Podcast
Questions and Answers
What did Jobs do to the general managers of all the business units in his first year as CEO?
What did Jobs do to the general managers of all the business units in his first year as CEO?
What is unique about Apple's organizational structure?
What is unique about Apple's organizational structure?
What is the role of senior vice presidents in Apple's organizational structure?
What is the role of senior vice presidents in Apple's organizational structure?
What is the benefit of a multidivisional structure, according to business history and organizational theory?
What is the benefit of a multidivisional structure, according to business history and organizational theory?
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What is the primary purpose of Apple, according to the text?
What is the primary purpose of Apple, according to the text?
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What is an example of Apple's commitment to continuous innovation?
What is an example of Apple's commitment to continuous innovation?
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What is the fundamental belief underlying Apple's organizational structure?
What is the fundamental belief underlying Apple's organizational structure?
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Why has Apple retained its functional structure, despite its large size?
Why has Apple retained its functional structure, despite its large size?
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What is a characteristic of Apple's organizational structure that enables it to succeed in rapidly changing environments?
What is a characteristic of Apple's organizational structure that enables it to succeed in rapidly changing environments?
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What is a significant change that Apple has made to its organizational structure in recent years?
What is a significant change that Apple has made to its organizational structure in recent years?
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What is a key principle that guides Apple's organizational structure?
What is a key principle that guides Apple's organizational structure?
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What is Roger Rosner's role at Apple?
What is Roger Rosner's role at Apple?
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Why does Apple's organizational structure help facilitate knowledge sharing and innovation?
Why does Apple's organizational structure help facilitate knowledge sharing and innovation?
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What is the philosophy behind Apple's approach to management?
What is the philosophy behind Apple's approach to management?
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Why is it essential for Apple's leaders to know the details of their organization three levels down?
Why is it essential for Apple's leaders to know the details of their organization three levels down?
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What is a notable characteristic of Apple's senior leaders?
What is a notable characteristic of Apple's senior leaders?
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What is the term used to describe the shape of Apple's product corners?
What is the term used to describe the shape of Apple's product corners?
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What is the advantage of Apple's product design approach?
What is the advantage of Apple's product design approach?
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What is an example of an area where Apple has a deep bench of experts?
What is an example of an area where Apple has a deep bench of experts?
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Why is Steve Jobs' quote about managers and individual contributors significant?
Why is Steve Jobs' quote about managers and individual contributors significant?
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What was the structure of Apple when Steve Jobs returned in 1997?
What was the structure of Apple when Steve Jobs returned in 1997?
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What was the primary reason for Steve Jobs' decision to lay off general managers in 1997?
What was the primary reason for Steve Jobs' decision to lay off general managers in 1997?
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What was the outcome of Steve Jobs' restructuring of Apple in 1997?
What was the outcome of Steve Jobs' restructuring of Apple in 1997?
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How has Apple's size changed since 1997?
How has Apple's size changed since 1997?
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What was a common issue among the general managers of the business units before 1997?
What was a common issue among the general managers of the business units before 1997?
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What is Apple well-known for besides its organizational design?
What is Apple well-known for besides its organizational design?
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What must a company do before getting market feedback and forecasts?
What must a company do before getting market feedback and forecasts?
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What is the primary goal of discussing Apple's organizational model in this article?
What is the primary goal of discussing Apple's organizational model in this article?
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How many employees did Apple have in 1997?
How many employees did Apple have in 1997?
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Why does Apple's commitment to offering the best products not get undercut?
Why does Apple's commitment to offering the best products not get undercut?
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What is true about the role of the finance team in Apple's product development process?
What is true about the role of the finance team in Apple's product development process?
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What is the role of individual and team reputations in a functional organization?
What is the role of individual and team reputations in a functional organization?
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What was significant about the introduction of the dual-lens camera in the iPhone 7 Plus?
What was significant about the introduction of the dual-lens camera in the iPhone 7 Plus?
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What is the fundamental principle of a functional organization?
What is the fundamental principle of a functional organization?
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What is expected of managers at Apple?
