Apple has earned the reputation as one of the most admired brands — and envied companies — in the world. For the third year in a row Apple ranked as the world’s most admired company, by the highest margin ever. But this didn’t happen overnight, and it’s not just because Steve Jobs is one of the world’s most admired CEOs. There are several factors that account for Apple’s continuing success as a market innovator.

A key element of Apple’s strategic playbook is its relentless pursuit of consumer-delighting innovation:

What makes Apple so admired? Product, product, product. This is the company that changed the way we do everything from buy music to design products to engage with the world around us. Its track record for innovation and fierce consumer loyalty translates into tremendous respect across business’ highest ranks.

As BMW CEO Norbert Reithofer puts it, “The whole world held its breath before the iPad was announced. That’s brand management at its very best.”

— Fortune Magazine, March 4, 2010

Apple’s success is not due to some secret sauce that only Steve Jobs can formulate. (Although he is a critical ingredient.)

Shared Strategic Values: Innovation, Excellence, Consumer Delight

Another factor is Apple’s remarkably cohesive corporate culture, one that actively fosters a set of shared values and beliefs among employees and partners. Central to that culture is a common understanding and passionate commitment to what it takes to deliver just the right set of capabilities and experiences to delight consumers.

This is not a corporate culture dominated by bean counters, risk-avoiding lawyers, or design committees whose negotiated compromises inevitably lead to boring products and mediocrity. It’s a culture that’s comfortable with using the words “passion” and “excellence” in everyday conversation.

These values fuel the creative juices and passionate collaborations that deliver award-winning products and services year after year.

A Strategic Commitment to Excellence

Over dinner recently with a fellow Apple alum, we talked about the fact that Apple’s remarkable success did not spring up overnight (even though most of the popular press seems to believe that). Apple’s achievement results from 30 years’ dogged pursuit of excellence, as defined by a design aesthetic that embraces simplicity, the perfect balance of form and function, and an experience strategy that engineers out the “friction points” that cause frustration or hassle in the environments or usage situations where Apple’s products compete.

We told each other stories of encounters between Apple marketers and product engineers, or designers and Steve Jobs — all of which underscored the lengths to which Apple will go to ensure product quality and innovation. Design as strategy… Some of our anecdotes came from our own experience as Apple employees; some were recent stories she’d heard from a cousin who works as an Apple product engineer today.

What struck us was how similar the themes were from our experiences at Apple in the late 1980’s, and the Apple of today. That’s a sign of a consistent, enduring corporate culture.

Apple “Thinks Different”

Apple’s culture offers a startling contrast to that of most public companies, the ones that settle for “just good enough.” Or worse, companies like BP that push cost-cutting to the point of unacceptable societal risk, with long-term deleterious consequences for shareholders and the public alike.

If you’ve been lucky enough to work in a corporate culture like Apple and contribute to products that change the world, worklife afterwards can be an incredibly painful experience — coping with the commonplace world of “just good enough…”

I wish more companies would take steps to emulate what’s best about Apple’s strategy.

Early Days

25 years ago Apple and a handful of partners ignited the digital publishing revolution. I was there, a senior member of Apple’s pioneering team, along with visionaries and change agents from Adobe, Aldus, Quark and others. Our work laid the foundations for digital content and publishing, key milestones on the road to the Web, social media, blogging, and other 21st century communications.

Idealists and visionaries, we would be providers of “enabling technologies” that would spawn new forms of digital content creation, expression, delivery and consumption. We would act as catalysts. Change agents, advocates, ambassadors.

We passionately believed that these changes would benefit society as a whole. After all, Apple’s corporate mantra at the time was “Changing the way people work, learn, live and play.”

But we would not have predicted that this transformation would take 25 years to unfold. Nor how disruptive it would be to everyone in the content ecosystem. And while we routinely used email (AppleLink) to communicate with partners and co-workers, we did not foresee the emergence of the Internet. We knew digital content would be transformative, but not how the changes would unfold.

Early Notions about Content and Digital Publishing

By 1989 we recognized that content, once created or captured in digital form, could be expressed and viewed across multiple media types. We had some fuzzy notions about digital assets, although no way to manage digital content. Internally we used words like “content,” “multimedia,” and “new media.” Most of the world thought we were crazy at the time… Including external marketing services providers, who fought our attempts to integrate and align their contributions to our integrated marketing campaigns…

Here’s a concept diagram excerpted from an internal Apple marketing plan, circa 1989. Our first attempt to popularize the idea that content could be created for multiple uses. This marketing plan was shared across the core marketing team, including trusted third party developers.

