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Codifying asymmetry: How Apple became Jobsian

Any student of organizational theory must struggle with the question of how to assign weight to the influence of the leadership of a company. In the case of Apple, the question is:

Is Jobs is the embodiment of Apple or is Apple already Jobsian, imbued with his ethos?

John Gruber summed up (start at 8:00 min) the “Apple is Jobsian” argument by saying that Apple is Steve Jobs’ greatest creation and that he has been working on crafting the company as much as he has been crafting products. The result being that it’s well designed for sustainable longevity.

The arguments for “Jobs is Apple” are mostly rooted in anecdotes of a supreme leader that is indispensable to every decision and detail. There are also ample examples from history of companies who foundered after the departure of founders (Apple itself is notably cited.)

But beside armchair quarterbacking, what evidence is there that Apple is being engineered to operate independent of its founder? Unfortunately there is almost no organizational analysis for Apple. Unlike many of its contemporaries, there aren’t org charts or tell-all accounts on life in Cupertino. There are no anonymous “mini-aapl” blogs or tales from the disgruntled.

For this reason, a recent quote about the mysterious “Apple University” in Fortune caught my eye.

First a brief review of what was known.

Apple University was first mentioned in 2008 when Joel Podolny was hired from running Yale Management School to join Apple in creating this new “University”. I remember at the time thinking what such a thing might be. To leave the top job in one of the top business schools to join Apple must require some powerful incentives. I envisioned Apple entering into a far more ambitious iTunes project where they could be offering degree programs or teaching resources through the familiar store front.

But nothing was heard about Apple University again. Until yesterday.

According to the article in Fortune and some additional details from another source, Joel Podolny has been building an understanding of how Apple is run. He’s then been asked to codify this understanding into a curriculum that can be taught to Apple employees.

The idea that Apple is trying to capture its institutional processes and knowledge is very compelling. Few companies have self-knowledge. Fewer still try to codify it and teach it to new generations of leaders (Disney, McDonalds and Toyota have in-house training programs but they are mostly aimed at new hires).

For those who don’t bother, the consequences are a more rapid descent into disruption. I’ve experienced the consequences of the failure to remember decision processes. Knowledge about decisions disappears once the decision maker moves on, leaving a new generation to figure out the causes of success (and failure) all over again.

The evidence of the forgetting of history abounds at companies like Sony and Microsoft which seem to be behaving exactly opposite to how they once did. Sony, once a serial disruptor, turned into a sustainer. Microsoft who pioneered software as a business, cannot find new business models for software.

Apple’s decisions and outcomes are the stuff of legend. They famously act asymmetrically to what is “conventional wisdom”. Wisdom imparted supposedly through business schools but systematically contradicted by Apple’s principles:

  • Accountability without control
  • Lack of “P&L responsibility” for top management
  • Saying no to “better things”
  • Building products before markets are identified
  • Functional vs. hierarchical or divisional organzation
  • A disregard for polite consensus

So if this type of decision process is not codified, how is it going to persevere when convention dictates otherwise?

If the article is correct and there is an effort under way to codify and teach new generations “the Apple way” then the case for Apple being Jobsian grows a lot stronger.

  • Ted Kluaf

    Only if the training is successful. Moreover, the 3 years of attempting to teach Jobs indicates that the institutionalization of Jobsian thinking was less real than what the optimists had proposed (or at least that it still had/has significant room for improvement).

    Even if it is truly an in-our-blood-but-lets-take-vitamins-just-in-case situation, the truth is that, the more we learn, we're usually left with the same or more questions.

    • Hamranhansenhansen

      No, Joel Podolny is not studying Jobs, he's studying Apple. Only a few years ago, Apple was still in its comeback phase. The past few years is a natural time to recognize it is now running as it should and to codify why it is running well.

      • Kizedek

        yes. And it is running well because the current generation of VPs and leaders are thoroughly "Jobsian" already.

        @ Ted Kluaf,
        It is obvious that a thorough exercise to examine, analyze and document should take as much time as possible: it is for future generations of leaders that don't have immediate, first-hand access to the inspiring model of the founding leader.

        This is true of any organization or worldview. As soon as a compelling visionary inspiration is off the scene the torch has to be passed on. The immediately following (partaking in the experience alongside the founder), and even the next younger generation (one removed from the first-hand experience) are usually fine; but the following generations begin to question why they do what they do in a certain way, unless they are really "living it" for themselves. If they have something to grapple with for themselves (both good leaders in the preceding generation and historical and explanatory texts) then they are far more likely to go on to "live it" themselves, than to merely try to sustain some kind of weak and hollow echo and making fatal decisions in the process.

        "…the 3 years of attempting to teach Jobs indicates that the institutionalization of Jobsian thinking was less real than what the optimists had proposed (or at least that it still had/has significant room for improvement)."

