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Sunday, September 20, 2009

Four Principles of Apple’s Successes (and Failures)

As the story goes, when Steve Jobs looked around Apple in 2002, he saw a profusion of gadgets: cell phones, PDAs, and MP3 players (including Apple’s blockbuster, the iPod). In a flash of brilliance, he asked himself a world-changing question: What if all those functions could be combined in just one device? The answer to that insightful question led to Apple’s next hit: the Rokr cell phone.

Whoops, scratch that. The Rokr was a commercial flop, and Apple’s short-lived partnership to develop an MP3 cell phone with Motorola is now an embarrassing footnote. In no small part, the iPhone exists today because the Rokr threw the shortcomings of the mobile phone industry into sharp relief. Smelling the industry’s stagnation, Jobs began planning the iPhone, even as the Rokr drew withering criticism.

The above anecdote highlights one important thing to remember about Apple: Its aura of infallibility is pure bunkum. The other thing to remember is that Apple learns from its mistakes. In fact, mistakes are vital to its creative process. But what are the rules that govern this process? Here are four of the most important principles.

Principle One: Don’t Follow Your Customers; Lead Them

Apple’s design process differs from that of most other companies. Traditional design research relies heavily on focus groups and customer feedback about existing products. Apple tends to place less emphasis on evidence than on intuition, under the theory that consumers can’t tell you they want a product or function if they can’t yet envision it. Instead, they need to be shown a superior alternative. Apple sees itself as being in business to create those revolutionary alternatives.

Principle Two: Temper Engineering With Art

Most companies that try to operate like Apple fail. Often that’s because of who they tap to spearhead the creative process. High-tech devices are built by engineers — and often designed by them, too. Unfortunately, engineers tend to design products that they would want to use, which explains why a typical device is jam-packed with a hopelessly confusing array of features. Apple has succeeded by making sure its top decision makers all subscribe to the same minimalist philosophy. The result is that the most-used features of its devices — like the iPod’s famous scroll wheel — feel entirely natural.

Principle Three: Focus on the Few to Sell to the Many

Instead of trying to satisfy every fringe taste or market niche — other companies that make laptops, for instance, often sell dozens of models at any given time — Apple focuses on just a few products in each category. With time and money on its side, Apple strives to make each item in its relatively small stable as perfect as possible. Over time, that helps differentiate the products and build customer loyalty.

Principle Four: Be Your Own Toughest Critic

The final ingredient to Apple’s success is an intangible energy and interest in doing well. And if the company ever lets that vitality go, it’s game over. (That’s what almost happened during the 1990s, before Jobs returned to provide a vital kick start.) Ultimately, Apple succeeds because it not only beats its competitors but also strives each year to beat itself. As management guru Peter Drucker noted long ago, “Your being the one who makes your products, process, or service obsolete is the only way to prevent your competitor from doing so.” In the process of trying to outdo itself, Apple often leaves its competition in the dust.