The Hidden Legacy of Steve Jobs
Posted on Harvard Business Review: August 30, 2011 9:51 AM
Since Steve Jobs’ resignation as CEO at Apple last week, there has been much concern, discussion, and hand-wringing in the business world. To many, Jobs is a once-in-a-lifetime genius whose success can’t be replicated or continued. On the morning of his announcement, one analyst immediately advised people to sell their Apple stock.
But other companies have managed to thrive long after the departure of their talented founders (GE, IBM, Procter & Gamble, HP until recently). Why not Apple? For years the firm has been codifying what it does and how it makes decisions, in anticipation of a day like this. It’s true that Apple’s success in the last decade has been built on a remarkable string of innovations, which seems harder to “codify.” However, I’d contend that we can glean more universal lessons than we think from Jobs and the way he’s built and run Apple. The following nine principles all derive ultimately from his greatest strength, which most commentators seem to miss—his obsessive focus on the customer experience.
1. Customers should run the firm
Steve Jobs is above all an Apple customer. He and Steve Wozniak built devices that both of them wanted to use themselves. Wozniak brought exceptional engineering chops. Even more important, Jobs (who can’t program) brought the perspective of a passionate and non-technical customer into the design, the look and feel, and the excitement of Apple products. What made and still makes Apple products great—and what other tech firms can’t seem to grasp—is that Jobs and Wozniak didn’t apply their talents to make money or demonstrate engineering prowess. They applied their talents, fiercely, in the service of creating something that would excite them as customers—which they could do because they were passionate customers, as are the employees of the organization they built.
2. You don’t have to invent much
Apple didn’t invent the laptop computer, the mp3 player, or the tablet computer. They certainly didn’t invent cloud computing — a current area of major focus. What they did for each was to take existing, poorly designed products and ask themselves: Would I want to use one of these if it was really cool? They then proceeded to build the Macintosh, the iPod and the iPad. Jobs’ brilliance in conceiving of the iPad, for example, was simply to think through how he would like to use such a device in ways that would make it greatly superior to a laptop or iPhone.
3. Don’t be obsessed with technical details, but do be obsessed with the details of customer experience
Jobs is supposedly obsessed with every detail that goes into Apple devices. Not so. He focuses on the details relevant to the customer’s experience. When one of Apple’s design teams was tasked with developing a DVD-burning software program for high-end Macs, developers spent weeks putting together a plan. On the appointed day to present it to Jobs, they brought pages filled with prototype information, pictures of the new program’s various windows and menu options, along with documentation showing how the application would work. When Jobs walked into the meeting, he didn’t so much as look at any of the plans. He picked up a marker, went to a whiteboard and drew a rectangle, representing the application. He then told them what he wanted the new application to do. The user would drag the video into the window, a button would appear that said “burn,” and the user would click it. “That’s it, that’s what we’re going to make,” he said.
4. Enforce brutal accountability for the customer experience
Attention to customer experience is meaningless without accountability, and Jobs knows this better than anyone in business. He is brutal about making sure a razor-sharp, customer experience-focused approach actually happens. When the ill-fated MobileMe was released to scathing reviews and numerous customer complaints, Jobs called the MobileMe team into a meeting, dressed them down for half an hour, and replaced the executive in charge on the spot. This is a common occurrence when Apple doesn’t live up to its standards. Yet turnover at Apple is low. Apple employees accept that the firm is a meritocracy.
5. Place product experience first, not P&L
Jobs considers P&L to be a distraction. According to Fortune Magazine, only one executive at the firm—the CFO—has P&L responsibility. One executive who worked at both Microsoft and Apple distinguished their approaches to business: Microsoft identifies a pocket of unrealized revenue and tries to figure out what to make to capture it. Apple starts with great products and then sells them. “Prototypes and demos always come before spreadsheets” at Apple, as one executive put it.
6. Process skills matter, management skills don’t
Jobs has been dismissive of “management” skills, and the company has no general managers. According to Fortune, Apple has only 70 or so VPs (for 25,000 employees). Instead the firm develops process specialists—for graphic arts, supply chain, coding, retailing, and of course, industrial design. For example, Apple’s retail chief, Ron Johnson, who developed the highly successful Apple Stores, didn’t handle inventory. Store inventory and all other supply chain issues were handled by COO Tim Cook, an expert in supply chain management (and Jobs’ apparent successor as CEO). To Jobs, this approach creates an organization with best-in-class skills. General managers tend to create fiefdoms.
7. Always assign responsibility for everything
At Apple, everyone knows who’s responsible for what. This approach even has an acronym—the “DRI” (directly responsible individual). When a DRI’s project appears on the Monday meeting agenda, so does his or her name. DRI names also appear next to action items on the action lists that result from meetings.
8. Keep the entire organization focused
Every Monday, Jobs and his executive team would review the whole business, including every product under development. It’s tedious—80% of each meeting is the same as the last one—but it keeps everyone on the same page, an important aspect of the firm’s famous ability to focus.
9. Forget grand strategy
Jobs had no overarching grand strategy. What Apple has is the ability to make and implement fast decisions, including corrections when it screws up. For example, Apple execs completely overlooked that third party developers would clamor to develop apps for the iPhone, but were able to respond quickly to the demand when the iPhone was released.
They were responding, of course, to a trend that they recognized would seriously enhance customer experience—the source of excitement about Apple products, and the core of Apple’s sustained success.
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