Leading Innovation and Change - Case Study Example

Leading Innovation and Change Case Study Analysis Holistic Application of Innovation and Change in Apple Computer Inc. Change and innovation processes need to be applied holistically in an organization for them to be effective. This research paper details and analyzes the innovative and change management dynamics that have occurred or are present in Apple Computer Inc. to study how they have been applied holistically with examples. A management team that works in harmony Apple’s CEO Steve Jobs is famous for his creative and visionary management and Jonathon Ives as the leading designer of Apple’s products. But it is a team that makes a successful enterprise and Apple has a strong engineering and other teams to back this leadership. Steve is also well-known as a innovator himself and for being a “tremendous motivator” (Hargreaves, 2009) Judy Estrin (2008) writing in Closing the Innovation Gap likens the innovative organisation to a biological ecosystem. She defines the “set of core values that must work in balance to support innovation: questioning, risk taking, openness, patience, and trust”. It is thus a holistic approach that also requires mutual trust and patience between executives, boards of directors, investors, and employees that is necessary. The entire organisation’s systems, structures, processes, departments, teams, objectives etc. must be ‘in tune’ to work for innovation. These have to be established or set in place and be in harmony with each other. That is why the role of the management is central. As one of the resistances to innovation, Judy points out the fact that many companies are “increasingly more focused on short-term gains” (ibid). For a while in the mid 1990s, Apple under Gil Amelio’s leadership fell for this trap by pricing its computers excessively. It is notable that whilst Apple made huge profits on its sales, it was losing market share and this paved the way for Microsoft to dominate the computing industry. Although the aforementioned and other qualities necessary for innovation are not measurable, the success of innovation can be measured by the normal corporate statistics and accounting ratios, such as increases in sales, profits and share price, and reduction in production and other costs to name a few. For example, Apple’s recent period of innovation is mirrored by its drastic increase in share price over the last few years. The ‘think different’ philosophy pervades Apple. This is a holistic statement because the whole corporate structure and culture is defined by thinking differently. An example of its success was demonstrated when the iMac was launched in 1998. This remarkable all-in-one desktop started a revolution in Apple product design by ending the traditional beige cases. More surprisingly at the time though was the fact that the iMac used USB and came without a floppy drive. What this demonstrated was Apple’s forward thinking in exploiting existing technologies. Intel developed USB but many PC hardware manufacturers continued to use old-style connectors that predated USB technology. Whilst other companies were ignoring useful technologies, only “Apple was listening… [while others] were unwilling to be the first to think different, Apple made that slogan its corporate motto with its 1998 iMac… [and this] kickstarted demand for USB-connected products” (Zisman, 2008). Connections and collaborations with other companies Apple has demonstrated its partnership skills with other companies on several occasions both for its own benefits and to bring about industry wide changes. For example, “Jobs’ skills at negotiating with companies have been invaluable for Apple… Convincing a company like AT&T to partner with Apple on a product unseen, convincing the music industry that this is the wave of the future and they have to get on board” (Hargreaves, 2009) were both significant accomplishments. Having strategic partners for collaboration and access to key resources, establishing strategic distribution channels, and so on is essential for having the power to make great industry wide changes. Organizational learning processes and strategies Besides the heavy capital investment required for hardware manufacturing whilst Apple also makes its own operating system, the other major reason why Apple products tend to be expensive is that it spends a large amount on research and development. Apple also has a strong relationship with Mac programmers. For example, if a third party program has bugs or crashes, a system report is automatically generated to provide the option for the user to send it to Apple online. Apple uses the feedback from these to work with other companies to improve their products. In fact, Apple has a solid Apple Developer Connection (ADC) through which it reaches out to developers to evaluate and improve on emerging software. With the release of Mac OS X, Apple has also made the kernel (though not the interface) of its Macintosh operating system open source. These are examples of solution-focused learning because the aim is to research and learn before offering the product, which is the outcome. Failure is also part of the learning process and Apple has learnt form some past mistakes too such as the failed Newton PDA in the 1990s. It involves all the stages of diagnosis, research, solution, implementation, and evaluation. It is a smooth process that begins with identifying needs, goes through a stage of learning, and finally releases its solution. Whereas most technology companies focus on customer demands, Apple carefully researches customer needs (The Economist, 2007). A corporate