Apple, Ahrendts, CEOs, and Workplace Transformation

Connect These Dots… starting with statistics about Apple (AAPL).

Dot One. There are over 900,000 iOS apps in the App Store, there have been over 50 billion app downloads, Apple has delivered 800 billion iMessages, and they’ve delivered 7.4 trillion push notifications. Half of all American households own an Apple product. Millennials (age 16-34), who already outnumber non-Millennials by millions, are more likely to own multiple Apple products.

Dot Two. Of all the things she did during her stint as CEO of Burberry, Angela Ahrendts will likely be remembered not only for the results she produced but also for her digitization of the 150 year old business. Ahrendts understands Millennials both as consumers and as employees. And this understanding of the important role of technology in the lives of the younger generation of business leaders as well as consumers resulted in Burberry’s transformation to the digital world (see strategy 3); a transformation that has paid off.

Dot Three. Corporate America is plagued by massive amounts of structural waste comprised of low or non-value added work. It is built into the things they do every day. Approximately 60% of white-collar work is low- or non-value added, although Vilfredo Pareto and I argue the number is much higher. And although many corporations have gone through massive layoffs, only a miniscule number have actually attempted to change the work itself. A recent article in Fortune magazine sites this as a failure of top executives to properly manage their business.


Resulting Scenarios…

Most CEOs Do Nothing. This is due in part because they will remain out of touch with the tectonic technology and social change occurring under their feet and because of a failure of leadership. Further, Millennials not only tend to choose Apple products based on design aesthetics but also choose their jobs and workplace based on design. So, poorly designed business models with non-value added work practices will struggle to attract talent and so those companies will progress through the typical stages of decline, irrelevance, and death. (Look no further than Blockbuster, Circuit City, Borders and a host of others that have gone out of business because they failed to change their business model.)

Some CEOs Will “Get It”. Like Ahrendts at Burberry, they will start the transformation in their business model by building a strategy and business case that leans heavily on IT as a transformational lever. Though traditional attempts to fix or change deeply entrenched work processes almost always fail to meet objectives, by utilizing a smart, new strategy execution model, businesses will succeed. They will attract top talent from the Millennial pool that will actually enjoy their jobs, workplace, and social interaction which leads to more innovation. These transformed businesses will become significantly more productive, innovative, and therefore competitive, resulting in increased cash flow to support growth or increased earnings.

Apple Becomes the Tech Leader for Workplace Transformation. Although Apple hired Ahrendts as head of retail and online stores, she and Paul Deneve partner to quickly bolster penetration of Millennial households with a wide variety of new fashion-oriented consumer products. The next big frontier for Apple becomes the transformation of the Millennial’s workplace. As Ahrendts did for Burberry, so she promises to do for Corporate America, armed with a variety of workplace iOS technologies and devices that fit seamlessly into the life and work of the new Millennial workforce. Apple stock tops $1200 per share…