What is expected of managers at Apple?
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How does Apple approach making bets on new technologies and features?
How does Apple approach making bets on new technologies and features?
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What is the relationship between structure and strategy at Apple?
What is the relationship between structure and strategy at Apple?
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What is unique about Apple's leadership model?
What is unique about Apple's leadership model?
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What is a key characteristic of Apple's operations leaders?
What is a key characteristic of Apple's operations leaders?
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What is the benefit of having leaders who are experts in their areas?
What is the benefit of having leaders who are experts in their areas?
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How does Apple develop and ship products that require collaboration across many specialist teams?
How does Apple develop and ship products that require collaboration across many specialist teams?
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What is the role of higher-level managers in resolving debates?
What is the role of higher-level managers in resolving debates?
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Why is it important for leaders at Apple to be effective collaborators?
Why is it important for leaders at Apple to be effective collaborators?
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What is expected of leaders at Apple in terms of expressing their points of view?
What is expected of leaders at Apple in terms of expressing their points of view?
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What is the purpose of the camera team at Apple?
What is the purpose of the camera team at Apple?
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What was the idea behind developing the iPhone's portrait mode?
What was the idea behind developing the iPhone's portrait mode?
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How many specialist teams were required to develop the dual-lens camera with portrait mode?
How many specialist teams were required to develop the dual-lens camera with portrait mode?
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What is the result of Apple's fanatical attention to detail at the leadership level?
What is the result of Apple's fanatical attention to detail at the leadership level?
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What happens when teams work with a shared purpose?
What happens when teams work with a shared purpose?
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What happens to those who engage in 'bad mess' and don't change their behavior?
What happens to those who engage in 'bad mess' and don't change their behavior?
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What challenge does Apple face as its revenue and headcount have grown?
What challenge does Apple face as its revenue and headcount have grown?
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How has Apple adjusted its organizational structure in recent years?
How has Apple adjusted its organizational structure in recent years?
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Why has Apple limited the number of senior positions?
Why has Apple limited the number of senior positions?
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What is the result of Apple's growth on its senior leaders?
What is the result of Apple's growth on its senior leaders?
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What is the discretionary leadership model intended to address?
What is the discretionary leadership model intended to address?
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What is a key aspect of the discretionary leadership model?
What is a key aspect of the discretionary leadership model?
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What challenge has Rosner, the VP of applications, faced?
What challenge has Rosner, the VP of applications, faced?
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How has Apple's organizational growth affected its VPs and directors?
How has Apple's organizational growth affected its VPs and directors?
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What was one of the challenges the camera team faced in developing the portrait mode feature?
What was one of the challenges the camera team faced in developing the portrait mode feature?
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Why did Sebastien Marineau-Mes decide to defer the release of the portrait mode feature?
Why did Sebastien Marineau-Mes decide to defer the release of the portrait mode feature?
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What was the engineering standard that the camera team was trying to meet?
What was the engineering standard that the camera team was trying to meet?
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What was the role of the design leaders in the development of the portrait mode feature?
What was the role of the design leaders in the development of the portrait mode feature?
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What was the outcome of the collaboration between the camera team and the human interface (HI) design team?
What was the outcome of the collaboration between the camera team and the human interface (HI) design team?
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What was the role of Johnnie Manzari in the development of the portrait mode feature?
What was the role of Johnnie Manzari in the development of the portrait mode feature?
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What was the outcome of the months of engineering effort by the video engineering team?
What was the outcome of the months of engineering effort by the video engineering team?
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What was central to Apple's marketing of the iPhone 7 Plus?
What was central to Apple's marketing of the iPhone 7 Plus?
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What is an example of Apple's collaborative debate in action?
What is an example of Apple's collaborative debate in action?
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What is 'accountability without control' in the context of Apple's organizational structure?
What is 'accountability without control' in the context of Apple's organizational structure?
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What is the primary area of expertise of Rosner?
What is the primary area of expertise of Rosner?
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What has Rosner moved from his 'owning box' to his 'teaching box'?
