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.