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8 Leadership Lessons From Apple And Samsung

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Apple and Samsung both made major announcements in the past month. iPhone 5S and C, a curved glass
Samsung phone, 64 bit processors, fingerprint privacy control and more.
What the companies said to the world reflects two very different strategies. But both excel at what they
do. Apple is the most successful service company on the planet. Samsung is a manufacturing and
innovation powerhouse. What have we learned from them in recent weeks about where strategy and
leadership should focus?
The short answer is we are learning about how the future of business is being bedded-in by two
extraordinary practitioners. The longer answer is we can also learn a lot from the conflict between them:
1. Business is about the platform. Apple is no longer a product business, despite the apparent
dependency on the iPhone. It is a platform business and its leadership lies in continuously developing the
potential of its platform. If you want an insight into Apple, look at the iPhone 5S. Its major innovation is
the A7 chip and what that does is open up a new word of service contextual computing for example, and
interaction with data rich services in monitoring, personal data, health data, location services etc. Apple
continues to win on profits because it has mastered, indeed is inventing, platform and ecosystem business
strategy.
Look at the form-factor of the iPhone and you see it is more or less unchanged. The 5C has different
colors but there is no underlying innovation to go with them no innovation in material to justify the
superficial design change. In fact the 5C is an anti-Ive product. A designer of Ives stature should not slap
color on a phone without some underlying justification like making use of a ceramic or other innovative
material. But thats ok, because Apple is innovating the platform and it has not been swayed by criticism
of the product. Thaats how it keeps Samsung at bay.

Leadership lesson? Leaders need total focus on business transformation from product to multiple
services and revenue streams built around platform and ecosystems where possible. Its a really durable
competitive position to build.
2. Making the big calls still matters. Samsung responded to Apples iPhone 5S A7 chip by saying it too
was ready with a 64 bit processor. It pre-empted Apple with a wearable device the Galaxy Gear smart
watch. And launched the new Note, having already launched 4 flagship S4 phones, its ATIQ range of
tablets and laptops, and various low cost phones during the year.
Samsung has created an entirely new pace of innovation in hardware, turning technical novelty into a
commodity that only it has mastered. To do that though requires big calls on future technologies.
Samsung took 10 years to develop efficient production of OLED, its display technology. The investments
the company makes are mind-boggling, dwarfing Apple and every other company I can think of. Its
technology investment for 2012 were $41 billion according to Reuters. OLED factories cost billions to set
up and run. Few companies will pony up think Intel in its heyday. But investment muscle is sometimes
the only way to compete with an agile leader like Apple.
Leadership lesson? There is still scope for hardware innovation but the commitments are huge, beyond
the willingness of many western business leaders. Bigger investment risks need to come back on the
agenda.
3. Design is a commodity. Design has become a necessary but not a sufficient ingredient of success. The
Samsung Galaxy Gear is a design failure. The S4 is a success. But, as its compatriot Hyundai has shown,
it is possible to buy success simply because good design skills are now freely available on the market.
There is no longer any excuse for design failure.
But Apple is showing us, ironically, that design is not so central as it was when they launched the iPhone.
The new 5s have the same form factor with a few tweaks. More critical is the design of the overall
package the service experience including what connectivity the service allows.
Leadership lesson? Companies cant afford to overlook great design but nor can they rely on it. Good
leaders will be looking for the next design advantage integrating service, software, hardware and
connection.
4. Charisma is no longer necessary. A development that is difficult for some Apple observers to accept
is that the company is going from strength to strength without the charismatic leadership of Steve Jobs.
Tim Cook has done a great job at Apple, involving teams to help him turn the tanker slowly around.
Samsung is able to respond because of its broad-based innovation capabilities. It can innovate across
chips, materials, displays, production processes, design, all with a view to compensating for its lack of
service skills. Those latter however have to be put in place soon or Samsung will miss the value it is
creating in its customer base. Both companies are showing that large and growing enterprises are still
relevant.
Leadership lesson? Innovation is a broadly based skill set, far removed from the old days when a good
product could meet a big marketing budget and win markets. Its no longer about charisma either but
finding more social ways to bring innovations through to market.
5. Lean is working. Big companies are also rushing failures to market. Apple ad Samsung have both
been there (Gear, some iOS7 features, and Maps!). Whats interesting though is that these supercorporations are trying to be nimble. Despite the wealth and leadership they want to do lean. Yet still they
dont quite know how to set it up so they are not panned. Doing the right PR around lean is a skill for
both to learn.
Leadership lesson? The crowd, the customer base or the ecosystem is essential to your decision making.
Best to be explicit about it.

6. Narrow innovation rules. We dont hear enough about how innovation is changing but it is. Ever
since Chris Andersen wrote The Long Tail in 2004 narrow niche markets have become increasingly
important. Smartphone markets are shaped by the many narrow, self-electing markets of consumers who
buy apps. In effect a smartphone is a narrow innovation platform. But smartphone markets are also
changing. Behind Samsung and Apple a new generation of niche suppliers is growing read abut here in
this Juniper report. The next generation of smartphones will nibble away at Apple and Samsung market
share in the hope or capturing some of the margin.
Leadership lesson? You have to combine the big vision for your company with an appreciation of all the
niches you now need to serve and protect, and a narrow innovation strategy for doing it.
7. Todays markets demand new decision processes. Every corporate leader I talk to says the same.
The rate of strategic adaptation they face is mind-blowing.You can see at Apple and Samsung. Apple
incorporated innovations in Siri, iTunes Radio, iBeacons, multitasking, control center, notifications and
many more in iOS 7.
Samsung gave us 4 S4s and will soon launch a curved glass phone, which will have involved hundreds of
decisions on production line set up. These innovations represent innovation after innovation iTunes
Radio alone involves multiple decisions and negotiations on the business model and where to generate
and distribute revenues, and when (ads, downloads, song royalties). At the same time Samsung has been
trying to generate crowd ideas about future phones, devolving some elements of decision making to its
ecosystem.
If you are not revising your strategy monthly , seeking out advantage in new niches, revisiting your core
skills to see where you can find adjacencies, seeking out new competencies so you can enter new markets,
then your business is at best a commodity one. But most companies are set up with old fashioned
hierarchy-based decision processes (or get hidebound and make no decisions).
Leadership lessons? You cant just delegate decisions, you need new decision models.
8. Be passionate without over-committing. Samsung remains a key supplier of innovation to Apple, like
the A7 chip. Apple and Samsung still work together closely.
Leadership lesson? No amount of passion and commitment should blind you to pragmatic decisions.
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