Thursday, May 24, 2012

Inside Apple, How the Company Really Works

Fortune Magazine Senior Editor at Large   Adam Lashinksy spoke to students  at Stanford University Wednesday   as part of the DFJ Entrepreneurial Thought Leaders lecture series.  The topic - Inside Apple.  Lashinsky is  the author of   “Inside Apple: How America’s Most Admired – and Secretive – Company Really Works”.   The lecture took place at NVIDIA Auditorium in the Huang Engineering Center, close to   the Packard Electrical Engineering Building and Gates Computer Science Building.

“Apple doesn’t want us to know what goes on inside of Apple,” stated Lashinsky.  At the store on the main Apple campus, individuals can buy a shirt that has on it,   “I visited the Apple campus.  But that’s all I’m allowed to say.”

He felt that Apple’s way of doing business violates “Everything you learned in business school.”  Lashinsky emphasized that businesses should learn from Apple, but not try to copy them.  “Competitors can better understand how to go against Apple by understanding how Apple does it”.

“Today, the company is not led by entrepreneurs.”  Nonetheless, Lashinsky  felt that the company is entrepreneurial and that people under Jobs were challenged (even rudely) to do their best work. 
“Jobs ran Apple as a productive narcissist," Lashinsky said.  He explained that , the company had become a number of fiefdoms by the time Jobs returned   in the 90's. .  They had become a fractionalized company.  Jobs wanted one fiefdom, run by him.  

As examples of  centralizing his fiefdom and focusing  Apple, Jobs slashed the number of products the company offered when he returned to four. Multiple advertising budgets under multiple people were combined into one.  All execs reported to Jobs.    Steve Jobs hated organizational charts,.Something about not making it easy to not poach members of the executive team. Jobs’ right hand person when he returned to Apple was Tim Cook, who is now CEO of the company.  

Apple’s campus, culture, and work are compartmentalized, according to Lashinsky.  Everything is a secret.  If employees aren’t working on a specific project, their card keys won’t give them access to areas dedicated to that project.  Individual’s not working on a product’s UI, for example, may not even know what the UI looks like until the product introduction is held.
Apple managers  micromanage, operating on a milestone basis.  Each action item is assigned to one person, the DRI, for "directly responsible individual".

There aren’t a lot of politics at Apple, Lashinksy stated.  “You don’t have a lot of information to play politics.  So you go to work.”

 “Apple has a culture of fear”, according to Lashinsky.  They have the “ultimate need to know culture.".     Part of the culture is that Apple keeps secrets from itself.  “You don’t talk about what you’re working on.  You charge forward with 100% of your energy” to do great things 

Apple operates on the basis that customers don’t really know what they want/need until it’s provided to them. Then when the product is introduced, the company can “delight its customers with the next new thing.”  He contrasted Apple with companies that do a lot of market research on products.  

As part of its rewards for employees, Apple has an annual Top 100 retreat.    Attendees  are not chosen by rank.  Under Jobs, the meeting room at the retreat was swept for bugs.  Jobs wouldn’t let people take when food servers were in the room.

One Apple's obsessions is their internal focus on integration between marketing,   manufacturing, product management, engineering, and design in a  “Highly  regimented, milestoned way.  Design is paramount at Apple.”

Some other keys to  Apple's  success:

Stay on script.  Determine the message and stay with it.  Keep the press at arm’s length, except important reviewers.  He mentioned the Wall Street Journal’s Walt Mossberg as one of those reviewers.

“Simplify, simplify, simplify”   is on the wall in the marketing building on the main campus,    Lines are drawn through the first two simplifies. 

Sweat the details.  “I would submit that most companies are bad at it.”  If you obsess, it leads to excellence, the company feels.

 Lashinsky felt that Jobs left the company with approximately an 18 month roadmap. It should get interesting after that. 

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