by 
Many businesses worldwide are trying to emulate {complink 379|Apple Inc.}, the world's most successful consumer electronics company. They will most likely fail. Thousands of CEOs and other senior executives will read — or have already read — Walter Isaacson's biography of Steve Jobs in an effort to be more like the late Apple co-founder. They'll probably fail, too. No company is like Apple, and no CEO will ever be like Jobs.
It won't stop the Apple and Jobs wannabes from trying, failing, and trying again with — sorry to say — devastating consequences for their businesses, according to a new report titled “The Perils of Best Practice: Should You Emulate Apple?” from McKinsey & Co. The authors argued in the paper that Apple's overwhelming success and its continued dominance of its segments has resulted in a cult following that's led competitors and many companies in other economic industries to pursue a utopian world of market domination while disengaging themselves from the realities of their industry segments. They said further:
- Managers tempted to distill universal insights from what are in fact exceptional companies put their own businesses at risk for strategic or operational missteps. Yet the desire to emulate is often stronger than mere rationality, even in the face of repeated evidence that most companies won't achieve the anticipated outcomes and that some will suffer a hard fall. Research by our colleagues, for instance, has shown that lockstep benchmarking may lead to “herding” effects that, over time, diminish emulators' margins.
While the McKinsey report used Apple as the perfect example of a company that businesses would like to emulate, its central premise is focused actually on the concept of best-practices and how enterprises, researchers, and consultants have elevated this to the apex of management operations. By learning about and seeking to replicate what others have done — so the concept goes — executives can avoid pitfalls and build successful enterprises. This idea omits one critical caveat, though, and that is the reality that what worked for one company and corporate executive may not work for others, even if they operate in the same business segment.
“Tried-and-true approaches often seem preferable to starting from scratch, whether for developing new products or running efficient supply chains,” noted the McKinsey report. “However, perils abound when truly exceptional companies morph into ever more ubiquitous examples. Observers and management theorists alike, blinded by star power, eventually assume that everything these companies do should be regarded as best practice — often without examining the context in which they derive their success or without parsing the true nature of their accomplishments.”
Of course, it's hard not to want to be like Apple or as crazily successful as Jobs. First, the company's more recent financial results and capitalization are simply extraordinary. Its sales for fiscal 2012 ending September is forecast to jump to $156 billion from $108 billion in fiscal 2011 and more than double the $65 billion it reported only two years ago. Net profits, too, are seen surging to $44.27 per share this fiscal year, from $27.68 in fiscal 2011. At its current net income run rate, Apple is probably the world's most profitable company. This is reflected in the company's market valuation, which now stands at about $658 billion, greater than that of any other publicly traded enterprise and more than the combined capitalization of Google ($238 billion), Microsoft ($260 billion), Hewlett-Packard ($36 billion), Cisco ($101 billion), and Dell ($18 billion).
Why shouldn't other enterprises strive to emulate such an exemplary company to similarly climb to the top of their industry segments? I have two answers. First, few people know the secret sauce behind Apple's success, despite the more than 40 books and thousands of articles that have been written about the company since Jobs died one year ago. Second, just having Apple's formula is not enough to recreate its success elsewhere. Too many other factors must come together nicely, including the right business environment, attractive products, innovative spirit, and coordinated management.
A better answer to the question above came from the McKinsey study. The authors Marla Capozzi, Ari Kellen, and Sven Smit argued that while it is alright to learn best-practices from leading companies and even attempt to emulate them, narrowly focusing on creating another enterprise's success without paying close attention to how these would be applicable considering your company's peculiar characteristics could be disastrous.
They concluded as follows:
- We don't mean to say that companies should never emulate Apple or other truly exceptional businesses. Many companies can draw new insights from Apple's achievements in design, brand loyalty, and retailing, to name a few things. Rather, our analysis is a cautionary tale suggesting that executives take a clear-eyed view of the companies they want to emulate, as well as the returns and outcomes they expect from doing so.
My personal conclusion is this: Your company is not Apple, and your CEO is not Steve Jobs or Tim Cook. There are no ways to emulate Apple to be as successful as the company is today, and while you can learn from its best-practices, some of the knowledge gained won't be applicable to your situation. Plus, can anybody really vouch that they know Apple's true best-practices? Find a way to create an experience and success that is unique for your enterprise.
