Steve Jobs Methodology for Apple R&D

Apple innovations such as iPod and iPhone have had a wide ranging impact on the technology industry. New York Times recently discussed How the iPhone Led to the Sale of T-Mobile.

Until Apple introduced its highly popular touchscreen device in 2007, which went on to become the world’s leading smartphone, Deutsche Telekom had been generating decent sales from its American operation, with growth in some years surpassing that achieved in Germany. But after the iPhone went on sale, sold exclusively at first by AT&T in the United States, T-Mobile USA began to lose its most lucrative customers, those on fixed monthly plans, who defected to its larger American rivals — AT&T and Verizon Wireless, which began selling the iPhone in February. The percentage of T-Mobile USA’s contract customers fell to 78.3 percent in 2010 from 85 percent in 2006, according to the company’s annual reports. During 2010 alone, T-Mobile USA said it lost 390,000 contract customers to rivals.

Nokia’s inability to compete with the iPhone led to its move to Windows Phone 7 and resulted in significant layoffs. (See DailyTech – Nokia Contemplates Deep Job Cuts Due to Windows Phone 7)

While Nokia’s growth has stalled, competitors like Apple and Android phone makers (Motorola, ZTE, HTC, etc.) have soared. Now the company is forced to make a big transition as it prepares to move away from the Symbian operating system to Microsoft’s Windows Phone 7.

Apple was not the only reason for these upheavals. Nokia was known to have become an inefficient bureaucratic organization which stifled innovation. But the fact is that Apple’s innovative products and competitive positioning are material contributors to the market landscape. Many observers have speculated that Steve Jobs has been the driver of Apple innovation. But conventional wisdom is that that management involvement actually drives down innovation. In fact, it has been shown that risk averse management can prevent employees from innovating. Research also shows that unless analysts categorize a company as a growth company, pressure from Wall Street also drives down innovation.

So what does Steve Jobs do differently and what can we learn from him about R&D management? Steve Jobs clearly personifies some of the characteristics of innovators. However, is there anything specific R&D managers can do to make their organizations more innovative? I was thrilled to find a treasure trove of information on the Steve Jobs Methodology at the website Cult of Mac (In the transcript of an interview with ex-Apple CEO John Sculley On Steve Jobs). Here is what I think are key lessons:

1. User experience centric design: Steve Jobs always started from the perspective of what the user experience was going to be. However, he did not do that by doing market research or by asking consumers what they wanted to see in the product. He rightly suggested that users did not know what the new products or technology could do. It is the role of the R&D team to decide the user experience. (More discussion here)

2. Long-term vision: Technology may not be mature enough to implement the entire user experience. R&D managers need to be able to map out a development plan that achieves this vision in manageable steps. Jobs started working towards a convergence device like iPhone in 2002. The technology was just not ready at that stage. He had an intermediate product in the ROKR in 2005 and finally reached iPhone in 2007. (More discussion here)

3. Deep leadership engagement: It is not enough for a manager to have a focus on user experience and a long-term vision to get to it. Just like other leaders of successful companies (like Bill Gates at Microsoft, Zukerberg at Facebook) Jobs is actively engaged in R&D. From user experience to industrial design to retail store layout, he ensured a consistent theme through the entire operation. (More discussion here)

4. Small focused teams: Building strong focused teams is a challenge for any R&D managers. Jobs had some interesting approaches to building strong teams. A clear vision and deep involvement from management will motivate most engineers. Even more importantly, designers reported directly to Jobs and were respected more than all other skills at Apple. He insisted on knowing all engineers by name and limited the team size to a number that he can know personally. (More discussion here)

5. Razor-sharp focus on the niche: Apple had a sharp focus on its niche – ultimate user experience. This is extremely important because the broad strategy always leads to conflicts between different goals. The original MacBook Air had a wasteful industrial design to get it to market in a reasonable time, but it definitely delivered on the user experience. (More discussion here)

The results continue to be stunning. Here is what the Japanese consumer electronics engineers had to say about the iPad 2:

Through the teardown of the iPad 2, we noticed that Apple’s design philosophy is clearly different from that of Japanese makers. It seemed that the priority orders of various features and functions were determined based on the company’s aesthetic sense, and it designed the iPad 2 while giving first priority to realizing them. The iPad 2 made us wonder if products developed based on the philosophy of prioritizing costs and specifications can compete with it.

Article first published as S teve Jobs Methodology to Manage Apple R&D on Technorati.