How Apple Is Organized for Innovation: The Functional Organization

27 Jan 2021

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When Steve Jobs arrived back at Apple in 1997, he laid off general managers of all business units and combined disparate functional departments into one functional organization. (Part 1 of 3) This is part 1 of 3 Part 2--The Leadership Model: https://youtu.be/d5enAGG51PQ Part 3--Leadership at Scale: https://youtu.be/hczW4Bqf3Qk The adoption of a functional structure may have been unsurprising for a company of Apple’s size at the time. What is surprising—in fact, remarkable—is that Apple retains it today, even though the company is nearly 40 times as large in terms of revenue and far more complex than it was in 1998. Senior vice presidents are in charge of functions, not products. As was the case with Jobs before him, CEO Tim Cook occupies the only position on the organizational chart where the design, engineering, operations, marketing, and retail of any of Apple’s main products meet. In effect, besides the CEO, the company operates with no conventional general managers: people who control an entire process from product development through sales and are judged according to a P&L statement. Based on the HBR article, “How Apple Is Organized for Innovation" by Joel M. Podolny and Morten T. Hansen: https://hbr.org/2020/11/how-apple-is-organized-for-innovation --------------------------------------------------------------------- At Harvard Business Review, we believe in management. If the world’s organizations and institutions were run more effectively, if our leaders made better decisions, if people worked more productively, we believe that all of us — employees, bosses, customers, our families, and the people our businesses affect — would be better off. So we try to arm our readers with ideas that help them become smarter, more creative, and more courageous in their work. We enlist the foremost experts in a wide range of topics, including career planning, strategy, leadership, work-life balance, negotiations, innovation, and managing teams. Harvard Business Review empowers professionals around the world to lead themselves and their organizations more effectively and to make a positive impact. Sign up for Newsletters: https://hbr.org/email-newsletters Follow us: https://hbr.org/ https://www.linkedin.com/company/harvard-business-review/ https://www.facebook.com/HBR/ https://twitter.com/HarvardBiz https://www.instagram.com/harvard_business_review

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