Free Inside Apple: How America's Most Admired--and Secretive--Company Really Works by Adam Lashinsky Page A

Apple, each with a divisional advertising budget. He put an end to that quickly, declaring that from that point onward, there would be one advertising budget; divisions would compete for ad dollars. Jobs would later brag that Apple’s overall ad spending
rose
in short order. Despite the company’s difficult financial position, the consolidation was about a renewed commitment to promoting Apple and its products, and not out of any sense of obligation to one division or executive—nor even to save money. The hottest products commandeered the most ad dollars. The focus obviously paid off, and Apple continued the practice of heavily promoting fewer rather than more products. Once things really picked up, a virtuous halo effect took hold: Heavy promotions of iPods brought people into retail stores, where customers were exposed to Macs. iPod advertising indirectly drove the sales of computers—even if Apple wasn’t currently pumping huge ad dollars into the category.
    The ailing bottom line exposed the need for a healthier corporate structure. Apple was losing money in the mid-1990s despite operating what looked like profitable businesses. An example was its printer division, which according to Apple’s accounting at the time delivered a positive “contribution margin” to the company. Apple printers offered nothing differentiated to customers, however, and a more honest accounting of corporate overheadrevealed the division to be a dog. Printers were among the products that Jobs summarily killed. (The Newton handheld computer, famously, was another.)
    What emerged over the years, as Apple transformed itself from a fallen idol to a world beater, is an organization that tries as hard as any big company can to embrace the ethos of a start-up. The benefits are not always obvious to those outside 1 Infinite Loop. With a handful of bold steps such as insulating all but a few employees from the profit-and-loss figures as well as using an extreme form of accountability, Apple has created a work environment where employees are encouraged to think big thoughts yet mediocrity becomes quickly exposed.
    Jobs often told audiences that there were no committees at Apple. Ex-employees have questioned this assertion, pointing to entities that looked and sounded like committees, including an international pricing committee and a brand committee. What they don’t dispute is that Jobs fostered a culture that eschewed standing, task-oriented groups that deflected attention from the primary and single-minded goal of executing Apple’s plans. “The reason you have committees is that you have divided responsibilities,” Jobs said. “We don s“We dt. At Apple you can figure out exactly who is responsible.”
    The notion of responsibility is enshrined at Apple in a company acronym, the DRI. It stands for “Directly Responsible Individual,” and it is the person on any given assignment who will be called on the carpet if something isn’t done right. Interestingly, the term
DRI
predates the return of Steve Jobs. For him, responsibility was part of Apple’s culture, not a word in an acronym. Employees many rungs down the ladder from the CEO echo the sentiment. “Whenyou talk to people at Apple, they can tell you in general what they do,” said a former senior hardware executive. “When you interview people at other companies it is amazing how few of them can say what they do.” Reported another departed employee, this one from Apple’s marketing ranks: “There’s no confusion as to who’s going to do what. It’s very detail-oriented. I tried to bring this to other places, and they were like, ‘What do you mean?’ They wanted two to three people to have responsibility.”
    The DRI is a powerful management tool, enshrined as an Apple corporate best practice, passed on by word of mouth to new generations of employees. “Any effective meeting at Apple will have an action list,” said a former employee. “Next to it will be the DRI.”