What has Rosner moved from his 'owning box' to his 'teaching box'?
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What is the primary challenge that Rosner faced with the addition of new activities?
What is the primary challenge that Rosner faced with the addition of new activities?
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How does Rosner approach leadership in areas where he is not an expert?
How does Rosner approach leadership in areas where he is not an expert?
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What is the primary reason why Apple's VPs spend most of their time in the 'owning' and 'learning' boxes?
What is the primary reason why Apple's VPs spend most of their time in the 'owning' and 'learning' boxes?
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What is the primary benefit of the discretionary leadership model?
What is the primary benefit of the discretionary leadership model?
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What percentage of his time does Rosner estimate he spends on activities he owns?
What percentage of his time does Rosner estimate he spends on activities he owns?
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What is the primary reason why Rosner has delegated some areas to people with the requisite capabilities?
What is the primary reason why Rosner has delegated some areas to people with the requisite capabilities?
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What is the primary way that Rosner guides and gives feedback to other team members?
What is the primary way that Rosner guides and gives feedback to other team members?
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What is the primary way that Rosner has adapted to the expansion of his responsibilities?
What is the primary way that Rosner has adapted to the expansion of his responsibilities?
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What was the structure of Apple when Steve Jobs returned in 1997?
What was the structure of Apple when Steve Jobs returned in 1997?
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What was the primary reason for Steve Jobs' decision to lay off general managers in 1997?
What was the primary reason for Steve Jobs' decision to lay off general managers in 1997?
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What has contributed to Apple's innovation success?
What has contributed to Apple's innovation success?
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What is the reasoning behind Apple's approach to management?
What is the reasoning behind Apple's approach to management?
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How has Apple's size changed since 1997?
How has Apple's size changed since 1997?
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What is the benefit of having experts lead experts in a functional organization?
What is the benefit of having experts lead experts in a functional organization?
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What is a key principle that guides Apple's organizational structure?
What is a key principle that guides Apple's organizational structure?
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What is a common issue among the general managers of the business units before 1997?
What is a common issue among the general managers of the business units before 1997?
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What is unique about Apple's product design approach?
What is unique about Apple's product design approach?
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What is the advantage of Apple's product design approach?
What is the advantage of Apple's product design approach?
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What is the primary reason for Apple's retention of a functional structure?
What is the primary reason for Apple's retention of a functional structure?
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What is the role of Tim Cook in Apple's organizational structure?
What is the role of Tim Cook in Apple's organizational structure?
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What is an example of Apple's continuous innovation in its products?
What is an example of Apple's continuous innovation in its products?
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What is the advantage of having a functional organization, according to Apple's experience?
What is the advantage of having a functional organization, according to Apple's experience?
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What is the primary goal of Apple, according to the text?
What is the primary goal of Apple, according to the text?
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What is the main reason for Apple's success in making bets on new technologies and designs?
What is the main reason for Apple's success in making bets on new technologies and designs?
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How are bonuses of senior R&D executives at Apple determined?
How are bonuses of senior R&D executives at Apple determined?
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What is the role of individual and team reputations in a functional organization like Apple's?
What is the role of individual and team reputations in a functional organization like Apple's?
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What is the fundamental principle of a functional organization like Apple's?
What is the fundamental principle of a functional organization like Apple's?
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What characteristic of Apple's leaders enables them to make balanced decisions between costs and user experience?
What characteristic of Apple's leaders enables them to make balanced decisions between costs and user experience?
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What is a characteristic of Apple's operations leaders?
What is a characteristic of Apple's operations leaders?
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What is the purpose of collaborative debate at Apple?
What is the purpose of collaborative debate at Apple?
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What is the significance of the development of the iPhone's portrait mode?
What is the significance of the development of the iPhone's portrait mode?
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Why is it important for leaders at Apple to be effective collaborators?
Why is it important for leaders at Apple to be effective collaborators?
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What is the result of Apple's fanatical attention to detail at the leadership level?
What is the result of Apple's fanatical attention to detail at the leadership level?
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What has expanded in Rosner's portfolio over the past 10 years?
