I have to admit to a strong bias up front: I love Apple. I think they’re responsible for some of the best technology products our industry has produced in the past 25 years, and I have been a fan of the company since the Lisa (which I consider a prototype for the Mac). I view Steve Jobs as one of the best product managers of all time.

Recently the Apple iPhone made its debut, and once again they have redefined the industry. But when I talk to people about that product, and Apple in general, I’m struck by how many different opinions there are as to what accounts for their success.

I strongly disagree with those that attribute their success to marketing prowess (although I think they’re quite good at marketing).

To explain, I thought I’d talk about the iPhone. Not so much about the specifics of it, but why I think Apple is able to consistently redefine major consumer markets – whether it’s personal computers, digital music players, or cell phones.

There is a great deal to learn from Apple, but to me there are four higher-order lessons:

1. The Hardware Serves the Software

Unlike virtually every other hardware company, Apple understands that the role of the hardware is to serve the software, and not the other way around. The software needs to know what the user wants the phone to do, so hardware technologies like multi-touch displays, and accelerometer and proximity sensors are invented to enable this. Every technology is there for a purpose. That said, while the hardware and software technology are truly impressive, Apple understands that once you get beyond the early adopters, that’s not what people care about. Which leads to the next point...

2. The Software Serves the User Experience

Almost every consumer company out there today gives lip service to the user experience, but Apple means it. Usability, interaction design, visual design, industrial design, are all front and center in the the priorities and it shows. It may have taken two a half years to come up with the iPhone, but the team knew that it was all about the user experience, and they knew they had to move mountains to make the experience great. In addition, they have the talent and persistence at all levels of the company to make this happen. Contrast this with the now famous example of Microsoft’s effort to make even a very minor and long overdue user experience improvement in Vista. However, as fundamental as the user experience is, Apple understands that...

3. The User Experience Serves the Emotion

If Apple has a secret sauce as a technology company, I believe it’s this: They understand better than anyone else the role that emotion plays in getting consumers to crave, buy, and love a product. They know how to create products that speak to these emotions in consumers. People are craving the iPhone. $500 for a phone? No problem at all, because consumers aren’t comparing the iPhone to a Razr or a Treo; it’s in an entirely different league. Take a look around an airport lounge; people treat their PC like a rental car, but they flaunt their MacBook like it's their dream car. And, if you’re brave enough, just try to take a teen’s iPod away from him.

4. The Product Serves a Real Need

Apple products are rarely first to market, but they always speak to a real, unmet need. There are well over a hundred different cell phones available, but it’s hard to find people that actually love their phone. They get frustrated dealing with voice mail systems that haven’t improved in decades, incompatible address books, unusable web browsers, and e-mail hacks. Apple comes along with a product that speaks directly to these unmet needs. The same thing happened with digital music players.

It’s amazing to me how few companies get these points. Even the many companies that are just trying to copy, only think to copy the functionality, and don’t copy what’s really important.

Not to pick on Microsoft, but their recently released Zune product is just too big of a target to pass up. But even if they had done a better job copying the user experience and design, it would have still been dead on arrival. That’s because while Microsoft was busy trying to copy the iPod, Apple was busy reinventing the iPod. As good as the iPod is, the iPhone’s music and video capabilities make it look like ancient history, and frankly make the Zune just look plain silly.

But don’t think this point is just about Apple and Microsoft. I find many of the same parallels with TiVo and their competitors. I would argue that the TiVo team personifies these same virtues, and similarly, while their competitors scramble to copy the functionality, they are missing the attributes that make TiVo the product success that it is.

Whether the iPhone turns out to have the industry impact I’m anticipating still remains to be seen, but in any case, I admire what Apple has created, and the courage and talents of their company to consistently produce the types of products that attracted me to this industry in the first place.

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In the last article, we discussed techniques for getting stuff done in a large company. Now I’d like to talk about the related problem of innovating in a large company.

There is a lot of cynicism out there about whether or not you can really innovate in a big company. Some believe that nearly all true innovation happens in the startup environment, and that the best a large company can do is either copy those innovations or acquire the successful startups. While I agree that it is certainly much easier to innovate in a startup, innovation most definitely can happen in larger companies as well.