        On the contrary, it tells me they are taking this seriously and making sure it is "real" for years and generations to come. The passion and will are certainly there, no doubt (if going purely by those of us who are Apple fans and speculate on these things is anything to go by, even though we are not privvy to the innerworkings of the Apple corporation). And the know-how and talent are certainly there today in the leadership and talent at Apple, probably throughout the organization. This is to guarantee the future.

        You seem to assume that this is a last ditch effort by Apple, to do "something" to stave off the oft-cited "impending doom" of Apple. And you seem to assume that it must not be working because we haven't heard anything of it for three years? And yet, Apple are doing something positive here, practically unheard of in other organizations.

  • CndnRschr

    Assuming the Apple University program is as described, it provides deep insight into how Apple thinks. Although some might see this as a selfish trip based on Steve Jobs ego, it is the opposite. Codifying the ethic and essence of Apple is incredibly pragmatic. If this program costs $100 million (an extreme exaggeration), if successful, it will have an ROI of at least 1000. This calculation is akin to Horace's theoretical rationale for Apple buying Google to remove the ~$300 billion weight of Android depressing value of iOS (deep market discount). The markets react severely when there is any news of Jobs health. His retirement from the company could wipe out billions in value. But Apple University provides a written coda of previous success which should extrapolate into future success. This is intended to mitigate the loss of Jobs from day to day operations and to ensure Apple's recipes for success are immortilized. Indeed, this is virtual cryogenics and far more cost-effective.

    • Hamranhansenhansen

      I hope they make it available to other companies, because if there were more companies that were run like Apple, we would all be better off. There is a huge business opportunity for smart people to essentially become the Steve Jobs of hundreds of other industries.

      • asymco

        The curriculum of Apple U would easily be the most important intellectual property of Apple.

      • CndnRschr

        Apple has a mixed record in corporate "philanthropy". There is a lot of vitriol expressed in some of the public statements (I thought Steve Jobs public spanking of RIM unnecessary and unprofessional – but it was entertaining). The corporate gestalt of Apple (and many other successful companies) is most effectively "shared" through employees leaving to set up their own start-ups and fuelling the industry in other ways. Indeed, should the curriculum achieve legendary status, it could be a tremendous talent draw for Apple – which, in of itself, is worth billions. Remember when all the young programmers dreamed of working at Microsoft to set themselves up for life? Who doesn't want to taste some of the Apple magic dust?

      • MattRichman

        I totally agree we would all be better off if they made Apple University available on iTunes University (or some other way). I also agree with Horace that there's no way Apple would release it.

        But, to play devils advocate: What would really happen? I'd be willing to bet that a bunch of their competitors still wouldn't have a clue what makes Apple so successful.

        Apple laid out their decade-long plan back in 2001. But it didn't matter since nobody listened. Some things never change.

      • davel

        Disseminating this might work. I think the hardest part is saying no. Apple now has the resources to do what it wants. The people running palm were from Apple. The WebOS is supposed to be a good piece of software, but the phone was not good enough. Did they say no enough? Did they have time? Apple famously says no to products and waits till the time is full.

        They have the Mac franchise and now the phone and ipod franchises.

        I wonder if there were 2 or 3 companies like Apple out there, if Apple would be as successful.

  • Hap

    While Apple may be able to run a school in a innovative and successful way, I'm still reminded of the following quote from J. Krishnamurti in a famous 1929 talk in which he dissolved a spiritual cult which had grown up around him.

    * * *
    You may remember the story of how the devil and a friend of his were walking down the street, when they saw ahead of them a man stoop down and pick up something from the ground, look at it, and put it away in his pocket.

    The friend said to the devil, "What did that man pick up?"

    "He picked up a piece of Truth," said the devil.

    "That is a very bad business for you, then," said his friend.

    "Oh, not at all," the devil replied," [one can almost hear him laughing...]

    "I am going to let him organize it."

    • asymco

      Perhaps for "spiritual truth" organization makes it evil. But for other forms of truth organization makes it science.

  • Ziad Fazel

    Horace, while I agree with most of what you wrote, I don't agree that Apple acts asymmetrically or systematically contradicting certain business wisdoms. You've drawn too stark a contrast. On many of these, I think Apple is further on a continuum from others, or executes better a common strategy, rather than having a unique strategy. For example:

    Saying no to "better things" is contrary to well established practices followed by many companies, under concepts such as kaizen, ISO-9000, Malcolm Baldridge, continuous improvement, etc.

