Published in HBR by Joel M. Podolny and Morten T. Hansen
Welcome to “How Apple Is Organized for Innovation: A quick summary” on Innovations4.Eu.
In this insightful article published in HBR by Joel M. Podolny and Morten T. Hansen, we delve into the unique functional organizational structure and leadership model that has propelled Apple’s remarkable journey of innovation.
Unlike traditional companies, Apple centralizes decision-making based on functional expertise rather than product or business unit, allowing it to continuously adapt and innovate as it has grown enormously in scale over the past two decades. We’ll explore the ‘why’ and ‘how’ behind Apple’s innovative success and the key leadership characteristics that make it all possible.
- Why a Functional Organization?
- Apple organizes teams around functional areas like hardware engineering, software, and retail rather than by product line.
- This aligns decision rights with technical expertise, empowering experts to make bets on disruptive technologies without short-term financial pressures.
- Senior leaders are immersed in technical details due to their deep subject matter expertise.
- Relying on technical experts rather than general managers increases the likelihood of successfully innovating in dynamic markets.
- Three Key Leadership Characteristics
- Leaders have deep domain expertise that allows meaningful engagement and guidance of specialist teams.
- They immerse themselves in granular functional details through several levels of the organization.
- Collaborative debate across functions is necessary due to horizontal interdependencies; leaders facilitate this process.
- Leadership at Scale
- Apple’s structure has evolved with new functions and complexity over 40x revenue growth.
- Leaders exercise discretion over focus and involvement using a model of owning core expertise, learning new areas, teaching others, and delegating non-core work.
- This preserves alignment of expertise while allowing scaling of organizational span of control.
- Case Study: VP of Applications Roger Rosner
- Responsibilities grew across engineering, design, and content-based apps like News.
- Adapted using discretionary model – owns core areas, teaches others, learns new domains, delegates less critical work.
- Benefits of Functional Structure
- Aligns decision rights and accountability to expertise for risk-taking and continuous innovation.
- Challenging for firms to transition but experts-led model can be cultivated within units initially.
