I wrote this a while ago (2016 I think, maybe earlier) – and its being sitting in draft doing nothing. I thought it time to put it out there. Have added a few comments to make it seem like it was written recently…enjoy
I have been subjected, like many of you I suspect, to Apple being used as the pinnacle of innovation in many a business conversation – usually with someone (internal and external to the company) trying to convince me that what we do today is inadequate and if we just did “x” , then we would be much more innovative , profitable and experience exponential growth “like Apple” (used to imply we are hopelessly behind, and its obvious what Apple is doing that we are not – but with little further detail). This has thankfully died down since Cook took over – but still is brought out now and again.
Like many people , I have been an Apple watcher over the years, and formed my view of Apple between 2001 to 2010 (iPod launch to iPad launch in “Apple Time”) – and it has not really changed since then. I am sure this point of view has been expressed – but I actually have never heard it – and yet another Apple talk by someone recently got me thinking I might as well add my version to the 1000’s already out there.
Apple to me is a company that has truly mastered Technology Management, Product management, Product development, Supply chain integration and above all launch disciplines , combined with a unique attention to detail in customer experience. All being traditional disciplines and not much to do with the type of innovation, implied in the introduction, people sell me about Apple.
My first realisation of this was when I bought the first iTouch – for those of you who have forgotten – it was released as a touch screen version of the iPod – with no apps store and no bluetooth. I then listened to Steve Jobs, in one of his live streamed events (at that time you needed to download the event), announce the Apps Store , and that everyone who had an iTouch could upgrade to the Apps store for an amazing discount rate of $25 (or something like this). I happily paid like others and was amazed at how little backlash there was to this charge. A little later he did the same for the launch of the next OS X and charged something like $50 to those that had to upgrade. Again little backlash.
I started to pay more attention to the product releases coming out of Apple. The lack of bluetooth at a time was completely against the de-facto rules of launch , as it was standard with competitors, yet still the iTouch was smash hit and with very little backlash from consumers (or non really I could determine at the time, except by reviewers). Then the perfect positioning of the iPhone on stage as a 3-in-1 device (phone, internet, music/messaging — the third always got a bit grey). Then the positioning of the iPad as the missing piece in our lives with iPod/itouch/iPhone at one end of the mobile spectrum and the Apple Air / Mac at the other and the blatantly obvious (when Steve showed us) gaping market hole between the two just waiting for the iPad / mini iPad to fill.
Each of these events were announced in advance on stage – with prices! I still consider that series of live stream events a better education in product strategy, product positioning, launch strategy and pricing strategy than anything in a text book. If you can find it – just look at the stage performance where Steve Jobs launches the iPad. The perfect start by redefining the product category of mobile devices – the perfect identification of a missing product position within that category (the iPad) and then perfect delivery into that gap. Why bother with text books or executive MBA – as an educational video on how to do product strategy, product positioning, value propositions and product pricing – I have never seen better.
Looking a little beyond these headline events – what does this show us? Well – to launch the itouch , then enable an upgrade to apps and next gen. OS X shows us that this was a product platform with these steps already designed in at the start. The same with iPhones and the upgrades that followed. To do this is not the sign of a company developing an MVP (Minimum variable Product – the textbook expectation of highly innovative companies developing business models and pivoting). Rather it is a development process and product that has been carefully thought through not just for first launch , but also for subsequent product releases.
This thought was re-inforced when meeting a US californian based consultant with insight to product development at Apple. He commented that at an early gate (note gate – so traditional set up) , the project team had to not only outline the product concept , but also the next (2 – 6?) releases that would come from that product family. In addition to this, there would often be parallel teams working on the same product or product sub-system – ensuring competition to drive innovation. Great for those companies with the money to do this.
Then there are the launches. The stage performances are used to announce world wide launches – but typically with US or a limited set of countries getting first release. Often other countries not even given a date at first. As the launch started , other dates would be announced for other countries. In terms of supply chain , I always thought this was a great way to manage the demand curve – so consumers are not disappointed and have a sense of the product being released all at once, but the supply chain using country roll out dates to control the demand curve , so it had a lever to pull to enable factory output to follow demand without significant customer backlash against product delays – Again that ability to manage customers feelings towards the company. Although even this has challenges if the demand is explosive against prediction, like the iPhoneX.
