In the earnings call following Appleâ€™s Q4 2016Â financial results, UBS managing directorÂ Steven Milunovich asked CEO Tim Cook a rather pointed question: â€˜Does Apple has a grand strategy for what it wants to do over next 3-5 years? Or does it react to the market then decide?â€™
Cook was widely felt to be uncomfortable with the question, andÂ Milunovich has now explained why he asked it,Â and how well prepared he thinks Apple is for the future â€¦
Cookâ€™s answer was brief, and somewhat contradictory, talking at once about being confident in its direction and at the same time arguing that itâ€™s able to adapt as needed.
We haveÂ the strongest pipelineÂ weâ€™ve ever had and weâ€™re very confident about whatâ€™s it, but we wonâ€™t talk about whatâ€™s in it. We have a strong sense of where things go and weâ€™re very agile and able to shift where people need to.
Milunovich toldÂ Business Insider that Apple has historically had a clear strategy, but heâ€™s not sure that its current approach is as clear. In particular, he referenced aÂ Harvard Business School term known as â€˜jobs theory.â€™ This refers to jobs that people want to get done rather than Steve Jobs, but he says that Steve was very good at taking this approach.
Coined byÂ Clay Christensen, the phrase essentially argues that Starbucks might think itâ€™s in the business of selling coffee, but the job many of its customers want it to do is provide a meeting place for friends or a temporary office. Companies need to think not about products, but what jobs customers want to get done.
So in terms of applying this to Apple, thereâ€™s a number of factors, one is that in jobs theory the focus is on the customer experience in a broad sense, and thatâ€™s Apple. Steve Jobs, of course, talked about the company being the intersection of liberal arts and technology [â€¦]
I donâ€™t think they necessarily adhere to the theory per se. I think it is what they do internally. They ask themselves, â€œwhat is it I donâ€™t like about my phone?â€Â I remember when Steve Jobs brought out the original iPhone. He talked a lot about the drawbacks of the current phone, and weâ€™d like it to do this, that, and the other. Apple solved those problems and it turned out to be an innovative job to be done.
He argues that itâ€™s currently unclear whether Apple still takes this approach now.
We donâ€™t know if Apple has figured out what the next jobs to be done are. But my sense in talking to them is theyâ€™ve at least identified the places they want to innovate â€” home automation; healthcare; and they donâ€™t talk about it but I guess automotive; AR and VR which they do talk about, particularly augmented reality.
The first new product category since Steve was the Apple Watch, and it is, he suggests, questionable how much of that thinking was based on a clear identification of the job to be done.
They introduced a number of jobs to be done, including some that you alluded to in terms of not needing to pull out the phone just to get notifications. They talked a lot about notifications, sending cards to friends and so forth. And it took a year or two to see there didnâ€™t seem to be a whole lot of demand for that job. Some of the applications turned out to be not early but just wrong in terms of expectations of use.
The company has, he said, now pivoted very much to presenting the Watch very much as a health and fitness device â€“ essentially giving it a different job to do.
With concern that Jony Ive and his team may be heading toward retirement at roughly the same time,Â Milunovich gives Cook credit for being great at keeping the companyâ€™s core culture alive.
This is where Apple University may play a role. Because Apple University allows them to continue the culture and principles that he put in place. And I think Tim Cook is a fantastic culture bearer. Jony Ive is, and hopefully the Apple University formalises some of these things as well.
The full interview is a worthwhile read.