, but not sufficient, to justify everything Apple did. That attitude resulted in a company that looks entirely different to almost any other modern Fortune 500 company.

    By taking this approach, Apple bent all the rules of disruption. To disrupt yourself, for example, Professor Christensen’s research would typically prescribe setting up a separate company that eventually goes on to defeat the parent. It’s incredibly hard to do this successfully…the number of companies that have successfully managed to do it is a very, very short list. And yet Apple’s doing it to itself right now with the utmost of ease.

    They can do it because Apple hasn’t optimized its organization to maximize profit. Instead, it has made the creation of value for customers its priority. When you do this, the fear of cannibalization or disruption of one’s self just melts away. In fact, when your mission is based around creating customer value, around creating great products, cannibalization and disruption aren’t “bad things” to be avoided. They’re things you actually strive for ? because they let you improve the outcome for your customer.

    I highly commend this article to each and every one of you.

         
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    Posted: 25 October 2011 11:55 PM #1

    Good article from Allworth for the most part.

    Apple exists to serve the customer.  You might always wonder after reading the Steve Jobs bio or hearing “horror stories” from disaffected ex-employees about how Apple’s execs or SJ himself would have sized you up as a person or intelligence, but as a customer, the engine of Apple’s innovation, you always know that Apple just plain loves you.  Apple the company lives to surprise, delight, and make you the customer’s life better.  (Forget that BS about planned obsolescence and up-sales and snake oil and P.T. Barnum stuff.  Customers don’t fall for repeated lies and bad business behavior long-term.)

    It really is so simple you don’t need a business degree or MBA to understand it.  When you run your business in a disciplined manner, but your primary focus is your customer and not yourself, great things can happen, and your company’s natural inclination is to be unselfish.  Apple gets this the best of any tech company and as long as it sticks to that principle no one will ever top it.

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
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    Posted: 26 October 2011 02:01 AM #2

    I recall getting attacked by Mark for making this very case over the future of an Apple TV.  Apple cares less about profit and more about building the best products in the world.

    SJ made this point many times in relations to aapl stock as well.  Good products will eventually give good returns to investors.

         
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    Posted: 26 October 2011 03:51 AM #3

    omacvi - 26 October 2011 05:01 AM

    Apple cares less about profit and more about building the best products in the world.

    I would not be able to testify to that in under oath.

         
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    Posted: 26 October 2011 03:53 AM #4

    Oh?

    How has Apple profiteered off you more than your typical company?

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    The Summer of AAPL is here.  Enjoy it (responsibly) while it lasts.
    AFB Night Owl Team™
    Thanks, Steve.

         
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    Posted: 26 October 2011 04:03 AM #5

    The quoted statement has 2 parts.  For part 1.  “Apple cares less about profit” whereas you paraphrased it so that it meant “Apple actually profits more and does so in a greedy manner.  There could be an in-between case where Apple neither cares more or less and is not more or less greedy than other major tech companies.

    The 2nd part is easier to critique.  “Apple makes the best products in the world.”  If this were true, why dont they ship all of their good products ?  The plain fact is—which products are the best—has not been defined.  Even if this were limited to only PC’s or phones, are there not some obvious improvements to be made ?

    Pick one category and tell me which is the best.

         
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    Posted: 27 October 2011 01:48 PM #6

    Mav - 26 October 2011 02:55 AM

    It really is so simple you don’t need a business degree or MBA to understand it.

    Actually, I think such a degree might make it harder to understand, and I say this as someone who teaches part time in a college business department.

    As the article points out, Apple does a lot of things the opposite of what is taught in the ivory tower.

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    We filed for over 200 patents for all the inventions in iPhone and we intend to protect them. — Steve Jobs, 2007