By Kirk Kardashian, August 2011
Published Aug 16, 2011
For a brief moment during a recent day of volatile trading on Wall Street, Apple overtook Exxon Mobil as the most valuable company on the stock market. This was quite an accomplishment, considering Exxon’s giant global footprint in energy exploration, extraction and sales, and that Apple nearly went out of business in the mid-1990s. The turnaround that delivered Apple to the pinnacle of the technology business began in 1997, when Steven P. Jobs became CEO of the company he co-founded but was ousted from in 1985. How did the company’s ascendance come about?
One popular theory, proffered by technology blogger John Gruber, is that Jobs runs Apple much like an auteur makes a film: by having complete creative discretion. In other words, if a new product doesn’t appeal to Jobs, it doesn’t get built. This model of innovation exists in contrast to the more common way of working, such as at Google, where teams collaborate to come up with something new. Both models work, says Alva H. Taylor, an associate professor of business administration who specializes in innovation and creativity, but companies need to manage each differently.
Overseeing the Genius
Let’s get preferences out of the way first. If a company had the luxury of choosing between having one genius innovator or a team of good innovators, Taylor advises that strength is not in numbers. “You definitely want one great innovator,” he says. Research by Taylor and others has shown that such a person can have 10 times the creative output of a team, so if you have a Jobs-type of creator on staff, you should let him work.
Strangely, many companies break this rule and end up wasting talent. “They’ll luck into this great person,” says Taylor, “but then they’ll force them to act like everyone else—to sit on teams or committees and have them work under the routines of the rest of the people in the organization. What they should be doing is giving this person all the resources they need and then getting out of his or her way.”
But that’s not easy. Everyone wants to huddle close to the genius, hoping that a great idea might just spontaneously appear. “You’re almost scared of not having that person involved,” explains Taylor, “and you end up taking up his time with administrative stuff like sitting in committee meetings when he should just be creating.”
Granted, everyone who works at a corporation will have to attend meetings at some point. But when you mix a great innovator in with other employees, the hazard is that they will think everything the auteur says is the holy grail of design. And auteurs can be wrong. “Jobs has been wrong a lot,” Taylor points out. Apple’s Mobile Me, for example, was a big flop. “But if you’re not wrong sometimes,” Taylor adds, “then you’re not being creative. You’re not taking risks and trying new things.”
That’s why it’s important to surround an innovator with a support team of smart people who will question what he or she says. Andy Grove, the co-founder of Intel, would intentionally make statements that were controversial, just to see if his top managers would question him. “He found that they would,” Taylor says. “But he also found that he had to discipline himself not to speak up, because no matter what he said, it would have increased weight and influence his people to look for evidence to confirm it.”
Putting the Team Together
Of course, most companies don’t have a Steve Jobs or an Andy Grove, so in order to get the creative process going, they need to form teams of experts. Managing a team to innovate requires special tactics that you wouldn’t use for, say, a team charged with execution. Executing is all about clear tasks, delegating, meeting milestones, and hitting known targets. An innovation team, on the other hand, needs to coalesce in a way that allows its members to share and build on each others’ knowledge, Taylor says. It needs to be comprised of people who are great at what they do, and it shouldn’t be a consensus process—the experts should have the final say in decisions they’re most qualified to make. “When you do things by consensus,” Taylor says, “you get average outcomes that no one loves and include items that should never share the same space. You get the Pontiac Aztek.” That’s not the goal. Innovative products, when successful, “meet the needs of a segment of your customer base in an outlandish way,” Taylor explains. “Consensus products don’t do that.”
Taylor’s research has shown that good teams need some time get up to speed, to learn to communicate with each other and respect each others’ knowledge. During that period, performance isn’t impressive, but then it ramps up later on. “It’s never quite as good as the genius innovator,” Taylor says, “but it’s close.” This means that teams should either be allowed to gain experience working together on quick but low-priority outcomes, or be given plenty of time to gel before tackling mission-critical projects.
To further ensure success, Taylor says, teams must create a working atmosphere that welcomes all ideas and discourages “pre-filtering”—that instantaneous good or bad feeling about an idea, often expressed openly within the group. Because when you’re trying to progress from the current product to the next big thing, it’s tough to close the distance incrementally. We often “localize our solutions,” Taylor says, thinking of improvements that are close to what we already have. “The way you break away from that is to have a crazy idea that’s outside the boundaries of what can be done, and then you work backwards. Pre-filtering kills these crazy ideas too early, resulting in teams not having enough idea variance to build a truly novel product.”
Importantly, this process will utterly fail if the team members are merely good at what they do. Like a fine watch, an innovation team must know with precision how all the pieces of a project fit together, and this requires exacting expertise about each area of specialty within a product’s design. The moment one component doesn’t mesh with the others, the whole system breaks down. “It’s a disaster,” says Taylor. The lesson? You don’t want just cross-functional teams; you want cross-functional expertise.
Before Apple temporarily became the most valuable company on the stock market, it secured a more permanent place in the upper echelons of the business world. In May 2010, after releasing the iPad, Apple surpassed Microsoft as the highest valued technology company on the planet. It achieved this not only because of Steve Jobs’ good eye for design. It succeeded, Taylor says, because it asked the fundamental question of innovation: what problem are we trying to solve? It’s a crucial point for any company—with or without an auteur—to keep in mind as it envisions the next product. Because, says Taylor, “there’s nothing worse that spending all of your time and resources on the wrong problem.”