A trillion dollar case for an under appreciated concept

Apple grabbed the first position on FastCompany’s list of the world’s most innovative companies 2018. That is pretty impressive for a brand which regularly gets accused to have lost its mojo since Steve Jobs died. If market cap is a judge then Apple’s mojo is alive and well, at least in the investors’ eyes.

A company that doesn’t innovate will eventually die so it is no surprise that most CEOs put innovation high up on the priority list. Getting there in practice is a completely different thing. Apple seems to have cracked the code so what is the secret?

The motivation to the no 1 position doesn’t give any clues, it is all about Apple’s achievements, i.e. the final result of the innovation. The title of the accompanying interview with Tim Cook sounds promising, “Why Apple Is The World’s Most Innovative Company”, but also fails to deliver an answer to the trillion dollar question.

Steve Jobs was clearly one of a kind. Still, the transition to Tim Cook was weirdly smooth. Apple was apparently not a one man show, although it might have appeared so from the outside. Since it wasn’t just Jobs, and probably isn’t just Cook, what is it that makes Apple keep on innovating?

A company culture of innovation

Innovation seems to be a team effort at Apple and a component of its company culture. Since “company culture” is kind of a buzz word and I like to keep things simple, here is my definition:

Company culture is how it feels to work at a company.
It is what attracts the right people, makes them want to stay and do their best.

The importance of company culture is clearly fundamental for a company’s success. A search for company culture in general and innovation more specifically gives a ton of results, please take a break and have a look if you are not already deep into the subject. Let’s see if you notice a pattern…

Glad to see you back!

So here is my take: I think they all share the same flaw. It is not that the specific advice are wrong but that they are all kind of superficial, they don’t really change anything fundamental in the company, just the behavior.
Which might work for a while.

And their suggestions are all over the place: it is about “keeping the employees happy”, it’s about “values”, it is about creating a “dream team” culture (which seems to work so so).

One article that purports to explain “What Silicon Valley gets wrong (and right) about culture” lists what they call the “six interconnected building blocks” of company culture – resources, processes, success, values, behaviors, climate – but completely misses what I think really matters (we are getting there 🙂).

Some get closer to what I think is the secret by talking about vision and purpose, but they too fail to explain where those come from.

The only thing everyone seems to agree upon is that it all starts with the Leader. The great Leader creates the right environment for the Culture to flourish. Hmm, what does that remind me of? Just kidding 😜.

So what is missing, according to me/myself/I?
Well, let’s do some reverse engineering, starting with…

A founder’s mindset

It is easy to see the path from the founder of a startup to a culture of innovation. A startup company is almost always an innovation, a new product, market, business model, production method. The founder is a visionary that attracts likeminded and if all goes well a culture of innovation is established.

It took Steve Jobs five minutes to convince Tim Cook to leave his perfectly safe job at Compaq in ‘98. What did convince him? Jobs described his vision and strategy for entering the consumer market. It went totally against the rest of the industry, but eventually took Apple’s market cap from 3 billion to 1 trillion in 20 years.

Vision and strategy…

In the absence of a Steve Jobs…

Most companies are not structured to be innovative, they are structured to generate short term growth. The way they grow is not through innovation but through acquisition and mergers or stock buybacks. With a time scale of several years innovation fits very badly into that picture. They are as far as you can get from a founder’s mindset.

So what to do? Their CEO is for sure not Steve Jobs or Tim Cook. And good luck with transmogrifying the current corporate sales oriented CEO into one. Hiring one seems exceptionally hard since they are probably following their own dreams.

Is there any way we could skip the founder and the charismatic leader altogether and focus on what drives a founder in the first place?

Do Corporations Dream of Electric Sheep?

To create a culture of innovation we need the founder’s mindset. In lack of a real founder we’ll have to do with the mindset. So what drives the founder to begin with?

It is a VISION that is so strong that there is no alternative, a MISSION so obvious that it’s almost ridiculous why no one has thought about it, and a STRATEGY so clear that the mission and vision is almost already accomplished.

