In Innovation, Apple Leads… But the Game’s Not Over

Posted by Jim Andrew and Hal Sirkin on June 13, 2007 11:31 AMJim Andrew and Hal Sirkin are Senior Partners and Managing Directors of The Boston Consulting Group and coauthors of Payback: Reaping the Rewards of Innovation.If you read recent cover stories in BusinessWeek and the Economist, you might conclude that Apple is the ultimate innovator. And you might be right. The company has reinvented itself multiple times and in the process has already transformed at least two industries — personal computing and digital music. What will be the impact of the iPhone? While there are no certainties, “major” seems to be a safe bet.So — is Apple’s continued innovation leadership a foregone conclusion? Not necessarily. As good as its track record has been, like every great innovator, Apple has had its share of mishaps, too. More fundamentally, our experience (as reflected in our book, Payback) tells us that there are many keys to long-term innovation success for any company — and very few organizations manage to maintain success for extended periods of time. First, innovation leadership needs to come from the very top, across generations. “From the top” isn’t a problem at Apple — obviously. But Apple will have to face the generational challenge at some point. Steve Jobs has been in charge for virtually decades. Who are the other Apple innovation leaders? How will a future, Job-less Apple continue to innovate at the same high level?Long-term innovation leaders make sure that the entire organization is aligned to support innovation. Again, no problem for Apple right now — but it’s easy for organizations to get out of alignment, slowly, incrementally, as other goals and priorities creep in. As long as Jobs is firmly in the saddle and the product set stays limited there’s less cause to worry — but with other leadership, and as Apple acquires more partners with agendas of their own, and the product line continues to extend, the focus may soften.Finally, long-term innovators are humble. They’re always looking out — watching competitors, listening to customers, picking up on trends — and finding ways to turn ideas into cash payback, which is the real test of innovation success. And innovation isn’t just about ideas — it’s about using ideas to generate incremental profit. Any company that falls in love with its cover stories — and with its ideas as opposed to its execution — is in danger of becoming an innovation also-ran. So far, Apple has successfully avoided this but it’s happened before — just ask any number of formerly “great innovators” who have fallen from grace. So, best of luck, Apple — but be careful out there.