Change is inevitable in the contemporary business world. As argued by Jain (2014), the political, economic, social, technological, marketing, and competitive environments have become very dynamic. Vast new labour pools and markets have opened up, new technologies have rendered once dominant business models superseded, and investor demand and capital flows have become less and less predictable (Ionescu & Bolcas 2015). As a result, organizational change has become a perpetual feature in the business landscape. To adapt to the changes and the accompanying challenges and opportunities, businesses have become more complex in regards to the strategies they apply to ensure successful change management. This is especially important when they are dealing with strategic change. According to Graham and Hede (2016), some companies have failed terribly in their quest to implement strategic changes. In contrast, there are many cases of businesses that have implemented changes successful and as a result achieved an edge in their respective markets. Research shows that the different outcomes have everything to do with the approaches followed by businesses when implementing change (Campbell 2015). If implemented in the right way, strategic change can boost the performance of a company and lead to sustainable growth. On the other hand, ineffective change can even lead to business failure or collapse (Ionescu & Bolcas 2015).
This report evaluates the way Apple Inc. has managed strategic change and how this has enabled it to maintain a competitive edge even when its peers are struggling to remain afloat.
Apple Inc. is an American global technology corporation headquartered in Cupertino, California. The company designs, creates, and vends computer software, computer hardware, consumer electronics, and online services. Apple’s hardware products include the iPad tablet computer, the iPhone smartphone, the iPod media player, the Apple TV, the HomePod, the Apple Watch, and the Mac personal computer. Its consumer software products include iOS, and MacOS operating systems, the Safari web browser, iTunes, and iLife among others. The firm’s online services include the iOS App Store, the iTunes Store, iCloud, and Apple Music (Hasan 2013). Apple is ranked first among largest information technology companies in the world by revenue and the third largest among mobile phone producers, behind Samsung and Huawei. It is also the most admired company globally. Apple’s success can be attributed to its commitment to innovation which enables it to produce cutting edge products (Govindarajan 2010). For example, the introduction of the iPhone smartphone in 2007 revolutionized the world of mobile phones and bolstered its overall market position. Many attributed the success to the former chief executive officer (CEO) and co-founder Steve Jobs (Mallin & Finkle 2011). In 2011, however as a result Steve Job’s health condition, Tim Cook took over as the company’s CEO and has still managed to lead the company successfully to date. Apple, just like any other company, has had a share of its inadequacies especially in the past.
Apple Computer Company, as Apple Inc. was initially referred to, was founded in 1976 by Steve Wozniak, Steve Jobs, and Ronald Wayne. However, the company made significant progress in 1977 when it introduced Apple II (Lusted 2012). By 1984, Apple had already achieved success with the creation of the Macintosh, which was the first personal computer to be traded without a programming language (Lusted 2012). Initially, this computer sold very well. However, as a result of its limited range of software and high price impeded sales growth. Consequently, the company introduced the LaserWriter, laser printer, which was sold at a reasonable price to boost the company’s performance. Power wrangles between the then CEO John Sculley and Steve Jobs ensued in 1985 and it was not long before Jobs was stripped of his managerial duties. This decision saw Jobs resign and start another company NeXT. Wozniak also left Apple to pursue other business ventures. After the departure of the two co-founders, Apple continued to change, with an aim of improving, the Macintosh and other product lines. The company also initiated other product lines that were priced lower than the Macintosh which remained expensive, for example, the Macintosh LC.
From 1991 until 1997, the management at Apple started to restructure its business as result of business decline (Hasan 2013). The company experimented with many unsuccessful consumer products such as digital cameras, video consoles, speakers, portable CD audio players, and TV appliances (Mallin & Finkle 2011). Enormous resources was used on these products, but the company did not achieve any meaningful returns. Apple main competitor during that time, Microsoft, continued to gain more and more market share. The firm at some point sued Microsoft for using a GUI similar to its own. This lawsuit dragged for some years and made it hard for Apple to focus on its products and how to achieve customer satisfaction. As a consequence, it suffered missed deadlines and a bad reputation which saw Sculley being replaced with a new CEO Michael Spindler. In 1994, Apple allied with Motorola and IBM with the hope of using the alliance to create new computing platform (Lusted 2012). Nevertheless, this did not do much to improve the company’s overall success as it continued to incur great losses. Spindler was succeeded by Gil Amelio as CEO who made various changes to Apple including extensive cost cuts and layoffs. During the same period, the CEO also made the decision to purchase NeXT and bring Steve Jobs back (Lusted 2012).
