//ALAN CAMPOS / READ TIME: 5 MIN

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 What We Can Learn From Apple's Organizational Structure

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What is Behind Apple's Success? The Organizational Structure.

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1// THE FUNCTIONAL STRUCTURE - A PARADIGM SHIFT

In 1997, Steve Jobs revolutionized Apple’s organizational structure, moving away from traditional business units to a functional model. This shift ensured that experts in specific domains, rather than general managers, held decision-making authority. This commitment to a functional structure has been a cornerstone of Apple’s ability to thrive in a dynamic & evolving innovation landscape.
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Inspirational leadership: Each VP is an expert on its nitch, driving the vision of that specific function and inspiring the team.

Authonomy to make intuitive decisions: Innovation is not about asking customers what they want. Innovation is based on the judgment and intuition of technical experts. In this model, experts are more likely to be right about customer needs than general managers or even traditional focus groups.

Easier Budgeting cycle: There is only one P&L, so there is no fight for the budget on the product level. It is a top-down decision on where to put the money.

2// THE LEADERSHIP MODEL

Experts leading experts:

Apple prioritizes expertise, believing that it is easier to train an expert to manage effectively than to train a manager to become an expert.

Immersion in the details:

Leaders are expected to immerse themselves in their organization, understanding issues at least three levels down. This hands-on approach ensures a deep understanding of the details.

Willingness to collaboratively debate:

Apple fosters a culture of collaborative debate, encouraging leaders to engage in discussions that involve diverse perspectives. This approach is integral to the decision-making process, ensuring thorough vetting of ideas and perspectives.

3// LEADERSHIP AT SCALE

As Apple has grown from 8,000 (in 1998) to 137,000 employees (in 2019), the functional structure has faced challenges. Leaders have had to balance their deep expertise with the necessity of delegation.

The adaptability of Apple’s leadership within a functional organization is evident, showcasing the company’s ability to evolve with extraordinary growth.

4// THE FRAMEWORK IN 4 PILLARS

This framework offers a strategic guide for navigating the dynamic challenges of the innovation landscape.

4.1// A Centralized P&L: No Business Units for Each Product.

4.2// Experts Leading Experts: No Traditional General Management.

4.3// Immersion in the Details: No General Decision-Making.

4.4// Willingness to Collaboratively Debate: No Silos.

This Week's Action Steps

If you are in a position to change your organizational structure, consider learning from Apple's model. At least implement some principles in the Digital Innovation area of your company or in your team structure.

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