Apple University Dean Shares Deep Dive Into Apple's Organizational Structure

Apple University dean and vice president Joel Podolny today wrote an in-depth article on Apple's organizational structure for Harvard Business Review.

appleparknovember
Titled "How Apple is Organized for Innovation," Podolny's piece delves deep into Apple's structure and how that has helped it grow over the years. Starting back when Jobs took over the company when he returned to Apple 1997, Podolny explains how Jobs fired the managers of each individual business unit and converted Apple into "one functional organization," a setup that Apple continues to have to this day.

As was the case with Jobs before him, CEO Tim Cook occupies the only position on the organizational chart where the design, engineering, operations, marketing, and retail of any of Apple's main products meet. In effect, besides the CEO, the company operates with no conventional general managers: people who control an entire process from product development through sales and are judged according to a P&L statement.

Apple's structure dictates that the people who have the most expertise and experience in a given domain should have the decision rights for that domain, with the company relying on technical experts rather than managers to make key decisions.

applefunctionalorganization
Apple's financial structure, where executive bonuses are based on companywide financial success rather than departmental success, also allows for more freedom when it comes to product decisions because there's not specific financial pressure on a single release. "The finance team is not involved in the product road map meetings of engineering teams, and engineering teams are not involved in pricing decisions," writes Podolny.

All of Apple's managers, from senior vice president and down, are expected to have deep expertise in their area, immersion in detail of the work being done under their leadership, and willingness to collaborate and make collective decisions. "Leaders should know the details of their organization three levels down," is one of Apple's principles.

As Apple has grown, Apple CEO Tim Cook has needed to make adjustments to the structure as Apple enters into new markets and technologies.

The adjustments Tim Cook has implemented in recent years include dividing the hardware function into hardware engineering and hardware technologies; adding artificial intelligence and machine learning as a functional area; and moving human interface out of software to merge it with industrial design, creating an integrated design function.

Podolny's full piece goes into much more detail on how Apple's internal structure works, complete with many examples of Apple's successes. It can be read in full at Harvard Business Review.

Top Rated Comments

az431 Avatar
44 months ago

Them writing an HBR article about innovation is the best indicator they stopped innovating.
Yeah that makes zero sense.
Score: 13 Votes (Like | Disagree)
eastwoodandy Avatar
44 months ago

Sounds great in theory, but in reality, do people really think executives aren't going to direct their attention to financially under-performing units?

If one unit is under-performing, another has to make up for the deficiency in order to maintain company-wide financial targets. Everyone ends up looking at the bottom line.

HomePod not selling well? Let's increase the mark up of iPhone accessories in response.
But there isn’t a HomePod division, that’s the point. The success of the HomePod is spread over most of those divisions, Sales, Marketing, Design, Software, Hardware Engineering etc
Score: 8 Votes (Like | Disagree)
Apple Freak Avatar
44 months ago

Never heard of Apple University
I'd love to attend but you have to be an employee first.


What's baffling is that some people want to work for that company
I'd DIE to work for Apple someday!
Score: 7 Votes (Like | Disagree)
TheYayAreaLiving ?️ Avatar
44 months ago
This will be taught in Grad College in the Business World. Case study time.
Score: 6 Votes (Like | Disagree)
Dekema2 Avatar
44 months ago
Never heard of Apple University
Score: 6 Votes (Like | Disagree)
JPack Avatar
44 months ago

Apple's financial structure, where executive bonuses are based on companywide financial success rather than departmental success, also allows for more freedom when it comes to product decisions because there's not specific financial pressure on a single release. "The finance team is not involved in the product road map meetings of engineering teams, and engineering teams are not involved in pricing decisions," writes Podolny.
Sounds great in theory, but in reality, do people really think executives aren't going to direct their attention to financially under-performing units?

If one unit is under-performing, another has to make up for the deficiency in order to maintain company-wide financial targets. Everyone ends up looking at the bottom line.

HomePod not selling well? Let's increase the mark up of iPhone accessories in response.
Score: 5 Votes (Like | Disagree)

Popular Stories

Beyond iPhone 13 Better Blue Face ID Single Camera Hole

Six Reasons to Wait for Next Year's iPhone 17

Thursday February 22, 2024 4:20 am PST by
Apple's iPhone development roadmap runs several years into the future and the company is continually working with suppliers on several successive iPhone models concurrently, which is why we sometimes get rumored feature leaks so far ahead of launch. The iPhone 17 series is no different, and already we have some idea of what to expect from Apple's 2025 smartphone lineup. If you plan to skip...
General Apps Messages

iOS 17.4 to Add This 'Groundbreaking' New Messaging Feature

Friday February 23, 2024 5:05 am PST by
With iOS 17.4, set to arrive in March 2024, Apple is bringing a new cryptographic security feature to iMessage called PQ3. This "groundbreaking" and "state-of-the-art" protocol provides "extensive defenses against even highly sophisticated quantum attacks," according to Apple. Let's break down what that means. Apple's iMessage service already supports end-to-end encryption, but security...
iPhone Notch

Apple Explored These Notch and Dynamic Island Designs for iPhones

Friday February 23, 2024 2:05 pm PST by
With the iPhone 14 Pro models in 2022, Apple introduced the Dynamic Island, which can morph and expand to display system alerts, sports scores, and a variety of other information. The feature makes the space surrounding the front camera and Face ID sensors useful compared to the notch on older iPhone models. Apple explored a variety of ideas for the iPhone's notch area over the years before...
New Macs iPads iOS 17 4

What to Expect at Potential Apple Event in March: iPads, Macs, and More

Friday February 23, 2024 8:35 am PST by
Apple often holds its first media event of the year in March, so the company could be just weeks away from announcing new products. Below, we have outlined what to expect from a potential Apple Event this March. Past Apple Events in March Apple has held five events in March since 2015:Monday, March 9, 2015 Monday, March 21, 2016 Tuesday, March 27, 2018 Monday, March 25, 2019 Tuesday,...
iOS 17

When Will Apple Release iOS 17.4 for iPhones?

Friday February 23, 2024 11:56 am PST by
Apple has been beta testing iOS 17.4 for nearly a month now. Below, we explain when the update is likely to be released to all users. In its press release announcing major App Store changes in the EU, which were implemented in response to new regulations under the EU's Digital Markets Act, Apple confirmed that iOS 17.4 will be released at some point in March:Developers can learn about these...
iOS 17

iOS 17.4 Coming Soon With These New Features for Your iPhone

Monday February 26, 2024 6:08 am PST by
In a press release last month, Apple confirmed that iOS 17.4 will be released in March, and the update includes several new features and changes for the iPhone. Key new features in iOS 17.4 include major App Store changes in the EU, Apple Podcasts transcripts, and an iMessage security upgrade. The update also adds new emoji and includes preparations for the launch of next-generation CarPlay...