Apple’s Rotten Core Competency?

Apple’s board is growing impatient and is calling for increased innovation as they try to put the loss of Steve Jobs behind them. At the same time, projections indicate that their anticipated product changes will be incremental at best. A recent article coins the term “frosted glass effect” to describe the incremental innovations that signal a fast moving challenger will soon leapfrog over a stodgy slow moving incumbent (like Apple). Not to be left out, the Onion has entered the fray as well. In short, stakeholders are wondering how critical Jobs was to Apple’s “organizational” capabilities — Has the core competence really rotted away? Some discussions of dynamic capabilities place great emphasis on organizational routines as the key elements that drive the ability to acquire, integrate, recombine and release resources and capabilities (e.g., see Winter). The importance of Jobs, in this case, shifts our attention to key individuals who may be essential components in harnessing and directing routines. Without a rudder, the routines may lose much of their value. Of course, this steers us solidly into a micro-foundations perspective (e.g., see Barney and Felin or Foss)…

Contributed by Russ Coff

2 thoughts on “Apple’s Rotten Core Competency?

  1. Every capability must be matched to an opportunity to create value (shameless self-promotion — see my Annals piece with Sarah Kaplan). This matching process depends on the manager’s perception of both the capabilities (and the routines that underlie the capabilities, and can be reassembled into new ones) and the external environment. If the treatment effect is largely the departure (in this case death) of a hands-on, micro-managing senior leader, then the root cause of a decline in innovation is likely due to a change in the matching — a manager that doesn’t understand the firm itself as well, or cannot see the environment as well. Given Jobs’s history as a visionary, I would suspect the latter. The underlying abilities of the organization (at the routine and capability level) have not changed. This puts the failure mostly (at least in my mind) in the cognitive space, though I admit to being biased.

  2. Pingback: J. Crew’s “Great Man” Problem |

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