Strategy Journal #3

Tim Cook Speech Reveals Passion for Apple Products

February 14, 2012

(Available at http://www.macobserver.com/tmo/article/tim_cook_speech_reveals_passion_for_apple_products/)

This week I decided to look at a key Apple decision and whether it fits within Apple’s overall strategy under the Hedgehog Concept discussed in Good to Great. Specifically, Apple recently hired Tim Cook as the CEO to follow Steve Jobs and Tim Cook’s leadership must be compatible with Apple’s overall strategy. As we read in Good to Great, we are faced with three circles or questions under the Hedgehog Concept:

(1) What can you (the company) be the best in the world at?;

(2) What drives your economic engine?; and

(3) What are you deeply passionate about?

Apple has become one of the best company’s in the world at product design and product maintenance. But how did they get there? What is their Hedgehog Concept? It is through a singular focus on limited products that are a result of great ideas—not just good ideas. Specifically, Tim Cook, when he was the COO, stated the following regarding Apple’s Hedgehog Concept:

“We say no to good ideas every day. We say no thanks to good ideas in order to keep the amount of things we focus on very small in number so we can put big energy behind the ones we do select. This table that you are sitting at today, can probably fit every product on it that Apple makes, yet Apple’s money last year was over $40 billion. ... [it’s] not simply saying yes to the right products, it’s saying no thanks to many products that are good ideas, but just not nearly as good as the other ones. I believe it is so ingrained in our company this hubris you talk about that happens to corporations that are successful and who whose single role in life is to get bigger, I’ll tell you that the management team at Apple would never let that happen. That isn’t what we’re about. We always keep only a little list to focus on.” (emphasis added)

This singular focus has given Apple an economic engine that has made them hugely successful (e.g., Apply has nearly $100 billion in cash on hand). Additionally, not only is it the best in the world at a singular focus surrounding innovative products, Apple also has incredible passion for creating innovative products that improve a customer’s lifestyle yet still have a practical purpose.

Knowing that this is Apple’s Hedghog Concept/Strategy, is hiring Tim Cook the right move? I think it is. In this article, Tim Cook comments that “Steve [Jobs] grilled in all of us that the company should revolve around great products and that we should stay extremely focused on just a few things rather than on so many that we can’t do any of them well. ” Tim Cook continues to say that “[t]hese things, along with keeping excellence as an expectation of everything we do at Apple. These are the things that I focus on. Because I think those are the things that make Apple this magical place that makes smart people want to do not just their life’s work, but their life’s best work.” (emphasis added). Additionally, as the author of this article notes, Tim Cook is a “product guy”—someone focused on creating, improving, and distributing great products. By being a product guy, Tim Cook, like Steve Jobs (who was a product guy), is positioned to keep the company aligned with its Hedgehog Concept/Strategy of singular focus on limited products. Furthermore, in the same interview, Tim Cook, in responding to the question of what Apple planned on doing with the $90 billion of cash on hand, stated “[w]e’re judicious, we’re deliberate, we spend our money like it’s our last penny … We’re not going to go have a toga party or do something outlandish.” This deliberate approach to spending money and growth is a classic example of the hedgehog progressing while the fox falters. It would be easy to justify spending a lot of money, but taking a “deliberate” approach still allows them on keeping their singular focus on great products.

Ultimately, this article (which highlights one of Tim Cook’s first interviews as CEO of Apple) illustrates that Tim Cook looks like someone who will continue Apple’s strategy. Although the article talks about others that could possibly fit this role, it looks like Tim Cook is currently one of the best people to continue Apple’s Hedgehog concept. We’ve seen how new CEOs negatively impacted Apple’s bottom line before (e.g., Sculley, Spindler, and Amelio) by neglecting to continue or follow Apple’s key strategies. However, it seems that Tim Cook is going to continue Apple’s singular focus on a limited, innovative product line, which, in turn, will hopefully strengthen Apple’s position and overall strategy.

Strategy Journal #2

AOL's Huff Post to Launch Live Streaming Network

THE WALL STREET JOURNAL

FEBRUARY 2, 2012, 4:40 P.M. ET

(Available at http://online.wsj.com/article/APf065f68b34754d2d9af547a8273be86b.html)

This article discusses the Huffington Post’s new strategy to move into online streaming and provides an opportunity to evaluate its decision through the strategy canvas/value curve. Below is a potential analysis of its decision with respect to their primary competitor, WSJ (Note: Although the Huffington Post will be competing against Fox, CNN, MSNBC, etc. I merely used WSJ to illustrate the potential comparison on the value curve). Additionally, I used the following factors of competition: price, hours of original online content, availability, guest starts, number of view points, structured schedule, and customer interaction.

Using this value curve, we can see a number of interesting differences. First, the Huffington Post added a new factor of competition to make their online content more appealable to customers—customer interaction. As this article indicates, “[p]eople don't want to have you tell them the news anymore. They don't want to be talked to, they want to be talked with.” Consequently, the Huffington Post is dedicating a third of its screen to consumer interaction and dialogue. Second, Huffington Post’s content is all free (both written and verbal)—unlike the Wall Street Journal—and its hours of streaming content will be triple that of the WSJ and other similarly positioned companies. Lastly, the Huffington Post will have less star contributors and its schedule is going to “mirror the chaos of the web”—meaning, it won’t be that structured and might possibly annoy consumers since they won’t know when their favorite segment will be on. Ultimately, the Huffington Post seems to hope that by adding an additional factor of competition (customer interaction), it will be able to distinguish itself in the online content world and gain market share.