steve jobs and the art of mental model innovation

8/11/2019 Steve Jobs and the Art of Mental Model Innovation

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STEVE JOBS AND THE ART OF MENTAL MODEL INNOVATIONbyPrasad Kaipa

Featured |May / June 2012

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Small wonder that many people who were in a meeting with Steve Jobs said that being in the meeting was like going

on a magical mystery tour. The brilliant Apple leader was indeed magical, with his ability to entrance, enthrall and

simply bring others around to his way of thinking. Jobs was also hardly an open book and many, from employees to

competitors wondered just where those amazing ideas came from. This author says that Jobs magic and mystery

was informed by what he calls re-framing, a talent that only a very few leaders have.

Steve Jobs was known to have created a reality distortion field. I can verify this because I experienced it. About 29

years ago, within 10 minutes of meeting Steve Jobs, I changed my mind. From a seemingly rational decision to buy

the then-available Osborne1 computer, I decided to wait 6 months to buy a yet-to-be released vaporware called

Macintosh.

Bud Tribble, one of the key hardware brains behind the Macintosh, is said to have been the person who apparently

used the phrase reality distortion field. He used the term to describe the impact that Steve Jobs had on people. In

Jobs presence, Tribble said, reality was malleable. He could convince anyone of practically anything. It wears off

when hes not around[i].

Jobs was able to get people to produce results that they themselves had believed impossible. This magical, almost-

mystical ability did not affect just employees but the media and customers as well. Andy Hertzfeld, one of the key

software engineers who worked closely with Jobs, says, in his folklore site[ii],The reality distortion field was a

confounding melange of a charismatic rhetorical style, an indomitable will, and an eagerness to bend any fact to fit

the purpose at hand. If one line of argument failed to persuade, he would deftly switch to another. Sometimes, he

would throw you off balance by suddenly adopting your position as his own, without acknowledging that he ever

thought differently. Amazingly, the reality distortion field seemed to be effective even if you were acutely aware of it,

although the effects would fade after Steve departed.

I have been a student of Apple and Jobs for a long time. Though I saw and talked to him only a few times, his impact

on me has not worn off. As a student as well of leadership, I have been researching and thinking about how others

can learn to have similar impact on others. In other words, I wanted to learn and teach others what was in the secret

sauce of Steve Jobs!

Jobs was very, very good at reframing issues. He helped people change their beliefs, convictions about what is good

and bad, what works and what doesnt, and what helps people to buy into his mental model. In other words, Steve

Jobs does mental model innovation better than anybody I have ever seen. In the minds of listeners, the result is

reframing. Over time, many people who worked with Jobs learned how to create that kind of impact on others, though

to a lesser degree. Nevertheless, they were able to reframe the issues and help bring about mental model innovation.

What is mental model innovation? In short, it is creating a reality distortion field, namely the ability to reframe a

problem in a way that convinces others to buy into your way of thinking and doing. They may not be convinced of

your logic when you describe a problem, but if they act on the problem with the new mental modelthat is if they

frame the problem differentlythey might gain new insights and new approaches which could enable them to come

up with a solution. The solution itself might not be innovative, but reframing the problem allows people to see old

reality with new set of eyesand that is an important innovation.

For example, think of the famous I have a dream speech by Dr. Martin Luther King, Jr. It became a defining moment

in the American civil rights movement as it put pressure on the Kennedy administration to move the civil rights
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legislation forward in Congress. Dr. King reframed the up-to-then political battle for civil rights as a dream that could

be realized. Another reframing address was given around the same time by President Kennedy. He issued a

challenge to Congress to put a man on the moon within a decade. After the after the Bay of Pigs fiasco with Cuba

and after several successes by Soviets in the space race, the address could have been a strategic move by

President Kennedy intended to overtake Soviets. But framed as a vision call, the address captured the imagination of

the nation and reframed the problem with Soviets. Eight years later, Neil Armstrong became the first human being tostep on the moon. Many wise leaders, no matter which field they operate in, seem to rely on reframing to bring about

major changes in others thinking.

Coming back to Jobs, he first gets you to buy into his mental model whether it is writing a software program in an

impossibly short time frame or convincing customers that it is worth waiting for products like the iPhone, even though

Apple had no history of designing telecommunications products and even though the product was still vaporware.

Once you are convinced of his mental model, it is easy for you to buy into his business model and the product. You

might not know it, but unconsciously and subconsciously you begin to think like Jobs and have very soon fallen in

love with everything Apple sells!

What is the connection between mental model innovation and business model innovation? Think of the iPhone that

Jobs introduced in 2007. It was an excellent example of reframing what a phone could be. In fact, in 2005, Apple

experimented by collaborating with Motorola on the Moto Rokr phone. The idea of a single device convergence

between iPod, phone, camera and a touch screen was thought about in Apple in the form of a tablet, but Jobs

directed the focus towards the iPhone. In fact, when the iPhone was announced in January 2007, Steve Balmer of

Microsoft said the folllowing:

500 dollars? Fully subsidized? With a plan? I said that is the most expensive phone in the world. And it doesnt

appeal to business customers because it doesnt have a keyboard. Which makes it not a very good email machine

Lets takephones first. Right now, were selling millions and millions and millions of phones a year. Apple is selling

zero phones a year. In six months, theyll have the most expensive phone by far ever in the marketplace[iii]

Within 5 years though, iPhone became the most successful smart phone and greatest profit maker ever for Apple.

