Innovation, Entrepreneurship and Steve Jobs
Nagji and Tuff (2012) define innovation as a “novel creation that produces value”. Innovation is the process of improving upon a product, service idea or a technology that has been invented, so as to make it readily available in the market. Innovation is significantly different from the word invention. Whereas the word invention refers to the creation of a new idea, product or a technology, Innovation is the process which is aimed at making it better so as to have more practical applications to it in the marketplace.
For innovation to reach the desired audience, in terms of a novel product, service or technology, it requires a medium. The medium is often an individual or a team that brings about the invention and turns it into an innovation and give it a platform for a wider acceptance in the marketplace. The individuals or the team are referred to as entrepreneurs; enterprising individuals who take up the responsibility and related challenges to build capital through risk and initiative. This enterprising initiative or effort can exist both within the boundaries of an established organization, or outside it. In this report we shall look into a product and an individual who I believe was one of the finest innovators and entrepreneurs of our times. We shall also investigate his methods briefly and try to speculate the outcomes had he taken an alternate approach.
The product I believe to be one of the prime examples of innovation is the Apple Ipod. The product is a portable digital music player introduced in the market in 2001 quickly revolutionized the electronics entertainment industry. Soon the ipods became the essential gadget for all music lovers. The tiny device that could hold up to 1000 songs and playlists, offered a unique experience to all the consumers. The ipod soon became a device to not only listen music, but also a symbol of being tech savvy and reflected upon the lifestyle of an individual. The iconic white earplugs soon became a common sight around the world.
The real reason for success of Ipod as a breakthrough innovation lies in its ability to revolutionize the whole music industry by popularizing mp3 as a file format for portable music players. Prior to the ipod, compact discs were the most practical choice available to consumers. MP3’s were scarcely available to buy from records stores and downloading albums took a very long time due to limited bandwidth and internet speeds prevailing in that period. It was the ipod and the subsequent service of software itunes that made available to the public of downloading and buying songs at affordable price. Thus the ipod was an innovation as it could improve upon the inventions of mp3 and mobile music players and combine them to create a product with wide consumer acceptance.
For being a huge commercial success that it became, it revived the fortunes of the company Apple. Since the release of ipod, it accounts for almost 1/3rd of its annual revenue and enable Apple to reenter the list 500 largest companies in the world (Tyrell, 2005). Previous to its ipod digital media device, Apple was strictly seen as personal computer manufacturer. The reason behind Apple venturing into new direction was their CEO Steve Jobs. Steve has been an entrepreneur since his teen years and found the company Apple in his garage in 1976 and made it a household name in the 1980’s. The level of competence of his enterprising capabilities is corroborated by the facts that he went on to create new businesses like NeXT computer and Pixar animations.
However, since his return to Apple Computers in 1998, the approach of Steve Jobs towards innovation has been within the boundaries of the organization. It is here that he went on to design ipod and then subsequently iphone and iphone and ipad, all considered to be landmark products in computer entertainment technology. The act of entrepreneurship that operates within the boundaries of the organization is often referred to as intrapreneurship. Intrapreneurship as a term was coined by Gifford and Elizabeth Pinchot (1978) in and defined them as employee entrepreneurs who work within a corporation.
Needless to say, intrapreneurship is an evolution of the entrepreneurship. However there are few fundamental differences between an entrepreneur and an intrapreneur, as there are similarities. Following which there are some advantages and drawbacks as well for an intrapreneur over the entrepreneur. With the development of ipod, Steve Jobs had the backing of the major corporation – Apple computers, something that an entrepreneur often lacks. Thus the financial risks involved are not directed towards the individual, but to the whole corporation (Luchsinger & Bagby, 1987). The intrapreneur focuses more on result rather activity and is easily frustrated by bureaucratic system and hierarchy (Luchsinger & Bagby, 1987). These are some of the factors that do not concern an entrepreneur. Hirsich (1990) believes that the prime motives of entrepreneurs and intrapreneurs differ in the fact that whereas the primary motive of entrepreneur is independence, opportunity to create and make money, intrapreneur strives towards independence and ability to advance in the corporate setting receiving the corporate rewards. It is to be noted that Luchsinger and Bigby (1987) believe that the job of the intrapreneur is much more difficult than that of an entrepreneur, as he/she is still answerable to higher authority and not his/her own boss.
The benefit that Steve Jobs drew out of the intrapreneurial venture at Apple was that it put very little finanacial risk on the individual. Also because of Apple being a major corporation, it could enter into agreements with various other companies for development of the product. For example, it sought Toshiba to supply it the small sized disk drives for the storage of music in ipod. It also took help from PortalPlayer and Pixo to design the software and the user interface of ipod. This would have been rather difficult if the ipod had been an entrepreneurial initiative. The scope of collaboration to build a superior product would have been much slimmer and the final product might not have provided the users with the delightful experience as with ipod. Thus I am of the opinion that intrapreneurial approach, in
spite of its shortcoming offers great potential for innovation, subject to the culture prevailing in the organization.
References
Hisrich, R. D. (1990). Entrepreneurship/intrapreneurship. American Psychologist, 45(2), 209-222.
Luchsinger, V., & Ray Bagby, D. D. (1987). Entrepreneurship and Intrapreneurship: Behaviors, Comparisons, and Contrasts. SAM Advanced Management Journal (07497075), 52(3), 10.
Nagji, B., & Tuff, G. (2012). Managing Your Innovation Portfolio. Harvard Business Review, 90(5), 66-74.
Pinchot, G. & Pincht, E. (1978). Intra-Corporate Entreprenuership. Tarrytown School of Entrepreneurs.
Tyrell, P. (2005, July 24).Smart companies show ‘intrapreneurial’ spirit. Financial Times. Retrieved from http://www.ft.com/intl/cms/s/1/7a76c0f0-fc62-11d9-8386-00000e2511c8.html#axzz213zkn600
