Unlock the secrets of Apple's success: Discover how its functional organization and leadership model drove innovation.

Apple is renowned for its innovation in hardware, software and services, and HBR reveals the functional organization and leadership model behind it. After Steve Jobs became CEO in 1997, he laid off the general managers of all business units and put the entire company under one P&L. This single functional organization divides roles based on expertise, empowering R&D leaders to weigh the benefits to users against cost considerations. Jobs' decisions not only saved the company from bankruptcy, but established it as one of the world's most influential tech companies.

Learning Outline

1. Apple had a conventional structure with business units and their own profit and loss responsibilities prior to Steve Jobs' return in 1997.
2. Jobs changed the structure to a functional organization, with functional managers who are experts in their respective roles.
3. Jobs also combined the different functional departments of the business units into one functional organization.
4. Senior vice presidents at Apple are in charge of functions, not products.
5. The CEO is the only position on the organizational chart where the design, engineering, operations, marketing, and retail of any of Apple's main products meet.
6. The functional structure ensures those with the most expertise and experience in a particular domain have the decision rights for that domain.
7. The combination of the organizational structure and leadership model saved the company from bankruptcy and transformed it into one of the most influential tech companies in the world.
8. R&D leaders are expected to weigh the benefits to users against cost considerations.
9. The decision to introduce the dual lens camera with Portrait Mode in the iPhone 7 Plus was a risk that would not have been taken under a traditional structure.

Instructional Content

Apple is an iconic tech company known for its innovative hardware, software, and services. However, its success can be attributed to more than just the products it creates. Apple's organizational design and leadership model have been instrumental in driving innovation and transforming the company into the influential powerhouse it is today.

When Steve Jobs returned to Apple in 1997, he quickly made changes to the company's conventional structure. He combined the different functional departments of the business units into one functional organization, where departments are divided based on their function. This structure ensures that those with the most expertise and experience in a particular domain have the decision rights for that domain. Additionally, Jobs put the entire company under one P&L to get rid of the general managers who stifled innovation.

The functional structure Apple employs today is tailored to its need to compete in a market with high rates of technological change and disruption. It relies on the judgment and intuition of technical experts who can predict which technologies and designs are likely to succeed. Senior vice presidents at Apple are in charge of functions, not products, and the only position on the organizational chart that holds decision rights for design, engineering, operations, marketing, and retail is the CEO.

For example, when the decision was made to introduce the dual lens camera with Portrait Mode in the iPhone 7 Plus, it was a risk. But, because the leaders making decisions were those with deep expertise in their areas, it was the right one. The camera was a defining feature of the phone and is an example of how the combination of Apple's organizational structure and leadership model has enabled it to offer the best possible products.

In conclusion, Apple's organizational design and leadership model have played a significant role in driving its success. By putting the entire company under one P&L and implementing a functional structure, Apple has been able to rely on the judgment of technical experts and make decisions that are tailored to the needs of the market and its users. This, in turn, has enabled the company to offer the best possible products and transform itself into an influential tech powerhouse.

Management

"Unlock Apple's Innovative Management"

Stakeholder Management is an essential skill for any manager, as it involves engaging and managing the interests of the various stakeholders in an organization. This video provides a great example of how Apple successfully managed stakeholders through its functional organization and leadership model. By placing the entire company under one P&L and combining the different functional departments of the business units into one functional organization, Apple was able to effectively manage their stakeholders. By doing so, they were able to create an environment of trust and collaboration between all of their stakeholders, resulting in better decision-making and a greater overall success.

Creativity and innovation are also key skills for any manager. This video demonstrates how Apple demonstrated this skill through their organizational structure and leadership model. By allowing their functional managers to make decisions based on their expertise and understanding of the user’s needs, Apple was able to create an innovative product like the iPhone 7 Plus. This example shows how creativity and innovation can be fostered in an organizational setting by empowering employees to make decisions based on their own expertise and understanding of the customer.

Finally, Business and Enterprise skills are also essential for any manager. This video provides a great example of how Apple used their organizational structure and leadership model to foster enterprise-level success. By placing the entire company under one P&L and combining the different functional departments of the business units into one functional organization, Apple was able to ensure that decisions were made based on the expertise and understanding of the user’s needs. This allowed them to create innovative products like the iPhone 7 Plus and increased their overall success.

