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Posted on 12/09/2009 6:29:26 PM PST by Star Traveler
By Joe Wilcox
Published December 9, 2009, 9:45 AM
Simply put: Apple doesn't play by the rules. It reinvents them. Apple applies what I call "David Thinking" to its broader business, product development and marketing. Apple is David to Microsoft Goliath -- and other ones, too. Goliath plays by one set of rules. David choses to change the rules, which favor his strengths rather than those of Goliath.
David Thinking is most provocative and surprising when Goliath acts like David. After all, David sometimes becomes Goliath; Apple is a giant in music with iPod and iTunes Music Store. But David turned Goliath also risks making mistakes that would allow another upstart advantage. Today, Apple is both David and Goliath, depending on market.
March 11, 2009, The New Yorker magazine story "How David Beats Goliath" is what got me to looking at David Thinking and making the realization this is how Apple operates its business. Writer Malcolm Gladwell could easily have written about Apple, but his examples are 12-year-old girls basketball and T.E. Lawrence.
Gladwell tells how obvious losers are winners more often than might be expected: "David's victory over Goliath, in the Biblical account, is held to be an anomaly. It was not. Davids win all the time." Gladwell explains why: "The political scientist Ivan Arreguín-Toft recently looked at every war fought in the past two hundred years between strong and weak combatants. The Goliaths, he found, won in 71.5 per cent of the cases. That is a remarkable fact."
David wins almost 30 percent of the time when playing by his opponent's rules. But the percentage dramatically increases when David changes them. Gladwell explains:
In the Biblical story of David and Goliath, David initially put on a coat of mail and a brass helmet and girded himself with a sword: he prepared to wage a conventional battle of swords against Goliath. But then he stopped...and picked up those five smooth stones. What happened, Arreguín-Toft wondered, when the underdogs likewise acknowledged their weakness and chose an unconventional strategy? He went back and re-analyzed his data. In those cases, David's winning percentage went from 28.5 to 63.6. When underdogs choose not to play by Goliath's rules, they win, Arreguín-Toft concluded, 'even when everything we think we know about power says they shouldn't.'
Nearly two-thirds of the time is a remarkable figure. The approach defines almost every line of Apple's business.
Steve Jobs as David
Apple isn't a team player, particularly under the two chief executive tenures of cofounder Steve Jobs. The examples of Apple's rule-changing behavior are simply too numerous to recount. So I'll start with a few around the 1984 launch of Macintosh:
Apple's business was at its worst -- closest to expiration -- during the early 1990s, when the company played more by rules Microsoft established. Apple had put on Goliath's mail and brandished his sword. For example, Apple embraced clones, allowing third parties to release their own hardware running Mac OS. The seemingly sensible strategy was anything but. Apple's attempts to play by DOS/Windows PC rules put the company at grave competitive disadvantage. Steve Jobs' late-1996 return to Apple and ascension to interim CEO in 1997 set forth dramatic changes in the company's business strategy. Among Job's first actions: The end of Mac cloning. Only Apple would make and sell Macs.
Since Jobs' return to Apple, there are so many examples of Apple changing the rules, it's hard to find ways the company played by Microsoft's -- or other Goliaths' -- rules. Some examples:
Microsoft was once David
At one time Microsoft changed the rules, too, when David to the IBM Goliath. For example:
There are many other examples how Microsoft defied convention over the years, how the company changed the rules. No longer. Microsoft seeks to preserve the status quo it established through success and becoming Goliath. For example, top perennial design principle for Windows is backward compatibility. It's the preservation of the past way of doing things.
Status quo thinking prevents Microsoft from being competitive and disruptive like Apple. Goliath thinking is so pervasive, Microsoft fails where it shouldn't. Microsoft will not beat Google in search as long as it plays by the information giant's rules. Microsoft must change the rules of the engagement, leveraging its strengths against Goliath Google. Gladwell writes in The New Yorker:
David, let's not forget, was a shepherd. He came at Goliath with a slingshot and staff because those were the tools of his trade. He didn't know that duels with Philistines were supposed to proceed formally, with the crossing of swords...He brought a shepherd's rules to the battlefield.
Microsoft must leverage its strengths, by battling Google in an unexpected way. Perhaps Microsoft should apply Apple's David Thinking to search. Apple's sales priority is profit share rather than market share. Maybe Microsoft should seek to make more money off lower search share, as Apple does today in the personal computer market.
Yesterday, at the Loop, Jim Dalrymple asked: "Apple can be copied, but can it be beat?" Apple can be beat if its David Thinking approach can be copied, I assert. But competitors let Apple set the rules in markets where it competes.
So far, Apple has resisted Goliath thinking, consistently competing, at least under Steve Jobs' leadership, in ways that emphasize its strengths rather than complying with rules set by others. Even as Goliath, Apple has consistently changed the rules to its advantage. The challenge ahead: Resisting the temptation to protect the status quo -- to truly be Goliath.
Why Apple succeeds, and always will
Dude, you work for Apple?
Please Demand AT&T allow Tethering NOW!!!
Best to not forget the agony, sweat, and tears of engineering the Apple products to please the consumer more than the competitors’. Do you know what it is like to work for managers who say “Not good enough, yet” to you, every day?
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Dude, you work for Apple?
Nope, just a Macintosh user since way back when... :-)
Please Demand AT&T allow Tethering NOW!!!
I think it would be good to have that, too. And apparently they are going to. But, I also see that there are problems with the amount of usage that AT&T is getting from iPhone users, so AT&T really needs to beef up their network. And I also suspect that the price tag for tethering will be significant, mainly because it's going to put a heavy burden on their network.
So, I would be ready for that price tag, too...
Best to not forget the agony, sweat, and tears of engineering the Apple products to please the consumer more than the competitors’. Do you know what it is like to work for managers who say “Not good enough, yet” to you, every day?