Apple's prime and unique charactristic is its stupendous innovation capability. It is very difficult to immitate this. On other hand they are too big an organization with very few products in consumer market. So it also does not help to be like them.
But there may be few discrete points to be learned from Apple.
We can't escape from the fact that Apple, with Jobs at the helm, did a lot of things right. Any business stands to profit by at least studying the lessons of Apple's recent success. McKinsey is absolutely right, though, to point out the perils of an half-baked imitation of the corporate juggernaut, and this makes the report a welcome one.
Imitatating Apple is akin to watching Michael Jordan on the TV over and over again in the vain hope of being able to do a double pump backward slam. You need to have the physical attributes, the skill, the flair, the desire, the right court conditions and above all, the tens of thousands of hours of dedicated practise.
Speaking for myself, I believe newcomers or compertitors need to focalize their strategy in trying to be different, instead of trying to “simulate” a “totem” as Apple is. It is not mandatory that newcomers bring on the market exactly the same features Apple provides endusers with; the point is about the value added, not basically in the list of functionalities. Being different could be potentially the key of success.
Dont try to copy someone or some process since it will not do any good to your business. It will only distract your mionde and will be thinking only within the frame of which you copied from. You will never be able to think how it can be applied to your busienss or going beyond of what you copy. Its always good to follow someone since then you know what is needed and what is not and how to improve by adding the extra details.
_hm, The best lesson Apple's recovery and subsequent domination of its market offers any company is the need to review closely the markets you operate in, understand your market segment and then target them with distinct products. Even this doesn't guarantee an Apple-like success.
MBertozzi, Exactly. Unfortunately, there are hundreds of CEOs right now trying to learn the “Apple Way.” Classes are being offered in business schools on the “Apple Model” and the Internet is chock full of seminars offering the “Secret to Apple's Success.” If these teachers really know how to duplicate Apple's success they would be out there duplicating it for themselves.
Thanks for the apt analogy. The ingredients must all be present to get the type of success Apple has had. Then, as in any any chemical reaction, the correct environment is critical and the right mix. Does your company have all these before you set out to duplicate Apple's success is the question companies need to ask.
Stochastic, Executives face a new challenge to be “like” Apple. Shareholders want to invest in companies that are quite as successful as Apple has been and they directly or indirectly pressure executives to become like Apple in sales growth and market valuation. I see one problem here and that is the fact that there isn't room in the wireless market, for instance, for many companies like Apple. The likelihood of a firm like Apple popping out again is limited.
Bolaji: one point cannot be emphasized enough: we really don't know, and never will know, all of the factors that went in to creating Apple. As you point out, there are articles, books, anecdotes and Jobs'/Cook's own words. That's just the tip of the iceberg and for anyone to profess to be “in the know” about Apple is hubris. In the wake of Jobs' death, we've glossed over some of Apple's failures (in retrospect, the 'Lisa” was too advanced for its time, rather than simply being a limited an awkward product.) Is there a lot to learn from Apple? Absolutely. Will there ever be another Apple? Nope. There may be another wildly successful consumer electronics compnay that blows the door off all preconceived notions of the market–but it won't be “Apple.”
@stochastic, it is true that Jobs did many things right to put company back to the forefront of consumer electronic but we should never forget that he also made blunders. The only difference is that last decade had everything right for Apple. One of the reason that Jobs could articulate things right was because of the sheer passion and love for the craft. We can find examples of individual excellence in other industries or sports or arts etc.
I agree that approaching the success of Apple is not about performing similar steps of the key players. You really have to look in a sober and open-minded way at your own capabilities and the capabilities of the organization in which you operate. Perhaps there are opportunities to think out of the box and launch a wildly profitable initiative.
I highly recommend a book by Guy Kawasaki called The Art of the Start. Kawasaki was “Chief Evangelist” for Apple during the launch of the iMac. The book is evidence that Apple didn't achieve success by following certain steps, but by being wedded to excellence.
@nimantha.d: it's the right approach in my opinion; if you aim to copy by learning, it make sense, a lot, but at the end, you need absolutely to put on top your value- added, if you want to become a real competitor / player in the market.
