collaborating across the many units. For instance, whereas
Rosner is responsible for the engineering side of News, other
managers oversee the operating system on which it depends,
the content, and the business relationships with content
creators (such as the New York Times) and advertisers.
To cope, Rosner has adapted his role. As an expert who
leads other experts, he had been immersed in details—
especially those concerning the top-level aspects of software
applications and their architecture that aect how users
engage with the software. He also collaborated with manag-
ers across the company in proj ects that involved those areas.
But with the expansion of his responsibilities, he has
moved some things from his owning box—including tradi-
tional productivity apps such as Keynote and Pages—into his
teaching box. (See the exhibit “Roger Rosner’s Discretionary
Leadership.”) Now he guides and gives feedback to other
team members so that they can develop software applica-
tions according to Apple’s norms. Being a teacher doesn’t
mean that Rosner gives instruction at a whiteboard; rather,
he oers strong, often passionate critiques of his team’s
work. (Clearly, general managers without his core expertise
would nd it dicult to teach what they don’t know.)
The second challenge for Rosner involved the addition
of activities beyond his original expertise. Six years ago he
was given responsibility for the engineering and design of
News. Consequently, he had to learn about publishing news
content via an app—to understand news publications, digital
advertising, machine learning to personalize news content,
architecting for privacy, and how to incentivize publishers.
Thus some of his work fell into the learning box. Here man-
agers face a steep learning curve to acquire new skills. Given
how demanding this is, only critical new activities should fall
into this category. Over six years of intense learning, Rosner
has mastered some of these areas, which are now in his
owning box.
As long as a particular activity remains in the learning
box, leaders must adopt a beginner’s mindset, questioning
subordinates in a way that suggests they don’t already know
the answer (because they don’t). This diers starkly from
the way leaders question subordinates about activities in the
owning and teaching boxes.
Finally, Rosner has delegated some areas—including
iMovie and GarageBand, in which he is not an expert—to
people with the requisite capabilities. For activities in the
delegating box, he assembles teams, agrees on objectives,
monitors and reviews prog ress, and holds the teams account-
able: the stu of general management.
Whereas Apple’s VPs spend most of their time in the own-
ing and learning boxes, general managers at other companies
tend to spend most of their time in the delegating box. Rosner
estimates that he spends about 40% of his time on activities
he owns (including collaboration with others in a given area),
about 30% on learning, about 15% on teaching, and about 15%
on delegating. These numbers vary by manager, of course,
depending on their business and the needs at a given time.
The discretionary leadership model preserves the funda-
mental principle of an eective functional organization at
scale—aligning expertise and decision rights. Apple can
eectively move into new areas when leaders like Rosner
take on new responsibilities outside their original expertise,
and teams can grow in size when leaders teach others their
craft and delegate work. We believe that Apple will continue
to innovate and prosper by being organized this way.
APPLE’S FUNCTIONAL ORGANIZATION is rare, if not unique,
among very large companies. It ies in the face of prevailing
management theory that companies should be reorganized
into divisions and business units as they become large. But
something vital gets lost in a shift to business units: the
alignment of decision rights with expertise.
Why do companies so often cling to having general man-
agers in charge of business units? One reason, we believe,
is that making the change is dicult. It entails overcoming
inertia, reallocating power among managers, changing an
individual- oriented incentive system, and learning new ways
of collaborating. That is daunting when a company already
faces huge external challenges. An intermediate step may be
to cultivate the experts-leading-experts model even within
a business unit structure. For example, when lling the next
senior management role, pick someone with deep expertise
in that area as opposed to someone who might make the best
general manager. But a full-edged transformation requires
that leaders also transition to a functional organization.
Apple’s track rec ord proves that the rewards may justify the
risks. Its approach can produce extraordinary results.
HBR Reprint R2006F
JOEL M. PODOLNY is a vice president of Apple and the dean
of Apple University. Prior to joining Apple, in 2009, he was
the dean of the Yale School of Management and on the faculty of
Harvard’s and Stanford’s business schools.
MORTEN T. HANSEN
is a member of Apple University’s faculty and a professor at the
University of California, Berkeley. He was formerly on the faculties
of Harvard Business School and INSEAD.
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