A Tribute to Steve Jobs: Speed of Innovation and Executive Sponsorship as Competitive Advantages:

© Mak Joshi October 5, 2011



There was a time when the First Mover Advantage (FMA) was touted as a significant competitive advantage. The first entrant in the market took most of the market (~40% market share) and the “laggard” entrants were left with very little upside. You enter first, bring good quality products and take a big chunk of the market. That was the traditional thinking.

Things have changed and how! What drives business today is not who enters the market first or how deep your pockets are. What matters more is the speed of innovation and how well you can engage your customers with your innovations. Quality is now work in progress. Consumers expect you to stumble along the way and eventually get it right. They also understand that innovation, by its very virtue, is not a smooth sailing road, but by bringing to market what customers perceive as the future, companies can expect consumers to go for the ride and enjoy the scenery, while paying for it.

Let’s take the case of two tech companies, viz. Apple, Microsoft,

Both these companies are giants in their own right, but have very different pasts and destinies.

Apple virtually created the PC market in the 80s, before they let it all slip away. By mid 90s, Apple was a non-entity, and left alone by most to die a natural, slow and painful death, except for the true Apple believer. Books were written about Apple’s imminent death and how unbundling the hardware and OS to create an “open yet proprietary network” in the early stages of the PC market had led to opening up of the PC market to the likes of HPs and Dells and Intels and Microsoft’s of the world and led to Apple’s demise. All that talk made sense.

Microsoft was the darling of the software industry with their MS Office suite and Windows OS, yet a company everyone slowly learned to hate. MS continued to churn out one blockbuster product after another. After they were caught napping with the Netscape browser launch, MS quickly reverse engineered the browser, made MS IE part of the OS, and practically killed Netscape as a company. Soon after, MS arrived with the .NET platform and looked like a steady ship in turbulent waters. Though never feted for their innovation, they were excellent copy cats, and provided good quality me-too products that surpassed the innovators in market performance.

Google came along and rocked MS’s boat with their search engine and solid innovations in the internet space with their awesome search engine and browser and generated steady revenue streams in the search and online advertising space. A new shining star was born.

Come Year 2001, Steve Jobs had other ideas. A visionary man who cut his teeth in the PC market and then left to run other companies such as animation factory Pixar, he had learnt his lessons over the years. Seemingly out of nowhere, Jobs got busy with his innovations. Starting with iPod, Jobs launched the iPhone and the iPad, products that created whole new product categories.

In 2001, just when Jobs launched the iPod, how many of us thought that a revolutionary product had launched? Not many and certainly not me! Today, ten years later, in 2011, the iPod is “the” consumer digital music device of choice. See Steve walk us through the need for the iPod and the economics of music in 2001. Fascinating stuff:



In the wireless handsets market, Nokia ruled the handset mobile phone market across the pre-iPhone world. Nokia was the Microsoft of the mobile phone market and Symbian seemed like a powerful platform with no end in sight to Nokia’s supremacy. In the US, Motorola did a few things right with their Razor platform by changing the profile of the handset. At one point, in 2004 and 2005, Motorola could not make Razor phones fast enough to keep up with the demand. All that was about to change with some significant innovations in the smartphone market, again thanks to one man – Steve Jobs. The interesting thing is that everyone knew where the phone market was headed in terms of capabilities. Yet, only a few capitalized on it and even fewer were successful at it.

Today, in 2011, the iPhone is “the” smartphone consumers want and the iPad is “the” computing tablet that customers are willing to wait in long lines for. Apple has more cash than the US government, and for a brief period, had the largest market capitalization than any other company ever.







How did Jobs do it? What was it about these products that caused absolute frenzy amongst Apple’s customers and developed such an awesome brand loyalty? What can others learn from Jobs and how can we attempt to replicate his successes in our own markets?

There are several known reasons for Jobs’ success:

1. Consumer experience: More than “fundamental research” and “truly breakthrough new-to-the-world” products, Apple products focus on a far better consumer experience than any other hardware or software maker out there. In addition to the superior usability experience, Apple’s User Interface and graphics set its products apart. As Jobs once famously said:
"We made the buttons on the screen look so good you'll want to lick them."
-- Jobs, on Mac OS X's Aqua user interface (Fortune, Jan. 24, 2000)


2. Segmented market: Jobs knows Apple products are not for everyone. He has focused his product development on consumers who are “willing to pay” for Apple’s high class user experience.
“Our belief was that if we kept putting great products in front of customers, they would continue to open their wallets.”

3. Power of the network: Through the App Store and iTunes, Apple has been able to create a network of users and apps that has snowballed into a significant competitive advantage. Even with a “closed network”, Apple has been able to create more apps than the competing platforms on the market. In fact, the variety of apps available for the iOS is one of the major reasons why consumers choose Apple products over competing products.

Yet, there is one distinct advantage that Apple has over any of its competitors. That advantage is “Speed of Innovation”. As Jobs himself acknowledged, Apple was once very slow to innovate:
"It wasn't that Microsoft was so brilliant or clever in copying the Mac, it's that the Mac was a sitting duck for 10 years. That's Apple's problem: Their differentiation evaporated."