@Bolaji: there are hundreds of CEOs right now trying to learn the “Apple Way”
it should be one of the reasons related to market's crisis; each one of us needs to learn, but the real key is on the value and ideas that we are able to bring, not to copy; maybe a new generation of CEOs is needed…
Lots of great responses and the points about understanding what strategies worked (or didn't) for Apple are certainly useful for brands in any market sector. HAVING a clearly differentiated strategy or a direction which eventually creates that, would be a major breakthrough for many companies in and out of tech.
“Being like” is perhaps the first and biggest mistake many marketers make. Someone looks at a company and says, “Hey, we can make money doing the same thing.” Me too isn't typically a great strategy. Apple hooked itself to trends not to what other companies were doing. Jobs was outspoken about not listening to customers for product innovations and figuring out paths not taken or even seen by others. Their slogan: “Think Different” wasn't just about Apple products.
Citing Marketing gurus Trout & Ries in their “22 Immutable Laws of Marketing,” laws number 7, 8 and 9:
7. The strategy to use depends on what rung you occupy on the (category) ladder
8. In the long run, every market becomes a two-horse race
9. If you are shooting for second place (a follower), your strategy is determined by the leader.
“Why shouldn't other enterprises strive to emulate such an exemplary company to similarly climb to the top of their industry segments?”
To be honest I don't think Apple has a secret formula that should follow if you want to have a successful company. In every final product we have a unique Idea so even if you copy the idea doesn't mean that will lead you to the same successful product.
I agree, Nemos. A large reason that Apple has been sucessful is that they have created products that have really caught on with consumers.
Other way of looking at this is the first 10 years of Apple, not the last 15 years. If one can put effort similar to one Apple did in its first ten years, it is good effort.
Other way of looking at this is the first 10 years of Apple, not the last 15 years. If one can put effort similar to one Apple did in its first ten years, it is good effort.
Exactly Ford, I agree with you, definitely; I have only one topic to point out: who is / are in charge for managing the company. We could absolutely discuss about market's strategy or how to move on for increasing sales, but (speaking for myself) executives need to play their key role in defining them – being responsible for them, avoiding any responsibilities' scrolling out, since the beginning, instead of trying to simulate others.
If I were a CEO of today one simple lesson I would learn from Apple is the conviction that your product is going to surpass all the competition in terms of its innovative features, quality , robustness and aesthetics.
I have seen a couple of examples of such conviction in my country where , a company looked like it was doomed , when it introduced its first indigenous car, survived and won the hearts of the consumers just because of the conviction of its CEO that he had made the right product for the right market.
Ford, I wonder what a company should do if it can't be No. 1 or even No. 2. This scenario is playing out in the mobile phone market. Perhaps it will take time for the winnowing to sort out the survivors (as in the PC market) but the best marketers learn not just how to win but also how to be truthful about their chances when they have a losing hand.
Prabhakar, How do you create such a product that is so compelling it leaves competitors in the dust and how do you ensure it is well marketed? What Apple has done is bring everything together and created not just an ecosystem that brings out the best products and the best marketing.
Bolaji – The answer is create a niche or market where you can become #1. Perhaps you've heard about “Blue Ocean Stategy.” That's complex but many companies have zigged when others zagged and found a place where they can become dominant.
Barbara, social medias have a wide coverage among professionals, especially with youngsters. So presence in the social media networks is the best and easiest way to catch the audience or reaching the customer/public. Since it's very faster than word of mouth/Email communication, there are possibilities to make use of it at difference instances like company announcements or in time require some help or even for disaster management etc. At the same time, if it's not use in right sense, chances for negative impact too.
Well, Apple has a few best-practices but it also helps to prove some marketing principles wrong and make them re-write them.
How do you create a cult-like customer? Where does it start? luck? trying to be very exclusive?
Apple started long ago creating a faithful customer base. The range of compatibility problems faced by PR users certanly helped Apple. They ceded schools with their products and created brand familiarity and preference among young users. As a market share underdog with obvious, positive differences, many people adopted the brand in contrast to mainstream but look-alike PCs. Recall the 1984 Big Brother ad? The preference for a valuable difference, which might be defined as elegant simplicity, as well as industry-leading technologies, has been consistently built on. That's how a cult-like customer base is built. It doesn't occur overnight.
