How Steve Jobs saved Apple by Simplifying
In 1996, Apple was on the brink of bankruptcy. The brand we all know and love today was on the cover of BusinessWeek magazine leading with the headline: The Fall of an American Icon.
Gil Amelio who was known as the "Turnaround Artist", was brought in to turn things around. When Amelio joined the team, he faced five major problems: Lack of money, low-quality products, unfocused R&D, a failing Mac OS and a toxic corporate culture.
Amelio was thrown into the deep end and had quite a bit of work to do. He downsized Apple's workforce by about a third and reorganized the companies product offerings into four groups: Macintosh, information appliances, printers and peripherals, and “alternative platforms.”
The Real Turnaround
This was a good start, but the real change came when Amelio brought back Steve Jobs as CEO. Within a year, things changed completely for Apple. Jobs had one goal in mind: to simplify the business.
He cut all of the desktop models from 15 back to one. He cut all portable and handheld models back to one laptop. He cut out all the printers and peripherals (Yes, Apple used to sell printers). He cut software development. He cut distributors and cut out five of the company’s six national retailers.
He cut out virtually all manufacturing, moving it offshore to Taiwan. With a simpler product line manufactured in Asia, he cut inventory by more than 80 percent. A new Web store sold Apple’s products directly to consumers, cutting out distributors and dealers.
The new simplified strategy was clear. Apple was now in the business of building a small set of products that would change the world. This was all accomplished by process of simplification.
Sometimes businesses mistake narrow for small. They think that if you’re focused in one area, you somehow limit your growth potential.
That simply isn't the case and this is a great example of that.
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(cred: Good strategy/Bad strategy by Richard Rumelt)
Simplicity is one of the key tenants behind flurly. Amen!
Love that!
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