How Apple Is Organized for Innovation: The Functional Organization

Summary

This video highlights Apple's innovative success, emphasizing its unique organizational structure and leadership model. After Steve Jobs returned as CEO in 1997, he eliminated the conventional management hierarchy, creating a functional structure that empowered technical experts to drive decision-making. This shift allowed Apple to focus on delivering premium products without being constrained by strict cost parameters. Notably, the introduction of the dual lens camera in the iPhone 7 Plus exemplifies this approach, demonstrating how deep expertise can lead to successful, user-centered innovations. Ultimately, these changes transformed Apple into one of the most influential tech companies in the world.

Takeaways

• 😀 Apple is renowned for its innovation in hardware, software, and services across various products.
• 🛠️ The company's success is significantly linked to its unique organizational structure and leadership model.
• 🔄 After returning as CEO in 1997, Steve Jobs restructured Apple by eliminating general managers to boost innovation.
• 📊 Jobs unified the company under one profit and loss statement, promoting a functional organization over traditional management.
• 👔 Senior vice presidents at Apple manage functions instead of products, with only the CEO bridging all key areas.
• 🚀 Apple thrives in a rapidly evolving tech landscape by relying on the expertise of technical leaders for decision-making.
• 💡 The company prioritizes product quality and user experience over rigid cost and price constraints.
• 📸 The decision to include a dual lens camera in the iPhone 7 Plus illustrates Apple's commitment to innovation despite risks.
• ⚖️ Apple's organizational structure enables a better balance between cost considerations and user value, fostering creativity.
• 🌍 The transformation led by Jobs not only rescued Apple from bankruptcy but also positioned it as a dominant player in the tech industry.

Q & A

What is Apple best known for?

Apple is best known for its innovation in hardware, software, and services across a wide range of products, including computers, iPhones, and iPads.

What significant change did Steve Jobs implement upon returning to Apple in 1997?

Upon his return, Jobs laid off all the general managers of the business units in a single day, aiming to eliminate the conventional management structure that he believed stifled innovation.

How did Jobs restructure Apple's organizational design?

Jobs consolidated the company under a single profit and loss (P&L) statement and combined various functional departments into a single functional organization.

What is a functional structure in an organization?

A functional structure divides an organization into departments based on their functions, with each department headed by functional managers who are experts in their areas.

What is the role of senior vice presidents at Apple?

At Apple, senior vice presidents are in charge of functions rather than products, facilitating a focus on expertise rather than traditional product management.

Why does Apple operate without conventional general managers?

Apple operates without conventional general managers because its structure relies on the judgment and intuition of technical experts who can better predict successful technologies and designs.

What are the two views that inform Apple's organizational structure?

The two views are: 1) the need to compete in a market with rapid technological change, relying on expert judgment, and 2) a commitment to offering the best possible products without being constrained by fixed cost and price targets.

What was the significance of the dual-lens camera introduced in the iPhone 7 Plus?

The dual-lens camera with Portrait Mode was a defining feature of the iPhone 7 Plus, representing a calculated risk by R&D leaders to enhance user experience despite potential cost concerns.

How does Apple's organizational structure facilitate decision-making?

Apple's structure allows leaders with deep expertise in their areas to make decisions, enabling a better balance between user experience and cost considerations.

What was the overall impact of Jobs' changes to Apple's organizational model?

Jobs' changes not only saved Apple from bankruptcy but also transformed it into one of the most influential tech companies in the world.