g-f(1)23 For its innovations, Apple relies on a structure that centers on functional expertise

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Perhaps no product feature better reflects Apple’s commitment to continuous innovation than the iPhone camera. The iPhone camera technology has contributed to the photography industry with a stream of innovations. To create such innovations, Apple relies on a structure that centers on functional expertise. Its fundamental belief is that those with the most expertise and experience in a domain should have decision rights for that domain. Relying on technical experts rather than general managers increases the odds that those bets will pay off.

Genioux knowledge fact condensed as an image.

Condensed knowledge 

• Apple’s main purpose is to create products that enrich people’s daily lives. That involves not only developing entirely new product categories such as the iPhone and the Apple Watch, but also continually innovating within those categories. 
• Perhaps no product feature better reflects Apple’s commitment to continuous innovation than the iPhone camera. When the iPhone was introduced, in 2007, Steve Jobs devoted only six seconds to its camera in the annual keynote event for unveiling new products. 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.
• To create such innovations, Apple relies on a structure that centers on functional expertise. Its fundamental belief is that those with the most expertise and experience in a domain should have decision rights for that domain. This is based on two views: First, Apple competes in markets where the rates of technological change and disruption are high, so it must rely on the judgment and intuition of people with deep knowledge of the technologies responsible for disruption. 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. Relying on technical experts rather than general managers increases the odds that those bets will pay off.
• Second, Apple’s commitment to offer the best possible products would be undercut if short-term profit and cost targets were the overriding criteria for judging investments and leaders. Significantly, the bonuses of senior R&D executives are based on companywide performance numbers rather than the costs of or revenue from particular products. Thus product decisions are somewhat insulated from short-term financial pressures. The finance team is not involved in the product road map meetings of engineering teams, and engineering teams are not involved in pricing decisions.

Category 1: A new, better world for everyone

[genioux fact extracted from HBR]

Authors of genioux fact

Fernando Machuca

References

How Apple Is Organized for Innovation, Joel M. Podolny and Morten T. Hansen, Harvard Business Review, November–December 2020 Issue. 

ABOUT THE AUTHORS 

Joel M. Podolny (Wikipedia, Google Scholar, LinkedIn) is the dean and vice president of Apple University in Cupertino, California. The former dean of the Yale School of Management, Podolny was a professor at Harvard Business School and the Stanford Graduate School of Business.

Morten T. Hansen (Wikipedia, Google Scholar, LinkedIn, Twitter) is a professor at the University of California, Berkeley, and a faculty member at Apple University, Apple. He is the author of Great at Work and Collaboration and co-author of Great by Choice. He was named one of the top management thinkers in the world by the Thinkers50 in 2019. Find him on Twitter: @MortentHansen.