    Building products before market identified depends on what you mean by "identified." The Newton (admittedly pre-Jobs) and the Motorola ROKR were early tests of whether a market existed for a PDA or iPhone. On the first, Palm picked Apple's pocket (pun intended) with a simpler more compact device like an appliance – a lesson Apple learned very well with the iPod and iPad. The ROKR helped define the iPhone. SUVs were concept cars which rescued the auto industry when the market developed for them and embraced them despite high oil prices. There is a market for a tablet computer, and has been for a decade, but Microsoft products failed to serve it. The market finally has the appliance-like device it waited for years, and that frustrated pent-up demand is mopping up every iPad that Apple's supply chain can crank out.

    Functional v Hierarchical – There has been significant matrixing within Apple as well: Bob Mansbridge of Mac hardware engineering also leading iPad hardware. Scott Forstall jumping from Mac OS development to iOS, and now back to Mac OS with the departure of Bertrand Serlet. Horace pointed to this in an article earlier today that Apple's lean R&D budget caused people to assigned across diverse projects, or moved within divisions as staff needs changed.

    I'd like to mention a few differences that Horace did not list here (although has discussed in other articles).

    1. Taking R&D as low as possible rather than trying to meet a target of other national champions or world-class companies of about 12%.

    2. Making little public comment about future products, when other companies count on pre-announcement and vapourware to stave off competition.

    3. Being silent while analyzing problems (see iPhone antenna, iPhone location tracking) until they can describe the problem fully and offer a solution, rather than immediately going into "damage control" with a PR consulting firm pushing the CEO to sound earnest while delivering platitudes.

    • iosweekly

      I think decribing the ROKR as a precursor to the iphone is strecthing the truth a bit – the only thing it added to the moto phone was the ability to sync up to 100 songs with itunes – at the time apple was already working on the multitouch interface that would become iOS, and I dont see any similarity between the ROKR and iOS version 1.0 (iphone genreation one), other than they both sync music with itunes.

      • Hamranhansenhansen

        Yeah, I think ROKR was a way to learn about carriers. I would bet you that every time Apple and Motorola met, Motorola would say the equivalent of "that sounds great, but the carriers won't allow that …" and ultimately, Apple realized they would have to go with a small, hungry carrier who was willing to break the rules. Because of the old school "AT&T" name, we forget that AT&T of 2007 was just a conglomerate of tiny carriers, trying to go national, very much in the shadow of Verizon. Solving the carriers was a huge part of Apple's success in mobile.

      • CndnRschr

        The initial deal was with Cingular, bought by AT&T after the iPhone deal but before its release. Good timing….

        I think you are right about the main lessons about ROKR. In fact, I'd add that it was such a crappy product that Apple realised that it wasn't just the carriers that were the problem, but that the device manufacturers themselves were clueless. Opportunity recognized, transformation accomplished!

      • EricE

        Not to be overly nit-picky but Cingular bought AT&T and then took their name.

        And it's really a shell game since it was just the baby bells that all started from AT&T originally re-consolidating :p

      • Ziad Fazel

        Just because you disagree with me, iosweekly, does not mean I am "strecthing the truth". I think you are missing most of the picture by focussing only on some changes to the phone itself with "the only thing it added to the moto phone was the ability to sync up to 100 songs with itunes" and "other than they both sync music with itunes."

        A phone with iTunes is a huge difference from the walled gardens the carriers were enforcing, and it was a very bold move for Motorola to risk upsetting them by partnering with an alternate source of music and ringtones. It was a test of completely different business model.

        There was also substantial tension in the relationship, with Motorola trying to develop feature phones that would deliver music like iPods, and Apple trying to prevent feature phones from damaging their iPod sales. Even the ROKR was limited to 100 songs, and Motorola felt betrayed with Apple's introduction of the Nano. But Motorola was also desperate for something after the RAZR.

        From that collaboration with Motorola, Apple learned:
        – the Apple could not just layer on top of a phone's operating system – it would need to completely integrate the hardware, OS and key applications like mail, calendar, address book, browser, sms..
        – that Apple would need to find carriers who needed something disruptive to grow or protect their business
        – that a partnership with a phone manufacturer would not meet both company's interests

        Apple sharing a portion of the ongoing revenues with the carriers in an unsubsidized iPhone 1.0 was an attempt to replace the carriers' lost revenue from their walled gardens, but by iPhone 2.0 was no longer necessary, and carriers were happy to return to the traditional subsidy for long contract model.

        There's a good article about this here.
        http://www.wired.com/wired/archive/13.11/phone.ht

        The Motorola ROKR definitely did help define the iPhone in many ways – business model, integration, relationship with carriers – much more than just putting iTunes on a phone.

      • Ziad Fazel

        You're missing most of the picture in looking only at iTunes common to the ROKR and iPhone 1.0, and then saying I am "strecthing the truth a bit."