Vision, mission and strategy. You have heard the words a million times.
But have you looked at them with a founder’s mindset?

Stating the obvious…

…is a lousy way to get appreciation. But how can you expect a company to be innovative if it hasn’t done its home work? Patching reality but ignoring the ground work will obviously not lead to innovation. So ignore the obvious at your peril 😜.

Historically I have struggled with the concepts of vision, mission and strategy. Most that I have ever read (or written myself) has just been words, written because they are required, boring as hell and definitely not of any use.

But a couple of weeks ago I had an epiphany. I have been working with a client where it slowly has become obvious what a powerful tool this can be. Different departments that each in themselves are exceptionally passionate about almost the same goal. Just a small nudge and they’ll be all on the same path and share the same vision.

This is the function for the vision, mission and overarching strategy, to be a compass and guide in every decision on all levels in a company. And when that vision becomes everyone’s vision, then the whole company has a founder’s mindset and is dreaming the same dream.

So let’s dream together!

And we are back with the central question: how can a company create a culture of innovation that doesn’t depend on a charismatic leader.

And you already know what I am going to say:

Create a vision, mission and overarching strategy that inspires and encourages innovation. Maybe this goes without saying, but if the word “innovation” is not in there, then there won’t be any innovation as we will see shortly.

For the statements to have any effect and value they have to be:

• inspiring, everyone should sign off on it and feel excited about making it come true
• concrete, easy to understand, no BS
• actionable, it should give you guidance in practical decisions

This is not by any means trivial. But by looking at some examples from the real world I think it becomes much more clear.

Two examples, guess who is innovating

I’ll use only two examples for comparison, Facebook and Apple.

Facebook

Facebook’s corporate vision according to Mr Zuckerberg is:

“People use Facebook to stay connected with friends and family, to discover what’s going on in the world, and to share and express what matters to them.”

Sounds more like a statement but whatever. To get more clarity Google helped me find their 5 core values:

Facebook’s mission is to give people the power to build community and bring the world closer together. As our company grows we have 5 strong values that guide the way we work and the decisions we make each day to help achieve our mission.
• be bold
• focus on impact
• move fast
• be open
• build social value

I will not include the full copy here but please have a read on the link. It fails on all levels: it is not inspirational, it is not concrete, it is not actionable. As a vision and mission statement it is totally useless. It seems like there is no vision for the company. Facebook got 2.2 billion dumb fucks to sign up and that was it 😜. Thanks for the ride, bye!

Facebook did not make it to the list of the world’s 50 most innovative companies.

Apple

Apple introduced a new corporate vision statement under the leadership of Tim Cook, who stated the following:

We believe that we are on the face of the earth to make great products and that’s not changing. We are constantly focusing on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, so that we can really focus on the few that are truly important and meaningful to us. We believe in deep collaboration and cross-pollination of our groups, which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change. And I think regardless of who is in what job those values are so embedded in this company that Apple will do extremely well.

With this statement he has aligned the whole company in the same direction. Every sentence is inspiring, concrete and actionable. Regardless of role or issue at hand, this works as a help for decision making.

This is how to create a company culture of innovation, not by focusing on making the employees happy but by giving them purpose, a shared vision to be proud of. If the company has succeeded to get it to this point then every decision will just affirm and reinforce the company culture.

A company culture of innovation

Apple continued to innovate after Steve Jobs, Tim Cook was in no way a second rate replacement. It seems like innovation runs deep in Apple’s DNA but the question is, how much does it rely on the leadership? Could it survive organically or does it require the strong leader?

Regardless of which, changing a company’s culture into one of innovation must start with redefining the vision, mission and overarching strategy for the company.

Done right it is not just words, it is the compass and guide for everyone in the company to become co-creators of the company’s true potential, the vision!

Internet is full of mission statements, some utterly dysfunctional, others pretty good. I took some time to rate the big ones, it was fun! Some mocking, some praise, you can find part 1 here: