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

Typical is the way Apple’s event marketing group prepares a document called “At a Glance,” a detailed schedule for the production of events. Each item, along with the time and place it will occur, includes a DRI. Similarly, in the weeks and months leading up to a product debut, the manual known internally as the
Rules of the Road
has DRIs assigned for even the smallest items. “When we’d go through a launch, each task would have a DRI listed,” said an ex-employee. “That’s the person who’s on the hook.”
    Just as Jobs made
committee
a dirty word at Apple, he also snuffed out that standby of managerial power, the “P&L.” In the rest of the corporate world, to say one manages a profit-and-loss statement is to proclaim one’s domain.
I run my own P&L, therefore I am
. The executive with a P&L has the authority—and the burden—to make profits for the company. Hiring and firing decisions, strategy, and resource allocation belong to P&L-wielding executives, often those with
general manager
in their titles, in addition to some variant of
vice president
.
    Under Steve Jobs, only one executive “owned” a P&L, and that was the chief financial officer. By creating a system whereby only a financial executive would mind the budget, Jobs forced functional executives to focus on their strengths. Managers at all levels of Apple said they rarely were pressed for any kind of financial analysis or to defend decisions based on potential return on investment. Said a former marketing executive: “I can’t recall one discussion when the conversation was about dollars or expenses.” It’s a common refrain when talking to ex–Apple people. The reason they didn’t discuss expenses is almost certainly because their bosses didn’t, either. Jobs held that authority himself and monitored it solely through his CFO. Apple managers and their employees almost behave like talented rich kids: They have access to unlimited resources to do interesting things. They do not have to think about what ideas, components, and experiences might cost. They are only limited by what their “parents” will give them.
    Aside from this removal of profit-and-loss concerns, another way that Apple is at odds with many corporations is in organizing along functional lines rather at lines r than by product groups or other structural conceits. Few big companies are able to organize along functional lines. That’s why above a certain size, big corporations carve themselves up into divisions. Yet the functional nature of Apple’s management is key to its success. When Ron Johnson left Target to lead Apple’s retail effort, he was not given control over retail inventory. Tim Cook, then Apple’s senior vice president for worldwide operations, held this. Johnson didn’t choose which products to put in the stores. He put all Apple products in the stores. Johnson controlledplenty, of course, including site selection, design, real estate acquisition, training, and so forth. In most companies, the executive who runs the commerce website would control the photographic images on the site. Not at Apple, where one graphic arts team chooses images for the entire company.
    In this alternative management structure, executives have limited power but also aren’t expected to have skills that check some all-star management box. You’re hired and appreciated for your ability on the field, not your ability as a coach or manager. Jonathan Ive, widely admired for his design ideas, is considered to have little grasp of finance. This could be seen as a negative: One of the most powerful executives at Apple, one who had the ear of Steve Jobs for years, isn’t viewed as having business chops. The upside, however, has served Apple extremely well. Ive is known to make seemingly unrealistic demands on the manufacturing and operations teams in pursuit of his design vision. Paying for his vision is someone else’s problem, and Apple’s products have been the outcome.