Amelio concluded the NeXT deal in 1997, bringing Steve Jobs back to the company and assigning him the role of an advisor. After the return of Jobs, Amelio’s tenure did not last for long as in the year he was expelled by the board for failing to improve the company’s stock price. Jobs took over as an interim CEO and immediately started to restructure the firm’s product line. Through Jobs’ efforts, Apple announced the Apple Online Store in November 1997. In 1998, the company introduced Macintosh 128K: the iMac. Moreover, Apple also purchased a number of companies to improve its digital production software (Lusted 2012). The following years, under the leadership of Steve Jobs, the company continued to redesign its products and eventually stripped down its product line to just four products including iMac, iPhone, iPod, and iPad. From 2007 to 2011, Apple’s success was greatly attributed to its mobile devices (Sayyed 2017). Apple made drastic changes to its strategic direction since Jobs took office in 1997 and this helped the company to avoid a collapse that was considered by many as inevitable. Jobs worked closely with other leaders in the company to realize strategic goals. However, many people have criticized Jobs for his autocratic leadership style. Basically, Jobs did seek the contribution of others in decision making but made the final decision. Steve Jobs was succeeded by Tim Cook in 2011 as a result of health problems (Titcomb 2016).
Change Management at Apple
In the earlier years, Apple was not very successful in implementing strategic change. The company made rush decisions with the hope of achieving good results in the short-run (Mallin & Finkle 2011). Basically, the company, through its leadership, made shallow decisions without a careful consideration of the impact this will have on the corporation, its people, and sustained growth. Research shows that this always ended up badly for the company. For example, in 1985, when Steve Jobs and the then CEO Sculley disagreed on the strategies the company should have followed to achieve success, the board moved quickly and removed Jobs from his managerial duties (Hasan 2013). Consequently, Jobs decided to leave and form another company. Fundamentally, the board did not take time to consider the impact their decision will have on Apple’s success in the long-run. Remember Steve Jobs was among the people who co-founded Apple Computer Company. According to the Nudge theory, during change it is essential for change implementers to utilize positive reinforcement to deal with resistance to change (McCalman, Paton, & Siebert 2015). Instead of the board make speedy decisions, it could have looked for ways to convince Jobs to appreciate their vision and in the process, it would have avoided losing the founder who was dedicated to the company’s success.
In the past, Apple’s leadership also made all the decisions regarding change without involving other stakeholders, especially employees. For instance, the first CEO was consumed with introducing new products and culture without involving employees in the decision making process (Lusted 2012). Consistent with Kotter’s change management theory, successful change implementation involves creating an urgency for change. At this stage, change implementers reach out to other stakeholders explaining why change is needed and how this can be achieved (Kotter 2012). Doing this gives other players in an organization to share their view and opinions and in the process help the management to determine whether change is really necessary. Apple’s first CEO and those that succeeded him were only interested in leaving a legacy that they ignored employees ideas (Hasan 2013). In the end, the made poor change decisions that ended in failure. In essence, they did not prepare the organization for change and also did little to learn from their past decisions. Apple’s leadership did not also get the change vision correctly. This destabilized Apple as it did not focus on one business model and have a clear vision regarding where it intended to be in the future. The company also failed in terms monitoring and reviewing change. This made it hard for the business to learn from its past experiences and make improvement to achieve better results (Sayyed 2017).
