The perfect culture for innovation: Apple or IBM?

A few months after Jobs’ death Business Insider published an article that struck a chord with me. In Why Every Company Needs To Be More Like IBM And Less Like Apple Mark Fidelman argues that IBM is way better at creating an attainable and sustainable innovation culture than Apple has ever been or will ever be.

Apple pictures IBM as Big Brother in its 1984 Superbowl ad but Mark argues that today IBM is the antithesis of Big Brother. It’s as he calls Big Open. Apple, on the contrary has transformed to a company with a genius led culture of fear quoting Adam Lashinsky from Fortune Magazine.

Apple’s closed culture has left the company with an innovation vacuum after its founder left whereas one genius leaving IBM would not matter at all. Its genius lies in what Mark calls fostering innovation through co-creation with its employees, suppliers, partners and customers. This is what creates real shareholder values he argues.

Since I am in the middle of pursuing a dream, growing a team that shares that dream and laying out strategy that helps us get there, this is a subject that more than interests me. I’ll occasionally talk about this and about the decisions we’re making at The New Motion to help realize that dream.

In the meantime that innovation vacuum hasn’t appeared yet. 4 months after Steve Jobs left, Apple’s share price is soaring. IBM on the contrary is seriously underperforming when looking at its S&P 500 peers. Obviously 4 months isn’t anything to go by, but I certainly wish I hadn’t sold my AAPL shares late December 😉

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14 thoughts on “The perfect culture for innovation: Apple or IBM?

  1. I think looking at the current share price is by far not enough. In Jobs biography there are clear hints that the next products will be in the educational market (as announce with the new iBook stuff) and some kind of TV. The former I guess has yet to find a market and the second is not even released – so Apple is still living from his innocation. If Jobs really leaves a vacuum behind I think we wil see the problem in one or two years, not now. IBM on the other hand has successfully moved from Hardware to Software and to Services. And IBM has been through a lot of successful CEOs while Apple only really had one successful CEO (i.e. Jobs).

    • Valid points Eberhard. Obviously when looking at IBM, it has been successful for almost 100 years and from a shareholder’s perspective Apple it’s only been about 10 years.

      Personally, I think there is definitely going to be an innovation vacuum and it’s up to current management to prevent that from happening, if at all they’re capable of doing so.

      p.s. to tell you the truth; I didn’t really sell my shares because of this, but rather because of a 4 week holiday that I was starting late December. I really didn’t want to worry about having to look at shares and such while lying in the sun.

      • Concerning the innovation vacuum: I do understand why a lot of people think that after Jobs death it will be hard for Apple to continue innovating – in particular if you look at what happend to the company after he left in 1985. But he was aware of his illness for quite some time – which has given him 5 or so years to make Apple a sustainable business. It would have been pretty stupid not to work on that. I think that is something quite a few people are missing.

      • Agree. So the question is whether not or he succeeded in creating that sustainable business and was able to keep the culture of innovation alive. And more interesting to me personally is what he did to get there.

  2. I agree. Apple does not innovate, they take existing technology and perfect it. They’re good at that, but you never hear about Apple inventing new technology, while you hear about fundamental new tech from an IBM research lab regularly.

      • As far as I’m aware Apple didn’t pioneer any new business models. What business models are you thinking of?

      • You’re mixing up two terms. To innovate != to invent.

        You’re absolute right in the sense that Apple take things invented by others and makes them pretty and easy to use. That is in fact what you would innovation.

        Speaking about invention by the way: Apple did invent a few things here and there but most of the time they were quite crappy at it. Think Newton, think Firewire.

    • Well, innovation is not research or inventing new technologies. For example MP3 was actually invented by a Frauenhofer – a public research facility in Germany. But the real innovation was to use it in MP3 players and finally make them as easy to use and capable of storing as much data as the iPod. That is also how I think Apple will win in the TV business – not by inventing new things but make them much easier and nicer to use.

      • I’m not sure I agree that using MP3 for creating music players was such an innovation. In my opinion the MP3 algorithm was the innovation, using it to make music players is just common sense. A five year old would think of it. But it doesn’t matter, since Apple did not invent the MP3 player. People forget nowadays, but MP3 players had been around for a while when Apple introduced the iPod.

        And that’s the Apple pattern. They take things invented by someone else (the personal computer, the mouse, the GUI, MP3 players, smartphones, tablet PCs, online music stores, etc., etc.) and by a combination of learning from the mistakes of others and an uncompromising stance on style and usability make a version that’s actually pretty and easy to use. But making things easier and nicer to use is not innovation, it’s just a lot of hard work and common sense. Without others to do the true innovation for them Apple would be nowhere.

    • Yes, and its artificial limit of two replies is quite annoying…

      Anyway, this is what Webster says “innovation” means:

      “Definition of INNOVATION
      1: the introduction of something new
      2: a new idea, method, or device : novelty”

      The operative word is “new”. Apple has not introduced something new in its entire existence, and that includes the Newton. They’re just very good at making people think they do… 😉

  3. To invent is 1) to find, discover, 2) to devise by thinking, 3) to product for the first time through the use of imagination or of ingenious thinking and experiment.

    To my mind the difference here is that an invention is the first time someone is coming up with something and an innovation is to bring an invention (something new) to the market. Apple is very good at introducing / bringing to market new things, i.e. innovative.

    But well, I think we’re not going to agree on this one ;-).

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