Microsoft has failed twice to launch a competitive product and is trying again with Windows 8 and the Nokia

partnership.

The mental model innovation that powered the popularity of the iPhone also resulted in significant changes in phone

carriers business models. Apple started getting a percentage of monthly revenues in addition tobeing paid for the

hardware itself. Jobs wanted all the applications to run on a version of Safari on the iPhone, but when critics and

customers revolted, Jobs relented and reframed, creating the App Store. That became another successful business

model innovation, as the store now has over 500,000 applications written by third-party developers. Apple gets a 30-

percent royalty of anything that is sold through iPhoneApps, subscriptions, renewals and ads. Over 3 billion dollars

has exchanged hands in the past couple of years between Apple and developers! Finally, product and solution

innovation is critical if the Apps are to sell and for the business model to be successful! In that respect, mental model

innovation is connected with business model innovation and product innovation. Reframing is the underlying secret

sauce for them to become radically successful.

Job did fail a few times in reframing his customerslike with the NeXT computer, the Macintosh Cube and Apple TV.

These products did not live up to the expectations set by business model and mental model. Jobs, though, never

stopped learning from his failures.

STEVE JOBS: THE MASTER REFRAMER

When Steve Jobs returned to Apple as the CEO in 1997, the company was reportedly very close to bankruptcy. Jobs

strongly believed that innovation was the way to make Apple successful and he did say so in one of his interviews:

The cure for Apple is to innovate its way out of its predicament, not cost cutting. With that mental model innovation
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always in his mind, he started reframing the rest, inside and outside of Apple. He convinced Bill Gates to invest

$150 million in Apple and to make a five-year commitment to develop Mac Office. He came out with Think Different

branding messages with the likes of Gandhi, Einstein and Disney, and created Get a Mac (Mac vs. PC) commercial

in which he convinced new customers to buy a Mac instead of a PC.

Understandably, Jobs did not try to create or support me too products. In fact, the first thing he did when he became

CEO was to stop the licensing of Mac clones. He worked with Jonathan Ive, the genius in industrial design, to come

up with thelolly-pop coloured iMacs and applied value-creation logic that supports premium positioning for Apple

products.

The foundation of Apples turnaround was the fact that Jobs came up with a different mental model for success

(innovating instead of cost cutting), and applied that mental model to create innovative business models (like iTunes,

App Store, revenue sharing for iPhone etc) and radical product offerings (iMac, iPad and iPhone). In July 1997, two

months before Jobs returned to the company, Apple had a market cap of $1.6 billion dollars; in August of 2011, it had

skyrocketed to approximately $360 billion.

Can others learn the secret sauce of Steve Jobs? It is possible that nobody else can do it as well as Jobs but it but it

wont be due to a lack of effort. Jobs successor, Tim Cook, is being closely watched to see how well he

communicates, inspires and keeps the Apple brand value intact. So far, Cook has passed with flying colors. Thoughhis approach to reframing is very different from that of Jobs, the magic of Apple continues to charm one and all. Cook

is calmer and more thoughtful than inspiring when he communicates his messages. But the quiet confidence that

Cook brings and the empathy that he demonstrates connect well with customers and the media. He has been able to

build Apple from $360 billion market capitalization to $600 billionthe highest in the world.

Most leaders invest large sums of money in R & D and hope that some of that investment pays off in the creation of

innovative products and solutions that compete well in the marketplace. Traditionally, companies prepare huge R & D

budgets to develop the innovative products and solutions that they hope will grow their revenues and profit. Still, the

real success of such innovations is always uncertain. Yet according to an Economist Intelligence Unit white paper,

more than half of 4000 senior global managers prefer business-model innovation to product/solution innovation as the

way to establish competitive advantage.[iv]Not surprisingly, Jobs was equally adept at business model innovation,

though his secret sauce still was mental model innovation.Business model innovation is coming up with a different model for how you actually do business, not just what you do

in terms of products and services.In other words, apply your mental model to connect your products and services

with providing a service or adding value for the customer.

Before Apple/Jobs introduced iPhone, no other device supplier (Motorola, Nokia or HTC) had linked services to end-

customer usage after the device had been sold and demanded a share of monthly revenues from carriers like AT&T

or Verizon. This became a very successful business model not only because carriers gave up a share of monthly

revenues, but also because they gave up control of their customers to Apple by allowing all the service-and-repair

questions related to the iPhone to be managed by Apple.