What has expanded in Rosner's portfolio over the past 10 years?
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What does Rosner do in the 'teaching box'?
What does Rosner do in the 'teaching box'?
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What is the percentage of time Rosner spends on activities he owns?
What is the percentage of time Rosner spends on activities he owns?
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What is the 'learning box' for Rosner?
What is the 'learning box' for Rosner?
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What is the benefit of the 'discretionary leadership model'?
What is the benefit of the 'discretionary leadership model'?
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What is the result of teams working with a shared purpose at Apple?
What is the result of teams working with a shared purpose at Apple?
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What is the primary challenge posed by Apple's growth?
What is the primary challenge posed by Apple's growth?
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What is the purpose of Apple's new educational program for VPs and directors?
What is the purpose of Apple's new educational program for VPs and directors?
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What is required of Apple's senior leaders in terms of their time and effort?
What is required of Apple's senior leaders in terms of their time and effort?
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What is the outcome for those who engage in 'bad mess' and don't change their behavior?
What is the outcome for those who engage in 'bad mess' and don't change their behavior?
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What was the main challenge faced by the camera team when developing the portrait mode feature?
What was the main challenge faced by the camera team when developing the portrait mode feature?
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What was the motivation behind deferring the release of the portrait mode feature?
What was the motivation behind deferring the release of the portrait mode feature?
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What did the design leaders bring to the debate about the portrait mode feature?
What did the design leaders bring to the debate about the portrait mode feature?
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What was the outcome of the collaboration between the camera team and the HI team?
What was the outcome of the collaboration between the camera team and the HI team?
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What is the term used to describe Apple's approach to project management, where leaders are accountable for the project's success but do not control all the teams involved?
What is the term used to describe Apple's approach to project management, where leaders are accountable for the project's success but do not control all the teams involved?
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What was the primary motivation behind Steve Jobs' decision to lay off the general managers of all the business units in 1997?
What was the primary motivation behind Steve Jobs' decision to lay off the general managers of all the business units in 1997?
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What is the consequence of having a functional organizational structure like Apple's?
What is the consequence of having a functional organizational structure like Apple's?
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What has been the outcome of Apple's organizational structure and leadership model?
What has been the outcome of Apple's organizational structure and leadership model?
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What is a key characteristic of Apple's approach to management?
What is a key characteristic of Apple's approach to management?
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What has been the impact of Steve Jobs' return to Apple in 1997?
What has been the impact of Steve Jobs' return to Apple in 1997?
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What is the primary reason behind Apple's commitment to a functional organizational structure?
What is the primary reason behind Apple's commitment to a functional organizational structure?
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What is a key characteristic of Apple's leaders that enables the company to succeed in rapidly changing environments?
What is a key characteristic of Apple's leaders that enables the company to succeed in rapidly changing environments?
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What is a benefit of Apple's functional organizational structure in terms of innovation?
What is a benefit of Apple's functional organizational structure in terms of innovation?
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What is a consequence of Apple's decision to retain its functional organizational structure despite its large size?
What is a consequence of Apple's decision to retain its functional organizational structure despite its large size?
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What is a principle that guides Apple's approach to organizational design?
What is a principle that guides Apple's approach to organizational design?
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What is the implication of having leaders who are experts in their areas at Apple?
What is the implication of having leaders who are experts in their areas at Apple?
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What is the role of higher-level managers in resolving debates at Apple?
What is the role of higher-level managers in resolving debates at Apple?
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What is the benefit of collaborative debate at Apple?
What is the benefit of collaborative debate at Apple?
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What is the result of Apple's fanatical attention to detail at the leadership level?
What is the result of Apple's fanatical attention to detail at the leadership level?
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What is the benefit of having a shared purpose at Apple?
What is the benefit of having a shared purpose at Apple?
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What is the primary reason why Apple's senior R&D executives are not involved in pricing decisions?
What is the primary reason why Apple's senior R&D executives are not involved in pricing decisions?
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What is the primary mechanism by which Apple's leaders are held accountable for their decisions?
