How Apple Breaks All The Rules of an Innovation Culture

Last night Apple announced financial results and blew away all expectations. It got me thinking about Apple’s culture – a culture that has supported the creation of some of the world’s most beautiful innovation.

Apple is – without a doubt – one of the world’s most innovative organizations. In 2011, they have been proclaimed by both FastCompany and BusinessWeek as the World’s #1 Most Innovative Company. Their products have set a new standard in design, usability and… well… beauty.

And yet – most innovation experts would tell you Apple is doing it wrong.


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A recent Fortune magazine article entitled “Inside Apple” (from which the quotes below were taken) offers a glimpse into how Apple ignores some widely-held “Rules of Innovation."


1. Innovation requires a flat, open, agile organizational structure.


The thinking goes something like this: innovation requires adaptability and change don’t expect a bureaucracy built for stability to create innovation. But Apple has one of the world’s clearest examples of a command-and-control structure, with Steve Jobs as the General. The Fortune article proves this point:

“[Jobs is] a corporate dictator who makes every critical decision – and oodles of seemingly noncritical call too, from the design of the shuttle buses that ferry employees to and from San Francisco to what food will be served in the cafeteria.”


2. Innovation flourishes when you give people autonomy, flexibility and discretion.


This school of thought says that innovation is hidden in the minds of your people – to set it free, just set your people free. Consider Google's “20 percent time” philosophy, which gives its engineers one day a week to work on whatever they want… projects that interest them... or jobs that aren’t in their job description... or a bug that needs fixing.

But autonomy and flexibility aren’t part of the lexicon at Apple. In large part, this is a function of the org structure. Basically, employees work on what Steve Jobs says they should work on. But beyond that, focus is highly valued at Apple:

“One of Apple’s greatest strengths is its ability to focus on just a few things at a time, an entrepreneurial trait difficult to imagine at a corporation [this size]. Saying no at Apple is as important as saying yes. ‘Over and over Steve talks about the power of picking the things you don’t do.’”

This is a stark contrast to the output of Google’s “20 percent time” philosophy, which has spawned hundreds of projects (which, notably, only contribute less than 3% to Google’s revenue so far).


3. Innovation requires openness to failure


Failure is part of innovation – or so goes the convention. This Honda documentary called “Failure: The Secret to Success” is a compelling tribute to the philosophy. The basic idea is that cultures that have a low tolerance for failure can’t produce innovation; leaders and innovators are too busy avoiding failure – covering their butt – to create true breakthrough innovation.

But Apple has a fantastically low tolerance for failure:

“Apple doesn’t often fail, and when it does, it isn’t a pretty sight…Steve Jobs doesn’t tolerate duds. Shortly after the launch event, he summoned the MobileMe team… and asked a simple question: "Can anyone tell me what MobileMe is supposed to do?"

Jobs immediately named a new leader of the team and soon disbanded much of the team.

So how does Apple do it? Is it an exception to the rule? Does it take a certain type of leader – like Steve Jobs – to consistently churn innovation out of a rigid culture? Is it sustainable?

The Culture-Centric Organization

Published July 20, 2011 | Written By Phil Haussler