Unless you’ve worked at one of these large companies, you might be surprised to hear that innovation is even a problem. After all, we hear so much about it, and see the success of large technology companies, so we naturally assume that innovation is powering all this growth. But as we explained in the last issue, as organizations get larger, they invariably become more conservative, and less willing to take risks. Again, this is because large companies have much more to lose than smaller companies, so they get good at protecting what they have. But there are also substantial advantages to shipping product from a large company, and despite their risk-averse nature, your company does need you to innovate.

The two biggest factors influencing your ability to innovate in a large company are your corporate culture and your manager. In my experience, there is much that the typical large company could do to improve the ability of their employees to innovate. What I want to discuss here is what you can do even if you find yourself in a team and an organization where innovation seems difficult. So here are several techniques for coming up with the innovations your product is looking for:

- Innovation via the 20% Rule.

Many of you have heard that at Google, the engineers get to spend 20% of their time on the projects of their choice. More than 20 years ago, this was also the policy for our team at HP Labs, and we borrowed the idea from Xerox PARC. It worked then and it still works now. At HP Labs, our job was to come up with innovative technologies that the product divisions could then incorporate into commercial products. In the group I was in, we took five new products to market, and only one of them was for a technology that came from above (and that product was the one that actually failed badly in the market). The other four innovations were fruits of the 20% rule.

As much as we might like to think that the great product ideas are the result of great strategic planning, and come down from the executive team, in many cases, the best ideas come from the bottom up. What’s great about the 20% rule is that so many ideas can be tried out. And when you inject the feeling of ownership that comes with coming up with the ideas yourselves, the ideas are pursued with more passion and creativity.

If your company does have the 20% rule, make sure it applies to product managers and product designers as well as engineers. Unfortunately, most companies don’t have the 20% rule. That’s a shame, and I hope you forward this note around and that management decides to give it a try. But if not, that’s why skunk works was invented...

- Innovation via Skunk Works.

Skunk Works is a very old industry term that originally referred to secret military projects, but today refers to chasing ideas under the radar, unhampered by bureaucracy, on your own time if necessary. Skunk works projects have saved countless large companies.

In large organizations, it’s hard to get permission to officially explore ideas. However, once you have proven an idea, it’s remarkably easy to get the project funded. So long as you continue to carry out your official job responsibilities, I have always found that management is supportive – many times they’ll even pitch in and help.

Just remember that your company likely owns the intellectual property of anything you come up with, so I’m not suggesting that this is how you pursue your new startup idea. Although, if you do chase a skunk works idea, and the result looks good but your company doesn’t want to pursue for whatever reason, you might want to discuss an arrangement where you pursue the idea on your own. Those of you that know your Silicon Valley history may recognize this situation as the birth of Apple Computer when Steve Wozniak’s employer HP wasn’t ready to enter the personal computer market.

- Innovation via Observation.

One of the easiest ways I know of to innovate is to just watch (and listen) as actual users attempt to use your current product or a competitor’s product. Watch a few of these sessions and you start to see patterns of frustration and expectations. Watch some more and you’ll start to get ideas as to how to better meet the needs. Bring in an engineer that is familiar with the available technologies, and together you will start to come up with better ways of solving the problem.

The key is to get the product in front of actual target users, not early adopters, and certainly not anyone from your company (including you). You don’t need formal usability testing labs either. You can do this informally, and you can often take the software out to the users (ideally in their native habitat – their office, their home, the mall).

And you don’t just care about whether the software is usable or not. You care about whether or not the software is meeting their needs. Even if it’s usable, do they care? What problem do they really need solved?

Remember that innovation is rarely about solving an entirely new problem. More often it is solving an existing problem in a new way. So watching people struggle with their existing solutions is a great way to highlight innovation opportunities.

- Innovation via User Experience Design.

Another good source of innovation is to step back, relax your technical constraints for the moment, and consider what the ideal user experience would be for your product. Not just more efficient implementation of tasks, but eliminating tasks altogether. What is really essential, and what is there because it’s a side effect of the way the product is designed and built?

Every system has an implementation model that is the basis for how the product was built. But the user doesn’t think this way. He has a conceptual model in mind for how he wants to think about this problem and what he expects the system to present. Frustration happens when the user is presented not with something that reflects his conceptual model but instead reflects the implementation model.