To improve Management skills in learners, an effective approach is to focus on the specific scenarios related to Stakeholder Management, Creativity and Innovation, and Business and Enterprise. Through this approach, learners can develop a comprehensive understanding of the various aspects of these skills, including the organizational structure and leadership model needed to create a successful enterprise. Additionally, learners can develop a better understanding of the importance of creativity and innovation in the development of successful products. Finally, learners can learn how to effectively engage and manage the interests of the various stakeholders in an organization.

Stakeholder Management

How Does Apple Manage Stakeholders?

Upskilling yourself to be more successful in personal growth and professional development is essential in today's competitive job market. A great way to do this is to learn from successful companies and leaders, such as Apple and Steve Jobs. Apple's unique functional organization structure and leadership model have been crucial to their innovation success. By combining the different functional departments of their business into one functional organization, their senior vice presidents are in charge of functions, not products. This ensures the most experienced and knowledgeable staff have the decision-making rights for their domain, allowing them to make the best decisions for the company. This structure allows Apple to compete in a market with a high rate of technological change and disruption, relying on the judgment and intuition of technical experts to predict which technologies and designs are likely to succeed. Additionally, Apple's commitment to offer the best possible products would not be achieved if cost and price targets were the fixed parameters within which to make design and engineering choices.

Upskilling yourself to better manage stakeholders and make more informed decisions can be done by learning from Apple and Steve Jobs' example. By understanding the importance of the functional organization structure and leadership model, you can develop a deeper understanding of user needs and make decisions that balance attention to costs and value added to the user experience. Furthermore, having a team of experienced and knowledgeable staff with decision making rights in their domain will ensure you are making the best decisions for the company.

Creativity and Innovation

How Does Apple Foster Creativity?

Upskilling oneself in creativity and innovation can pay significant dividends in terms of personal growth and professional development. The video, “How Apple Is Organized for Innovation”, provides an excellent example of how to do just that. When Steve Jobs returned to Apple as CEO in 1997, he restructured the company by combining the different functional departments of the business units into one functional organization. This decision enabled Apple to remain competitive in an ever-changing technological landscape. The functional structure ensures that those with the most expertise and experience in a particular domain have the decision rights for that domain. Senior vice presidents at Apple are in charge of functions, not products, and the company operates without conventional general managers.

This structure allows Apple to focus on the user experience and weigh the benefits to users against cost considerations. For example, the introduction of the dual lens camera with Portrait Mode in the iPhone 7 Plus in 2016 was enabled by the functional organization, which allowed experts to take a risk on a more costly and better camera. The risk paid off, and the camera became a defining feature of the iPhone 7 Plus.

This example serves as an illustration of how upskilling oneself in creativity and innovation can lead to success. By understanding the fundamentals of organizational design and leadership, as well as the importance of understanding users’ needs, individuals can take advantage of opportunities to create innovative solutions. This approach has enabled Apple to become one of the most influential tech companies in the world, and the same can be true for anyone who is willing to invest time and effort into upskilling themselves.

Business and Enterprise

How Does Apple Innovate?

In today's competitive business landscape, innovation is key to success. As Apple's organizational structure and leadership model demonstrate, having the right people in the right roles is essential to drive innovation. It starts at the top with a CEO who understands the importance of empowering functional managers to make decisions based on their areas of expertise, rather than relying solely on cost and price analysis. This approach allows organizations to stay ahead of the curve and make decisions that are the most beneficial to their users.

For those looking to upskill themselves and become more successful in their personal growth and professional development, the key takeaway from this video is to identify what areas of expertise you need to focus on and find ways to become an expert. This could involve taking courses, participating in webinars, or simply taking the initiative to research new topics and trends. Additionally, it's important to understand the value of taking risks and creating innovative solutions. By being open-minded and taking calculated risks, you can open up opportunities for yourself and your organization.

Overall, Apple's organizational structure and leadership model is a prime example of how focusing on expertise, innovation, and risk-taking can lead to success. By learning from this example and upskilling yourself in the right areas, you can set yourself up for personal growth and professional development.

For Learners

Watching this video on How Apple Is Organized for Innovation: The Functional Organization can provide a great insight into the success of one of the world’s most innovative companies. It outlines Apple’s unique organizational structure and leadership model that have helped to drive its innovation success. By understanding Apple’s unique approach to organizational structure and leadership, viewers of the video can gain a deeper understanding of the strategies that have enabled Apple to become a leader in the tech industry.

