Apple University Dean Shares Deep Dive Into Apple's Organizational Structure

[MacRumors]

Apple University dean and vice president Joel Podolny today wrote an in-depth article on Apple's organizational structure for Harvard Business Review.

Titled "How Apple is Organized for Innovation," Podolny's piece delves deep into Apple's structure and how that has helped it grow over the years. Starting back when Jobs took over the company when he returned to Apple 1997, Podolny explains how Jobs fired the managers of each individual business unit and converted Apple into "one functional organization," a setup that Apple continues to have to this day.

As was the case with Jobs before him, CEO Tim Cook occupies the only position on the organizational chart where the design, engineering, operations, marketing, and retail of any of Apple's main products meet. In effect, besides the CEO, the company operates with no conventional general managers: people who control an entire process from product development through sales and are judged according to a P&L statement.

Apple's structure dictates that the people who have the most expertise and experience in a given domain should have the decision rights for that domain, with the company relying on technical experts rather than managers to make key decisions.

Apple's financial structure, where executive bonuses are based on companywide financial success rather than departmental success, also allows for more freedom when it comes to product decisions because there's not specific financial pressure on a single release. "The finance team is not involved in the product road map meetings of engineering teams, and engineering teams are not involved in pricing decisions," writes Podolny.

All of Apple's managers, from senior vice president and down, are expected to have deep expertise in their area, immersion in detail of the work being done under their leadership, and willingness to collaborate and make collective decisions. "Leaders should know the details of their organization three levels down," is one of Apple's principles.

As Apple has grown, Apple CEO Tim Cook has needed to make adjustments to the structure as Apple enters into new markets and technologies.

The adjustments Tim Cook has implemented in recent years include dividing the hardware function into hardware engineering and hardware technologies; adding artificial intelligence and machine learning as a functional area; and moving human interface out of software to merge it with industrial design, creating an integrated design function.

Podolny's full piece goes into much more detail on how Apple's internal structure works, complete with many examples of Apple's successes. It can be read in full at Harvard Business Review.

Article Link: Apple University Dean Shares Deep Dive Into Apple's Organizational Structure

 

[TheYayAreaLiving 🎗️]

This will be taught in Grad College in the Business World. Case study time.

 

[JPack]

Apple's financial structure, where executive bonuses are based on companywide financial success rather than departmental success, also allows for more freedom when it comes to product decisions because there's not specific financial pressure on a single release. "The finance team is not involved in the product road map meetings of engineering teams, and engineering teams are not involved in pricing decisions," writes Podolny.

Sounds great in theory, but in reality, do people really think executives aren't going to direct their attention to financially under-performing units?

If one unit is under-performing, another has to make up for the deficiency in order to maintain company-wide financial targets. Everyone ends up looking at the bottom line.

HomePod not selling well? Let's increase the mark up of iPhone accessories in response.

 

[rafark]

Even though I do not like a lot of the decisions they take (like removing the accessories from the box), whatever they do it seems to be working because their products are more popular than ever.

 

[jav6454]

So basically, it means every department has to pull together or the ship sinks.

 

[Darth Tulhu]

Even though I do not like a lot of the decisions they take (like removing the accessories from the box), whatever they do it seems to be working because their products are more popular than ever.

That's because for a lot of what they actually do, they do extremely well.

They are masters of "packaging" features into products that allow you to ignore their weak areas (like Siri, for example).

 

[Dekema2]

Never heard of Apple University

 

[now i see it]

What's baffling is that some people want to work for that company

 

[Glideslope]

Other corporations use similar structures. In the end a corporation is only as functional as those comprising its circulatory system.

Nothing revolutionary in this article.

 

[whyamihere]

How does one apply to Apple University? I hope my GPA is good enough!

 

[eastwoodandy]

Sounds great in theory, but in reality, do people really think executives aren't going to direct their attention to financially under-performing units?

If one unit is under-performing, another has to make up for the deficiency in order to maintain company-wide financial targets. Everyone ends up looking at the bottom line.

HomePod not selling well? Let's increase the mark up of iPhone accessories in response.

But there isn’t a HomePod division, that’s the point. The success of the HomePod is spread over most of those divisions, Sales, Marketing, Design, Software, Hardware Engineering etc

 

[Apple Freak]

How does one apply to Apple University? I hope my GPA is good enough!

You have to be a corporate employee to even qualify (maybe retail as well but I'm not sure on that)

 

[Wiesenlooser]

Them writing an HBR article about innovation is the best indicator they stopped innovating.

