Apple Identity Re-Analyzed

by Jean-Louis Gassée

This week we use a simple, memorable device that helps us parse corporate verbiage, to sort the important and vital from the supportive, dispensable, and even parasitic.A

Last week’s Naive and Nostalgic Look At Apple’s Business Model, while suffering from the lingering effects of epidural sedation, still generated lively discussions of the company’s future, its business model and identity. Hoping to clarify matters, allow me to introduce a favorite of mine, the Pointed Quadruple:

The Pointed Quadruple comes in handy when we want to describe a business — or any organization, for that matter.

At the top, we have the all-important Identity statement. As the graph suggests, there’s no room for a sprawling testament: A company’s identity must be defined in a few words. A prolix identity statement is the symptom of a fractured identity, usually because management doesn’t quite understand its own business, or is trying to mislead (in both senses of the word).

A few examples will help. Once upon a time, Microsoft had a sharp identity, it was, as the saying goes, written on the tin: Software for Microcomputers (as PCs were once called). Today, the company site offers a metaphysical abstraction:

“Our mission is to empower every person and every organization on the planet to achieve more.”

While the statement is laudably short, it’s vague and inappropriately aspirational — it could apply to any business, government, charity, and even some etiolated religions.

In my mind, Microsoft is more precisely identified as…

“We create business software for individuals and organizations.”

This recognizes Office (and the cloud) as the heart of the company’s business. Microsoft’s identity won’t die if gaming consoles or Surface devices disappeared. Certainly, the Xbox is popular, but it’s not what Microsoft is.

For more examples of strong identity statements we can look to Oracle, which was once sharply defined as a relational database company, or today’s SalesForce, which, after a bit of self-promotion, perfectly describes itself:

We help your marketing, sales, commerce, service and IT teams work as one from anywhere.

Counterexamples abound. I’ll just pick Sony. I should write “Sonies” because it’s hard to crisply define the company, a conglomerate whose activities range from (world-class) digital camera sensors to game consoles, music, movies, and financial services. Instead of an identity definition, the company site carries a Statement of Purpose & Values starting with:

“Fill the world with emotion, through the power of creativity and technology.”

Lame, vague.

A sharp identity statement is needed for an organization to channel energies and desires towards the same goals. Palm made pocket computers, so did RIM/Blackberry. And Nokia once was the world-leading mobile phone maker (100 million shipped in the 2009 Holiday quarter), Compaq made PC-clones. Everyone inside these companies knew what needed to be done and why.

Descending a layer, we see Goals. With more space for words, the goals statement can be more detailed and existential, it can recognize time and money: “By December 2022, we’ll become the number one supplier of high-end electric bikes” or, “Our EBITDA will be $10B next year.”

More words…but concision is still important. A concise goals statement helps every one in the company understand, memorize, and see where they contribute to the current campaign.

Next, the Strategies statement outlines the paths to the company’s goals. More words, more details: “We’ll introduce three new bike models next year, one per quarter, models XT5, XT3, XT2 and XT1” or “We’ll monitor and maintain OPEX at 23% of revenue”.

Finally, the Plan gets as much detail as needed, no restraints required here, spreadsheets, presentations, memos…

Another important element of the Pointed Quadruple is the rate of change indicated by the arrow on the left. Not only do we see more words as we descend the layers, but their content can change more frequently. The plan can change almost daily as a factory freezes or as a competitor surprises us. At the top, Identity should rarely change once it has been solidified unless there’s trouble inside the house, such as a change of leadership.

HP is a textbook example. In the late sixties, the company comprised a constellation of divisions held together by the charisma and skills of Bill Hewlett and David Packard (author of the highly readable The HP Way). The company’s identity was clear, expressed by the motto “Measurement, Analysis, Computation”.

After Hewlett and Packard left, HP began to lose The HP Way. The force of the duo’s leadership was replaced by the demands of the bottom line and the company spun off the electronic instruments business as Agilent. Much later, after the catastrophic Compaq acquisition and a number of bad board moves, HP split into HP Enterprises and HP Inc. The former is a rather indistinguishable enterprise software company and the other “makes” and sells commodity PCs and printers.

We can now turn to Apple’s identity.

Born as a Personal Computer company, Apple hasn’t drifted much from its identity as a maker of personal computers, small, medium, and large. You could argue that Apple’s singular identity has been weakened by ventures such as Apple TV videos and movies, services such as Apple Fitness+, AirPods, AirTags, Apple Pay and much more, but this dilution can be reconciled by sorting the vital from the supplemental.

For Apple, the iPhone is vital, as are the iPad and Mac. All other products and services, however respectable and well-liked, could disappear without changing the company’s identity. Put another way, Apple’s personal computers are at the center of an ecosystem; the ancillary activities contribute to the ecosystem by helping to sell more principal products which, in turn, sell more supporting products and services.

This virtuous circle is an admirable Strategy that fuels the company’s Goals and doesn’t dilute its Identity…although one is left wondering about Apple execs’ vague statements of making “technology that enrich people’s lives”. There’s no specific statement of identity on apple.com, neither in the Values section nor elsewhere.

One also wonders about the fantasized Apple car, for which Tim Cook is rumored to hold a particular fondness. What would it do to the company’s identity?

Apple is also facing the issue of succession. After Steve Jobs left us on October 11, 2011 (nearly ten years ago!) there were many questions about whether Cook could take up the mantel. A decade later, Cook has answered the doomsayers: The company’s personal computer business is more vital than ever.

But now another succession question is raised: Who will succeed Tom Cook? As Horace Dediu tweeted, the Apple Board has certainly already decided. Will it be Tim Cook’s Tim Cook, the well-liked and respected Jeff Williams? Or is Williams too close in age to Cook? Maybe it will be someone like Craig Federighi or Johny Srouji?

I’ll conclude with the Pointed Quadruple’s function as a BS Detector. Applied meaningfully, the Quadruple can finger windy mission statements (decades ago, one Apple exec proposed eight pages, unsuccessfully), and mealy-mouthed corporate web sites. Use it as you please.

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I’ll soon be on a plane to Paris and Deep France. Monday Notes may or may not appear in August

— JLG@mondaynote.com