        I said the ROKR helped define the iPhone. Apple learned much about the vertical integration required, smartphone design, the inherent conflict of relying on a smartphone manufacturer as partner, how to replace the value of the walled garden for carriers….
        http://www.wired.com/wired/archive/13.11/phone.ht

        These lessons were applied in iPhone 1.0, and its unusual model of sharing data plan revenues with the carrier, partly to make up for their loss of income from their walled gardens of music and ringtones. By iPhone 2.0 the carriers were OK with the usual subsidized hardware for long contract model.

        When I commented on Horace's point about releasing products when the market was identified, this iPhone market needed development of the carrier distribution channel, and potential hardware partner, more than the customers who wanted their beloved iPod in an Apple phone. ROKR and iPhone 1.0 were calculated risks Apple made to develop the market for what has turned out to be a huge and lucrative investment.

  • relentlessfocus

    Google recently carried out a not dissimilar exercise in which they wanted to understand what "good management " is http://www.nytimes.com/2011/03/13/business/13hire… so they could develop better managers. They took a data mining and statistical analysis approach going through all of their HR resources data and analysed and dissected and wound up with an 8 point plan by which Google can analyse prospective managers and train them on weaknesses.

    Apple's approach is to hire one very bright guy with specialised experience and presumably a passion for education who presumably gets to put together his own team and the guy then presumably studies how apple functions, reveals his findings to Steve Jobs who gives the ok and then this guy tries to think up educational strategies that will train managers to think in the desired ways so that the "Apple Way" is continued beyond Steve.

    Without prejudging the success of either approach for the context in which they're meant to be used I think it reveals something about the DNA of each company that Google takes a data mining/statistical analysis approach and Apple takes the "key man" approach. Apple has a history of focusing on the individual as actor with the power to change things from the very first 1984 Superbowl ad where one indivudual smashes organisational totalitarian domination to the Think Different ads that portrayed individuals through history who have made a difference and then boiling down the whole Mac vs PC argument as a dialogue between 2 individuals. And even with iPad and iPhone commercials the ads are about empowering individuals to do things.

    One last thought is that Apple University is an internal process designed to maintain an Apple competitive advantage and thus one can understand why Apple is reluctant to talk about Steve's future because it brings into focus Apple's strategies for maintaining this competitive advantage that Apple is somehow trying to codify. It's a bit like the coke formula. You just don't discuss it.

    • http://www.geise.com PXLated

      Google's data mining analysis is all they can do. Google is totally left-brained (and hires for that). Apple on the other hand is equal parts left & right brain. The difference between teaching math (Google) vs creativity (Apple). The former is probably easier whereas the latter takes a lot of study to pick up the nuances.

    • http://www.formandfunction.com/ Jonathan Gibson

      How do we know this 'one guy' isn't supported with hard data to back his own assertions? Someone like that isn't prone to hand-waiving and guru-talk. We are all reading Tea Leaves divining the shape of things to come and can only speculate so far before it's meaningless.

      • relentlessfocus

        I think you have misunderstood my comment. Podolny is a well known and well proven theoretician and professional. I didn't say or even imply anything about "hand waving or guru like talk" and that doesn't represent my thinking.

        My point was simply that rather than create a team of statisticians Apple picked one known expert to spear head their attempt to codifying what they can. They either head hunted Podolny or hired him after what would likely be significant interview process. They must have liked some qualities of this chap to give him the post and presumably they liked what he had to say. Why else hire him?

        And lastly, while many posts here are trying to read tea leaves, my post specifically mentions that its an observation about company styles. Given that you seem to have misunderstood what I said in my post I can fully see how you conclude your misunderstanding is meaningless.

      • EricE

        Well, I think the "tea leaves" comments are still justified since even though you are factoring in "company styles" and biographical information of the leader of "Apple U" that's still a pretty flimsy knowledge base to make any assertions from.

        When Google diversifies and achieves significant revenue from anything other than advertising, I'll be more impressed with their approaches. While I appreciate the comparisons to Google, Microsoft and others, to me the most telling thing about Apple is they have literally re-invented their core revenue stream three times now. Very few companies do it more than once. They have established three new markets – the original PC with the Apple II, the GUI with the Macintosh and the "Internet in your pocket" with the iPhone. Appliance "for the rest of us" computing with the iPad is next.

        And we have PC manufacturers making such heady decisions as whether to stick with USB 3 or include Thunderbolt :p

  • poke

    It'll be interesting to see what happens 10-20 years from now when the graduates of Apple University leave Apple to create and lead other companies. What if Apple can systematise the creation of systematically disruptive companies? Such a thing could have a greater lasting impact than any of Apple's products.

    • addicted

      We have already seen a lot of this. E.g., consider that WebOS, which is widely considered a better mobile OS than any other than iOS (and even this is debatable) was created by Rubenstein, who worked at Apple.

