The Rotting Apple: Innovation Lessons From A Failing Giant

By

Roshan Thiran

23-01-2015

7 min read

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How Apple's Demise as an Innovative & Creative Organisation Began After Steve Job's Demise

[This article was originally published in 2015]
By ROSHAN THIRAN
roshan.thiran@leaderonomics.com

In May 2014, Apple’s brand value dropped 20% whilst Google’s grew 40%. According to various reports, this US$37bil drop in value for Apple was due to “lack of innovation”. Everyone talks about innovation and its importance, yet we see many companies struggle with innovation including companies like Apple whom most of us would prescribe as innovative. So, why was Samsung, Google and even Microsoft succeeding in being innovative whilst Apple struggled?

What changed?

According to Andre Spicer from the CASS Business School, Apple’s decline in innovation has to be solely the fault of the chief executive officer (CEO).

He adds:

“What’s been interesting with Apple in the last few years is that under Tim Cook, the company has moved very much from being the leader in the industry, to following many industry trends.”

To Spicer, the leader sets the innovation agenda and has to take a huge responsibility for its results or lack of.  Many analysts believe that a key reason for Apple’s lack of innovation has been Cook’s relentless focus on short-term profit rather than long-term growth and innovation.  In contrast, Google was clearly seen focused on solving long-term problems rather than obtaining short-term profits. Even Microsoft with its new CEO had moved from a profit-hungry machine into one with a long-term view.

But much more alarming at Apple was its loss of being the industry leader. At the launch of the iPhone 6, 6Plus and iWatch, most industry experts were unimpressed. Where Apple once led the industry, these new products were entering a market already dominated by Samsung and Sony, who have already brought out numerous iterations of big phones and smartwatches and are now moving into new areas such as virtual reality headsets. In fact, Steve Jobs once stated that “no-one’s going to buy a big phone”. Well, the good news is that there are many who have forgotten what Job’s said and are buying Apple’s new big phones.

Imagine Jobs watching as Apple releases big phones, becomes a “follower” in various areas, and uses its cash to buy back shares (to prop share prices) and thereby diverting money that could have been used in longer-term innovation.

The declining great

So, how did Apple lose its ability of being the leader and trendsetter? Clearly it was a leadership issue.

But this fall from innovation greatness is not something that has only inflicted Apple. This has been the case for many innovative companies from the beginning of time.  The moment organisations forget what brought them success, and instead dwell on profits and share price, they are bound to fall. So, what can we learn from here? What lessons can we gather for ourselves in our organisation’s innovation journey?

We hate new ideas

A few years ago, I read Scott Berkun’s Ten Myths of Innovation. One of the 10 myths he postulates is “the myth that we love new ideas”. According to Berkun, as humans, we hate change as “conformity is deep in our biology”. To him, being creative is not safe. Most creative people were shunned, disgraced and most great ideas were rejected, often for many years before they became the norm.

Berkun adds:

“The history of breakthroughs is a tale of persistence against rejection. Much of what makes a successful innovator is their ability to persuade and convince conservative people of the merits of their ideas, a very different skill from creativity itself.”

Apple’s innovation stemmed from their former CEO’s skill in pitching ideas to others. There are a million ideas being rejected daily. Ideas are rarely rejected on their quality but because of how they make people feel. Selling ideas are possibly a key element in the innovation process that is often taken for granted. Yet, it holds the key if an idea is accepted and embraced.

Apple not only lost a great CEO in Jobs, it lost its chief persuasion officer. Innovation is persuasion.

Change is tiring

The word “innovation” is derived from the Latin word “innovare” which means to “renew or change”. Innovators are essentially change agents. They are always defying their bosses, the organisational structure and refusing to conform to status quo.

When organisations become big and strapped with cash (as in the case with Apple), change may actually not be welcomed.  Processes, structure and consistent performance become the new mantra instead of the usual experimentation, risk and play. This drowns out the “heretics” in the organisation that push through disruption and change.