Laying the Groundwork

Early customer feedback suggested that open-minded, creative individuals would eagerly seize upon these new capabilities as a powerful means of self-expression. And that enterprises, educational institutions and nonprofit organizations would someday follow suit. Once the early adopters had worked out all the kinks…

We hoped our ideas would someday be embraced, but recognized that our strategic marketing challenge entailed category creation, market development, and on-going evangelism. Something few companies can afford to do on their own, so we tackled it with the help of “co-marketing partners” like Aldus, Adobe, and eventually HP, Microsoft and other like-minded developers.

Apple invested millions to associate its brand with all forms of creative expression, initially under the tagline “The Power to Be Your Best.” (TV spot via YouTube.)

While Apple’s ad agency produced high concept TV and print ads, our marketing team invested in more pragmatic tactics to persuade creative professionals and wannabe’s that digital content creation was possible. We knew we had to demonstrate and prove that both processes and results would be appropriate for many use cases and budgets. So we spent heavily on success stories, channel marketing and event marketing, to bring these concepts to life. Marketing via “proof points”… We celebrated our early adopters as heroes.

The first image above is the cover of a late 1980s sales tool for Apple’s US resellers. We knew that “seeing is believing,” and wanted to empower our dealers to show potential customers actual samples of what was then state-of-the-art for digital publishing. This was probably Apple’s most popular ever sales tool, one I saw chained to dealers’ countertops years later. (This book should probably be archived in the Smithsonian, given its importance to the early digital publishing revolution…)

The second image comes from the internal marketing plan for the “Expressions Campaign,” aimed at what we called “frequent communicators,” including professionals. Our first attempt at thinking about some of the ideas that Razorfish calls “nimble content.”

Businesses can stumble badly in their financial projections if they over-estimate customer adoption rates. And if you work in product marketing or sales environments where everyone must “drink the Kool-Aid,” you’re potentially at risk, especially in B2B markets.

In consumer markets, where the decision maker and the end-user are often the same person, motivational issues are less likely to affect post-sale adoption rates (unless the product is a “lemon”).

By contrast enterprise employees have relatively little control over the choice of technology-related tools they must use at work. Faced with a mandated change, employees may have all sorts of conscious or unconscious reasons to stall or minimize use of the new tool or application. Especially if it requires behavior or process changes, or new learning. Passive resistance flourishes — which is bad news for sellers counting on rapid uptake of their “Kool-Aid.”

People are resistant to change, for lots of reasons, including unconscious biases. One such bias is people’s tendency to highly overvalue the status quo.

Entrepreneurs and salespeople also suffer from biases, what I call “the Kool-Aid factor,” a form of irrational optimism. This can cause them to over-estimate the speed as well as the degree of adoption for new enterprise applications or other types of employer-mandated tools and resources. Sellers often have inflated views of the value of what they have to offer, relative to the prospective end-user’s perception of its value. Add in the end-user’s inflated perception of the status quo, and you have a sizable value gap.

As shown here, the combination of these flawed assumptions can lead to almost a ten-fold value disparity (thanks to Joyce Hostyn for the infographic):

Why? There are significant cognitive biases and psychological barriers to adoption that sellers overlook at their peril.

A thoughtful post by Open Text’s Customer Experience Director, Joyce Hostyn, outlines her thinking on the stages that people must pass through before they’re willing to change habits or adopt new applications at work. Joyce also points to several must-read articles on the topic.

Her visualization of the stages people must pass through before they become advocates or champions of the “next new thing” is quite helpful. Although aimed at customer experience designers, Joyce’s diagram of the experience journey offers a useful POV for people who forecast revenues tied to assumptions about adoption scenarios within enterprise environments.

If you must “drink the Kool-Aid,” take note of your customers’ motivational climate, and factor in how their adoption journeys will affect your product/service uptake.

Lately I’ve been struck by how we marketers may be losing our way, overlooking our core mission. Preoccupied with wrenching changes in how we launch products, retool the marketing mix, and engage influencers and stakeholders, it’s easy to overlook our core mission: understanding customers. How we apply what we understand about customers is what drives the marketing (and sales) engine.

Although we may be landing new projects based on the latest new thing, like social media or yesterday’s Web 2.0, that’s not the point. Here’s the deal:

The purpose of a business is to create and keep a customer

If you believe Peter Drucker’s maxim, surely you accept its corollary: the role of marketing is understanding what it takes to create and keep customers.

Our quest for understanding should encompass the entire lifecycle of customer engagement. We need to listen to and learn about customers, putting ourselves in their shoes at every step along the way. Listen, and then respond appropriately. The question is, how do we do that without falling back into company- or product-centric habits and biases.

Where Do We Start?

These days, it’s hard to know which methods or technologies offer the most effective, actionable, timely, accurate and affordable ways to capture, share and refine customer insights so they lead to understanding. All the hype around social media may cloud the issue, and get us focused prematurely on platforms or technologies before we understand the reasons why. (What people call the lure of the “shiny new object.”)

