This week’s book learning is from ‘Inside Apple’ by Adam Lashinsky –
A big source of the politicking in big organizations is the concept of the P&L. Essentially, having your own P&L or Profit and Loss statement means you are wholly responsible for the profits of your business unit and defines your ‘domain’ as a manager.
i.e. ‘I run my own P&L and therefore I am.’ ;-)
Steve Jobs bucked the trend at Apple by ensuring only the CFO owned a P&L. This led to a few interesting outcomes – aside from removing all politicking about the amount of money executives controlled, it focused discussions around creating incredible products.
Managers at all levels were never asked to defend decisions on ROI or ‘Return on Investment’. The conversations around dollars and expenses were thrown out of the window and teams were made to feel like ‘rich kids’ and believe they could do whatever they wanted as long as their parents i.e. the CFO gave the final ‘okay’.
The overall P&L was closely monitored by Jobs and the CFO, of course. And keeping it centralized meant there were no repeat expenses across business units!
‘Inside Apple’ provides some interesting insights into Apple’s way of working. The most interesting observation here is that Apple consistently bucks all traditional management ‘best practices’ and has done exceptionally well.
Perhaps ‘best practices’ need to be overhauled once in a while? Perhaps learning to question, understand the rationale and make the best judgment is the essence of greatness?
Here’s to understanding the reason behind ‘best practices’ around us this week!
A Learning a Day 