Design thinking & Innovationat Apple

May2012

H A R V A R D | B U S I N E S S | S C H O O L

A case study by

BARBARA FEINBERG STEFAN THOMKE

Presentation byAhmed Soliman

Contents› Intro› Design Thinking

› Simplicity in Design & use› Beyond Fashion

› Innovation, Product Development strategy, and Execution› Excellence in Execution› Platform Strategy› Beautiful Products

› The CEO as Chief Innovator› Bold Business Experimentation

› Against Conventional Wisdom› Apple’s Future

Intro

› In 1997 Steve Jobs returned after 12 years of being fired with a share worth of $ 5.

› Future was uncertain.

› In 2012 Apple’s share price $ 600.› Market capital of $ 550 billion.› Annual Sales exceeding $ 100 billion.› Most valuable Publicly-traded company in history.

“They do what they do best and leave other things to others”.

Apple’s slogan:

Think different

1997 - 2002

Design Thinking

› In mid-1970’s, computers were typically housed in discrete locations and only used by specialists.

› Jobs’ goal was to design a computer that both supports and foster individual work instead of enterprise use.

› Level of complexity needed to be reduced dramatically.

Design Thinking

( Simplicity in Design & Use )

› Focus on what people need and want.

› Help people love their equipment & the experience.

› First do the design, then push engineers make it happen.

› Jobs’ design-sensibility:“ Simplicity is the Ultimate sophistication ”.

Design Thinking

( Beyond Fashion )

› It is an essence of customer experience by which design seems to happen from the inside out.

› iMac wasn’t about candy-colored PCs, but a computer that’s really:

QuietDoesn’t need a FanWakes-up in 15 secBest sound systemSuper-fine Display

Design Thinking

( Apple’s vision of Simplicity )

› The integration of Sophisticated features and Functionality with no contradiction or trade-offs.

› No compromise between Simplicity of use & Functionality.

› At Apple, Problems are moving targets not issues to be solved for once.

Video

Innovation, Prod Development, & Exec

› Firm’s history and co-founder Steve Jobs had pivotal influence on the corporate performance.

› It had nearly 50% of education market & artistic enterprises.

› It had almost Zero penetration to Business market.

› Product idea inception should be non-typical to avoid confusion and complexity.

Innovation, Prod Development, & Exec

( Excellence in Execution )

“The system is that there is no system, that doesn’t mean we don’t have a process.

Process makes you more efficient, but innovation comes from people calling each other at 10:30 at night with a new idea” ,

“Its only by saying No that you can concentrate on the things that are really important” ,

“It comes from saying No to 1,000 things to make sure we don’t get on the wrong track”.

-Steve Jobs

Innovation, Prod Development, & Exec

( Excellence in Execution )

› After 12 years Jobs returned and took immediate actions:› Closed 2 divisions› Eliminated 70% of new projects› Launched a website for Direct sales› Product lines reduced (from 15 to 3)› Shut facilities (moved manufacturing abroad)

› Apple takes interest in material selection and how things are manufactured plus being completely attuned to customers.

Innovation, Prod Development, & Exec

( Platform Strategy)› Apple’s Innovation approach to streamline product

portfolio.

› A Platform strategy envisions a family of products at the early stages of Product Concept and planning.

› Design with an architecture that will accommodate development & production of derivative products.

Innovation, Prod Development, & Exec

( Beautiful Products)

› Apple’s passion & close attention to new materials and

manufacturing process offers new opportunities for

product Innovations.

The CEO as Chief Innovator› Research reveals that founders imprint

their own personalities characteristics.

› Jobs’ Design-sensibility reinforced hiring like-minded people.

› Jobs’ had no formal Design training just as engineering (or business).

› Jobs envisioned the importance to put individuals (problem-solving works rather than routine) before Organizations, which was radical in early 80’s when companies were looking for “Enterprise solutions”.

Bold Business Experimentations

› Controversial idea to move into retail.

› Similar attempts had spectacularly failed.

› Internet-based business models “App Store”.

› Entire industries were forced to accommodate Jobs’ vision.

› Generated highest revenue per square foot in the entire retail sector.

Bold Business Experimentations

( Against Conventional wisdom )

› The Open source movement has been ignored by Apple.

› While opened up to outside developer communities “App Store”.

› Apple suppliers learned a slip of the tongue can forfeit business.

Apple’s Future› Most of 2011 Steve Jobs was on medical leave.› He passed away on October 5th 2011. › Apple sold 172 million devices rather than PCs.› It had 362 retail stores with <1million Daily visits.

Since 2011 till 2015, Apple kept its market leadership by development while being consistent with Jobs’-inspired culture of

unconventional way for innovation.

Thank you

Questions & Comments are Welcomed