Steve Jobs made Apple great by ignoring profit

“Steve Jobs retires as the CEO of Apple with a reputation that will place him amongst the pantheon of history’s great global business leaders,” Clayton Christensen and James Allworth write for Reuters.

“Many people have written about what makes Jobs and Apple special, but they’re missing what truly set him apart,” Christensen and Allworth write. “Jobs has succeeded by eschewing the one thing that most people view as the raison d’être for companies — profit.”

Christensen and Allworth write, “Despite being perceived as a premium, high-end player, Apple under Job’s leadership has not simply managed to avoid being disrupted by others, it has disrupted entire industries — many of them. Even more impressive, it’s disrupting itself.”

Read more in the full article – highly recommended – here.
 

[Thanks to MacDailyNews Reader “krquet” for the heads up.]

35 Comments

  1. Great article. Jobs approach to driving his company to chase after the next great thing through innovation and trusting the profits to follow beautifully exemplifies Jesus’ teaching: “Seek ye the kingdom of God… and all this well be given to you as well.”

    1. Either that or a Lion hunting its prey by anticipating their moves and being there to devour them alive. Yeah, either one: Bible quote (really?) or wild predator…

      1. “Bible quote (really?)”

        Yeah, really. Such a deep a philosophical teaching Jesus was making. So few get “it”, Christian or not. It can be applied to every facet of life.

        Not sure how your Lion quote figures in on Apple make profits secondary though…

            1. I never made any reference to that. Obviously Bible came some 600 years before Quran but most people are tempted to say that since Quran came after Bible so It must be copied from Bible as essentially the message is same – From God , Our Lord.

              Love live Steve Jobs!

    2. Hey Wil,

      I really like your post and think I get your connection. However, just so I’m sure, could you explain the MT 6:33 verse as it relates to trusting innovation first, then trusting profits to follow? Could you describe how a small businessperson could use this concept too?

      Thanks!

      1. Well….

        I don’t want to get too theological on MDN, lest the flames burn me, but here goes..

        Jesus taught his followers to pursue God, the Transcendant, use let go of our petty egoistic desires of fame, fortune and security, and work to find our identity in the One who created us. 100% will sell out our souls for something less on this planet, and live to regret it.

        I think when Jesus said follow God and his goals, God will take care of things like importance, fortune fame, sexual fulfillment, etc. When we seek after those things our way, more than not we will get burned. So when Steve Jobs first said when he came back to Apple in 1997, “Microsoft doesn’t have to lose for Apple to win”, he was starting to understand a path to success. To make MS lose as his primary goal, he would paradoxically make Microsoft his God. I hope you get that.

        So when jobs says “the goal of Apple is to make really great products”, and “Apple’s worst competitor is Apple”, Jobs is making the pursuit of excellence and innovation his goal. This goal is intangible and ephemeral because you can never nail it down. You can only chase after it.
        It’s like a talented pianist whose primary go is not to be better than your next competitor but to be better than he himself was last week.

        If Jobs made profits his goal, he would not have cared about craftsmanship, excellence and doing things right.

        Chasing after profits, invariably, reduces a company to:

        1) sacrifice long-term growth for short term gain.
        2) sacrifice long-term character development (as a company as a whole) for low commitment from employees, managers, and owners.
        3) a company becomes more concerned about appearances and looking good to the sacrifice of being a healthy, thriving workplace.
        4) being about selling to the detriment of living in community with the customer.

        Jobs pursued the higher path and in the end, Apple is one of the most respected brands in the world. During the recession when his competitors were letting employees go, his promise was to innovate the company out of the recession. Apple made SO MUCH MONEY during the Recession(s). He created a healthy company, with inner character, a drive for excellence, and a disdain for cutting corners, with the single aim of being the best Apple it could be. This, my friend, is the kingdom of God. What is the result? Apple is the most valuable company on Earth.

        But it all starts with a ruthless self-examination of one’s character and a total demand for self-respect. Because in the end, Jesus himself never sold out. And now he is revered around the world.

        Look at MS. They never came up with any thing original, their stuff sucks, they paid journalists to write complimentary articles about them, what they can’t buy, they destroy, and in the end, they don’t know how to grow or come up with new original ideas. Lastly they are run by a guy in marketing. They can’t survive, because they never knew how to thrive.

