If He's So Smart...Steve Jobs, Apple, and the Limits of Innovation

By: Carleen HawnWed Dec 19, 2007 at 12:46 AM

The battle over digital music is just another verse in Apple's sad song: This astonishingly imaginative company keeps getting muscled out of markets it creates. So what does Apple have to tell us about innovation?

The real problem, according to Kay, is the enormous investment that Apple must make to open each retail location. Apple is holding leases on some of the most expensive real estate in the country, in places such as tony Michigan Avenue in Chicago and New York's trendy SoHo. And then there are those Tuscan stone floors. "Apple is creating a boutique environment, and they're doing it in a very expensive way," says Kay. "It doesn't seem very reliable as an approach for selling large quantities of goods."

Johnson argues that it's far too soon to claim success or failure on the issue of overall market-share growth--but that the retail stores are a very definite success. "Wal-Mart has taken 40 years to get where it is today," he says. "We've been open for just over two years. As we continue to add more and more stores, you'll see. We will move the needle." -Alison Overholt

Sidebar: Getting Innovation Right

If Apple teaches us anything, it's that effective innovation is about more than building beautiful cool things. A few thoughts for innovating well in your own shop:

Not All Innovation Is Equal
Technical innovation will earn you lots of adoring fans (think Apple). Business-model innovation will earn you lots of money (think Dell).
Innovate for Cash, Not Cachet
If your cool new thing doesn't generate enough money to cover costs and make a profit, it isn't innovation. It's art.
Don't Hoard Your Goodies
Getting to market on time and at the right price is vital. If that means licensing your idea to an outside manufacturer or marketer, do it.
Innovation Doesn't Generate Growth. Management Does
If you covet awards for creativity, go to Hollywood. Managers get rewarded for results, which come from customers.
Attention Deficit Has No Place Here
Every innovation worth doing deserves your commitment. Don't leap from one new thing to another. If your creation doesn't appear important to you, it won't be important to anyone else.

Carleen Hawn (chawn@fastcompany.com) is Fast Company's West Coast bureau chief.