Then there is the complexity management. The apple product range is a supply chain wet dream with tight control of variants, only minimum variants available and a standard , incredibly disciplined and effective phase out (launch a new version – keep only the low end version of the old version – discontinue the others immediately to ensure a hard change over). Ensuring amazing scale with few variants. I don’t know how many SKU’s there are of the iPhone, but it can’t be much more than 100 – a number most companies would die for , in a product group. It also effectively allows new platforms of a product to be launched with low re-use from old platforms (so large room for manoeuvre to introduce completely new technologies, processes etc) but maintain supply chain scale and simplicity (and thereby cost that others can only achieve with partial platform upgrades, stretching lifetime of modules to keep costs low).
Finally the technology mastery. In each area – there is no doubt Apple has identified key technology leadership targets and invests heavily in them. Unlike many companies , it clearly believes process technology leadership is as important as product technology – with each product launch seeming to bring technology jumps in production areas it believes enhances its customer differentiators (like the single block Alu bodies, to the fused screens and so on). This selection of key technologies to lead is clearly also seen in the product technologies applied. And of course – they build this into the promotion – name another Company that will split its technology and show the insides in promotion videos? Not so many on my list – except maybe high end Swiss Watch makers.
All of this , for me, implies a company with an incredible discipline in technology management, product strategy , product development , go to market and supply chain excellence – not a company pushing innovation fast , at the limits , with a series on MVPs and rapid iterations, exploring uncertainties and business models. It implies a company that takes the integrated product development disciplines to the limit – fantastic product platform thinking infusing all steps, amazing product strategy built on customer insight – out of this world technology roadmap thinking tied to product strategy and customer insight – far thinking product development discipline with competition built in and supply chain and market launch completely in sync.
The magic for me is of course the same as all others point out – spotting new “mega” categories from the customer insight (however this is arrived at). This implies a user oriented culture deeply embedded in top management (or I guess most people would say in Steve Jobs personally – but not so sure), as well as in the organisation.
But from this point in – it is just out of the world execution and top management “ice in the stomach” (to use a Danish expression) to follow through convictions. I am sure Apple did its fact finding and saw that customers at that year (launch of the iTouch) – were not so bothered about bluetooth. They , I am sure, like all others , saw it was coming fast, and others would and did include it. But they also knew that it was not yet a key differentiator – so were willing to cut it from the development of the early versions – saving time , cost and speeding up development I am sure – knowing they would add it to the platform next year. To keep this discipline , plan to release the updates and do it, and then repeat it consistently every year- coordinating market, product development , supply chain and sales so seemlessy (from the outside) – using systems like country release delays to manage uncertainty – is truly impressive.
Similarly for the apps store addition to the iTouch. I am sure they were in the middle of apps store development , but could see they had enough differentiators to launch an iTouch without the store, with huge success. So instead of waiting , did that – cashed in – always making sure to ask for payment where they can see they have a unique differentiation to offer. Then cash in when they have the app store (another extra payment for those with older iTouchs) and cash in on upgrades and again in on OS X. They don’t charge when they can see the differentiation is not sufficient to ensure customers are more than happy to pay – so their pricing discipline again seems to be a refined science routed in customer insight.
All of this for me indicated a product Development, marketing and supply chain excellence company that is world class. It does not come over at all as an innovation company with Google like “20% – do what you want” innovation processes or anything like that. In fact all the elements seem very traditional management disciplines in one sense – but taken to a competence level rarely seen.
Then of course Apple adds one more layer. The almost obsessive attention to detail of customer experience at every level is close to unique. All tech Companies clearly now focus on user design, but where as I always feel places like Google do it case by case, for each product – then stitch it together – Apple seems to be able to embed the ecosystem experience deeply into the individual product experience. Clearly with advantages and disadvantages – I would not be surprised that this overall experience thinking means they did not see as clearly as say Amazon, the one trick Echo dot like activating music with voice – even with Siri being around forever.
I always remember the complete shock at the apple map launch failure. In itself it was not really that much of an issue – but to see apple slip in what seemed to have been over 10 years of launches with complete 100% attention to customer experience that never missed the mark – then have them make such a customer experience error – seemed just wrong. There have been other launch failures – but not with such a clear miss on customer experience.
So innovative or business excellence at its best? One thing is “there are no shortcuts on the road to success” seems to be true of Apple – there seems a hell of a lot of hard work , discipline and process excellence going on behind its “innovation success”. Maybe like the saying “chances seem to come more often to those that work hard” , we could say that “innovation seems to come more often to those that drive for customer experience and business execution excellence”
These views are my own and not related in any way to the company I work for.