Through Apple’s semi-annual events, the company expects the markets to anticipate new and breakthrough products. Apple has made a habit and a routine developing and launching new products at these events. This is a different, more forceful and dynamic approach to unleashing innovation and has sped up Apple’s innovation cycles. Only a few companies do this successfully, year in and year out.

Jobs also understood the relationship between R&D and speed of innovation better than most companies, including IBM, Xerox and Intel, who have had great tradition of innovation and have been prolific at producing patents, yet have seen varying degrees of success with commercializing them.
“Innovation has nothing to do with how many R&D dollars you have. When Apple came up with the Mac, IBM was spending at least 100 times more on R&D. It's not about money. It's about the people you have, how you're led, and how much you get it“. -Steve Jobs, Fortune, Nov. 9, 1998

A common folly by marketers is to develop products by asking the consumer what they want through focus groups and advisory boards - what I call “lazy marketing”. Jobs did not let his consumers tell him what they want. He showed and told them what they must have!
“It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them.” -Steve Jobs, BusinessWeek, May 25 1998
“You can't just ask customers what they want and then try to give that to them. By the time you get it built, they'll want something new”

Finally, what is the most important factor that leads to “Speed of innovation”? It is Executive Sponsorship. Companies where executives are highly involved in innovation have better growth trajectories, more satisfied customers and happier and wealthier stakeholders. Steve Jobs was "the" master executive sponsor.

RIP, Steve Jobs. The world is a lesser place without you tonight.

Cool presentation on Unlocking Cool

Check out this presentation by Jeremy Gutsche on spotting trends and leveraging them to deliver customer-centric innovation. By methodically approaching innovation, organizations and individuals can generate ideas, stimulate creativity, and ultimately unlock cool. Very impressive!

HP DreamScreen and TouchSmart

Check out these interesting innovations from HP. While one can debate how much of original IP (one that is patentable) went into these products, one has to agree that these devices nicely tie together some very cool existing technologies into an exciting package. From an innovation standpoint, these products rely heavily on derivative and variation types of innovation to create a strong impact in the market. This further emphasizes the point that not all innovation has to be fundamental or breakthrough type to make an "innovation" play for your company.

Some very smart marketing at play here. Don't forget that the marketing function is about satifying and exceeding consumer needs and it plays a huge role in the way the final product shapes up. Marketing is not just about selling or push/pull tactics.

With such futuristic products, HP is slowly but surely reclaiming its lost glory, as the analyst reports and stock price will suggest.



More on Innovation Culture

Here is an excellent presentation on developing an innovation culture in companies in decline. The author talks about 8 steps required to turn around companies that are past their hey days.

Innovation in China

Look how the Chinese are innovating. Its a revolution happening there. And the best (worst?) part is that we have not even heard of many of these companies. They are innovating in every way: the way they communicate with their customers or the way they monetize these innovations. Take a look:

How difficult are Marketing Innovations?

Growth is a fundamental differentiator between profitable and non-profitable businesses. Innovations are considered incredibly hard to come by. Many industries thrive on Intellectual Property (IP) for their existence, sustenance and growth. Technology and healthcare companies make or break due to their IP.


Just how difficult is innovation? Innovation seems incredibly difficult, laborious and time-consuming. When we think of innovation, we think of scientists in labcoats toiling away in an R&D lab trying to discover a cure for cancer or develop the next big supercomputer.

Not always the case. Thankfully, for marketers, we need not always depend on huge R&D investments to drive innovation. Marketers are very unique because we can continue to create wealth and add to the company topline as well as the bottomline by being customer oriented and by fostering customer-centric innovation.

In order to understand further how marketers can achieve this, lets first visit the different types of innovation. Praveen Gupta, in his highly recommended book Business Innovation in the 21st Century describes the following 4 different types of innovation:

  • Fundamental innovation develops fundamental science or knowledge and is extremely rare. It typically happens in government labs and universities. The timeframe for development of fundamental innovation is usually several years.

  • Platform innovation extends fundamental innovation into useful product platforms, systems and technologies. The timeframe for development is usually several months and is sporadic in nature.

  • Derivative innovation happens more regularly and has a cycle time of weeks or a few months. It develops products or small systems for platforms that are usually part of a larger system.

  • Variation innovations can be continuous in nature and can be delivered in days, even on-demand.

So where can marketers innovate to target growth? In all four types of innovation, of course. But marketers are uniquely positioned to leverage both derivative and variation type innovations. Here is how:

  • Product line extensions: These are your new and improved product with additional benefits to consumer. Example is vitamin and calcium fortified cereal that improves upon the original cereal or Tylenol Arthritis Pain, which a slighltly modified and improved version of the original Tylenol.
    • Brand extensions: Arm & Hammer went from being a baking soda to a tooth paste to a laundary detergent and now a household paint. Thats an extremely elastic brand. By leveraging your brand equity and brand strength, you can quickly grow a product in a relatively unknown product category.
    • Customer-centric variation innovations: By making changes to your product that makes it easier to use, more convenient or faster, you can innovate for growth. Examples would be faster service such as 3G or a better user experience such as the one with the Apple iPhone.

    So, marketers, don't let the inefficient innovation processes in the R&D labs dishearten you. Put the customer at the center of your innovation process and get busy with your innovations.

    Learning marketing from the Prez

    What can we learn from President Obama about marketing? Watch this interesting presentation to learn how to run a publicity campaign against some heavy brands.