      • iosweekly

        Agreed. Rubensteins influence over HP/Palm is already evident, with HP planning on deploying WEB OS on every PC it ships, abnd the HP WebOS tablet looking like the only device with innovative features in the non-ipad tablet field.

      • Hamranhansenhansen

        WebOS is not even close to iOS. Anyone who debates this does not know what they are talking about. They do not have hardware acceleration, they are lacking all kinds of stuff.

        But it's certainly true that HP got some Apple DNA in their purchase of (the new) Palm. If you watch their February 2011 presentation, notice it was done in Keynote, which only runs on a Mac. Who would have thought that HP would be making their presentations on Macs?

      • asymco

        Thanks for the tip. I shared this on Twitter.

  • http://www.informationworkshop.org Mark Hernandez

    "Servo-systems" are in use all around us, such as our refrigerator which links a temperature sensor to the compressor so that when the temperature rises it snaps on to cool things back down again so the food doesn't spoil.

    When you look at yourself in the mirror every day you don't notice how you're slowly aging, and likewise it's hard for rapidly expanding companies to notice how they're slowly drifting off course, while hiring all those extra people, and slowly impacting their nimbleness.

    Apple University can be much like installing a servo-system so that things are kept on course even while the human beings may not notice the slow creep in things that will ultimately negatively impact the company's options in the future.

    It won't protect you from a meteor on a collision course, but it's just one more thing that helps to ensure sustained success — a part of the "fabric of solutions" since there's no silver-bullet answer to anything, ever.

    • Eric Gen

      Reminds me of a phrase from a boxing or martial arts perspective: "There are no guarantees, no matter what you do. But, there are many thing that you can do to improve the odds."

    • http://twitter.com/fictionalui @fictionalui

      Yeah.
      One thing I don't see mentioned often in this kind of discussion is the fact that in the last five years Apple has at least doubled, probably tripled, his employees.

      This kind of unavoidable headcount growth is usually what disrupts the internal effectiveness of very successful companies.
      As the article points out, the insights about Joel Podolny are a very telling sign that Apple recognizes very well this major risk and is actively working to minimize it.

      The public loves personification when discussing history, politics, business; focusing on leaders figures and forgetting that no single man's will and instinct can micromanage organizations of ten of thousands of people.
      Apple would never have been able to reach the point where it is now if it wasn't already able to operate autonomously from its patronizing founder.

      Moreover, Jobs is a self-taught entrepreneur whose business biography consists of two extremely successful failures (Apple 1.0 and NeXT) and a subsequent complete, overall triumph (Apple 2.0).

      While his own gut instinct and personality have always been the marks of his entrepreneurial style, you can't look at his career without concluding that what separates his juvenile efforts from the maturity's ones has to be related to a deep and frank evaluation of his failures and shortcomings as a business leader that undermined his creative genius.
      That is, to paraphrase what Gruber, Horace and others keep telling us, Jobs life experience let him mature from a designer of products to a designer of companies.

      It is telling that two of the very first C-level staff decisions he made when he got back at Apple were promoting Ive as design head and hiring Cook as COO – industrial design and industrial processes were two of his micromanaging obsessions at Apple 1.0 and NeXT.

      • EricE

        "That is, to paraphrase what Gruber, Horace and others keep telling us, Jobs life experience let him mature from a designer of products to a designer of companies."

        Nice!

    • Ziad Fazel

      Excellent analogy with servo-systems, Mark. Feedback loop is another way of saying it.

      In companies, the performance management process provides much of that feedback to employees. Where employees need training to improve their performance, in many companies (especially since the latest outsourcing binge) go to external training. Where they may learn practices that contradict Apple's success.

      Although Apple is being contrarian in insourcing its training program, it is ensuring its servo-system / feedback loop makes properly engineered corrections and improvements to the employees' performance. And is itself under Apple's control to correct and improve.

  • Rod

    Anyone has a link to the Gruber article?

  • Magnus K

    Ikea is another example of a company where the founder (Ingvar Kamprad) has gone to lengths to ensure that it remains long after he is gone. It is also an example of a company with "its own ways" and being secretive, with very limited insight into its organizational structure, as it is not on the market but being run by a Dutch (!) foundation. According to Kamprad a Dutch foundation is the most stable organization form there is, having sustained over hundreds of years including numerous wars and conflicts.

    So perhaps Apple will use its cash to buy back the company and ensure really longterm stability, secured from the market's ups and downs…

    • Peter Evans

      The "Dutch foundation" is a kind of charity with very low reporting requirements (a peculiar Dutch thing). Ikea use it to hide income and hide how income is dispersed to it's owners. To be blunt, it is a tax dodge.

