Dr. Luciano Thomé e Castro, International Adjunct Professor


How Apple is Organized for Innovation by Joel Podolny and Morten Hansen


Harvard Business Review


When one thinks of Apple’s success as a company, it is likely some images quickly come to mind, such as Steve Jobs creating the Macintosh computer in 1982, iPods, iPhones (all 13 versions so far), Apple Watches and much more; however, what most likely explains Apple’s successful history is not all these products or its other tangible assets such as software or specific materials. Rather, the explanation relies on something purely intangible, soft, invisible and simple. Something that is behind all these successful products — Apple’s organizational culture.

Joel Podolny, vice president of Apple and dean of Apple University (previously the dean of the Yale School of Management and faculty member of Harvard and Stanford’s business schools), and Morten Hansen, member of Apple University’s faculty and a professor at the University of California, wrote about the elements of Apple’s culture in the Harvard Business Review, detailing how they see the culture unfolding into Apple’s organizational structure such as its design, processes, beliefs, creeds, rituals, incentive systems, and many other cultural elements. Although invisible to the eye, the authors say these are the strong elements that led to Apple’s high-performance today. Further, they create great future expectations that are reflected and monetized in its share values. As of the 2021 Fortune 500 ranking, Apple is the third most profitable company in the world and holds the sixth position in market value.

Apple’s main purpose is to create products that enrich peoples’ daily lives. This involves not only developing entirely new product categories, but also continuously innovating within these categories. That being said, how can culture be such an important piece in assuring and supporting this purpose? The article authors discuss four intertwined elements they see as cornerstones when understanding how Apple excels in its purpose.

Apple opts for a functional organization rather than a business unit organization. Most large organizations switch to business unit type organizations when growing, meaning the units are controlled as profit centers and have all needed specialists within that unit, which can be a region, a product group or other option. Apple on the other hand opted to maintain its functional structure from its early beginnings when it was much smaller. People within Apple are grouped based on their highly specialized expertise. Hardware, software or Artificial intelligent groups are examples of functions, and Apple brings individuals with the same specialization together to work on related topics rather than having expertise scattered throughout the organization.

Experts lead experts, not general managers. There is a belief inside Apple that those who should lead functions are the best experts in their field of expertise rather than general managers. There is a creed that specialists like to be led by specialists and not by someone who doesn’t understand what they do and who will evaluate them on different criteria other than knowledge, creations and solutions. People are promoted and recognized by how much they excel in their field of expertise and how well their created solutions succeed technically and commercially. The more a functional leader and their team come up with successful software, cameras, designs and so on, the more the group will be recognized and gain a reputation within the organization. This is the incentive system that predominates Apple. Function managers want to hire and develop the best specialists available internally, and specialists are proud to be part of a unique and recognized talented group.

There is a willingness to collaboratively debate and strong push back on individualistic behavior. Apple products are a result of a combination of the outputs of these different functions, meaning the company can only launch the products it desires within different functions if its numerous teams work collaboratively. There are countless situations where different sides must find a joint solution, and this doesn’t always happen without conflicts and disagreements; however, managers and team leaders should attempt to truly and genuinely collaborate or they are likely to be removed from their leadership position or Apple altogether.

Apple is immersed in the details. Given the importance of expertise and specialized knowledge in the company, attention to detail is extremely important at Apple. For example, the authors explain a classic story about the “squircle”. “The standard method for rounding the corners of a rectangular object is to use an arc of a circle to connect the object’s perpendicular sides. That can result in an abrupt transition in curvature. To produce softer highlights by minimizing light reflection, Apple uses a squircle, which creates continuous curves”. Moreover, there are countless stories of how senior leaders probe their teams during meetings for small details, program codes or the basics of product design. These examples mean leaders at Apple engage in these conversations in order to challenge and push their teams to the limit.

What this means for Food and Agricultural Business

Undoubtedly, agribusiness companies may study Apple’s organizational choices to assess if there are beneficial options they can adopt within their organization, especially if they are looking to foster innovation. For example, they can seek to understand the ups and downs of functional organizations to identify if this organizational choice suits their needs rather than the often-adopted product organizations, such as Seed Group, Crop Protection Group and Special Fertilizer Group. Examples of other elements and thought processes agribusinesses could apply are collaborative work, integrating different areas, incentive systems, experts as leaders, and details.

Ultimately, the main point is to understand that culture is extremely important and serves as an impactful factor behind success or failure when trying to change an organization. With the many ongoing shifts currently happening in agribusiness pushing companies to change in various degrees, it’s critical to evaluate if an organization’s culture is favorable or detrimental among these changes.

In general, agribusinesses seek to bring solutions to farmers to aid them in increasing their success, and much is heard about contributing more intentionally to preserve the environment. While many investments and promises for results are related to farmers and their suppliers incentivize customers to embrace digital tools and take advantage of data generated by them, agribusinesses must think carefully about their own culture. Does it help or get in the way of the needed change?