Apple was most decidedly not thinking about portable music as the 20th century drew to a close. In the age of mp3 and peer-to-peer sharing of music, Apple was focused on video and developing iTV and iMovie — so much so, that their then current version of the iMac didn’t have a CD-burner. In fact, if they are honest, they missed reading the market for music completely. The world’s most innovative company was literally blind to one of the biggest social trends that was occurring at the time!
To their credit, however, and with the aid of distressing financial figures resulting from such a misreading of the market, Apple realized that it had to change its approach to the market and to the technology. Given Apple’s widespread reputation for innovation and trendiness, its failure to anticipate the importance of music in the lives of personal computer users was completely uncharacteristic. Occasioned by a $195 million quarterly loss, however, Apple took motivation from their mistake and realized that they needed to completely rethink the way they went to market. Apple not only learned from their mistake, they used it to catapult a new innovation.
So, if you’re Apple, how do you recover? The common advice from most management books on building teams has typically been to: “hire for attitude, train for skills.” This model better ensures harmonious work environments and friendly collaborations. Yet, in the world of innovation, aspirations and attitude aren’t enough. In the situation that it found itself in, Apple needed real skills, and so when Steve Jobs compiled the iPod team he loaded the odds in his favor by going with his very best people in hardware, software, and design. A team was assembled because they were the best. And putting the best skilled on a mission to change the world, drove competition within them, leading the team to perform at peak levels – nobody on that team wanted to be “second-best!”
What really sets the iPod apart from all of the other mp3 players, however, is neither the hardware, the software, nor the design – although all are world-class. The iPod’s real differentiator is the ease with which the customer can access, download, store and upload the music and podcasts. No one else can do this, and this “innovation” did not come from within Apple, but from an outsider – Tony Fadell – who was trying to do this on his own.
Apple found him – think about how difficult that is, to find someone with a good idea outside of your firm – and hired him on an eight-week contract! This was not about building a long-term employment relationship, nor about loyalty, but about accessing someone else’s good idea.