Mike Fromowitz
Feb 1, 2012

What companies can learn from the Master of Innovation

There’s much that companies and brands can learn from Apple, the masters of innovation. It’s hard to think of a large company that better epitomises the art of innovation as they do. Apple’s ...

What companies can learn from the Master of Innovation

There’s much that companies and brands can learn from Apple, the masters of innovation. It’s hard to think of a large company that better epitomises the art of innovation as they do. Apple’s success is nothing short of brilliant — its fourth-quarter earnings showed phenomenal sales of 15.43 million iPads, 15.4 million iPods, and 37.04 million iPhones, and profits of $13.1 billion which helped Apple become the largest industrial corporation in the world.

Given all their success and the press they have garnered from this—I remain puzzled as to why so many companies continue to hold fast to their traditional ways of creating “good-enough” products. It’s as though Apple’s success in innovation, design, manufacturing, and marketing did not exist at all. And with $17.5 billion in cash flow, you’d think companies would try to learn as much as they can to emulate some of Apple’s process methodology.

For certain, Apple defies long-held conventions about how companies should work today, and the secrecy about some of their product process has long been legendary.

New book “Inside Apple” a must read.

Now there’s a new book out that talks about Apple’s product development process. Until this book, much of Apple’s processes have been shrouded in mystery. The new book is Inside Apple: How America’s Most Admired–and Secretive–Company Really Works, by Adam Lashinsky.

The new book lifts the lid on what it's really like to work for one of the world's most secretive organisations,  revealing Apple’s secret systems, tactics and leadership strategies that allowed the company to churn out hit after hit and inspire a cult-like following for its products. There’s a lot of new information in this book and is well worth a read. It takes the reader through a framework on which Apple products are  developed.

Apple starts with great design.

Every product of Apple starts its journey with design. In fact, designers at Apple are treated like royalty, with the entire product conforming to their vision. This is the very opposite of the way it works at other companies where manufacturing departments and finance seem to lead the way forward.

Design leads the way at Apple and conforms to the requirements of its lead designer Jonathan Ive. The designers have little to no contact with the finance department.  And the costs of materials in the manufacturing process are virtually unlimited. The objective here is to build the best product possible.

Minimalism is The Apple Way

Minimalism seems to be the most obvious design theme in Apple products. They tend to be extremely simple, with few gizmos, buttons and visual distractions. The original iPhone in 2007, was bare-bones  beautiful, besides being the easiest-to-use smartphone operating system ever made.  Apple's focus on minimalism gives its products their own identity. You know an Apple product when you see one. The late Steve Jobs' uncommon obsession with visual artistry ensured that everything Apple produced, would be iconic, whether it was a computer or an Apple store, it had to look great.

Apple acts like a new start-up.

Apple is now an extremely mature company of 35 years. Compared to Google, there's a grownup atmosphere at headquarters. You won't find a lot of people dressed in shorts and flip-flops, or sitting in wildly decorated cubicles. When a new sensitive project is initiated, Apple organizes a team and segregates them from the rest of the company and shrouds them in secrecy. Sometimes they erect physical barriers and have their people sign secrecy agreements.

In effect, this is like a ‘start-up’ inside Apple. The selected team is free from the reporting structure of a big company. Once the new product is chosen,  a planning document is created that sets out every step in the development process of a product in detail.  It maps out all the milestones, who is responsible for each stage and when they will be completed.

The all powerful EPM.

Two key people are enlisted to bring a product to fruition, the engineering program manager (EPM) and the global supply manager (GSM). The EPM has absolute control of the product process, and both of these executives spend considerable amounts of their time in China where they oversee production. Decisions are based on ‘what is best for the product’.

Once a product is completed, it isn’t finished.

Apple is never satisfied with any product that first comes out the gate. Once Apple is done building a product, it redesigns it and puts it through the manufacturing process all over again, a 4-6 week process. The EPM returns with the product to Cupertino for examination and comments. Once that process is complete, he hops back on a plane to China to oversee the next iteration of the product. Apple goes through many versions of any device it builds. Its new product ideas are never partially prototyped. While other manufacturers would agree that this seems to be an insanely expensive way of building a new product, it’s the standard at Apple.

In Apple’s Marketing building, its staff are totally dedicated to device packaging where employees spend hours and hours, every day for months,  simply opening and closing prototype boxes in order to experience and refine the consumers’ experience in the unboxing process.

The “Rules of the Road” define the product launch.

A top-secret strategy and go-to-market action plan for the product launch is generated. They call this “the Rules of the Road”. It lists every significant milestone in t product’s development up until launch, including the names of those directly responsible to make that product happen. When it comes to product launch day, Apple employees find out about the new product via a television in the cafeteria. They are as surprised as everyone else despite having helped build it, said Mr Lashinsky.

Apple’s draconian treatment of its workforce is also a large part of its formula for success, Mr Lashinsky explained. It creates a loyal ethos among the staff, protecting the products.

Tim Cook, who now runs Apple, once said: "That's part of the magic of Apple. And I don't want to let anybody know our magic because I don't want anybody copying it."

A more expensive process? You bet.

Apple’s process is often more expensive and less efficient. But the result is often a seriously better product—ones that consistently do not disappoint.

Most other companies make their manufacturing process far too complex. Perhaps this is due to their traditional way of doing things, and a reluctance to create products that will offer consumers something they never thought they needed before. It’s also their lack of vision.

What lessons can others learn from apple?

Apple has just posted results that far outstrip analyst expectations - nearly doubling their revenue year-on-year and more than doubling their profit. What lessons can other corporations and marketers learn from Apple’s stunning success?  There are three aspects I believe they can put into practice in their own businesses:

  1. focus on clarity and simplicity
  2. focus on disciplined execution and
  3. focus on the customer experience

Focus on clarity and simplicity: When Apple decides to compete in a market, it does so with exceptional clarity of focus and communicates their message with beautiful design and simplicity. It is not about the numbers, it’s about dominating the market, becoming the leading player, and addressing that market’s needs better than any other option available. Apple did just that with the iPod, the iPhone and the iPad. They weren’t first in the market, but better to be strong in a market you can own rather than weak in a market where other players are dictating the terms.

Focus on disciplined execution: No one seems more disciplined than Apple when it decides to compete in a market. The company pays attention to every small detail of the solution. It recognises that having the “best” product isn’t enough, so they work to establish the best channel ecosystem. Apple surrounds itself with complementary product providers. Their stores serve to extend the capabilities and value of its offerings. Other brands and manufacturers would do well to understand and address every aspect that might impact the potential benefit of their offering to your customer.

Focus on the customer experience: Apple is now the world’s most valuable brand. Apple’s brand value reflects every aspect of the customer experience - from the elegant simplicity  through to every touch point with its customers. It’s about the experience—which is always exceptional—when you visit an Apple store, when you use the Apple website, or when you call Apple on the phone.

Your brand isn’t about your logo, or your advertising. It’s about interaction between your company and your customers. It’s about your products and services making a clear promise and the company going out of its way to ensure that it’s promises and benefits are indeed delivered upon. It’s about eliminating the opportunities for disappointment and delighting your customers.

As Adam Lashinsky’s book reminds us, there is an alluring simplicity to Apple’s devotion to ‘good products first’. And there is, as I noted above, Apple’s massive financial success.

This product development process is just a fraction of the information revealed in Lashinsky’s book. Add it to your reading list soon.

Mike Fromowitz



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