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Steve Jobs And The 4 Counterintuitive Business Strategies Of Apple

And what we all might learn from them

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Steve Jobs And The 4 Counterintuitive Business Strategies Of Apple
[ Business]

One of the most legendary stories about Zappo’s famed culture of customer service above all else is their longstanding business practice of paying people to quit.

It is a perfect example of the power of counterintuition – that offering an incentive to leave will actually help you get rid of employees who would have lacked commitment and likely developed into underperforming employees in the long term. Counterintuition is like that. It takes something that initially seems crazy and illogical and flips it into a business strategy for success.

Perhaps no other company in recent memory has been quite as good at applying counterintuition to running their business as Apple. It is simultaneously a source of frustration for their competitors and confusion for business analysts why Apple is able to do business in a way that would surely be toxic for many other brands if they were to adopt the same closed approach to ecosystem, partners and social media.

Over the last week, media has iconized Steve Jobs and his impact on Apple and even humankind. Among the daily individual tributes are stories people share from their moments of meeting Steve Jobs and how Apple under his watch has become a master brand at using counterintuition to become the exception to nearly every rule in business. I have written before about the “real secret of Apple’s success” … but this week I have been thinking about some of their most counterintuitive business practices and what we all might learn from them. Here are a few to consider:

  1. Control the uncontrollable. If you had to name one thing that has helped Apple get to where they are today, it is that they control more aspects of their product development, distribution, sales, marketing, usage and service than any other technology manufacturer. They have their own stores, a locked down software platform and ecosystem, no open standards, integrated product service, and exacting brand standards for how their brand is to be mentioned in any context. They rarely offer media access into the company and are notoriously guarded about anything they allow to be shared about their products or company. Elements that many other brands would consider “uncontrollable” are meticulously micromanaged and centrally controlled by Apple. As a result, they can reduce any potential for a negative customer experience because they have more control over the entire journey.
  2. Forget the low end. Apple could never be accused of acknowledging that there has been a global recession. Their products are consistently and unapologetically for the “high end” and they are widely admired for their discipline as a company in making sure they are not producing too many products or compromising on quality in any way. In one story, Nike CEO Mark Parker recalled advice Steve Jobs gave him about Nike: “Nike makes some of the best products in the world–products that you lust after, absolutely beautiful stunning products. But you also make a lot of crap. Just get rid of the crappy stuff, and focus on the good stuff.” Apple has consistently done that, and charged a premium for it.
  3. Use partnership as a last resort. Apple is well known for controlling their communications and dictating what their partners are (and are not) allowed to say publicly about working with Apple. More than that, Apple’s first thought in most situations is how they can complete an element of their product or sales and distribution internally rather than having to partner with anyone. While some other organizations see partnership as an opportunity, Apple uses it as a last resort when they have no other options.
  4. Obsess over the little things. Generally, if you ask most people in business they will describe micromanagement as a bad thing. No one wants a manager who is always looking at every little detail – yet most accounts of working with Steve Jobs describe him as the sort of leader who stresses about such trivialities as font kearning and slight shade variations of yellow. This unwavering attention to detail translates into unique well thought out products, and it offers yet another argument for why, as my fellow Ogilvy colleague Rory Sutherland suggests in his brilliant TEDx talk, every company should have a Chief Detail Officer focused on “sweating the small stuff.”

Check out Influential Marketing Blog for more articles by Rohit Bhargava

Steve Jobs And The 4 Counterintuitive Business Strategies Of Apple
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  • slaws

    One quibble, Apple actually does use and promote a number of open standards including HTML5, CSS3, and javascript.

  • Jeff

    Just fyi – the line about “no open standards” is not accurate: http://www.apple.com/opensource/
    They use and contribute to many open standards where it benefits them strategically.

  • Etta

    Rohit,

    I think you have at least #2 very wrong. You’ve fallen in to the same trap that other business analysts have too, which is continually think that Apple’s products are exclusively high-end and expensive. Not so. Get rid of that presumption and look carefully at the products. For sure, Apple doesn’t make low-end stuff, but they also don’t exclusively make high-end stuff. What comes to mind are the iPad, various versions of the iPod, MacBook, MacBook Pro 13″ etc. None of these are high-end stuff and are competitively priced. Plus, they are well-designed and beautiful. You are right that Apple ignores the low-end market. But you are very wrong to then conclude that Apple aims for the high-end. They aim for both the middle and high-end.

  • http://opinion-nation.blogspot.com/ Philip Machanick

    The partnership one #3 is also wrong. Their real strategy is to seek partnerships they can dominate. Apple did not create hundreds of thousands of apps or millions of iTunes songs on their own.

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