One of Apple's attempts to diversify was their introduction of a digital camera in 1994, the QuickTake. According to Carlton (1997), "Within four years, the digital camera market would begin taking off, and as usual, Apple would largely sit on the sidelines of a category of product it had helped popularize" (p. 170). Marketing blunders were made and a lack of awareness of and taking action to face the competition ultimately killed the product. Morgan refers to an organization as an organism (1998, p. 35). A healthy organization operates in an open system, where its interaction with the surrounding environment keeps the organization healthy and relevant (Morgan, 1998, p. 41).
Apple continued their lack of awareness of the surrounding competitive business environment by having an unhealthy dependence on Microsoft, their arch-rival. "90 percent of the Mac's spreadsheet market was dominated by Microsoft Exel ..." (Carlton, 1997, p. 274). Their relationship with Microsoft was not only competitive but spiraled into hurting their client base for the sake of not sharing technology. They avoided using Microsoft's OLE (Object Linking and Embedding), a system for developing software that would have made software development much easier for Macintosh developers (Carlton, 1997, p. 274).
Thankfully, when Steve Jobs took over as interim CEO in 1997, things began to change. This closed environment corporate culture became more open, to a degree. Corporate willingness to not just adapt but to innovate, both internally and externally, allowed Apple to become the very healthy company it is today. Handsomely rewarding innovative employees such as Jonathan Ive, their lead industrial designer, has helped lead to their current success. Ives is the designer of Apple products including the iMac, the iPod, and the iPhone. This is an excellent example of Worley and Lawler's idea of "person-based pay" (Worley & Lawler, 2006, p. 20). Rewarding Jonathan Ive for his skill and creativity rather than solely for his position within the company provided him with the motivation to ascend new heights of inventiveness. His achievements led to his appointment by the Queen of England as a Knight Commander of the British Empire ("Apple's Jonathan Ive gets knighthood," 2011).
References:
1. Carlton, J. (1997). Apple : the inside story of intrigue, egomania, and business blunders. New York, NY: Random House, Inc.
2. Morgan, G. (1998). Images of organization. San Franciso, California: Berrett-Koehler. Thousand Oaks: Sage.
3. Worley, C. & Lawler, E. (2006). Designing organizations that are built for change. MIT Sloan Management Review, 48(1), 18-23.
4. Apple's Jonathan Ive gets knighthood in honours list (2011). Retrieved May 27, 2012 from http://www.bbc.co.uk/news/technology-16367022
I remember a quote from Steve Jobs that said, "A lot of times, people don't know what they want until you show it to them." Do you think this goes against Galbraith's idea that buyers have increasingly more power to shape organizations?
ReplyDeleteI also wonder if Apple is a good case to combat the ideas in population ecology, which was mentioned in Chapter 3 of Morgan. This theory contends that change is extremely hard for an organization, and when faced with new kinds of competition or environments, whole industries or types may come and go. Does Apple give us hope that an organization can completely reinvent itself, or was it that the environment selected Apple to succeed?
In answer to your first question, Apple has not been infallible in showing the way. They have made several mistakes in plowing new ground. Their third generation iPod Shuffle, similar to a stick of gum, was a failure. For the fourth-generation Shuffle, Apple returned to the same design the second generation. So buyers did shape the product direction.
DeleteApple does provide hope that it is possible to reinvent an organization. Completely new directions such as the iTunes Store expanded what they were with a great deal of success. In some senses, the environment also selected Apple to succeed. Their iPhone line continues to have an unparalleled "I want it" factor, in spite of being about seven months old. In the smart phone marketplace, months are nearly equivalent to years, in other marketplaces.
The Morgan quote that you included, "a healthy organization operates in an open system, where its interaction with the surrounding environment keeps the organization healthy and relevant," is especially interesting here because Apple (in the Jobs era, at least) seems to not only maintain an interaction with its surrounding environment, it seems to CREATE its surrounding environment.
ReplyDeletePaul,
ReplyDeleteHow sustainable do you think Apple's current structure is w/o Jobs? I know this is a pop-culture question, but given the context of class this week I feel it is especially relevant. He created a unique culture and the value of it is obvious. That being said I wonder how much it relied on him.
Nik, Apple stock has increased more as a percentage, when factored for length of time, after Steve Jobs died than while he was alive. That is not a direct answer to how the corporate structure will change, but it is a reflection of how the directions he established are still succeeding, even if some of those directions are changing.
DeleteI'll be interested to see how things shake out at Apple post Jobs. He obviously designed an organization that was built to change by managing talent like Ive in a way that allowed them to excel without the constraints of overbearing job descriptions, which I believe was a huge part of the company's success. I'm sure that Microsoft and other companies has some of the brightest minds in the industry, possibly even brighter and more innovative than Ive, but how that talent is utilized seems to be key to Apple's dominance in recent years.
DeleteI'd be interested to learn more about the rest of Apple's organizational structure, whether it was a few high-ranking, highly talented lieutenants that had free reign, and if lower-ranking employees were/are encouraged to develop the next iPod as well.
Interesting post, Paul. I'd be interested to hear your thoughts on which dimensions of the Star Model were most influential in Jobs' turnaround at Apple. My personal opinion was that when he focused the strategy of the company on a smaller, higher-quality number of product lines, getting out of the QuickTake and Newton kinds of businesses, this strategy was able to drive simplicity in processes, structure, etc.
ReplyDeleteParticularly in the light of the Morgan quote, "a healthy organization operates in an open system, where its interaction with the surrounding environment keeps the organization healthy and relevant," I wonder if Apple might be well-served by adopting a "20 percent time" concept for certain employees as found at Google and other high-tech, high-growth organizations.
Agreed on both accounts. Strategy seems to be the driving force at Apple, as their organization fits into the Star Model.
DeleteThe most recent time I met someone who worked at Apple's HQ in Cupertino, that lady said she barely had time to catch her breath. I think Apple is not providing any kind of employee margins, like Google does.
Paul, I am an avid fan of Apple products and very concerned about future leadership of the company because Steve was an outstanding motivator as well. Do you think his untimely departure will have an affect on employee morale, motivations and desire for reaching outside the box? Do you think Ivy's drive was fueled by Steve's leadership?
ReplyDeleteAudrey, my guess is that Apple's desire to continue its reach outside the box will continue, in spite of the death of Jobs. I think their economic growth is dependent on continued over-the-top innovation.
DeleteJonathan Ive's drive must have been fueled by Jobs' leadership. In reading Ive's history, his first projects of any significance were for Apple, so I don't know that he learned much outside of the Apple eco-system.