SAST Wingees

Apple’s Innovation Method? – Part 1

Prolog

As promised in my last post on Christensen’s Theory of Disruption, I want to share my findings on Apple’s Innovation Method (AIM). How does the planet’s most watched company come up with its string of ground breaking innovations?  Lots of books and articles have been written about Apple and its methods and I have read quite a few of them myself. Given how secretive the company is, we will likely never know what its methods truly are?  BTW, i have no connections to any one in Apple, nor do I have access to any internal Apple documents, unless they are in the public domain. Many of you that have worked with me will recognize many of the points that I will be mentioning.

Holy Grail of Innovation Management

Before I talk about Apple’s methods, I want to set the context. I am very lucky to have had the good fortune of running the Innovation program for a Fortune 500 firm for 5 years . As you can imagine, my job demanded that I look  at the top innovators in the world, which obviously includes Apple. I have also read scores of books on the topic of Breakthrough Innovation. One important & obvious inference is this –  Systematizing Breakthrough Innovation, is the Holy Grail in the field of Innovation Management.  If we could Systematize Breakthrough Innovation, sky is the limit, isn’t it? Obviously this inference triggered my passion to soak up a lot of material on the topic of Breakthrough Innovation.

Before I start, it may be useful to define Breakthrough Innovation and I will use my favorite innovation chart – the NASSCOM-BCG Innovation Matrix:

Let me the explain the chart. On the X Axis – Area of Innovation – Any organization can be thought of, simplistically, to consist of 3 major functions – Input, Process & Output. Input – is the raw material, Process is the company’s process, Output is the product(s)/services the company sells in the market.  For example,  an IT/ITeS services firm, like the one I was working for, the Input is – people  & technology, Process is the company’s proprietary processes, and Output is the IT/ITeS services sold in the market.  On the Y Axis, the Extent of Innovation – Sustaining, Enhancing & Breakthrough – the 3 kinds of Innovations a firm could do. I think the words Sustaining, Enhancing & Breakthrough are self-explanatory. I have marked the Breakthrough Tier in Green.

Another interesting observation I made is this – most books on Breakthrough Innovation focus themselves entirely on Breakthrough Innovations in the Output category –  just 1 out of  the 3 potential areas for Breakthrough Innovation.

Why is Breakthrough Innovation so hard?

Some interesting factoids – IBM’s survey of Top CEOs says Creativity is the most important trait. Everyone talks incessantly about Breakthrough Innovation, The Global 1000 has spent over 2 Trillion $ in R&D in the last 5 years. But Apple is one of the lowest R&D spenders in the Global 1000 and Apple’s R&D spend is decreasing !

Looking back in History is one of my favorite methods of analysis. I looked at the history of Breakthrough Innovations and I realized how hard it is even for the reigning experts in the field to recognize and encourage Breakthrough Innovations:

“The cinema is little more than a fad. It’s canned drama. What audiences really want to see is flesh and blood on the stage.” -– Charlie Chaplin,1916  

“The Americans have need of the telephone, but we do not. We have plenty of messenger boys.” — Sir William Preece, Chief Engineer, British Post Office, 1878.

“This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication. The device is inherently of no value to us.” — A memo at Western Union, 1878 (or 1876).

“[Television] won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” — Darryl Zanuck, movie producer, 20th Century Fox, 1946.

“When the Paris Exhibition [of 1878] closes, electric light will close with it and no more will be heard of it.” – Oxford professor Erasmus Wilson

Above Quotes source: Listverse

“A rocket will never be able to leave the Earth’s atmosphere.” — New York Times, 1936.

“Heavier-than-air flying machines are impossible.” — Lord Kelvin, British mathematician and physicist, president of the British Royal Society, 1895. “

There is not the slightest indication that nuclear energy will ever be obtainable. It would mean that the atom would have to be shattered at will.” — Albert Einstein, 1932

“Rail travel at high speed is not possible because passengers, unable to breathe, would die of asphyxia.” — Dr Dionysys Larder (1793-1859), professor of Natural Philosophy and Astronomy, University College London.

“Fooling around with alternating current is just a waste of time. Nobody will use it, ever.” — Thomas Edison, American inventor, 1889

          Source: Physics of the Impossible by Michio Kaku

If this is so hard for the reigning experts of the field, then how can the typical executive in a firm, recognize and encourage Breakthrough Innovations?

Neuroscience of Breakthrough Innovation

I decided to look at Neuroscience to understand why Breakthrough Innovation causes such reactions from people. A 2010 paper from a Cornell study titled “The Bias Against Creativity: Why People Desire But Reject Creative Ideas”  provided a brilliant answer:

Because we are motivated to reduce uncertainty in our operations, and the fact that Innovation creates uncertainty, we are subconsciously averse to Innovation, even though we may desire Innovation.

Epilog

Now that I have set the stage, I want to cover the Apple Innovation Method, more directly 🙂

Updated Oct 2, 2014: Links to Part 2 and Part 3 of the series.