    • CndnRschr

      IKEA is a company that has, in my opinion, lost its way (disclosure, I have a close family member working there and my perspective has soured the more I've heard). The quality of their products has deteriorated over the past decade. There treatment of staff is abysmal (emphasis on part time workers to avoid benefits) and their management structure promotes adherence to company ethic over individual innovation. This is a company that is going to spiral downwards. IKEA does have an interesting structure but I wouldn't compare it to Apple. Despite Jobs dominant personality, it is a public company, responsible to its share-holders and sensitive to the world. Maintenance of growth is not easy to achieve and there is much to be admired in the growth and success of IKEA, but you certainly don't do it by disrespecting your employees.

  • danthemason

    One tenant at Apple is that the market will take care of itself. They don't appear to be troubled in the least by the Wall Street crowd. With their cash position they need not be concerned.

    • Roger

      One tenet at Apple …

  • Omar

    I keep hearing about a possible buy back of shares, can someone enlighten me if this is possible, and how would going private benefit the companies long term outlook.

    • instig8r

      Not possible. They can't afford to buy it all at once and if they did in chunks it would inflate the price of what was left beyond what even they could pay. I don't care what they offered, if they wanted it, I'd want to keep my shares even more. And there's just too many hard-core AAPL-believers to let them get away with that. They had their chance in the 90's. That ship has sailed.

      • Hamranhansenhansen

        They could buy it all at once if they had a consortium made up of guys like Jobs and Larry Ellison. And what if Jobs announced his retirement and the stock crashed and then they bought it?

      • asymco

        I only half jokingly suggested that the consortium of buyers should bribe Jobs to announce his retirement and pick up the company for a song.

    • EricE

      You have stock to get capital to allow you to do things like expand, or research your next big thing.

      With Apple's cash horde, they really don't need the capital from the stock market. And not having a bunch of whiny shareholders, with the inevitable ones who think the can run the company better than management, would be a HUGE benefit to me.

      Apparently it doesn't affect Apple enough one way or the other – they don't seem inclined to change their stance in the market. And I just checked – with 71% of the stock owned by institutional investors, even if they wanted to buy it back it would be a huge undertaking.

  • db2011

    Is it possible that Apple will someday become a private company?

    • Pete

      Do you know anyone who has got the cash to take it private?

    • asymco

      This is in theory possible and even economically desirable but not practically possible. Going private is essentially a process of a group of private investors buying enough shares to force through a de-listing of the company. De-listing would reduce liquidity for shareholders and thus be very unpopular with a majority of shareholders. So the acquirers would need to buy a majority of the company.. At the same time, the buyers would need to pay a premium to the market price for control. This makes sense usually only for distressed companies and although Apple is almost priced as a distressed asset, the price would likely explode if a takeover were attempted.

      • http://twitter.com/ankleskater @ankleskater

        So that's how we can get AAPL price to rise – someone please start a rumor on AAPL takeover! :)

      • Ziad Fazel

        I think this would be an economic benefit in the short term, at best. It would only be for the shareholders taking advantage of the higher prices caused by Apple's hypothetical buyback.

        Apple has been excellent at reinvesting its earnings into growth in sales, earnings, market share, global reach, distribution channels, supply chain, product platforms…. While these have not yet been reflected in the share price (for reasons I hope we continue to discuss on Asymco) it is much better in the long term for Apple to invest in its business rather than its listed shares.

        We are now in an era where iPods and PCs are being supplemented and increasingly replaced by smartphones and tablets. But where is the puck going? Where does Jobs want to be like Gretzky? I suspect there is some other market for which Apple is preparing a massive investment. Perhaps film and television streaming over the net, which would take a big chunk of that invested cash.

  • kyler

    based on what those business school pundits have been saying as you can see, for example, in 'good to great' and all those business fantasy books, i wonder how you can explain the success of apple, and fall of someone like sony, who once was so dominant that it came close to destroying even nintendo. if you heed those pundits, you'll end up becoming like circuit city and fannie mae, which are a few of these companies praised by those pundits. i'm glad apple is self-educated.

    • asymco

      There are also books and research that explain how great companies fail. Look for books by Clayton Christensen. There is much in common between Disruption Theory and Apple but I don't think Apple practices exactly that.

      • CndnRschr

        Expect to see a number of books comparing Apple to X, Y and Z over the next few years (including case studies in business school). Everyone wants to replicate success and Apple has a remarkable (Disney-esque?) story/fable. But the only one I'd buy is an authorative text authored by H. Dediu.

      • Andreas K.