Not watching this video would be a detriment to any learner’s personal and professional growth. Not understanding the strategies that have enabled Apple to remain successful could leave one unable to recognize and apply similar strategies to their own projects. Additionally, not watching this video would leave one unable to recognize the value of recognizing the importance of experts in certain areas, and how empowering those experts to make decisions can lead to success.

By using the ‘what’s in it for me’, ‘what’s in it for them’, ‘what’s in it for us’, and ‘what’s in it for the world’ approach to learning the content of this video, viewers of the video can gain a greater understanding of the strategies that have enabled Apple to remain successful, and how similar strategies can be applied to their own projects. This can provide a great benefit to viewers of the video, as they can gain insight into strategies that can improve their personal and professional growth. Additionally, by understanding the strategies that have enabled Apple to remain successful, viewers can apply these strategies to their own projects, which can have a positive impact on the world.

For Employers

Apple's success in innovation is due in no small part to its organizational design and leadership model. Watching this video can help employers understand how Apple's structure, which combines the different functional departments of the business units into one functional organization, has enabled it to remain competitive and successful. Employers can learn from the video how the functional structure ensures that those with the most expertise and experience in a particular domain have the decision rights for that domain. This can help employers differentiate themselves and their teams from other companies.

Customers and clients can benefit from employers who understand the concepts in this video. If they know that the employer is knowledgeable and understands the importance of efficiently balancing cost and value, customers and clients will perceive the products and services more positively. This can help employers build trust and long-term relationships with their customers and clients.

In conclusion, employers can benefit from watching this video and learning the content by understanding the organizational structure and leadership model that Apple uses to drive its innovation success. This can help them differentiate themselves and their teams, build trust with customers and clients, and create a successful, forward-thinking business.

Career Path

Completing a course in Management based on these competencies: Stakeholder Management, Creativity and Innovation, and Business and Enterprise, can be a huge advantage in enhancing career prospects and improving employability. These competencies are highly sought after by employers and empower individuals to develop their skills and become more promotable within their current role.

By mastering the competencies outlined in the course, individuals will be able to level up their knowledge and become more purposeful in their careers. For example, understanding Stakeholder Management will enable them to be better-equipped to foster relationships with internal and external stakeholders; Creativity and Innovation will help them to think outside the box and come up with creative solutions to problems; and Business and Enterprise will help them to develop the skills required to succeed in a business environment.

Furthermore, for life long learners, leveling up their skills by watching a video like 'How Apple Is Organized for Innovation: The Functional Organization' and reading the transcript, can give them the knowledge they need to bridge the Skills Gap and become more employable in high demand and high growth industries. This video and transcript provides valuable insight into how Apple's organizational design and associated leadership model have been instrumental in driving their innovation success, and how understanding the functional structure, senior vice presidents and decision rights for a particular domain, can help individuals to become more knowledgeable and successful in their field.

By taking the steps necessary to complete a course in Management based on the competencies outlined, and leveling up their knowledge by watching videos and reading transcripts, individuals can become more employable and promotable. They will be able to gain income-producing skills to bridge the Skills Gap and become more purposeful in their careers in high demand and high growth industries. This is a great opportunity for life long learners to acquire the credentials they need to become more successful in their chosen field and obtain meaningful work in the future.

Meaning

"Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to create wealth." - Peter Drucker

This quote relates to the video in terms of how Apple, under the leadership of Steve Jobs, was able to revolutionize the world of technology through its organizational structure and leadership model. The video explains how Jobs combined the different functional departments of the business units into one functional organization and how the functional structure ensures that those with the most expertise and experience in a particular domain have the decision rights for that domain. It is this innovation in organization and leadership that enabled Apple to be successful and remain successful.

This quote is important for learners and employers because it highlights the importance of innovation in an organization and how it can be used to create wealth and success. It also emphasizes the role of entrepreneurship and how it is necessary to empower resources with the capacity to create wealth. It is a lesson that can be applied to any organization, no matter its size, and can be used to drive innovation and success.

Takeaway

The key takeaway from this video is that Apple's organizational structure based on a functional organization and associated leadership model has been crucial in driving its innovation success. This structure allows technical experts to make decisions based on their expertise, rather than relying solely on cost and price analysis.