This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl.

More than 20 years after Steve Jobs returned to the company in 1997, Apple continues to deliver innovation and commercial success every year, even as the number of employees and revenues have grown dramatically.

What are these organizational strengths of Apple? Joel Podolny, who runs Apple University (an internal training program), explains in detail how Jobs transformed Apple into "one functional organization".

According to Podolny's article in the Harvard Business Review, at the time of Jobs' return, Apple was divided into business units, each with independent P&L (final profit) responsibilities under its own general manager. As a result, the Macintosh product group, the information technology division, and the product division tended to fight each other, according to the article.

Believing that this was stifling innovation, in his first year as CEO, Jobs fired all of the general managers and placed the entire company under a single P&L, combining the functional divisions that had been separated by business into a single functional organization.


This means that Apple doesn't have a "Mac division" or "iPhone division", only job-based responsibilities and executives across the company, such as design, operations, and marketing.

And even after Tim Cook takes over as CEO, there is only one person who is involved in all aspects of design, engineering, operations, marketing, and retailing of Apple's major products. In effect, there is no traditional general manager, other than the CEO, within Apple, who manages everything from product development to sales, and whose performance is judged by the bottom line. Apple's structure is based on the principle that the person with the most expertise and experience in a particular field should be the decision-maker in that field, so it's based on technical experts, not managers.

That means that under a financial structure where executive compensation is judged based on the company's overall revenue, rather than the success of each division, there is less pressure to make a profit on a single product and therefore more freedom to make decisions around products. Podolny says, "The finance team is not involved in the product road map meetings of engineering teams, and engineering teams are not involved in pricing decisions."

He also said that all managers, from the senior vice president on down, must have deep expertise in their area, know the details of the work they are leading, and be willing to discuss it collaboratively with other professional teams. They seem to be enforcing the principle that "leaders should know the details of their organization three levels down."

As the company grows and enters new markets and expands into innovative technologies, it also needs to evolve its functional structure and leadership. Some of the adjustments made in recent years under CEO Tim Cook include dividing the hardware function into hardware engineering and hardware technologies and adding artificial intelligence and machine learning as a functional area.

Despite some concerns about the future of Apple after the death of Steve Jobs, the company continues to be the world's leading company, with its market capitalization topping $2 trillion this year. The leaders of each division have focused on refining the features and user experience for which they are responsible, and their combined efforts may be the driving force behind the perfection of the iPhone and other products to remain competitive.

Source: Harvard Business Review

Via: MacRumors

This article is based on an article from the Japanese edition of Engadget and was created using the translation tool Deepl. The Japanese edition of Engadget does not guarantee the accuracy or reliability of this article.