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One of the most misunderstood concepts in innovation management is why some companies can bring their ideas to life and continue innovating, while in other companies good ideas get no traction and die.
Apple has long been seen as one of the world’s most innovative companies, but since the passing away of Steve Jobs in 2011 it has found it much more difficult to continue innovating.
In fact, this year it became clear that Apple is more concerned with making small improvements to its existing products than really trying to “Think Different”, letting other companies like Google and Microsoft take the innovation crown they previously held.
Ironically, in an interview extract in the video above, Steve Jobs himself talked about why certain companies lose their innovative edge, exactly what is happening at the company he helped build.
In the video, Jobs talks about the time he made a deal with Xerox to get an inside look at the technologies they were working on in the late 1970s, where Jobs first saw a working example of a graphical user interface using a mouse and menus.
Malcolm Gladwell also wrote an excellent article for the New Yorker about this day which changed the history of personal computing, which I highly recommend you read if you are interested in how ideas evolve between companies.
As Jobs sees it, different types of companies analyse who is “helping the company the most” differently.He notes that in some companies which are young and focused on growth
He notes that in some companies which are young and focused on growth, the people who are “Product people”, and working to improve the current product and develop new ones to help the company grow, are the ones who get a lot of recognition and get promoted, ultimately getting into the senior management positions and encouraging others to develop their ideas.
However, in other industries with a slower pace of change, product improvement isn’t seen as importantly. The example he cites here is PepsiCo, who would not dare to change their recipe and therefore would only make product changes once every ten years or so. In companies like this, the people who appear to be bringing the most benefit to the company are the ones making the most money from the product, which are the Sales & Marketing people, and therefore these are the people who get promoted.
What Jobs doesn’t note is that in a similar vein, people who work on improving efficiency by lowering costs also usually get promoted, and are usually from the “Operations” division.
When these “non-product” people get promoted, they bring their priorities from their own work up into leadership, as those habits are what helped them succeed. In these situations, those prioritise will likely be things like sales incentives & training, efficiency programmes or marketing plans, while investment in innovation is a lower priority, especially if it could risk changing the product which is currently performing well.
This can also happen in technology companies which have developed a monopoly, as Jobs cites happened with Xerox and IBM in the 1980s. In those companies, which invested heavily in research & development, even though amazing new ideas and technologies were being developed in their laboratories, the focus was never on getting them into the mass-market, because the senior leadership weren’t focused on that.
This is what allowed Apple to see the seed of an amazing yet ignored innovation, and exploit it successfully.
Ironically, a similar thing appears to be happening at Apple nowadays.
With Tim Cook in charge, Apple has continued to successfully grow its revenue and sell more products. This is not surprising, as Cook was formerly the Chief Operations Officer of Apple.
Yet at the same time, the industry is beginning to criticise Apple’s ability to launch products which are truly forward thinking, or to even keep the consistent product ecosystem which made people fall in love with their design and be willing to pay a premium in the first place.
An excellent example is how in 2016, Apple launched new versions of its iPhone and MacBook. The iPhone 7 removed the headphone jack, keeping only the “Lightning” port at the bottom. The new MacBooks are regarded as less powerful than their predecessor and only a little thinner, but have only the newest USB Type-C ports. This means that for the first time, you cannot plug your new iPhone into your new MacBook without paying for additional adapters, a concept which would make Steve Jobs roll over in his grave.
This means that for the first time, you cannot plug your new iPhone into your new MacBook without paying for additional adapters, a concept which would make Steve Jobs roll over in his grave.
Apple isn’t the only company which eventually moves on from their visionary, product-centered founders to the detriment of their innovation efforts.
Yet if they want to continue to succeed, they need to ensure the desire to find and exploit original new ideas remains part of the company culture, and not get lost in the spreadsheets.