A company’s reputation can impact its role as a reliable industry leader. It can be the difference between financial success and customer retention or an organization’s customers—and employees—seeking products or employment elsewhere. In today’s competitive and often disruptive world of work, how do companies best shape and maintain a positive reputation? Here’s a hint: It’s about the experts — or lack thereof.
The following is a tale of two companies, Apple and Twitter, and how their distinct approach to expertise has led to very different outcomes and consequences.
Apple: Leveraging Expertise for Success
Apple has a long-standing reputation for both stability and innovation. But it may surprise you how Apple’s deliberate approach to valuing and leveraging expertise has contributed to its success. Apple relies on an expert, or functional, leadership model to maintain a strong competitive advantage and loyal brand following. All of its managers, including senior vice presidents, are required to have “deep expertise” in their specialty area, for example, hardware or software development.[1] This means that experts are leading experts, enabling Apple to rely on the deep technological knowledge of its senior experts while also cultivating its next generation of expert talent.
Apple’s atypical organizational structure began with Steve Jobs and has continued under the stewardship of Tim Cook. Since 1997, Apple grew from around 8,000 employees and $7 billion in annual revenue to approximately 164,000 employees and $394.3 billion in annual revenue in 2022. [1,2,3] The company enjoys a seemingly unwavering customer base, with a solid business reputation and brand image. Apple’s customers often eagerly await its latest product developments and are willing to pay a premium price for Apple merchandise. Much of its success and stellar reputation is credited to Apple’s reliance on experts. Let’s look at some of Apple’s other accomplishments due to leveraging expert knowledge: [1,4,5,6]
- A culture of continuous innovation, with systems for knowledge transfer
- An engaged and motivated workforce, with highly skilled talent
- Creation of a deep expert talent bench in different specialty areas
- Consistently one of the world’s most profitable businesses
- Current money reserves of $165 billion
- Stock prices up around 20% so far this year
- Since 2022, the only tech giant to not announce layoffs.
Twitter: The Consequences of a Lack of Experts
By contrast, Twitter has continued to grapple with financial and operational problems since Elon Musk purchased the company in October 2022. Shortly after acquiring Twitter, Musk began cutting the workforce, with around 75% of Twitter’s employees now having been laid off, fired, or resigned. [7,8] Among those dismissed, many were company’s engineers—those senior members with the expertise and knowledge to diagnose and resolve technical and platform issues. This left the site vulnerable to glitches, service failures, and security breaches.
Perhaps the most glaring example of these vulnerabilities is Twitter’s recent discovery of a source code leak and its publication online. No one knows how long parts of the source code were published online—but it has at least been several months—and managers only recently discovered the problem.[7] Without the deep expertise of engineers, Twitter’s more inexperienced junior employees struggle to monitor and manage the platform, including responding, in a timely fashion, to the onslaught of complicated issues. Here are some of the other direct and indirect consequences from Twitter’s loss of experts over the last six months:[7,8,9]
- Lack of institutional knowledge, making it more difficult to resolve problems
- Inability to create strategic plans, with staff often involved in “putting out fires”
- Disengaged and overworked employees, including disgruntled former workers
- 50% decline in company value, from $44 billion to $20 billion, according to Musk
- Loss of advertisers, the main source of the site’s revenue
- Twitter usage in the United States has declined roughly 9%
- Damaged reputation, with the site often viewed as unreliable and unstable
- U.S. Federal Trade Commission investigation due to concerns about Twitter’s lack of resources and staff to protect users’ privacy.
Though not all companies will choose an expert-leader model like Apple, valuing experts and ensuring they’re embedded in your organizational structure can make a real and tangible difference in your company’s success and long-term market strategy.
About the Author
Lisa Danels | Executive Director, Human Edge
Lisa Danels is a senior executive, talent and leadership consultant, and coach. Lisa’s focus is on developing mindful and purpose-driven leaders, unlocking their full leadership potential. She can be reached at info@human-edge.com.
Resourceful leaders are able to tap the critical professional mastery of their experts to drive business success. To learn how to identify and cultivate the potential of your company’s experts, visit our website to discover more about the Human Edge CORE X assessment, including a free trial.
References
[1] Podolny, J. M., & Hansen, M. T. (2020). How Apple is organized for innovation. Harvard Business Review. https://hbr.org/2020/11/how-apple-is-organized-for-innovation
[2] Apple. (2022, October 27). Apple reports fourth quarter results. https://www.apple.com/newsroom/2022/10/apple-reports-fourth-quarter-results/
[3] Laricchia, F. (2023, February 24). Statista. https://www.statista.com/statistics/273439/number-of-employees-of-apple-since-2005/
[4] Zetlin, M. (2023, February 4). The 1 word Apple CEO Tim Cook has not said is a lesson for every leader. Inc. https://www.inc.com/minda-zetlin/the-1-word-apple-ceo-tim-cook-has-not-said-why-its-a-lesson-for-every-leader.html
[5] Gurman, M. (2023, March 19). Inside Apple’s companywide cost-cutting push to avoid layoffs. Bloomberg. https://www.bloomberg.com/news/newsletters/2023-03-19/apple-cost-cutting-efforts-no-layoffs-but-less-travel-and-delayed-bonuses-lffgahkd
[6] Tipalti. (n.d.). Profit per second. https://tipalti.com/profit-per-second/
[7] Mac, R., & Conger, K. (2023, March 26). Twitter says parts of its source code were leaked. The New York Times. https://www.nytimes.com/2023/03/26/technology/twitter-source-code-leak.html
[8] Mac, R., Isaac, M., & Conger, K. (2023, February 28). ‘Sometimes things break’: Twitter outages are on the rise. The New York Times. https://www.nytimes.com/2023/02/28/technology/twitter-outages-elon-musk.html
[9] Schiffer, Z., & Newton, C. (2023, February, 9). Elon Musk fires a top Twitter engineer over his declining view count. Platformer. https://www.platformer.news/p/elon-musk-fires-a-top-twitter-engineer