        Hi horace, there is an interesting paper by Govindarajan and Kopalle (2006) that introduces the concept of high-end disruptions. This is what Apple might have pursued with the iPod and now iPhone. The basic idea is that the innovation is satisfactory in all relvant attributes (e.g. iPod: solves consumer job perfectly, great UI, great design) – except price! Therefore the usual pattern of ignorance from incumbents sets in (Microsoft on iPhone: It's a 500$ subsidized item!). In the next step the attacker starts lowering price points to meet mainstream demand (iPod mini/nano). These prices might still be higher than mainstream prices where before (e.g. more expensive as disc-man), because the overall product is better. If this is Apple's pattern we should see a further tiering of iPhone prices in September.

  • KenC

    When I read about Podolny leaving SOM to run the University at Apple, it made me think of Pixar. They have a University where classes are taught to employees, on every step of the process of filmmaking. A secretary can take a digital art class, etc. I wondered if Podolny was going to try to do something similar at Apple, or whether it was about iTunesU trying to expand its reach. At the time, it seemed to me that an Apple U similar to what Pixar was doing was too small a job for Podolny, but with the latest bit of information about codifying an Apple curriculum, it seems prescient.

  • Pete

    So, what stops a new CEO from coming in and dismantling everything. Ego is an unpredictable thing, and sometimes well disguised. The new CEO may be more interested in putting his own mark on the company rather that following a method laid down by the predecessor.

    I think in this case making sure the people (mangers and employees) have the right personality and ethics is at least as important as codifying the culture and processes. And so it pretty much guarantees that the subsequent CEOs will be selected from within Apple.

    • 21tiger

      That's one of the things Apple University would prevent. This is straight out of E-Myth: if you can 'codify' greatness, or the Apple Brand, you can teach it to others, systematically. Like a Franchise.

      With McDonalds, all Managers are required to (i believe) enroll in McDonalds Hamburger University, so they can get the McD Brand, Values, mindset, etc. And then McD is confident each store will be identical. That's powerful.

    • asymco

      In theory nothing. But you have to also recognize that even the power of the CEO is not without bounds. Organizations with strong cultures are very resistant to change. It's like DNA. The Apple U codification would re-enforce cultural bias.

      • CndnRschr

        Apple has also been there, done that. Jobs is The One and any turkey who thinks he/she can outdo Jobs is likely to be filtered out in the first round. The next Apple CEO will talk about building on the genius of Jobs, extending his clarity of vision. Who would want to be known as the person who f#&%ed-up Apple?

      • Ziad Fazel

        Apple's Board of Directors is responsible for choosing Jobs' replacement, likely with his significant input, and as part of their duty to protect shareholders would also prevent a new CEO from damaging the DNA.

    • deray

      "Ego is an unpredictable thing, and sometimes well disguised." Not in this view: Ego's primary nature is "me, me, me, mine, mine, mine, what's in it for me?, how can I take advantage of this (person, place, thing, situation)?." So ego is very predictable, mostly quite obvious though sometimes subtle (disguised?). Ego's not 'good' or 'bad'', it's just what it is until it relaxes. There are over 6 billion egos operating on the planet! Ever wonder why this world is… (Thanks Leonard Jacobson and others.)

      If SPJ and Apple are mirrors, what do I see when I look there? What if, despite 'appearances', ego is quite relaxed in him and Apple top executives?

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  • gslusher

    SImon Sinek, in his book, "Start with Why," gives a good explanation of why Apple is so successful. You can see an introduction in his TED talk at:
    http://www.ted.com/talks/simon_sinek_how_great_le

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  • http://ximagin.co/thecw The CW

    The idea of a corporation attaining self awareness is compelling. Self awareness and corporate memory would beget a system that learns and adapts.

    I'd say that sums Apple up nicely. Corpus Sapiens.

  • http://twitter.com/xtophr @xtophr

    It's interesting to ponder what other internal "universities" would emphasize. What would Oracle U look like? Microsoft? General Electric? Goldman Sachs? If nothing else, this topic is a rich vein for a parody blog.

    • Hamranhansenhansen

      Microsoft U would have an arts course where they teach monkey dancing and for athletics: chair throwing. But it wouldn't be called Microsoft U, it would be called Microsoft Courseware Series Professional Edition 2011 Service Pack 3 for Windows 7 Professional Service Pack 2.

  • Jdub

    I imagine whenever Steve leaves this mortal coil (hope it's a long while until then, his co-workers may think:
    WWJD = What Would Jobs Do?

  • glenn

    Once a company starts "codifying" the way it works, it is well on the way to losing that way. Because the people doing the codifying are usually the exact wrong people qualified to be describing the "way." Even if they are Apple employees, they aren't the people that created those breakthrough products, the true "first wave" that defined the culture.