 

[Apple Freak]

Never heard of Apple University

I'd love to attend but you have to be an employee first.

What's baffling is that some people want to work for that company

I'd DIE to work for Apple someday!

 

[Rogifan]

Where I work (in the top 6 on Fortune’s list) executives are moved around a lot to give them different experiences. It seems like at Apple everything is more specialized and people aren’t moved around to get different experiences. Is there really room to grow? Or if you’re really good at camera systems is that all you’ll ever do at Apple?

 

[44267547]

Just looking at the 1998 itemized list of core departments in comparison to 2019, it’s a lot of the same segments that branch of 1998–>2019, just kind of sub-categorized breaking it down into departments that requires more staffing resources, Especially being how much Apple has expanded over the last seven years or so. It just shows you how much more responsibility there is with expanded growth compared to where it was under Jobs.

 

[az431]

Sounds great in theory, but in reality, do people really think executives aren't going to direct their attention to financially under-performing units?

If one unit is under-performing, another has to make up for the deficiency in order to maintain company-wide financial targets. Everyone ends up looking at the bottom line.

HomePod not selling well? Let's increase the mark up of iPhone accessories in response.

Did you even bother to read the article? How about the HBR article itself?

Of course not, which is why you don't understand why what you're positing is nonsense.

 

[mannyvel]

"Whereas the fundamental principle of a conventional business unit structure is to align accountability and control, the fundamental principle of a function organization is to align expertise and decision rights."

There's another paragraph that talks about another issue: when you're on the edge of technology there's no way to get market feedback, because the product/feature doesn't exist. So you need to rely on your experts...who may of course be wrong. Just look at the 3d-touch/deep press function. But they're probably more right more often then a GM-level person in a normal, who is likely even more clueless. Just imagine some guy up the food chain trying to figure out of people really want a camera in their refrigerator. "Sure, why not?"

 

[az431]

Them writing an HBR article about innovation is the best indicator they stopped innovating.

Yeah that makes zero sense.

 

[mannyvel]

Sounds great in theory, but in reality, do people really think executives aren't going to direct their attention to financially under-performing units?

According to the article, there aren't really under-performing units in Apple's model because the units aren't organized that way.

I haven't read the whole thing yet, but it'd be interesting to see how Apple builds, designs, and ships a product with this structure. For example, arguably the HomePod was shipped before the software was ready. Who made those decisions? And they should compare that process to the AirPods process, which is arguably simpler (no AI needed).
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Them writing an HBR article about innovation is the best indicator they stopped innovating.

Soon we will see a Samsung reorg along these lines, I'm sure.

 

[RFolk]

There are so many mangers that have no idea idea what their team is actually doing . I am specifically referring to the technical side of things , details on understanding how engineering concepts really come together, what's the impact on the product. Most of them are interested in efficiency and delivery time of their direct reports.

 

[44267547]

There are so many mangers that have no idea idea what their team is actually doing . I am specifically referring to the technical side of things , details on understanding how engineering concepts really come together, what's the impact on the product. Most of them are interested in efficiency and delivery time of their direct reports.

In the context of Apple in Bold and being genuinely curious, how would you even know that? Please Provide any literal examples how would you know “There’s so many managers they have no idea what their team is actually doing.”

 

[drsox]

Soon we will see a Samsung reorg along these lines, I'm sure.

Don't think it works that way. Having been round the loop twice in this area I think a lot of its success is due to organic growth. The structure hasn't changed but it has expanded in size. If the people aren't the best and collaboratively motivated then the basics aren't right. Note the comment that staff who can't work in the desired way are removed from responsibilities and, possibly, from Apple completely.

Corporate culture really does mean something here (and not just in the yoghurt in the canteen).

 

[applicious84]

I for one would love to go to the McApple University. Long live the corporate university. Also I can't believe McDonalds has a more creative name for their university than Apple does.

https://en.wikipedia.org/wiki/Hamburger_University

 

[PatrickCocoa]

Sounds great in theory, but in reality, do people really think executives aren't going to direct their attention to financially under-performing units?

It sounds like that's a rhetorical question, where you feel the answer is "obviously they will". It's pretty clear from Apple's non-standard behavior that the answer is "no, no they won't".

First, if Apple could mark up iPhone accessories, they would do so regardless of the sales of other products. Second, Apple's bizarre product update cycle (except for the iPhone, which admittedly is most of their sales/profit) indicates there's no internal pressure to introduce an updated product (MacBook, iPad, Macintosh) to meet a quarterly/annual sales or profit target.