Reduce, Improve, or Expand
It’s funny to me when I hear people question what Apple has been doing for the past couple of years as if they must be coasting on cruise control. It is apparent that these questioners have never worked in a large manufacturing organization. Never mind that Apple has completely redesigned their Apple TV and MacBook Pro line, invented 3D Touch, and launched the Apple Watch. And that’s all on top of producing and delivering over 200 million iPhones a year.
I’ve worked in corporate America for Fortune 500 level companies all my adult life, and I can tell you what people at Apple do every day. One, they have their daily duties. And two, for typically about 30% of their time if they’re lucky, they work on special projects. This special-project time is split between all the things that are priority at the company. But it’s a zero-sum-game where every project that gets time means another one loses it.
Choose Your Priorities Well
If you drive in the snow much, you learn really quickly that your car has limited grip which needs to be divided between accelerating, stopping, or steering. Doing more of the one leads to less of the others. If you misjudge conditions and choose poorly how to apply your grip, you could end up causing some damage.
This picture reflects the balance that Tim Cook is probably trying to find in steering Apple where he thinks it needs to go. Corporations like Apple that are trying to both grow and improve their current products concurrent with expanding into new products have “limited grip”, meaning their current staff can only handle so much. Doing more of one will lead to less of the other.
Producing durable goods is not like software. You can make the exact same product in any number of ways. Do you invest in more machinery and let some heads go? Negotiate with new suppliers? Lay out the plant floor to improve efficiency? Even if you don’t make any changes to a product, everyone has goals attached to making them more efficiently and with higher quality. These are difficult projects that demand a lot of focus.
Corporate CEOs are trying to find that delicate balance between pursuing higher quality and lower cost and launching new products. It’s like trying to drive down an icy highway. If a CEO pushes too hard in the wrong way, he’s going to spin out and possibly cause some damage.
Cost vs Quality vs Expansion
Every corporation has to divide their time between the following:
Most corporations lean heavily towards lower cost and and higher quality with a sprinkling of new products mixed in. That's because the older generation always believed in “first things first” and “if it’s worth doing, it’s worth doing right”. I’m sure this old guard probably shakes their head in disapproval at the new breed of companies like Google and Tesla. Companies that forge ahead and leave quality, safety, and security concerns for another day. Normally, an older and wiser senior management staff member would yank the wheel in the right direction. But different times have brought different philosophies.
If Apple decided not to launch another new product for the next five years every employee there outside of R&D would still have a full plate of projects. Customer feedback always leads to a ton of projects on where the product can be improved. Manufacturing plants are always trying to deploy new technology. And every employee working against a deadline always has a list of items that they mean to go back and improve when they have time.
But there can be conflict when a corporation is constantly doing new products with the same group of people who are delivering the current ones. They have to split their time between focusing on current products or the new ones. Whether you’re talking about engineers, purchasing agents, or even accountants, everyone has a certain amount of time in their day for “ad hoc” project time. Where they spend it is up to the priorities of top management. But like grip on a snowy road, there is only so much to be had, and you can’t magically make more.
Some corporations—Samsung comes to mind—are able to deliver a constant stream of new products. However, either cost or quality typically will suffer. In Samsung’s case, it’s obviously quality. Even before the exploding Note 7s they have delivered example after example of shoddy or poorly thought out products. Anyone remember the overheating processors or styli that were permanently damaged if you inserted them backwards?
The people at Samsung aren’t spending overtime on efficiency and cost projects. They don’t have time. When their mid-level managers get to the end of their work day, they have to spend time on figuring out how to accommodate the new products. They’re too busy sourcing new suppliers and setting up new manufacturing lines. So every company has to choose what is most important to them and their market.
Companies have to decide what they value more. Being first to market or being the best on the market. Because most of the time, you can’t be both.
Choose Your Priorities Well
If you drive in the snow much, you learn really quickly that your car has limited grip which needs to be divided between accelerating, stopping, or steering. Doing more of the one leads to less of the others. If you misjudge conditions and choose poorly how to apply your grip, you could end up causing some damage.
This picture reflects the balance that Tim Cook is probably trying to find in steering Apple where he thinks it needs to go. Corporations like Apple that are trying to both grow and improve their current products concurrent with expanding into new products have “limited grip”, meaning their current staff can only handle so much. Doing more of one will lead to less of the other.
Producing durable goods is not like software. You can make the exact same product in any number of ways. Do you invest in more machinery and let some heads go? Negotiate with new suppliers? Lay out the plant floor to improve efficiency? Even if you don’t make any changes to a product, everyone has goals attached to making them more efficiently and with higher quality. These are difficult projects that demand a lot of focus.
Corporate CEOs are trying to find that delicate balance between pursuing higher quality and lower cost and launching new products. It’s like trying to drive down an icy highway. If a CEO pushes too hard in the wrong way, he’s going to spin out and possibly cause some damage.
Cost vs Quality vs Expansion
Every corporation has to divide their time between the following:
- Lower Cost – Can we improve efficiency?
- Higher Quality – Can we reduce defects?
- New Products – What new areas should we expand into?
Most corporations lean heavily towards lower cost and and higher quality with a sprinkling of new products mixed in. That's because the older generation always believed in “first things first” and “if it’s worth doing, it’s worth doing right”. I’m sure this old guard probably shakes their head in disapproval at the new breed of companies like Google and Tesla. Companies that forge ahead and leave quality, safety, and security concerns for another day. Normally, an older and wiser senior management staff member would yank the wheel in the right direction. But different times have brought different philosophies.
If Apple decided not to launch another new product for the next five years every employee there outside of R&D would still have a full plate of projects. Customer feedback always leads to a ton of projects on where the product can be improved. Manufacturing plants are always trying to deploy new technology. And every employee working against a deadline always has a list of items that they mean to go back and improve when they have time.
But there can be conflict when a corporation is constantly doing new products with the same group of people who are delivering the current ones. They have to split their time between focusing on current products or the new ones. Whether you’re talking about engineers, purchasing agents, or even accountants, everyone has a certain amount of time in their day for “ad hoc” project time. Where they spend it is up to the priorities of top management. But like grip on a snowy road, there is only so much to be had, and you can’t magically make more.
Some corporations—Samsung comes to mind—are able to deliver a constant stream of new products. However, either cost or quality typically will suffer. In Samsung’s case, it’s obviously quality. Even before the exploding Note 7s they have delivered example after example of shoddy or poorly thought out products. Anyone remember the overheating processors or styli that were permanently damaged if you inserted them backwards?
The people at Samsung aren’t spending overtime on efficiency and cost projects. They don’t have time. When their mid-level managers get to the end of their work day, they have to spend time on figuring out how to accommodate the new products. They’re too busy sourcing new suppliers and setting up new manufacturing lines. So every company has to choose what is most important to them and their market.
Companies have to decide what they value more. Being first to market or being the best on the market. Because most of the time, you can’t be both.
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