Tiny Menu

Steve Jobs demonstrated numerous counter-to-received-wisdom management strategies after his return to Apple. Notice I say "demonstrated" rather than "taught," because it is doubtful the world of MBAs will be able to go against their training and even notice the really important ones.

For example, Apple has accumulated a mountain of cash. Correct MBA Thinking would dictate that this cash be used to go on an acquisition spree, despite the fact that (1) The vast majority of acquisitions are failures (by any measure) and (2) The acquiring company is often damaged by the acquisition (witness HP).  But Apple doesn't spend their money acquiring other companies (other than the occasional small one for talent or technology). Instead, they focus on improving what they do. They leave their money in the bank until they need it for the really important things, like controlling the parts and manufacturing channels from end-to-end (I don't know about this one: is this strategy considered too mundane to be taught in business school, or is it a staple of thinking there? It's not something I've heard one way or another).

The most important idea Jobs may have contributed to the business world is that a company should

Only do a few insanely great things

This is especially challenging. It means getting rid of all the "really great" and even the "freakin' awesome" things -- how do you argue against a completely viable idea that will make money? Somehow Jobs was able to say, "Because it's not great enough." Not only was he able to recognize ideas that were and weren't great enough, he had the confidence to make the cut.

This goes against normal business thinking in so many ways. I have a hard time reconciling it because I, too, have been subliminally trained in mainstream thinking. After all, if you have a lot of resources, it seems to make sense to develop a lot of products. I think Apple did pursue a lot of ideas, but somehow it was able to only develop the really world-changing ones.

Perhaps it requires a benevolent dictator. When I began working at Fluke (my second job after graduation), John Fluke Sr. had recently died. He had always been aware of all the projects in the company, and if a project stopped looking good to him, he would terminate it -- thus keeping the company's collection of projects lean and focused, and the company's resources well-allocated. After he died, there was no one to do the pruning and the number of active projects slowly grew; there were a lot that were arguably viable but not great. There was no one to say "nope, it's not great enough."

It requires a lot of confidence. If you go into a restaurant that has a very small menu, you're in a restaurant that believes in each item on the menu. You're not there to see if they have a big enough menu to have everything on it you might ever want; you're looking for a special dining experience. Consider the resources of Apple and the size of their menu, which is quite tiny by comparison. But each item on that menu is exceptional.

Of course this idea can't be easily applied everywhere. Max's diner in San Francisco has a big menu that covers just about everything you would consider "diner food," and yet it's a great experience. But I find that it's very reliable that a restaurant that can't commit to one type of food (the worst offenders have been "Chinese and Vietnamese") is not worth going to.

Similarly, some companies can pull off the "lots of products" approach. I've written about W.L. Gore, which is completely structured around innovating new products, and they do. But it's an exception precisely because it is structured so differently from mainstream corporations.

In order to know what's insanely great, you must also know a lot about the alternatives. It doesn't mean freedom to be ignorant; on the contrary, you must know even more.

Here's a bigger challenge: It's not hard to see how just the right oh-so-rare benevolent dictator can ruthlessly trim the company's offerings down to the insanely-great core. Because we have seen that in Apple and perhaps a handful of others (we should make a list). But how do you achieve this with a self-organized company? I suspect the answer is that you can't; that instead you take the genetic/evolutionary approach -- although the typical failing in companies that generate lots of possibilities is in the process of determining what survives and what doesn't. Without a benevolent dictator there must be some way to decide, perhaps even by the team working on the project. Or possibly by the equivalent of a "law of two feet" for projects.