When you spot these incongruencies, you have identified an opportunity for innovation (or at the least, an opportunity for significant product improvements).

- Innovation via Acquisition.

Finally, we do need to talk about innovation via acquisition. Many product managers view an acquisition as a failure on their part. But in truth, acquisition can be an excellent technique for innovation, especially in areas where the risks are high. Essentially the company lets dozens of startups test the waters, try out their ideas, and the few that work out may be good candidates for acquisition. Not only does this sort of acquisition bring in new innovative technologies, but they also come with new blood with new ideas that you can then leverage.

I encourage product managers at large companies to reach out and establish relationships with interesting related startups. You can often help, and learn from, each other, and the nurturing you do might just save your company millions. There are many cases out there where the company that was acquired did not just choose the highest bid, but the company that also had the people they wanted to work with.

It is important that the acquisitions are handled well, as we all know most aren’t, but realize that innovation via acquisition is a powerful tool for large companies to keep expanding their offering and maintaining leadership.

So I hope you’ll try out some of these techniques. Your company truly does need you to innovate. Peter Drucker said “Every organization needs one core competence: innovation.” Innovation can absolutely happen in large companies. If you’re still not convinced, just take a look at www.apple.com/iphone.

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Many of my readers work in large companies, including Adobe, Amazon, AOL, Apple, eBay, Google, Microsoft, PayPal, and Yahoo, and two of the most consistent themes from your questions and comments are: “how do I get things done in a large company?” and “how do I innovate in a large company?” In this issue and the next I want to tackle these two related topics, as I have worked in several large companies, and while it’s not easy, I do believe that those that figure out how to leverage the considerable resources of their company bring a substantial advantage to their product.

For those of you not in a large company, as your company grows, you’ll likely face these issues too. And if you partner with any of these large companies, you are effectively in the same boat, and you’ll get more out of the relationship if you can understand how these companies work.

In this issue I’d like to focus on techniques for getting things done; especially getting the organization behind your product, and getting your product designed, built and launched.

But before we get to the specific techniques, there are two important points to understand:

First, it’s critical to realize that an underlying dynamic in large organizations is that they are generally risk averse. This is not an accident. This is because large companies have much more to lose than smaller companies. It’s one of the biggest cultural changes that comes with success and growth. It’s also why it’s so much easier to innovate in a small company. So first and foremost you need to realize that you will have to deal head-on with the many mechanisms that large companies put in place to protect what they have accumulated. Start by memorizing this paragraph.

Second, in many of these same organizations, they have at least some degree of matrix management and shared resources, where key members of the product team (most often design, engineering, QA, site operations and marketing), are shared resources, and your project needs to secure the necessary people from the pool in order to staff up and create your product. It’s not that this organizational design is particularly effective – it’s just that this model has significant cost savings over project-oriented approaches (where much like a startup, you assemble a dedicated product team for the life of the project).

With these points in mind, here is a list of ten techniques for getting things done in a large company:

1. Learn how decisions are really made in your organization. Every organization is different. The key is to learn and accept how things get done in your organization. Don’t try to change the culture. If you want to succeed in your company, you’ll need to embrace it. Learn to love it. And be sure you look closely. Despite any formal decision processes that may exist, don’t be surprised if your company requires one key person (or a few) to buy off on any significant decision. If this is the case, at least you know who you really need to convince, and then you can work on the best way to reach that person. And you’ll need to learn how that person makes decisions; for example, does he base his decisions on a demo, or market data, or on customer commitments and testimonials?

2. Build relationships before you need them. If you want to go it alone, you might want to consider a startup, as large companies are all about people working with and depending on each other. You need to figure out all the people across the company that you might have to depend on to get your product designed, built and launched. It’ll probably be a long list. But well before you need the help of these people, you should introduce yourself, ask how you can best work with them, and start getting them excited about what you’re working on. Try to figure out if there’s anything you can do to help them in their job. Make friends.

