Rosner, the VP of applications, provides a good example. The Game Band/Snowman. They are typically organized into business units, each with its own set of functions. Much less well known are the organizational design and the associated leadership model that have played a crucial role in the company’s innovation success. Senior vice presidents are in charge of functions, not products. Instead of using overall cost and price targets as fixed parameters within which to make design and engineering choices, R&D leaders are expected to weigh the benefits to users of those choices against cost considerations. Long before it can get market feedback and solid market forecasts, the company must make bets about which technologies and designs are likely to succeed in smartphones, computers, and so on. Apple has hundreds of specialist teams across the company, dozens of which may be needed for even one key component of a new product offering. One current example is Roger Rosner, who heads Apple’s software application business, which includes work-productivity apps such as Pages (word processing), Numbers (spreadsheets), and Keynote (presentations) along with GarageBand (music composition), iMovie (movie editing), and News (an app providing news content). As was the case with Jobs before him, CEO Tim Cook occupies the only position on the organizational chart where the design, engineering, operations, marketing, and retail of any of Apple’s main products meet. Fortunately, Apple has our back on this. HONORING. (Clearly, general managers without his core expertise would find it difficult to teach what they don’t know.). When the teams succeeded, they knew they had an acceptable standard. Leaders can push, probe, and “smell” an issue. The second challenge for Rosner involved the addition of activities beyond his original expertise. Where Cards Fall. However, given Apple’s size and scope, even the executive team can resolve only a limited number of stalemates. The camera turned out to be a defining feature for the iPhone 7 Plus, and its success further enhanced the reputations of Hubel and his team. https://hbr.org/2020/11/how-apple-is-organized-for-innovation By 2020, the Lightning port will be eight years old — a perfect time to be retired. What is surprising—in fact, remarkable—is that Apple retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1998. Yet it has not been without challenges, especially with revenues and head count having exploded since 2008. Portrait mode was central to Apple’s marketing of the iPhone 7 Plus. In an interview with He Shijie, a senior at the Beijing University of Posts and Telecommunications, Apple CEO Tim Cook called 2020 Apple's "top year of innovation ever." They know which details are important and where to focus their attention. When Steve Jobs arrived back at Apple in 1997, he laid off general managers of all business units and combined disparate functional departments into one functional organization. That is daunting when a company already faces huge external challenges. With a quarterly revenue of $58 billion and an incredible market valuation of over $1 … The only things more impressive than Apple’s financial numbers are the products that generated them. Although such a structure is common for small entrepreneurial firms, Apple—remarkably—retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1997. Many people at Apple see it as liberating, even exhilarating, to work for experts, who provide better guidance and mentoring than a general manager would. It was divided into business units, each with its own P&L responsibilities. Words 1309 (5 pages) Views 436. App Clips comes to iPhone with iOS 14 in the fall. As an expert who leads other experts, he had been immersed in details—especially those concerning the top-level aspects of software applications and their architecture that affect how users engage with the software. “When we saw the demo, we realized that this is what we needed to do,” Townsend told us. Its approach can produce extraordinary results. Cognizant of this problem, Apple has been quite disciplined about limiting the number of senior positions to minimize how many leaders must be involved in any cross-functional activity. Business history and organizational theory make the case that as entrepreneurial firms grow large and complex, they must shift from a functional to a multidivisional structure to align accountability and control and prevent the congestion that occurs when countless decisions flow up the org chart to the very top. Thus the key decision makers—the unit leaders—lack a deep understanding of all the domains that answer to them. Essay type Research . As the importance of artificial intelligence and other new areas has increased, that structure has changed. In a functional organization, experts leading experts means that specialists create a deep bench in a given area, where they can learn from one another. Universal Search comes to iPad with iPadOS 14 in the fall. 2021 In this article the authors discuss the innovation benefits and leadership challenges of Apple’s distinctive and ever-evolving organizational model in the belief that it may be useful for other companies competing in rapidly changing environments. The members of his camera hardware team weren’t sure they could do it, but difficulty was not an acceptable excuse for failing to deliver what would clearly be a superior user experience. Now let’s turn to the leadership model underlying Apple’s structure. Apple proves that this conventional approach is not necessary and that the functional structure may benefit companies facing tremendous technological change and industry upheaval. And yes, this includes our Apple … It demands that Apple’s operations leaders commit to extremely precise manufacturing tolerances to produce millions of iPhones and other products with squircles. Apple Women’s Health Study releases preliminary data, Apple TV+ announces programming partnership with Nobel laureate Malala Yousafzai, Apple Hearing Study shares new insights on hearing health, New Zealand students prototype their own Samoan language app with iPad, Apple celebrates Women’s History Month and International Women’s Day, Apple helps Encircle expand its support for LGBTQ+ youth and their families. From the Magazine (November–December 2020). The adjustments Tim Cook has implemented in recent years include dividing the hardware function into hardware engineering and hardware technologies; adding artificial intelligence and machine learning as a functional area; and moving human interface out of software to merge it with industrial design, creating an integrated design function. In effect, besides the CEO, the company operates with no conventional general managers: people who control an entire process from product development through sales and are judged according to a P&L statement. Launched in September 2019, Apple Arcade is one of the freshest ideas in apps since the App Store debuted in 2008. Apple has been widely criticized in past years for lacking the innovation the company was known for. Like many other Apple managers, he has had to contend with three challenges arising from Apple’s tremendous growth. To get some agreement on quality standards, the engineering teams invited senior design and marketing leaders to meet, figuring that they would offer a new perspective. Doing so is not always easy, of course. Growers pride themselves on a rich heritage of producing an array of fine apple varieties. The wire to the side would be as blurred as the background. dpa/picture alliance via Getty Images. So they charged the algorithm teams with achieving the same effect. As the Harvard Business School historian Alfred Chandler documented, U.S. companies such as DuPont and General Motors moved from a functional to a multidivisional structure in the early 20th century. In an interview with He Shijie, a senior at the Beijing University of Posts and Telecommunications, Apple CEO Tim Cook called 2020 Apple's "top year of innovation … Steve Jobs was booted from the Lisa group, but he got the ball rolling with his stroll/deal … Category Innovation. They must decide which activities demand their full attention to detail because those activities create the most value for Apple. Where Cards Fall proves as moving as it is inventive. Since then iPhone camera technology has contributed to the photography industry with a stream of innovations: High dynamic range imaging (2010), panorama photos (2012), True Tone flash (2013), optical image stabilization (2015), the dual-lens camera (2016), portrait mode (2016), portrait lighting (2017), and night mode (2019) are but a few of the improvements. Written by Dave Mark. Last Updated 31 Mar 2020. Handwashing detection comes to Apple Watch with watchOS 7 in the fall. The first attempts produced some amazing portrait pictures but also a number of “failure cases” in which the algorithm was unable to distinguish between the central object in sharp relief (a face, for instance) and the background being blurred. Its fundamental belief is that those with the most expertise and experience in a domain should have decision rights for that domain.