What is the primary mechanism by which Apple's leaders are held accountable for their decisions?
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What is the primary benefit of having leaders who are experts in their areas?
What is the primary benefit of having leaders who are experts in their areas?
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What is the primary goal of Apple's approach to making bets on new technologies and features?
What is the primary goal of Apple's approach to making bets on new technologies and features?
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What is the primary principle that guides Apple's approach to decision-making?
What is the primary principle that guides Apple's approach to decision-making?
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What is the primary reason why the camera team had to defer the release of the portrait mode feature?
What is the primary reason why the camera team had to defer the release of the portrait mode feature?
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What was the outcome of the meeting between the engineering teams and senior design and marketing leaders?
What was the outcome of the meeting between the engineering teams and senior design and marketing leaders?
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What was the role of the human interface (HI) design team in the development of the portrait mode feature?
What was the role of the human interface (HI) design team in the development of the portrait mode feature?
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What was the result of the collaboration between the camera hardware team and the video engineering team?
What was the result of the collaboration between the camera hardware team and the video engineering team?
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What is the term used to describe the concept of being accountable for a project's success without having control over all the teams involved?
What is the term used to describe the concept of being accountable for a project's success without having control over all the teams involved?
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What is the primary benefit of Apple's functional organizational structure?
What is the primary benefit of Apple's functional organizational structure?
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Why does Apple's leadership insist on continuous curves in product design?
Why does Apple's leadership insist on continuous curves in product design?
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What is the primary role of senior leaders in Apple's organizational structure?
What is the primary role of senior leaders in Apple's organizational structure?
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What is the fundamental principle underlying Apple's approach to management?
What is the fundamental principle underlying Apple's approach to management?
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What is the result of Apple's leaders knowing the details of their organization three levels down?
What is the result of Apple's leaders knowing the details of their organization three levels down?
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What is the primary challenge that Rosner faces as he takes on new responsibilities beyond his original expertise?
What is the primary challenge that Rosner faces as he takes on new responsibilities beyond his original expertise?
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What is the term used to describe the areas where Rosner guides and gives feedback to other team members?
What is the term used to describe the areas where Rosner guides and gives feedback to other team members?
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What is the approximate percentage of time Rosner spends on activities he owns, including collaboration with others?
What is the approximate percentage of time Rosner spends on activities he owns, including collaboration with others?
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What is the primary purpose of the discretionary leadership model?
What is the primary purpose of the discretionary leadership model?
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What is the characteristic of Apple's senior leaders that enables them to succeed in rapidly changing environments?
What is the characteristic of Apple's senior leaders that enables them to succeed in rapidly changing environments?
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What is the main challenge posed by Apple's growth in terms of its functional structure and leadership model?
What is the main challenge posed by Apple's growth in terms of its functional structure and leadership model?
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What is the primary goal of the discretionary leadership model at Apple?
What is the primary goal of the discretionary leadership model at Apple?
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What is the result of Apple's leaders needing to exercise greater discretion regarding where and how they spend their time and efforts?
What is the result of Apple's leaders needing to exercise greater discretion regarding where and how they spend their time and efforts?
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What is the relationship between Apple's growth and the number of VPs and directors?
What is the relationship between Apple's growth and the number of VPs and directors?
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What is the outcome of Apple's leaders being able to exercise greater discretion regarding where and how they spend their time and efforts?
What is the outcome of Apple's leaders being able to exercise greater discretion regarding where and how they spend their time and efforts?
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Study Notes
Apple's Organizational Structure
- In 1997, Steve Jobs returned to Apple and transformed the company's organizational structure from a conventional business unit structure to a functional organization.
- He laid off general managers of all business units, put the entire company under one P&L, and combined functional departments into one functional organization.
- Apple still retains this structure today, despite being 40 times larger in revenue and more complex than in 1997.
Functional Organization
- In a functional organization, senior vice presidents are in charge of functions, not products.
- The CEO, Tim Cook, is the only person who oversees all functions, including design, engineering, operations, marketing, and retail.
- There are no conventional general managers who control an entire process from product development to sales.
