And the award goes to... the supply chain guy

A recent Wall Street Journal article has a very interesting data point on the impact Apple’s COO Tim Cook has had in the company’s turnaround:

"Mr. Cook joined Apple in 1998 from Compaq Computer Corp. to fix Apple's then-troubled supply-chain system. At the time, Apple was dealing with bloated inventory and an annual loss of more than $1 billion. Mr. Cook was instrumental in closing down factories and outsourcing manufacturing to contractors.“He turned a company that was on the brink of bankruptcy into one that is generating a huge amount of free cash," says Charlie Wolf, an analyst at Needham & Co."
People who preach about innovation love to bring up Apple as an example: how cool the products look, how seamlessly all the products and services integrate as part of a larger system, how delightful the user experience is, and how edgy their stores look and feel.

But what many of them forget to mention are all the behind-the-scenes and not so salient strategies Apple has chosen in order to deliver these customer experiences in a more profitable way: simplifying the product portfolio to reduce manufacturing costs and increase profit margins, making a product available simultaneously in multiple countries to increase product launch impact while reducing marketing costs, making a one-size-fits-all cell phone without a physical keyboard to accommodate any current and future keyboard configuration and decrease localization costs, using open-source FreeBSD as the core of Apple OS X to provide stability to the OS and focus precious development efforts in a market-differentiating OS experience, locating the core of their developers in Cupertino, CA rather than outsourcing development to India to make development tasks more effective and achieve better alignment around user-focused corporate culture, and the list goes on.

All these decisions might not be obvious to many of Apple's users, but they definitely have been relevant in order to turn Apple's inventions into innovations. These decisions that influence both the user experience and the cost to bring it to market are made possible by the supply chain guy. Unfortunately for innovation practice, the work of our guy doesn’t get as much press as the eye-candy photographs of the products. But the reality is that the entirety of product decisions that affect the way you structure your company are equally important to succeed. While a great supply chain will not help you be more innovative (think about Dell’s recent troubles with waning demand in spite of having one of the most sophisticated supply chains), a bad one will definitely keep your great invention from the market way too long. Again, an innovative product can’t succeed without a well-thought-out way to bring it to market.

So how this relate to designers? Face it, talking about supply chain and the way a company structures itself to deliver its products is not the best way to get designers’ attention. All these behind the scenes processes and its consequences can cause designers' eyes to glaze over. "Supply chain" is neither shiny, nor glamorous, does not help win design awards, and is an unsexy term.

But if the designers’ goal is to really help companies to launch successful products, they really will have to start thinking about it next time they present their glossy reports to clients. No doubt clients will ask: “And how will my company launch this product?”

The answer "focus on the user experience" is not enough for a company, it is just the starting point. Companies need a routing plan. They need to find out the best and most creative ways to organize themselves in order to deliver (supply chain). Different products require organizations to structure themselves in different ways (supply chain, again), and innovators have to pay close attention to this if they want to increase the chances of market success.

So here is my message to all the judges that give yearly innovation awards. The next time you give an innovation award to a designer with black frame glasses and blinding white shoes, please have another one for the supply chain wiz who orchestrated the whole show to put that designed experience in the users’ hands.

update: An example of how efficient Apple is at running their business, look at this graph that shows their really high operating profits of the market compared with its revenue. [Apple Is In The Middle Of The Pack On Revenue, But Crushing On Operating Profit]

[photo: dead reckoning]