@jacob: agreed. Also, from what I've seen, it isn't just younger people who have embraced it, although they might be more comfortable with it. My peers, or people just slightly younger than myself, are some of the biggest proponents of social media that I know. I look forward to watching it develop
@Jacob,
“At the same time, if it's not use in right sense, chances for negative impact too.”
You are correct. Question is: Should every employees be responsible for the company's announcements on social media?
@Barbara,
The common belief is that new technologies are more embraced by youngsters. But it is good to see that this belief is changing with the rate of social media adoption within all demographics, especially in the professional environment.
I cannot say for sure whether the Supply Chain disasters can be tackled by the social media but the medical emergencies, natural calamities , accidents information spread and emergency help for people who get lost in the wilderness are some of things where the social media can definitely be of help.
I compare today's social media to older generations HAM radios
HH,
“Should every employees be responsible for the company's announcements on social media?”
No. Why should they?
-Susan
Yes to some extent I agree that social media may be good for supply chain management. But we must not forget that in social media there are no restrictions, people can write or behave in any which way they prefer. Sometimes it may be too rude or unpolished. But yes if some of the supply chain participants set up their own social media and only member with some connections to supply chain are allowed/moderated I guess it would be fun, interesting and lots of knowledge sharing and win-win for everyone. I would love to be a part of it 🙂
Well IMO, I feel that copying things will not work for anyone. Get the best out of Apple by studying them and then try to implement it to yours. If you try to copy their model will definitely not match with the business process of yours since they are different from each other.
Social media ia a very powerful tool and can be used to good or poor effect. It all depends upon how it is implemented and managed.
Barbara, you raised a very valid point for a closed collaboration and cloud based solutions are kind of perfect for such things. I recently watched a presentation by a colleague which underline the importance of using cloud services as much as possible for collaboration projects simply because the service is a 24X7 stop. Apart from collaboration, even for personal projects such solutions might be preferred now with the data privacy and security fears subsiding.
@hospice_, i donot know the definition of new technology but web based solutions are evolving with time. Earlier browsing the net has not the same meaning as it used to be. We still have to find a smarter way to use social media and i doubt that non-professional youngsters will have any contribution in that.
“How do you create a cult-like customer?” I think if we all knew the answer we would be duplicating Apple's fanatical following.
@himanshugupta,
The point here is that web-based technologies are being enbraced by everybody, and the trend will continue as more and more people get connected around the world.
@SF,
I didn't say that everybody should. I want to know if employees “be allowed” to post messages about their company on their social media pages or not? Can any employee be allowed to promote the their company on their Facebook pageS for instance? I just want to know what people think about that. I do have my own opinion, but it may not be what everyone thinks.
For me social media is a disaster. I do not see any positive signs which involves social media and disaster management other than you can pass the message to a huge set of people via social media.
HH,
Maybe I misunderstood what you meant
Should every employees be responsible for the company's announcements on social media?”
I thought you meant to ask if all the employees in the company should be responsible for what the ones in charge of posting announcemnets/messages on social media actually post.
So I said that no, not all the employees should be responsible for what some employees post on social media.
“Can any employee be allowed to promote the their company on their Facebook pageS for instance? “
To that I also say no. The reason is because social media should be managed by someone –or by a group– who knows exactly what message the company wants to send. Also, it keeps certain order and knowledge about what has been posted before.
-Susan
HH,
What is your opinion about it?
-Susan
Houngbo,
I don't think everyone (in a company)should post on Social Media.
Too often(if you don't have a designated Social Media Champion) in particular Divisions of a company everything gets so messy and companies fail to present a coherent message to Clients and customers.
Regards
Ashish.
Susan,
I could'nt agree more !!!
My thoughts precisely!!
Regards
Ashish.
You see, Ashish? This is one of those times when we do agree. 😀
-Susan
@SF,
My opninion is that employees can promote their companies online if they want to, but they should not use that opportunity to criticize the company or complain about co-workers or the management. This is not to say that everyone can be the company's spokesperson online, but everybody should be given the freedom to share with outsiders why they enjoy working in that company.
@Ashish,
Of course there should be designated social media champions to represent the company online, but every employee can also get involve in the marketing strategy of the company on social media platforms.
@hospice that's true, but is it fair to demand that of them when it is not an official part of their job description? Just adding on the expectation as a sign of loyalty is tantamount to adding on extra duties for no additional pay.