Innovation Benefits
- Apple's functional organization allows for innovation through a structure centered on functional expertise.
- The company relies on the judgment and intuition of people with deep knowledge of technologies responsible for disruption.
- Technical experts, rather than general managers, make decisions, increasing the odds of successful bets.
Leadership Characteristics
- Apple's managers are expected to possess three key leadership characteristics:
- Deep expertise in their area, allowing them to engage in all work within their function.
- Immersion in the details of their function, with knowledge of the details three levels down.
- Willingness to collaboratively debate other functions during collective decision-making.
Examples of Leadership Characteristics
- Roger Rosner, head of Apple's software application business, is an example of an expert leading experts.
- Graham Townsend, a camera expert, leads a group of over 600 camera hardware technology experts.
- Leaders at Apple are expected to have deep knowledge of their area and be able to debate and decide on key issues.
Collaborative Debate
- Apple's functional organization requires collaborative debate among teams.
- When debates reach an impasse, higher-level managers weigh in as tiebreakers.
- Leaders must be able to express their views and advocate for them, but also be willing to change their minds when presented with evidence.
Development of iPhone's Portrait Mode
-
The development of the iPhone's portrait mode illustrates the fanatical attention to detail, intense collaborative debate, and the power of a shared purpose to shape and resolve debates.
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The camera team's stated purpose was to enable "more people taking better images more of the time."### Apple's Collaborative Culture
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Apple's camera hardware team successfully developed Portrait mode, a key feature of the iPhone 7 Plus, through collaborative debate and open-mindedness from senior leaders.
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The project involved people from various functions, including the video engineering team, who contributed their time and effort to achieve the goal.
Leadership at Scale
- Apple's leadership model involves accountability without control, where leaders are responsible for making a project succeed despite not controlling all the teams involved.
- The company's functional structure and leadership model have evolved to accommodate growth and new markets, with adjustments made to enable collaboration and rapid decision-making.
- The CEO has implemented changes, including dividing the hardware function and adding artificial intelligence and machine learning as a functional area.
Challenges of Organizational Growth
- As Apple has grown, its senior leaders face the challenge of overseeing larger and more diverse teams of experts, with more details to oversee and new areas of responsibility outside their core expertise.
- The number of VPs has approximately doubled from 50 to 96, while the number of employees has grown from 17,000 to 137,000.
- In response, Apple has developed the discretionary leadership model, which involves experts leading experts, immersion in details, and collaborative debate.
The Discretionary Leadership Model
- The model involves leaders exercising discretion regarding where and how they spend their time and efforts, focusing on activities that create the most value for Apple.
- Leaders must decide which activities demand their full attention to detail (owning box), which require learning new areas of expertise (learning box), which can be taught to others (teaching box), and which can be delegated (delegating box).
- The model preserves the principle of aligning expertise and decision rights, allowing Apple to effectively move into new areas and teams to grow in size.
Examples of Discretionary Leadership
- VP of Applications, Rosner, has adapted his role to contend with the challenges of Apple's growth, moving some responsibilities from his owning box to his teaching box.
- Rosner has also learned new areas of expertise, such as publishing news content via an app, and has delegated some areas, like iMovie and GarageBand, to others.
- He estimates that he spends about 40% of his time on activities he owns, 30% on learning, 15% on teaching, and 15% on delegating.
Apple's Unique Functional Organization
- Apple's functional organization is rare among large companies, flying in the face of prevailing management theory that advocates for divisional structures and business units.
- The company believes that its functional organization will continue to drive innovation and prosperity by aligning expertise and decision rights.
Apple's Organizational Structure
- In 1997, Steve Jobs returned to Apple and transformed the company's organizational structure from a conventional business unit structure to a functional organization.
- He laid off general managers of all business units, put the entire company under one P&L, and combined functional departments into one functional organization.
- Apple still retains this structure today, despite being 40 times larger in revenue and more complex than in 1997.
Functional Organization
- In a functional organization, senior vice presidents are in charge of functions, not products.
