1997 When Jobs returned to Apple, Apple had a traditional organizational structure. The company was divided into various business departments, each of which had its own profit and loss responsibilities, and managers were in conflict with each other.
Jobs believed that traditional management methods stifled innovation. In the first year of Return of the King, he dismissed the general managers of all business divisions within one day and merged the units with the same functions under each business division.
According to business history and organizational theory, with the development of an enterprise, it must change from a functional structure to a multi-department structure to coordinate responsibility and control and prevent the crowding phenomenon when numerous decisions are conveyed to the top. Giving department leaders complete control and letting them do their best to meet the needs of customers in their respective departments can maximize their performance and facilitate the company to evaluate their performance. As Alfred Chandler, a historian of Harvard Business School, wrote, American companies such as DuPont and General Motors changed from functional structures to multi-sectoral structures in the early 20th century. In the second half of last century, most big companies did the same.
Apple has proved that this traditional method is unnecessary, and the functional structure may be beneficial to companies facing technological changes and industry turmoil.
Apple has created many products that enrich people's daily life. This includes not only developing new product categories, such as iPhone and Apple Watch, but also continuous innovation in these categories. Perhaps there is no better example to illustrate this point than the iPhone camera. In 2007, Apple introduced the first generation iPhone. Since then, the development of iPhone camera technology has changed with each passing day: high dynamic range imaging (20 10), panoramic photography (20 12), true color flash (20 13) and optical image stabilization (20 15).
In order to achieve such innovation, Apple relies on an organizational structure centered on professional knowledge. Its basic belief is that people with the most professional knowledge and experience in a certain field should have the decision-making power in that field.
This is based on two arguments. First of all, Apple's market is full of competition, and the rate of technological change and subversion is very high, so it must rely on the judgment and intuition of professionals. Before getting market feedback and reliable market forecast, the company must make a bet on which technologies and designs may succeed in the fields of smart phones and computers. Relying on technical experts rather than professional managers will increase the chances of return on these bets.
Secondly, if short-term profits and cost reduction are taken as the criteria for measuring investment and leadership, it will be difficult for Apple to provide customers with the best products. It is worth noting that the bonus of Apple's R&D director is based on the performance of the whole company, not the income of specific products. Therefore, product decision-making has nothing to do with the short-term financial pressure of the company to some extent. The finance team does not participate in the product design meeting of the R&D team, and the R&D team does not participate in the pricing decision.
Of course, this does not mean that Apple does not consider the cost and benefits when deciding which technologies to adopt, but it is different from those traditional companies in the way of choice. Leaders should not take cost and price as reference standards for developing new products, but should weigh the cost and the benefits these choices bring to users.
In a functional organization, the reputation of individuals and teams is the mechanism to control gambling. A good example is that in 20 16, iPhone 7 Plus introduced a dual-lens camera with portrait mode. This is a big bet, that is, the feedback from the market must prove that the dual-lens camera has greatly improved the user experience and the increase in cost is reasonable.
An Apple executive said, Paul? Huber was the main promoter of the camera upgrade, and he and his team took a great risk at that time: if users were unwilling to pay extra for a higher-priced and better-quality mobile phone, the team would not be very convincing when they proposed to upgrade the mobile phone next time. It turns out that this camera is a major upgrade of iPhone 7 Plus, and its success further enhances the reputation of huber and his team.
When a decision-maker has deep professional knowledge in his own field, he is more likely to strike a balance between cost and increasing user experience. The basic principle of traditional business department structure is to coordinate responsibility and control, while the basic principle of functional organization is to coordinate professional knowledge and decision-making power.
Therefore, the connection between Apple's organization and the type of innovation it produces is obvious. As Chandler famously said, "Structure follows strategy".
Of course, it is also important for top decision makers to grasp the overall situation and Apple's development. In Apple's organizational design, the CEO can control everything in the organization, which contributes to rapid and effective strategic management and helps to establish consistency in the organization.
Compiled from Harvard Business Review in Panmore.com.
Editor: Yang Baihui
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