The leaders at Apple relied on the same leadership style to manage change. Mostly, they implemented change without a careful review of what the impact will have on the organization and those working for it. According to the situational leadership theory, there is no one leadership style that can be applied in all situations. This means that leaders should understand their situation and determine the best strategy to apply to achieve the best results (Graham & Hede 2016). For example, a leader will lead best through democracy while in other situation the best leadership strategy may be autocratic. In change management, a leader should also be able and willing to vary their leadership style depending on the situation at hand. Previous CEOs at Apple failed to appreciate this fact. For instance, they made changes that would affect their employees yet they do not take time to include workers in their decision-making process (Sayyed 2017). According to McKinsey 7 S model, staff are an integral part of a change process. Often, it is the employees who are directly affected by strategic changes in organizations. As such, it is important for their leaders to appreciate the importance of democracy or people involvement in decision making. Fundamentally, Apple’s CEOs such as Sculley and Amelio would have benefited most from varying their leadership strategies during strategic change management (Lusted 2012).
Despite the challenges Apple faced, in its historical past when leaders tried to implement different strategic changes, the company proved resilient. A study carried out by Ahmed, Bwisa, Otieno, and Karanja (2014), revealed that many companies fail in their quest to implement successful strategic changes because they give too easily. Some change implementers in organization easily come to the conclusion that everything is not working when they encounter challenges during change implementation. What they fail to understand is the fact that some changes take time before good results can be achieved. Apple endured may challenges and disappointments in its early years. This led to the board changing the company’s CEOs with an aim of utilizing new skills and knowledge to achieve organizational success. It is through endurance that the company did not collapse in 1997 (Sayyed 2017). The then CEO went to the extent of making the decision to acquire NeXT, a company belonging to Steve Jobs who had left Apple in 1985 (Lusted 2012). This was a bold move that eventually saved Apple. The board was also willing to replace Amelio with Steve Jobs, a decision that paid off as Jobs brought success back. In essence, resilience and bold moves are essential for a company trying to improve its performance through strategic change. When one strategy fails, this does not mean that all is lost (Hasan 2013).
When Jobs came back to Apple, he endeavoured to do things differently. For one, as a new CEO he applied different leadership strategies as compared to what the predecessors did. Jobs understood the need to consult with others and communicating with the team before making decisions that could impact the organization’s success. As argued by Hasan (2013), Jobs was an autocratic leader. Jobs was also considered charismatic. According to the McKinsey 7 S model, the creation of shared valued helps in ensuring successful change management (Graham & Hede 2016). Through communication with other stakeholders and Jobs was able to create shared values and hence did not have to deal with a lot of resistance from other stakeholders. Instead, the then Apple’s enlisted the support that was required to change the organization’s direction (Sayyed 2017). In the same way, studies have shown that the support of top management is an imperative if strategic change is to succeed. Under Jobs’ leadership, top leaders were involved and informed of the change and how it would impact organizational success. With this being the case, they provided the necessary support to guarantee success. According to the ADKAR model, knowledge and ability to bring about change is essential in realizing successful change (McCalman, Paton, & Siebert 2015). Jobs demonstrated that he had both the knowledge and the ability to implement successful change. This helped this leader to get the support needed from employees to spearhead change.
Jobs also displayed exemplary skills and knowledge in terms of creating a clear vision for change. A research carried out by Garza (2013), concluded that many companies and organizations fail to achieve their strategic change goals and objectives as a result of lacking a clear vision. Garza, (2013) adds that these organizations often start well but because they lack a vision, they lose their keenness and direction. Accordingly, failure becomes inevitable. Correspondingly, according to Kotter’s change management theory, to implement change successfully, change implementers must come up with a clear change vision (Kotter 2012). This includes taking into account the creativity, strategy, objectives, and emotional connect imperative to achieve the proposed change. Jobs always had a vision when implementing change. For example, after returning to Apple, this CEO embarked on the road to cut down the company’s product line to a few products. Jobs knew that it was only by focusing on a few products that the company could survive with the few resources and avoid financial woes (Sayyed 2017). The CEO had also learnt from the mistakes made by predecessors by pursuing many products instead of focusing on what the company can perform best. Essentially, Jobs saw Apple performing better with a few products as compared to many. This vision helps Jobs to save Apple when it needed this most (Mallin & Finkle 2011).