I can appreciate that, too... but it is a price to pay for producing the kinds of products that have been as successful as they have been.
I hear it's hell to work for Steve Jobs, but no one would want Jobs to turn into a wimp, just to be nicer to the employees -- and change the way things are done, which may affect the quality of the products coming out of Apple.
Because there are enough of these people out there who will buy anything white, shiny, has an Apple logo on it, and hears Steve Jobs tell them they can't live without it.
(Waiting to be MacFlamed...)
Because there are enough of these people out there who will buy anything white, shiny, has an Apple logo on it, and hears Steve Jobs tell them they can't live without it.
Well..., that's what happens when a company knows what the consumer wants and makes the best out there...
That is the "name of the game" -- for "business" -- which is to give the consumer what they want, and the consumer gives you "money" which is what "business" is all about... :-) Ain't it great living in a capitalist, free-enterprise system...
I don’t care, unless you’re talking about God, it is totally stupid to believe some company or some person ‘always will’ be something wonderful or unblemished.
We’re already seeing “It could never happen in America” be shown to be a lie.
Hmmmmm.... strange. My 24" iMac has an Apple logo on it, and part of it is shiny... but only the keys on the keyboard are white... it's mostly black and aluminum. I guess your FUD and ad hominem insults are way out of date.
Yeah, when you insult a good number of FReepers you will be flamed. But I won’t judge how you want to spend your Wednesday night.
I don’t care, unless you’re talking about God, it is totally stupid to believe some company or some person ‘always will’ be something wonderful or unblemished.
At their present performance for over the last decade and with Steve Jobs (one of the founders of the company) showing the company what needed to be done... I would say that they're demonstrating that very thing. And that is what the writer is talking about.
Playing "other companies games" is not the way Apple does things, as the article is saying. And that's precisely why they're "winning" (which means winning the consumers to buy their products).
And I don't have any problems at all with that, because that means when a company, such as Apple, is successful like that -- it's because the people who boy their products are pleased with those products.
That's the situation with Apple. As long as they keep that up, they'll be fine.
And we're talking about "business" and a "company" here, not a religion and not about God. I do know the difference between the two... :-)
We’re already seeing “It could never happen in America” be shown to be a lie.
Just because things are going wrong in a lot of other areas doesn't mean that absolutely everything and every company and every person is going wrong, too... :-)
You would be foolish to say Apple will never get it wrong just because Jobs is doing a good job now. We’ve had great companies run by great men in the beginning, only to have future leaders run them into the ground.
“If they keep it up”. That’s a big if. If anything is certain, people who take over companies that are ‘doing well’ but have little to do with them getting there in the first place, take for granted what it took to get them there in the first place, and get greedy and stupid.
The founders of a company put everything into it to make it big. The next wave of people aren’t as vested but make expansions but are more concerned about maintaining. the third removed executives are even more removed from the founders and it’s just a job and stock options and such. They’re more concerned about dividends to pised off shreholders, domestic partner benefits, and if everyone’s taken the latest sexual harassment class.
You see the same behavior in the families that have amassed large fortunes, you see it in monarchies, you see it in unions, you see it in certain religious groups. You see it in all sorts of business. The ones who come down the road after the founders rarely wnat to put everything they have on the line and into the business. They rarely take the same kinds of risk or have the same kind of skin in the game. It all starts into maintenance and preservation and status-quo-ism as you mention, and the further away you get from the initial founder, the more it sets in.
As far as I read it, Microsoft is one step ahead of Apple. Gates is still there but not running day-to-day anymore. Jobs is THE FOUNDER (only remaining founder) at Apple and once he’s gone, they will most likely run into the same problem most other companies do. Stagnation and maintenance mode.
You would be foolish to say Apple will never get it wrong just because Jobs is doing a good job now. We’ve had great companies run by great men in the beginning, only to have future leaders run them into the ground.
Well, I've done quite a bit of "reading" over the last 25 years about Apple and Macintosh and how they were either "beleaguered" or "going out of business soon" or would never increase market share and on and on.
These were so-called business pundits and/or tech pundits who -- apparently -- were a whole lot more stupid than the consumers who were buying the products that Apple Computer (and now just "Apple") made.
And when we see today, that Apple has no debt, has billions of dollars (that's with a "B" for "billion"), is expanding the marketshare, has 70-75% of the iPod business in the market, is the largest retailer of music in the U.S., has the largest marketshare of online music sales in the world, brought a radically new and different type of phone to market from never having it before and in the face of almost all "pundits" saying that they were going to fail -- I have to say, after all that, after 25 years of seeing what has gone on -- that if anyone were to fail in the future -- it would be long after I'm dead and gone and basically don't care any more... :-)
As it stands now and has stood for over a decade of excellent performance and great success with the consumer -- I don't have any doubts about how Apple is going to do in the future.
Well if you’ve got shares of Apple then I hope you’re right.
But even Apple sells shares with the caveat “past performance doesn’t equal future results.”
Nothing is ever certain, with the exception of death, taxes and Christ coming back to fix this place we’ve messed up.
Well if you’ve got shares of Apple then I hope you’re right.
No, I don't and haven't in the past, either. I'm only interested in Apple from the standpoint of the products that they make and me being a customer of theirs and having several of their products, and having had their products for the last 25 years.
As a Mac user since, oh, the Mac Pro and programming the Mac since Lightspeed C, here’s what I have to say about Apple’s business prospects:
They’d better keep Steve alive through whatever means necessary, because when Jobs isn’t at the company, their product innovation, quality and indeed their internal employee enthusiasm goes downhill - quickly. Their board has put in such idiots as Scully (a former soda pop exec) and Spindler. A future without Jobs does not look promising given the Apple board’s history.
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