        One more thing. As Jesus life pointed out, if you chase after the kingdom, people will make fun of you, people won’t understand you, and people will think you are stupid, because you are for long range growth, long range character, you are committed to ideals rather than the buck. As the numerous global meltdowns in the USA over the past decade has shown, not only do you destroy yourself, you hurt everyone around you.

        Other companies to study are Zaphos, and Chik-fil-A.

        As a small business, do you:
        1) sacrifice long-term growth for short term gain.
        2) sacrifice long-term character development (as a company as a whole) for low commitment from employees, managers, and owners.
        3) a company becomes more concerned about appearances and looking good to the sacrifice of being a healthy, thriving workplace.
        4) being about selling to the detriment of living in community with the customer.

        5) Do you chase after the one, great, original product, or idea that God, or the Transcdant has for you? Are you also looking out for the next great thing?

        That’s all I can think of.

        1. Also as someone else below pointed out:

          “Jobs never ignored profit; it is the law that the company has to make more than 30% margin (lately, about 40%). Profit was never the goal, but this is totally different thing from ignoring profit.” But you trust that result to God.

  2. Hahaha. Was this article written from the perspective of an SNL skit writer? Yes, profits are unimportant at Apple. If so, where’s my $500 Mac then? I don’t think any organization can afford to ignore profit. Not make it the primary driving objective maybe, but ignoring it? Tell that to Tim Cook and ask him to give the iPhone’s 70% margin away back to Foxconn.

    1. You missed the point, which is summed up in the final sentence of the article: “… profit is not the ultimate goal, but rather a consequence of something greater.”

      In other words, do something great, and profits will follow. That’s always been Steve’s mantra…

    2. You don’t get it… They could have build a $500.00 Mac but choose not to… Keeping the standard that they believe in, Soon or later people would realize who really make the best product in town.

    3. Right on the money. Jobs learned his lessons about ignoring the business side of the equation early on. His really remarkable achievement is finding a perfect balance between watching the bottom line and producing awe-inspiring products. Tim Cook isn’t CEO for nothing, he knows very well there are two sides to the golden coin.

  3. MDN’s headline here is misleading. The author is correct – Apple put the need to make profits secondary to putting its customers’ needs, desires, and moving beyond their expectations first. Here is a list of what Apple does that very few companies do:

    1. Make great products that fit what customers need, want, and will buy;
    2. Keep looking for the next leap in solving customers’ needs and making their lives easier, then actually build and sell it;
    3. Lock up your suppliers and use cash and market clout to corner the market on critical components at reduced prices;
    4. Profits will follow;
    5. To hell with what Wall Street and analysts think you should be doing.

    Number 5 is why Wall Street doesn’t get Apple, because Apple only reports what it is required by law to do. Apple doesn’t pander to Wall Street, nor does it really care if it meets Wall Street’s expectations. Apple cares if it meets and exceeds its customers expectations. If it does that, then it’s a job well done and Apple can move on to the Next Big Thing.

    1. All true. Also, if Apple can’t bring value to a market within a specific margin (which looks to be around 30%), they keep innovating on design and/or production processes until they can. Or, they don’t go in at all.

  4. More or less, dont build devices with profit in mind, simply make great products that people will want and the profit will happen….

    Company 1: we need to make money. We have to design this product around a plan that will make us money.. The focus is profit

    Apple: shut up about profit and money. I’m more worried about making this thing badass… The money will come. Now shut up and let me focus on making this badass device. We’ll deal with money when they sell out EVERYWHERE.

  5. Jobs never ignored profit; it is the law that the company has to make more than 30% margin (lately, about 40%). Profit was never the goal, but this is totally different thing from ignoring profit.

  6. I love Steve Jobs, but am I the only one who has had enough already of the deluge of “me too” articles about Apple and Steve Jobs that have flooded the internet since Steve’s announcement? I know that no one is forcing me to read them, but that’s not the point. It reminds me of what happens when an emergency vehicle passes by in my neighborhood. As soon as I hear the siren, all the dogs start howling in unision.

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