culture that is supported by its customers Other companies can claim that there exists a great cultural cohesion amongst its workforce but not many can claim that the identity is so strong that it has diehard supporters from amongst its customers too. It is not just design and architecture but also image branding that Apple has built around itself, and this is what reinforces its culture. Macintosh fans are an important and integral part of the Apple culture and customer relationships help Apple products to be desired and admired. Apple is also skilful in ‘playing’ with its customers by creating ‘buzz’ in the marketplace and timely product releases. All departments and teams working together for seamless integration Apple makes well-designed products for which it has won many innovation-in-design awards, but as Steve Jobs points out, ‘design’ is not just how something looks, “if you dig deeper, it’s really how it works” (Jobs). Apple pays great attention to ensuring that all its products work together. This means that teams working on the operating system, the hardware, Apple’s own software, third party software, etc. work together on a common purpose to ensure seamless integration. The ‘digital hub’ of products that work together, all-in-one designs, ‘plug-and-play’ philosophy, ‘digital lifestyle’ revolution etc. are all evidence of this teamwork and single purpose. During the decade prior to Steve Jobs’ return to Apple in 1997 the company was struggling to innovate like it had been in its early years. When asked how we can learn from this period, Steve stressed the need for a “very product-oriented culture” (Jobs, 2004). Many companies have great engineers and smart people “but ultimately, there needs to be some gravitational force that pulls it all together. Otherwise, you can get great pieces of technology… but it doesn’t add up to much. That’s what was missing at Apple for a while” (ibid). The ‘gravitational pull’ therefore is what makes all the parts work together. In his book Sketching User Experiences, Buxton (2007) mentions a researcher at Apple’s top competitor who complained that executives at his company were instructing him… to “make it more like the iPod – you know, simple and cool”.” Whilst this makes it frustrating for competitors to innovate without being able to apply their own creative thinking, it highlights two important ingredients viz. simplicity and coolness of successful innovation. Both of these can perhaps come under the umbrella of intuitiveness, which is something that Apple excels at especially with the design of the Macintosh operating system. Rather than attempting to mimic Apple’s designs, the focus should be on trying to understand and implement the “approach to design and learning” from the “process of iteration and innovation”. Extended networks of innovation that incorporate outsiders Apple is clever at not only using its own research and development efforts to bring in innovation but also in using the creative ideas and resources of others by having an extended innovation network with no defined boundaries. This is called open innovation (Brown, 2006). The idea for the iPod is a case in point. The idea actually came from outside Apple, but whilst others refused to take the risk, only Apple saw and exploited the potential and subsequently benefited hugely from it. The iPod and iPhone have set new standards for portable music players and smart phones respectively. But more fundamentally, their architectures have been built with extensibility in mind. This means that they have “the fundamental capability for other companies to develop add-on products” (Carrol, 2007) that are designed to extend their software features and capabilites. In this way Apple has extended the network of potential for innovation to include outsiders to the organization viz. customers, suppliers, partners and any other interested parties to innovate on Apple’s behalf. Operating systems in general allow others to make programs that enhance the functionality of the host computer, but Apple used this same philosophy in a special way with more specialised products. This enhances the appeal of these products further and continually adds to their value through encouraging and utilising the unleashed creativity of other people. References Brown, John S. et al. (2006). Creating Nets: Getting the Most From Open Innovation. The McKinsey Quarterly, 2006. Buxton, Bill. (2007). Sketching User Experiences. Morgan Kaufmann. Carrol, Jim. (2007). What do innovative companies do that other companies don’t do? Jim Carrol’s blog – Recently in Innovation Category. June 18, 2007. Available at: http://www.jimcarroll.com/blog/innovation/. Economist, The. (2007). Lessons From Apple. The Economist. June 7, 2007. Estrin, Judy. (2008). Closing the Innovation Gap: Reigniting the Spark of Creativity in a Global Economy. McGraw-Hill. Hargreaves, Andy. (2009). Quoted in: Michaels, P. and More, D. (2009). Steve Jobs taking leave of absence from Apple (Updated). Macworld News. Jan. 14, 2009. Retrieved Jan. 16 from http://www.macworld.co.uk/mac/news/index.cfm?newsid=24409. Jobs. (n.d.). Quoted in Buxton, B. (2007). Sketching User Experiences. Morgan Kaufmann. Jobs, Steve. (2004). Quoted in Burrows, P. (Ed.) (2004). The Seed of Apple’s Innovation. Voices of the Innovators. Business Week. Oct. 12, 2004. Available at: http://www.businessweek.com/bwdaily/dnflash/oct2004/nf20041012_4018_db083.htm. Zisman, Alan. (2008). Apple Innovation Includes Exploiting Existing Technologies Others Ignore. Low End Mac. Sep. 30, 2008. Available at: http://lowendmac.com/zisman/08az/apple-innovation.html. Read More