Steve Jobs' Revolutionary Reorganization: The Quiet Catalyst of Apple's Stock Surge
1min read In 1997, when Steve Jobs returned to Apple, he made a significant impact on the company's internal structure. His efforts to revive the company’s profitability were quickly followed by a transformative shift in its organizational structure.
Almost three decades later, this managerial overhaul continues to be a driving force behind Apple's exceptional stock growth, heralded as an underappreciated factor in the tech giant's success. Originally, Apple had a product-oriented structure with separate departments for Mac, peripherals, and applications, each with its own financial statements and general manager.
Jobs swiftly dismantled this framework, replacing it with a function-based structure and eliminating the general manager roles. The new organization created departments focused on hardware, software, and marketing, all reporting directly to Jobs. The financial incentives of employees were no longer tied to department performance, but rather to the overall financial health of Apple.
This functional organization allowed for deeper specialization within each department and encouraged nimbleness in keeping pace with emerging trends. Today, it remains largely intact, albeit with some evolution. Key departments like services, hardware, and chip design are led by domain experts who report to Tim Cook, Jobs’ successor.
The system encourages collaboration between departments, a necessity bred by the structure itself. This cooperative dynamic helped usher in the era of groundbreaking products, such as the iPod and iPhone, by reducing internal competition and power struggles.
While the functional leadership method fosters expertise and innovation, it does come with downsides, such as coordination stresses and potential burnout. However, Apple's strong employee retention in pivotal departments has generally alleviated potential negative impacts.
Apple’s structure contrasts sharply with competitors like Samsung, which operates with a product-based structure, leading to internal cost and resource conflicts that Apple typically sidesteps. This organizational advantage is often overlooked but is integral to Apple's persistent success and innovation.