Innovation Blog
Be Big, Think Small: How Apple Retains its Startup Culture
The Three Things Steve Jobs Did
By Shlomo Maital
In a recent Bloomberg Business Week article by Nilofer Merchant, Steve Jobs is portrayed as saying that Apple’s culture is “that of a startup”.
Really? At a time when Apple’s market capitalization has overtaken that of Microsoft’s? (At $250 b., Apple surpassed Microsoft on May 26). Considering that Apple was at the brink of death a decade ago, with only $150 m. in the bank, this is amazing. Apple — a giant startup? Startup giant?
What is the startup culture? Can you be big and still think small?
Merchant quotes David Caldwell, professor of management at Santa Clara University, who says “culture is a shared understanding of assumptions and expectations among an organization’s members, and it is reflected in the policies, vision, and goals of that organization.”
Merchant says Jobs, when he returned to Apple, focused on doing three things well.
“1. Sharp laser focus: He refocused the strategy to be about one thing. That meant he killed off even good things. Merchant notes that she led server channel management at Apple when Jobs returned to the company in 1997, and was there when he made the decision to shut down big portions of revenue-generating businesses (including her division) because they didn’t fit with his vision for the company.
2. He eliminated passive aggressiveness and encouraged debate when new ideas were forming. When you are thinking about difficult problems together with exceptionally bright people, there are going to be disagreements. But it is through the tension of that creative conflict that new ideas get born, new angles get explored, and risks get mitigated.
3. He set up a cross-disciplinary view of how the company would succeed. This holistic vision means there is cohesion throughout the company, from concept to product to sales. For example, the retail strategy could have been a separate or disparate part of the whole, but Apple has made its retail strategy part and parcel of its overall promise of ease of use.”
These three changes in culture are easy to define but extraordinarily difficult to implement. Jobs’ force of personality did it. “It would be easy to count any revenue as good revenue, to allow a few people to stay even though they were rotting the culture, or to allow the different parts of a business to act in their silos”, Merchant says. Jobs would have none of this ‘path of least resistance’.
One of the toughest managerial and entrepreneurial tasks around, maybe THE toughest, is to retain entrepreneurial culture while leveraging and organizing disciplined operations and economics of scale. Very few companies succeed. Apple seems to be one. It is a case worth careful study.
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June 20, 2010 at 3:46 pm
James Katt
Correction: Apple had $4 Billion in the bank in cash when at it’s deathbed. The $100 million you referee to was what Microsoft donated to Apple.
June 20, 2010 at 4:23 pm
fring
I know it’s tough prof, doing research, but there was never a time when Apple only had $150m in the bank a decade ago. I think you are confusing that figure with the $150m that MS ‘invested’ in Apple stock at the same time as giving a commitment to develop Office for the Mac for the next 5 years. At that time, Apple had $1.2billion in cash, MS was fighting monopoly charges and settling with Apple for stealing Quicktime code. I’ll let you join the dots.
I think there are a few things missing from your short list, but number one in my book, above all else, was the imposition of ‘Jobs’ himself who had become a different person to the one who was sacked ten years earlier. He brought discipline, focus and fierce competition, treating all Apple staff the same way. I believe some key appointments – Jonathen Ive particularly, cemented the belief that Apple could do anything – successfully.
June 20, 2010 at 6:22 pm
sinD
Dumb!
June 20, 2010 at 11:31 pm
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June 21, 2010 at 1:08 am
lucifer
i thought it was be small, think big … ???
geez. people keep slapping these home-grown “catch-phrase” with “apple” and attribute it to job-o, hoping to catch the googling waves …
June 21, 2010 at 2:12 pm
vsp
The difference between Apple and Microsoft or Google is the laser-sharp focus that Apple have honed to an art form. Apple will only pursue projects that they feel they have a handle on the user experience. That is why they took nearly 10 years to perfect the iPad to a high bar for others to cross over. I have not heard of Apple announcing vaporwares just to steal on the competition. Only when products are 99.99% ready, then only will they spring a surprise on the competition. Microsoft is infamous for vaporwares and Google is very sly for throwing things at the wall and see what sticks. These behavior are not in Apple’s DNA and that is why they always capture the mindshare of the public – whether from fans or from detractors.
June 21, 2010 at 2:12 pm
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