- The CEO, Tim Cook, is the only person who oversees all functions, including design, engineering, operations, marketing, and retail.
- There are no conventional general managers who control an entire process from product development to sales.
Innovation Benefits
- Apple's functional organization allows for innovation through a structure centered on functional expertise.
- The company relies on the judgment and intuition of people with deep knowledge of technologies responsible for disruption.
- Technical experts, rather than general managers, make decisions, increasing the odds of successful bets.
Leadership Characteristics
- Apple's managers are expected to possess three key leadership characteristics:
- Deep expertise in their area, allowing them to engage in all work within their function.
- Immersion in the details of their function, with knowledge of the details three levels down.
- Willingness to collaboratively debate other functions during collective decision-making.
Examples of Leadership Characteristics
- Roger Rosner, head of Apple's software application business, is an example of an expert leading experts.
- Graham Townsend, a camera expert, leads a group of over 600 camera hardware technology experts.
- Leaders at Apple are expected to have deep knowledge of their area and be able to debate and decide on key issues.
Collaborative Debate
- Apple's functional organization requires collaborative debate among teams.
- When debates reach an impasse, higher-level managers weigh in as tiebreakers.
- Leaders must be able to express their views and advocate for them, but also be willing to change their minds when presented with evidence.
Development of iPhone's Portrait Mode
-
The development of the iPhone's portrait mode illustrates the fanatical attention to detail, intense collaborative debate, and the power of a shared purpose to shape and resolve debates.
-
The camera team's stated purpose was to enable "more people taking better images more of the time."### Apple's Collaborative Culture
-
Apple's camera hardware team successfully developed Portrait mode, a key feature of the iPhone 7 Plus, through collaborative debate and open-mindedness from senior leaders.
-
The project involved people from various functions, including the video engineering team, who contributed their time and effort to achieve the goal.
Leadership at Scale
- Apple's leadership model involves accountability without control, where leaders are responsible for making a project succeed despite not controlling all the teams involved.
- The company's functional structure and leadership model have evolved to accommodate growth and new markets, with adjustments made to enable collaboration and rapid decision-making.
- The CEO has implemented changes, including dividing the hardware function and adding artificial intelligence and machine learning as a functional area.
Challenges of Organizational Growth
- As Apple has grown, its senior leaders face the challenge of overseeing larger and more diverse teams of experts, with more details to oversee and new areas of responsibility outside their core expertise.
- The number of VPs has approximately doubled from 50 to 96, while the number of employees has grown from 17,000 to 137,000.
- In response, Apple has developed the discretionary leadership model, which involves experts leading experts, immersion in details, and collaborative debate.
The Discretionary Leadership Model
- The model involves leaders exercising discretion regarding where and how they spend their time and efforts, focusing on activities that create the most value for Apple.
- Leaders must decide which activities demand their full attention to detail (owning box), which require learning new areas of expertise (learning box), which can be taught to others (teaching box), and which can be delegated (delegating box).
- The model preserves the principle of aligning expertise and decision rights, allowing Apple to effectively move into new areas and teams to grow in size.
Examples of Discretionary Leadership
- VP of Applications, Rosner, has adapted his role to contend with the challenges of Apple's growth, moving some responsibilities from his owning box to his teaching box.
- Rosner has also learned new areas of expertise, such as publishing news content via an app, and has delegated some areas, like iMovie and GarageBand, to others.
- He estimates that he spends about 40% of his time on activities he owns, 30% on learning, 15% on teaching, and 15% on delegating.
Apple's Unique Functional Organization
- Apple's functional organization is rare among large companies, flying in the face of prevailing management theory that advocates for divisional structures and business units.
- The company believes that its functional organization will continue to drive innovation and prosperity by aligning expertise and decision rights.
Apple's Organizational Structure
- In 1997, Steve Jobs returned to Apple and transformed the company's organizational structure from a conventional business unit structure to a functional organization.
- He laid off general managers of all business units, put the entire company under one P&L, and combined functional departments into one functional organization.
- Apple still retains this structure today, despite being 40 times larger in revenue and more complex than in 1997.