During Jobs’ tenure as CEO, the company also adopted the Lewin’s change management model. The aforementioned model emphasizes three important stages imperative for an organization to implement change effectively, that is, unfreeze, change, and refreeze (McCalman, Paton, & Siebert 2015). The first stage involves change implementers preparing an organization for change and explaining to those who will be affected by the change the need to alter the existing ways of doing things. The second stage involves change itself after stakeholders see the need to do things differently. The last step entails ensuring the change becomes a part of the organization. For many years, since 1997, Apple has gone through tremendous changes (Hasan 2013). In all these incidences, the management ensured that people understood the need for change, implemented the change, and then ensured change become a part of the proud Apple culture. Steve Jobs was always in the forefront to see to it that this was achieved. Taneja and Pryor (2014) argue that employees in many organizations have the tendency to resist change especially if they are uncertain of the consequences this will have on their jobs. Moreover, people are more willing to support change when they are involved in the process. The leadership at Apple has always understood this fact ever since Jobs took office. Consequently, this has helped in ensuring effective change management (Sayyed 2017).
Six years ago, Apple underwent a change in its top leadership, a move that left many critics arguing that the new leader could not manage the company as the predecessor had done. Steve Jobs had been the CEO at Apple for more than a decade but had to step aside citing health issues. Jobs had enabled the company to avoid collapse in 1997 to become the most admired company in the world (Sayyed 2017). Many ideas that the company implemented were first approved by Jobs before they could be implemented. Generally, it was hard for many, including scholars, to mention Apple Inc. and fail to mention its CEO (Govindarajan 2010). Thus, many believed that, as result of Jobs leaving the position, the person replacing him would not have what it takes to maintain the success the company had enjoyed for many years. Six years later, reports on Apple’s performance show otherwise. Tim Cook, the current CEO, has managed to lead the company as desired and ensure its sustained growth (Titcomb 2016). Despite applying a different leadership style, as compared to Jobs, Cook has continued to introduce small changes to the firm that aided to remain afloat and guarantee value for money to shareholders. The value for consumers also continues to increase as the company endeavours to produce high quality products that are differentiated from the competition (Lusted 2012).
Since 2011, Apple has been facing stiff competition from companies such as Samsung, Huawei, HTC, and Microsoft among others (Hasan 2013). Additionally, the company has been under pressure to ensure high levels of customer satisfaction through the production of differentiated products. Despite all these challenges, among others, the company has managed to remain ahead of its competition in many regards. The leadership at Apple has focussed on what needs change and not just following what others are doing in the industry (Vergara 2012). When Cook took over Jobs, he made it abundantly clear that Apple was not going to change. Instead of changing everything his predecessor has achieved or was in the process of achieving he focussed on areas that needed change. For example, the company focussed on continuous innovation and improving the environment where its employees worked. Leadership strategies also changed to some extent to adapt to the changing work environment. Specifically, Cook has been viewed a collaborative leader who works closely with and considers the ideas of peers and includes them in decision making. Cook is also viewed as a democratic leader. Leaders at Apple have also applied different change strategies to ensure successful implementation (Sayyed 2017). Kotter’s change management model can be used to evaluate the current strategies employed by Apple, through its leadership, to achieve effective change management.
In the present day, Apple has managed strategic changes by following particular steps that are almost similar to Kotter’s change management model. For one, whenever there is the need for change, the management at Apple ensures everyone understands why this is important and how the change will bring about success to the company. Equally, leaders also explain the impact the change will have on individual employers. Under Tim Cook, collaboration has become a norm (Titcomb 2016). The management also ensures the establishment of a guiding coalition. Cook has been viewed as a team builder through his collaborative leadership style. This has also helped in the creation of strong bonds between employees and hence strong teamwork. Teamwork culture is one of the main reasons Apple has maintained an edge over its competitors. As stated Barratt-Pugh and Bahn (2015) lack of teamwork can be an impediment to effective teamwork. Apple benefits from people working together and having a common goal when implementing change. This has also helped the company to the level of resistance among people whenever a change is proposed. It also take advantage of teamwork to address the issues raised by naysayers during the change process.