While social media may be a good idea to inform your consumers and end-users about delayed shipments if there's a disaster situation, I don't think it's such an effective tool for B2B communication with your suppliers and manufacturers. You need a much more professional and well-designed information system to handle this.
@Hospice_Houngbo: I don't think employees can make that much of a difference when it comes to defaming the company on social media. At the end of the day, they may be a few bunch of “fans” on the company's page out of several thousand others. Their opinion might not matter that much.
HH,
I believe anyone can do that, just using their own social media account, and posting on the company's social media. Eveyone has the freedom to post on social media, what they post is their own responsibility, though.
-Susan
@TaimoorZ, i will prefer not to use social media to inform my suppliers and manufacturers and the reason is plain old fashioned secrecy about them. Using social media will give undue advantage to competitors. Though a company can and should inform unknown customers through social media as a simple and effective way to keep them in the loop.
Barbara, I know some of the companies is insisting their employees for a social media accounts and they have to share the business and product release notes with their friends and groups. In that case they are using the employs social media accounts for company advertisements and like a chain of interconnections with others. From company point of view, it can have a better coverage through employees, the trusted source for spreading the corporate profile.
HH, whether they have to take responsibility for companies announcements? They are only the medium to get connected with more members and they are sharing the news with their groups. So in that case personally I won't take any responsibility.
@Jacob: I can see the advantage of this to the company, but I think success of such a program would depend on the product. I feel blasted by advertising already and I wouldn't appreciate my 'friends' advertising to me. On the other hand, if the company has an account, I would expect to see ads and promotions for products. It gets complicated becuase social pages already have advertising on them. Competitors could conceivably advertise on your page as long as they are willing to pay to do so. I think it dilutes the value of advertising and scoial media if social just becomes an advertising venue.
@H_H: I agree with you, definitely; if you want to avoid possible mistakes or disasters in promoting your company b using Socials, it shoud be enough to entitle some one within your company in charge of that role. Not to say I am right, but clear rules and clear internal policy could really mitigate potential “disaster”, in my opinion.
Barbara, I agree with you as an independent reviewer. But when we look from business perspective (Company) they always look for better coverage and mileage like maximum exploitation. For a simple example, suppose we are attending tech workshop or seminars, all the items they distributing (pen, bag, tag, writing pad etc) have each companies name or emblem. Certain times I got surprised, how they can engrave the names and logs in micro-font size over key chain and pens.
@Jacob: absolutely right. A company has to do everything it can to reach a potential customer. And if these things didn't work, they'd have gone by the wayside a long time ago.
True, true! Well, what is obvious is that if you create a really good product, people will go buy it – not minding the premium.
Are cult-base behavior past from father to son? Will Apple become so mainstream that kids will need a “Apple in the 80s/90s” effect and go for a new brand?
After a cult is built, they only need to deliver good products or how is it maintained?
You wish! Some people have said Apple has created a new dynamism in consumer electronics and that its future is guaranteed. That's a fantasy. In time, even today's most modern and desired products lose their shine. The idea that future generations will be as hooked on Apple as today's befuddled generation runs counter to history. Believe me, something better than Apple is getting cooked up.
Bolaji – There's two questions in your comment. If a company can't be #1 or 2 in a market, Jack Welch, a rather estute businessman who drove General Electric to greatness, would say, “Get out.” Alternatively, develop a new business plan that will lead you to a new market where you CAN lead. See Law #2 in Trout & Ries' 22 Immutable Laws of Marketing
The second question seems to be about being straigntforward (new buzzword in play: “transparent”) that your business is tanking and you're taking a new approach. That requires management to admit mistakes. (Not something our culture is real great at.) However, having a plan for what's next and how you can win against competitiors is a great business story that people will want to hear about. Guess the answer is whether the management team has thought through their new game plan and also has the guts to admit errors. “We didn't exactly nail this market but here's how we're coming back and going to become successful.” (Plan B)
As likely you know, the history of Silicon Valley is full of great business people who have failed and failed again and then gone on and done great things. The unique value of the Valley's business ethic is that prior failures aren't held against business people. Typically, everone has been with a company that faiedl. Then we move on to the next gig…a lot wiser!