3. Long live skunk works. It really is easier to beg forgiveness than ask permission, especially in larger companies (see the point above about risk aversion). If you have a product idea, you can create a PowerPoint presentation and propose it through the proper channels, but it’s all too likely that the idea won’t go anywhere. However, if you take that idea, along with a few like-minded friends from across the company, and you flesh the idea out into a prototype, then if the idea is a good one, you’ll be stunned at how quickly the resources of the company will line up to help. Countless great products were launched this way. More on this point in the next article on innovation, but for now, know that your idea will have a much better chance of getting traction if you can actually show the idea works, rather than just talk about the idea.

4. Be willing to do whatever it takes. One of the great ironies of large companies is that even though there may be thousands of employees, it can often be impossible to get someone to help when you need them. Even when management is very willing and supportive, there may be no suitable resources available. In this case, you may need to get creative. You might be able to find some funding for a contractor, or call in some favors, or you might have to pitch in yourself. With a large company with formal processes and deliverables required, it may very well be easier to step in and perform the task or create the deliverable yourself rather than fight the process. I know of many cases where the product manager needed to help out with deliverables for customer support, sales training, technical writing, QA, engineering, and marketing. You may need to just do it.

5. Pick your battles. The most effective people in a large organization have far more friends than enemies. Getting things done in a big company isn’t easy, and there will be many situations where you’ll have good reason to be frustrated, but you need to pick your battles carefully. Make sure you pick something worth fighting for, where the outcome truly matters. And when you do fight, make sure you’re fighting for your product and not against another person. Try to bring the company along with you and not back your adversaries into a corner. You don’t want to win the battle only to lose the war.

6. Build consensus before important meetings where decisions are required. Always keep in mind than once someone opposes your position in a broad and public way, you have a major problem. It will not be easy for that person to publicly switch positions. In the long run, it takes much less time to build consensus beforehand when the outcome is important. In a large company, the main value of these decision meetings is for everyone to see everyone else in the same room indicate their support for your product or decision. So make sure that before any big meeting (or before sending out an important e-mail), talk one on one with each person to make sure they have a chance to privately voice any concerns to you, and that you have adequately addressed their concerns, and that they are now on board and are willing to indicate this publicly.

7. Be smart about how you spend your time. It is all too easy in a big company to get sucked into a week full of non-stop meetings. At the end of the week, you will have rushed from meeting to meeting, and stayed up late just trying to keep up with your e-mail, but you will have not actually done the things that will make a real difference to your product. Make sure you triage your meetings ruthlessly. Attend the meetings you must, but get used to trusting your colleagues to do their jobs and know that they’ll let you know if something really needs your attention. Most importantly, make sure you have the time during the week to work on the items crucial to the success of your product: your product strategy, your roadmap, the current prototype of the next release, your understanding of the competition, and especially talking to actual users and customers.

8. Share information. Communication is a hard in any organization. In a large company, communication is a serious challenge, and information becomes like a currency. Unfortunately, many people treat it like currency and hoard it rather than sharing it freely. Don’t take the view that information is power. You have more to gain by sharing, and hopefully others will reciprocate and help keep you informed as well. So anything you can do to help your colleagues by providing useful information as soon as you get it is good for you and good for your company.

9. Put your manager to work. In a large company, your manager can make a big difference to your success. Assuming your manager is reasonably well regarded, you should leverage his or her relationships, and use your manager to get a better understanding of the company and your management chain. Make it easy for your manager by doing your homework and providing the information he or she needs to make your case to others. Make sure your manager knows he or she can trust you talking to all levels of the organization.

10. Evangelize! In a large company, the need to evangelize never stops. You need to continuously spread the word, explain the vision and strategy, demo the prototype, and share customer feedback. Don’t underestimate the importance of this internal sales function. Make sure everyone even remotely connected with your product understands why the product is important, and how they can help.

While it is undeniably hard to overcome the internal obstacles and get the considerable resources of a large company focused on your product, the benefits can be tremendous. You will get a level of attention from the press, industry analysts, partners, customers and users that the small company couldn’t buy at any price. So it definitely pays for you to learn how to use the assets of your company to the fullest.

A special thanks to David Weiden for his contributions to the above list. David is now a VC with Khosla Ventures, but I know him as an exceptional product management mind, and one of the best at successfully navigating large organizations. A great closing quote from David, which I think sums up nicely the situation and opportunity for many people in large companies: “Most people wander around in the dark and bitch about it being dark, instead of learning where the light switches are.”

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