    It would be a shame to see this happen to Apple, but it will be hard to fight off. A publicly traded company that grows this fast will feel the need to have people take care of all that cash and financial expectations, so they will hire more people to watch over it. They will attract opportunistic legal scrutiny, and that will make them hire lawyers to mitigate risk. Their employees will start to sue them, so they will empower HR, who will promise to protect management from their own people and will mitigate risk through the regularization of compensation and performance management. And finally, as they hire more people, they will worry about getting too big, and then that will cause them to hire more people to — like Joel Podolny — teach these new people how to act correctly, and the downward spiral begins.

    • asymco

      So is the answer to maintain self-ignorance?

      • glenn

        Look, Microsoft codified its way and then went into antitrust hell. HP codified its way and is riddled with problems. Most recently, Toyota had its way "codified" so thoroughly in several popular books only to find themselves with the most humbling product quality failures ever seen by an automobile manufacturer. If someone wants to write a book about your way, run!

        Internal corporate "universities" with curricula defined by Yale business school professors are not the only way to spread culture. If I were Jobs' consiglieri all I would whisper in his ear is "beware of coming hordes of managers who will try to make Apple a very pleasant place to work." Culture happens whether its codified or not, as long as the second- and third-wave employees don't throw the brash, politically incorrect first-wave entrepreneurs out of the company.

        And ultimately, the "codifiers" are often reflecting internal company mythology about itself, and not true enlightenment about the way.

      • Kizedek

        It is possible you have a point… if this was all about "culture". It is entirely possible that most people are wrong when it comes to what makes a company "tick", or contributes to its successes — particularly in the case of Apple.

        Is it really all about culture, and how a young, hip .com era company like Google or Pixar have casual dress-standards and padded rooms full of toys, and employees roller-blading around the campus while sipping fruit smoothies?

        It might be that this is a really practical exercise for Apple that proves to have some truly valuable insights. So much of the myth surrounding Apple is attributed to Apple's "culture", or to Jobs' own personality or ego. I think Jobs may be more practical than we think. I don't think he is particularly interested in perpetuating his personality and the atmosphere at .

        As Horace pointed out in the article, there are a number of straightforward business-type principles that Apple seems to have followed and which have directly contributed to Apple's successes. If codifying these merely represent an undoing of traditional business school teachings and a re-education in the very things that have caused the undeniably real success at Apple, then there is no reason they shouldn't continue to be successful in the future.

        If there was anything of real value in the thorough codifications of Toyota and MS that you have mentioned, then wouldn't someone have found it by now? Are there any real gems in there, then, that are not already taught in all the business schools around the world? However, there sure seems to be something to be learned from Apple.

    • Hamranhansenhansen

      So what do you suggest? Shut Apple down and give the money back to the shareholders?

      Apple can't be compared to other companies after the decade that they just put in. If a baseball team wins the World Series 10 years in a row, damn right you document their methods.

      And the guy who is doing it is an academic, not a middle manager. He doesn't have an axe to grind.

    • chandra

      Agreed!

  • taylor

    It should be noted that Jobs has been involved in something like this before with Pixar University, which they use to train all incoming animators, as well as for continuing education.

  • iyciycc

    it would be WWAD. If they've found a replacement who thinks WWJD, then the board got it wrong, and Joel P. and his division was unsuccessful in its efforts.

  • berult

    This should be up my alley. But it obviously isn't, for I've been staring at a blank page for it seems ages. I tussle, hustle, bustle; too many clues, too few avenues…

    Can one formulate a rule out of an exception, punctuate commas out of periods …overbearing singularities, figure out ground-hugging developments from ground-breaking conclusions?

    Can Mozart, Einstein, Aristotle, Darwin, Picasso and …Steve Jobs be summarized, synthesized, deconstructed and trivialized into metrics and 'how-to' summations. These guys are closers, period instruments for meme symphony. They deserve metrical metrics and versed verses; none should get table of content.

    Beethoven couldn't cross Mozart's threshold, so he went Romantic on his second piano concerto… Hat's off to the Closer and long live the Classical Period thereby minted into Humanity's cultural lexicon!

    Einstein filled in Newton's dotted lines… Answers traveling down a Socratic thoroughfare to an interrogative destination. What if …determinism were uncertainty's exception…? Bohr'ing isn't it?

    I will spare the philosopher, the botanist and the painter for some future lyrical encores, but as for 'Stevie Wonder' …version foresight, the claim here rests on a sequitur. Academia gets you mutually assured hindsight, cycling comeuppance rivets the eyes to the fore and timelines brasses to the shore… The closer lays, resting ashore …and the cycle sets anew for heirs to ad-lib, …and comeuppance through…

    • berult

      A cutting edge systemic, quantifiable, comparative, multi-dimensional perspective : " The mechanisms by which companies die"
      http://www.edge.org/

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    Idiots of the world, unite! this is your site!