In fact, most organisations won’t promote many of these “rebels” into senior roles as they lack political savvy in conforming to the unwritten status quo of the organisation. Innovation gets stalled and over a period of time, the decay starts to show.

Some ‘fruitful’ lessons

So, what can we learn from Apple’s fall from its innovative glory? Clearly, money is the root of all innovation failures. An intense focus on profit will drive innovation to its tomb. Leadership is also key to innovation success. Having the skill to persuade others to embrace and try your ideas is critical in every organisation. And more importantly, ensuring your innovators and heretics are given the space to grow and innovate is key.

So, what can we learn to enable us to be better innovators?

Here are my top 10 tips to becoming a better innovator and a heretic:

1. Learn to observe and listen more

Part of Jobs’ uncanny ability for innovation was his skill of observation and listening. I saw a YouTube clip of Jobs listening intently to Bill Gates explaining in minute detail the future tablet. Jobs listened and two years later, the iPad was birthed. Microsoft at that point, didn’t seem to be listening to its former CEO. Today it listens to everyone and its innovation shines through.

2. Connect the dots

Apple may lag its rivals as they had failed to connect the technology dots. What does this mean? It simply means utilizing point 1 (observation and listening) and then finding patterns and other ideas to create new ones. Ideas always come from other ideas. When you listen and observe, the key is to look for patterns and figure out a way to combine and build upon the existing ideas.

3. Be brave, be heretical

Take risks. Don’t be afraid of making mistakes. Innovators struggle and struggle. Apple in the early days made numerous product mistakes with Lisa and other ‘dud’ products. Yet, that did not stop it from innovating. It dared to go against convention and stand up for it. And it resulted in a much admired Apple. In its later years, one can argue that it follows in the footsteps of others.

Berkun adds that “experiment is the expected failure to deliberately learn something”.

General Electric (GE) founder Thomas Edison famously said that:

“I have not failed. I’ve just found 10,000 ways that won’t work.”

Innovators are brave people. If you want to be an innovative organisation or an innovator, be ready to be ridiculed as people hate change. But stand firm on your heretical belief and one day you may be praised. Gutenberg invented the printing press and received no credit during his lifetime. Today, his invention is considered one of the most important in history.

4. Be persistent

Innovation requires hard work and the ability to keep going strong in dark moments. Edison adds that:

“Invention is 1% inspiration and 99% perspiration.”

Ideas are the starting point of innovation but the majority of the journey is a laborious one where persistency, faith in vision and hard work will take us through.

5. Learn to persuade

The key to ensuring your innovation becomes successful is to have the Jobs-like skill for persuading others to accept our ideas and make them come true. Many innovators cannot communicate their work resulting in many great ideas not being accepted and mediocre ones (that are well communicated) being glorified.

6. Always keep a journal or device to write things down

Ideas are usually built on other ideas. When the apple fell on Isaac Newton’s head, it was the last piece of the jigsaw. The apple falling reinforced his 20 years of work on gravity and enabled him to pull together all his notes and thoughts previously on the subject.

I am sure there were many other people who had apples fall on them. Yet, it was Newton who made the connection. Having different thoughts and ideas written down helps as you can always go back to them in the future and start to make those connections when an apple falls on your head.

7. Ask questions always, be curious

Innovators are inquisitive people who are always looking for a problem to solve.

8. Find an innovation buddy

Innovation never happens alone. Our media constantly showcases lone-ranger type innovators sitting in a dark lab and creating the most amazing inventions. Most inventions happen in groups who brainstorm and work together. Find a partner who is interested in similar innovating ideas and join forces.

9. Access your creative energy

To do this you need to be in a relaxed manner. This is why we sometimes get great ideas in the shower or when driving alone. Find your creative energy trigger or creative zone or space.

10. Plan for setbacks

There will always be roadblocks along the way. Think and identify possible problems that may arise and be prepared with Plan B and Plan C. This will enable you to be ready when these setbacks occur.

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Roshan Thiran is CEO of Leaderonomics, an ‘ever learning’ social enterprise passionate about transforming the nation through leadership and youth development.

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