– Having been dismissed as a footnote in the personal computer industry, Apple is now the market leader in computers costing more than $1,000. In one recent month, its market share in this segment exceeded 90%.
– Though it was a late entrant into the mobile phone business, Apple currently makes more money from roughly 3% of the global handset market than Nokia makes from more than 30%.
– Within six years of launching its online music store in 2003, Apple had become the world’s largest music retailer.
– Apple’s first physical store opened in 2001. Five years later, Apple’s sparse, elegant shops were generating four times more revenue per square foot than its big box competitors,v and its Fifth Avenue store in New York is thought to be the most profitable retail outlet in the world.
– At $180 billion, Apple’s market value is currently three and half times that of Nokia, and more than 60% higher than Hewlett-Packard’s—a company with three times Apple’s revenue.
So rather than fretting about the prospects for the iPad, clever Apple watchers and envious wannabes should be asking themselves: How in the world could one company have accomplished all this? How do you build an organization that is capable of reinventing not just one industry but four—computing, music, electronics retailing and mobile phones. How do you do the unprecedented repeatedly?
Competitors and business analysts would probably credit Apple’s gravity-defying success to a contrarian strategy that . . .
Focuses heavily on design.
Fuses hardware and software.
Integrates a broad array of complementary technologies.
Locks up customers with velvet hand-cuffs.
Harnesses the efforts of independent software developers.
Leverages the company’s core competencies into new markets.
But as logical as this analysis may seem, it’s also unsatisfying. It reveals something of the “how,” but nothing around the “why.” Why has Apple been able to rewrite the rules in a handful of industries when most companies struggle to do it in even once? Why does the company seem to take such pride in defying conventional wisdom? And most importantly, why is it able to routinely deliver the exceptional?
Nevertheless, I don’t think it’s a particular strategy that makes Apple Apple. Nor can you attribute all of the company’s success to the executive abilities of Steve Jobs. Instead, I believe the company’s extraordinary run of success reflects an unstinting devotion to a particular set of values. Within the universe of inventors, designers and artists, these values aren’t particularly remarkable; but within the universe of Fortune 500 companies, they are as rare as a rose in winter.
It’s not too hard to deduce at least some of the ideals that have propelled the company forward . . .
Be passionate.
Lead, don’t follow.
Aim to surprise.
Be unreasonable.
Innovate incessantly and pervasively.
Sweat the details.
Think like an engineer, feel like an artist.
Apple—but if they aren’t, they should be! For me, the case of Apple is just a convenient and plausible vehicle for driving home a fundamental truth: you can’t improve a company’s performance without improving its values. So don’t get distracted by all the things you hate about Apple. I agree: it’s a company, not a shrine.
With that out of the way, let’s compare and contrast. If the values in the left hand column characterize Apple (or my airbrushed rendering of it), what are the values that characterize your company? I’m guessing it’s something closer to what’s on the right.
Be passionate. Be rational.
Lead, don’t follow. Be cautious.
Aim to surprise. Aim to satisfy.
Be unreasonable. Be practical.
Innovate incessantly. Innovate here and there.
Sweat the details. Get it mostly right.
Think like an engineer, Think like an engineer,
feel like an artist. feel like an accountant.
Unlike Apple, most companies have a lot more accountants than artists. Most are prisoners of Management 1.0—of industrial-age management practices that emphasize discipline, focus, efficiency and alignment above all else. They are bound by the shackles of a management model that is utilitarian, antiseptic and hyper-rational. And that’s why they won’t soon mimic Apple’s success.
But what if Apple’s passions were the norm rather than the exception? What kind of world would it be if the values I’ve attributed to Apple were the values that characterized the world’s leading insurance company, or publisher or shipping company or airline or hotel chain? What if they were the cherished ideals of the paper shufflers at the Internal Revenue Service and the Department of Motor Vehicles? OK, now I’m hallucinating. But I still can’t help but dream of a world in which Apple seems a lot less exceptional because every other organization has become more so."
Gary Hamel: Deconstructing Apple - Gary Hamel’s Management 2.0 - WSJ
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