Functional Organization
- In a functional organization, senior vice presidents are in charge of functions, not products.
- The CEO, Tim Cook, is the only person who oversees all functions, including design, engineering, operations, marketing, and retail.
- There are no conventional general managers who control an entire process from product development to sales.
Innovation Benefits
- Apple's functional organization allows for innovation through a structure centered on functional expertise.
- The company relies on the judgment and intuition of people with deep knowledge of technologies responsible for disruption.
- Technical experts, rather than general managers, make decisions, increasing the odds of successful bets.
Leadership Characteristics
- Apple's managers are expected to possess three key leadership characteristics:
- Deep expertise in their area, allowing them to engage in all work within their function.
- Immersion in the details of their function, with knowledge of the details three levels down.
- Willingness to collaboratively debate other functions during collective decision-making.
Examples of Leadership Characteristics
- Roger Rosner, head of Apple's software application business, is an example of an expert leading experts.
- Graham Townsend, a camera expert, leads a group of over 600 camera hardware technology experts.
- Leaders at Apple are expected to have deep knowledge of their area and be able to debate and decide on key issues.
Collaborative Debate
- Apple's functional organization requires collaborative debate among teams.
- When debates reach an impasse, higher-level managers weigh in as tiebreakers.
- Leaders must be able to express their views and advocate for them, but also be willing to change their minds when presented with evidence.
Development of iPhone's Portrait Mode
-
The development of the iPhone's portrait mode illustrates the fanatical attention to detail, intense collaborative debate, and the power of a shared purpose to shape and resolve debates.
-
The camera team's stated purpose was to enable "more people taking better images more of the time."### Apple's Collaborative Culture
-
Apple's camera hardware team successfully developed Portrait mode, a key feature of the iPhone 7 Plus, through collaborative debate and open-mindedness from senior leaders.
-
The project involved people from various functions, including the video engineering team, who contributed their time and effort to achieve the goal.
Leadership at Scale
- Apple's leadership model involves accountability without control, where leaders are responsible for making a project succeed despite not controlling all the teams involved.
- The company's functional structure and leadership model have evolved to accommodate growth and new markets, with adjustments made to enable collaboration and rapid decision-making.
- The CEO has implemented changes, including dividing the hardware function and adding artificial intelligence and machine learning as a functional area.
Challenges of Organizational Growth
- As Apple has grown, its senior leaders face the challenge of overseeing larger and more diverse teams of experts, with more details to oversee and new areas of responsibility outside their core expertise.
- The number of VPs has approximately doubled from 50 to 96, while the number of employees has grown from 17,000 to 137,000.
- In response, Apple has developed the discretionary leadership model, which involves experts leading experts, immersion in details, and collaborative debate.
The Discretionary Leadership Model
- The model involves leaders exercising discretion regarding where and how they spend their time and efforts, focusing on activities that create the most value for Apple.
- Leaders must decide which activities demand their full attention to detail (owning box), which require learning new areas of expertise (learning box), which can be taught to others (teaching box), and which can be delegated (delegating box).
- The model preserves the principle of aligning expertise and decision rights, allowing Apple to effectively move into new areas and teams to grow in size.
Examples of Discretionary Leadership
- VP of Applications, Rosner, has adapted his role to contend with the challenges of Apple's growth, moving some responsibilities from his owning box to his teaching box.
- Rosner has also learned new areas of expertise, such as publishing news content via an app, and has delegated some areas, like iMovie and GarageBand, to others.
- He estimates that he spends about 40% of his time on activities he owns, 30% on learning, 15% on teaching, and 15% on delegating.
Apple's Unique Functional Organization
- Apple's functional organization is rare among large companies, flying in the face of prevailing management theory that advocates for divisional structures and business units.
- The company believes that its functional organization will continue to drive innovation and prosperity by aligning expertise and decision rights.
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Description
Learn about Steve Jobs' bold move to restructure Apple's management in 1997, eliminating general managers and introducing a functional organization. Test your knowledge of this pivotal moment in Apple's history.