As discussed earlier, Steve Jobs always had a clear vision when implementing change (Hasan 2013). The company has remained the same even in his absence. Leaders in the company understand the importance of creating a change vision before embarking on the change itself. Other than leaders, Apple has skilled and knowledgeable employees who contribute to the development of realistic visions that are in line with the firm’s values and objectives. Visions often incorporate ideas from other inventors, social observation, history, philosophy, and arts. After creating change visions, the management communicates the same to employees for buy-in. ADKAR model emphasises the importance of creating awareness to ensure people understand the need for change and the benefits linked with it (Samson & Bevington 2012). As debated by Rana and Vohra (2016), many change leaders come up with visions but fail to communicate the same to their subjects. This not only increases resistance but also make it hard for the subjects to understand the change is needed. In the same way, this can also ruin teamwork as people may not see the need to work together to achieve common goals. Apple has been able to avoid similar problems through communication. Employees or members of the team are also allowed to give feedback to enable leaders make informed decision. The vision then acts as a guidance to successful change implementation.
Apple, just like any other company, also faces some obstacles when implementing strategic changes. In the past, the firm did not perform very well when it comes to removing the obstacles (Titcomb 2016). Currently, its management has mastered the art of dealing with the common obstacles to change management. There are times when some managers and employees feel like the direction the company may be taking will not yield the best results. Through collaboration top leaders reach out to those having concerns about the proposed changes with an aim of addressing their issues even through incorporation of some of their ideas (Sayyed 2017). Change implementers are also provided with the materials they require to effectively implement change. Apple hires the best talent on merit. No one is favoured during the recruitment process. This has helped the firm to maintain a highly skilled workforce. Knowledgeable employees also help in dealing with obstacles such as lack of a skilled workforce, a common problem in other organizations (Lusted 2012). However, Apple does not perform very well in terms of creating short-term wins. This is, to some extent, a barrier to its success. The management always looks at the bigger picture. Jobs shared the same ideas. Cook has also embraced the same culture. All in all, Apple performs well in terms of removing obstacles to change.
Apple has also maintained the culture of letting or giving up. The company has a strong team that is ever committed to seeing things through instead of giving when some things go wrong. For example, in 2012 Apple suffered a failure in the introduction of its map application. Many thought that the company has begun to lose its ability to come up with cutting edge products (Hasan 2013). Nonetheless, this did not stop the firm from trying again and again and eventually it did figure it out. According to the McKinsey 7 S model the skills and competencies possessed by employees working in an organization are an important factor in change implementation (Samson & Bevington 2012). Apple takes advantage of its people’s skills to deal with failures when they arise. Individuals work in teams to come up with innovative ideas that eventual enable the company to overcome its shortcomings. Apple also has a strong management team that does not believe in failing and instead focuses its efforts on finding solutions even if this seems impossible. Investment in research and development also enables the company to deal with its weaknesses with ease (Asdemir, Baowaidan, & Bugshan 2013). The management engages in research whenever they are faced with obstacles and in the process, they are able to come up with new solutions. In general, giving up is never an option in the present-day Apple.
The last step in strategic change management at Apple is always to incorporate the resulting change into the firm’s culture. Leaders at the firm understand the fact that failing to anchor the changes in organizational culture can have a negative effect to the realization of the change goals. Sondhi and Nirmal (2013) debate that failing to incorporate change as part of an organization’s culture can be dangerous as employees can revert back to previous practices and cost the company in question. For example, a company can identify a certain culture that it intends to do away with. If its employees can make the mistake of reverting back to previous practices that can impact the company negatively especially when time and resources are involved. Apple’s management ensures change is accepted, implemented, incorporated, and monitored (Hasan 2013). Through monitoring, leaders are able to determine if the change is working as expected. Moreover, they are able to help those experiencing challenges in adhering to the change.
Effective strategic change management can enable a company to improve its performance and remain competitive in a market. Apple has demonstrated great ability regarding change management. Throughout its history, the company has undergone changes that impacted its survival in the market. In the first years of operation in the market, the company struggled to implement change effectively. However, over the years through learning and effective leadership, it has mastered the art of effective strategic change management.
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