Similarly, the success of the iPod could be attributed to another business model innovation, iTunes, which delivered

value to the end customer by streamlining how music could be bought one song at-a-time instead of one album at-

a-time. Music companies resisted that model for a long time till Jobs convinced them through his reality distortion

field, or reframing. And for any business model to succeed, reframing must be effective. Otherwise, people just dont

buy into a new business model. Till now, no other company that we know of shares revenues with wireless carriers.

My proposition is that without reframing, product innovation could get lost in the market place, since most technology

products are commodities these days. Mental model innovation is the first stage re-conceptualization or reframing

allows people to pay attention to what you have introduced. Business-model innovation is the second stage coming

up with a framework for making money using the reframed context. And product innovation is the third stage
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coming up with a product or solution that stands out in the market place and attracts new customers. Thus, reframing

is a key to successful business model innovation. Reframing has an added advantage in that mental models reside in

our subconscious. We observe behavior but it is difficult to appreciate the underlying driver of that behavior. This

underlying driver, in most cases, is ingenuity. Jobs understood that ingenuity cannot be easily copied and used it

effectively to make Apple the most valuable company on the planet today.

Let us take the iPad. Its success exemplifies Jobs mental model innovation the best because it really reframed the

computer industry and created a new category of productstablets that competitors are still unable to compete

with, two years after it was launched.

When Apple introduced the first iPad in 2010, many critics expected it to fail big. iPad was ridiculed as a glorified

iPhone. The name was mocked as too similar to feminine hygiene products. iPad did not use a stylus (to make

drawing easier) or have a keyboard (to make typing easier) and there was no camera or phone capability. Without

having many features that consumers were used to, conventional wisdom predicted that no one would buy such a

device.

Two years and 50 million iPads later, Jobs/Apple is credited with having created a new market. Despite attempts by

rivals to compete with the iPad, Apple has captured a 70- percent share of the tablet market. The iPad is so

successful that HP recently announced that the entire PC sector is being negatively affected, because instead ofbuying a new PC, new consumers are buying an iPad instead.

The iPad was not the first tablet computer. In fact, tablets have been around for 20 years (Go Corporation pioneered

pen-based computing in late 80s) and there have been many other attempts to come up with a successful tablet. But

no one made a tablet like Apples. One of the iPads most compelling innovations captured the imagination of

customers by offering them something they didnt even know they needed, a media-consumption tablet. The iPad

was not competing with NetBooks on the market or laptops. It was a new kind of device that allowed airline pilots,

mechanics and even physicians to carry just an iPad instead of heavy manuals or charts. Jobs mentally modeled a

new marketmedia consumption, and the iPad was the manifestation of how he reframed it. The iPadwas not

intended to replace the laptop or phone. It was to fill a new need in a new market. Steve Jobs had changed the game

on his competitors and created a new segment. While Jobs is not the first leader who used reframing to succeed in a

market, he is certainly the most successful, considering the seven industries he has transformed: personalcomputing, music publishing, animated films, digital publishing, tablet computing, mobile phones, and retail.

THE INNOVATION IMPERATIVETo be a leader in the midst of 21

stcentury complexity, one has to be an effective innovator. Product innovation is the

most common strategy for growing the top line but the success rate is unpredictable. Business model innovation is

what leaders from emerging economies are using to succeed and compete with large established businesses in the

west. This is a smart choice.

Very few people recognize that a leaders job begins and ends with reframing. Without continually reframing oneself

and others in the ecosystem with new mental models one cannot compete successfully in the global market place.

For now, only A few wise leaders, like Steve Jobs, mastered mental model innovation and are able to use itrepeatedly to build success upon success.

By learning how to reframe, one might not become as successful as Steve Jobs. But there are other leaders, like

Mark Benioff, the founder of SalesForce, who learned to use mental model innovation to create billion-dollar

business. He reframed software as a service and pretty much invented cloud computing. Now SAP, Oracle and

everybody else is following his lead. Entrepreneurs routinely attempt to reframe established products everyday and

the buzz they build in the ecosystem gives them an indication of how successful their reframing is. Their success then

depends on coming up with the right business model and following through with innovative products/solutions.


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Reframing is not limited to business leaders, as we saw in the examples of John Kennedy and Dr. King examples

above. Successful political leaders have been using mental model innovation as an effective tool for a long time.

Gandhi reframed Indian minds to not just share power with the English rulers through home rule but to ask for total

freedom. India got it in 1947. On the other hand, President Mikhael Gorbachev introduced Perestroika and Glasnost

to citizens of the USSR, and that led to the fall of the USSR, the rise of democracy, and the fall of Gorbachev himself.

The lesson is that, when you reframe peoples mental models, results can be unpredictable; a leader should beprepared to lose control. It will be interesting to see how President Obamas support for gay rights, reframed as new

civil rights, helps him in the presidential election in November.

Reframing is the new job for most leaders today. Without dropping mental model innovation into the organizational

ecosystem, change will not take place and the culture will stagnate and become non-competitive. Smart leaders

focus on business model innovation, whereas wise leaders like Steve Jobs focus on mental model innovation. What

kind of a leader are you and how do you plan to reframe your ecosystem?

steve jobs and the art of mental model innovation

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