What’s a marketer to do?

Should we mine twitter streams or troll the blogosphere? Subscribe to a “listening platform” so we can listen in on customer conversations wherever they occur online? Develop and manage a private online community? Outsource community management to a specialist firm? Hire ethnographers to observe customers where they work, play or go about the business of their daily lives? Run some focus groups? Send out an online survey? Do some phone interviews? Get some insights from an online consumer or executive panel? Buy some reports from Forrester or Gartner? Run some web analytics reports?

There’s no easy answer to these questions, given the siloed nature of marketing services, the fragmentation across market research and analytics providers. It’s hard to find objective advisors with a broad perspective across the full spectrum of customer insight sources, from the tried-and-true to the new online options. It’s all too likely that whoever you consult will tell you that their way, their proprietary methods, or their technology/service is the best.

Here’s a good starting point, a wise reminder from a research maven’s blog:

The purpose of market research is to understand people so we can answer business questions.

— Paraphrased from Steve August’s blog post

Step 1: Define Your Questions

So, start with your questions. What is it your business needs to understand? What do you need to do as a result? What can you afford (or afford not) to do? Given that as your business context, then start asking the marketing questions that will lead to understanding.

How customers buy (or make buying decisions)? Why do they buy? When do they buy? Where do they buy? What motivates them to choose your brand over others (or vice versa)? Where do they look for information or help?

How do customers segment, based on their particular usage occasions for your product? What causes them to stop using your product, or to use it less frequently? What other ways could they get this job done?

What do they think about you? What are they telling their friends about you? Who is influencing their thinking, or setting constraints on how they go about satisfying their needs? Whose opinions do they trust?

How else could you satisfy their needs? Do they have latent needs that you are uniquely equipped to satisfy?

Etc., etc.

How much are you willing to invest to get answers to these questions?

Step 2: Define and Prioritize Your Objectives

Define the questions that will have the most impact on your business. Eliminate those that can’t be linked to actions or decisions you might take in the future. While the answers to some questions might be nice to know, if you can’t identify how they will guide future business decisions, you probably can’t afford to waste money getting answers you can’t use.

Setting your objectives is a key step in any marketing project; smart marketers set objectives that are measurable. As a best practice, you should apply the SMART framework to articulate your objectives — and get consensus from your key stakeholders (and budget approvers) that these are the most important objectives and metrics.

Step 3: Do Your Homework or Consult an Advisor

Before getting caught up in the courtship dance with a technology or specialty research provider, make sure you’ve framed your business goals and marketing objectives; defined how you plan to apply the customer understanding you’ll obtain as a result.

Then assess your options for discovering or capturing customer insights, and how effective each option is for its intended purpose.

Be mindful of the implications from cognitive science about how people think, the low correlations between consumers’ stated intentions and actual behaviors — the gap between the conscious mind and what drives behavior. Narrow your list to the research methods (including listening) that are most likely to deliver the kinds of actionable insights you seek.

If you’re feeling over-whelmed by all these considerations, you might want to engage an advisor to help you think through your best course of action.

Be aware that the market research industry itself is in flux, undergoing transformation, so it may be difficult to find well-informed and objective advisors who can advise you across the full spectrum of options. If you consult a technology or service provider for guidance, watch out for unintended biases. As Abraham Maslow said,

If you only have a hammer, you tend to see every problem as a nail.

As we approach the New Year and the start of a new decade, this is the traditional time to reflect and dream: looking back over the past year, imagining new possibilities and then setting goals for 2010. The question is, how good are the resolutions and intentions you set for the coming year? How do you approach this process? What opportunities do you create for yourself and your business?

Late December tends to be a quiet time in my consulting practice, a chance to reflect, rethink, imagine, and possibly reinvent service offerings for clients. Or envision new types of clients. I use it as a time to read or re-read business books, magazines, blogs and other resources that might trigger new ideas or spark relationships to pursue. I also learn new skills (like learning to blog) or experiment with new services and capabilities. But mainly it’s a fertile time to imagine new possibilities.

Sometimes these reflections are in the foreground of my mind, more often percolating in the background while I read materials chosen to provoke and push me out of habitual patterns of thought or assumption making. I’ve learned that the ones that often prove most productive are the unconscious ideas that percolate, the chance meetings with friends and business associates, the patterns and associations that emerge without my being aware of them.

15⁺ years of consulting have taught me to to trust in Louis Pasteur’s adage,

Chance favors the prepared mind.

So how do I prepare for a new year? The key is breaking out of day-to-day habits in terms of what to read, what to ponder, what to try, or what to imagine. So here’s what’s on my desk for inspiration or experimentation this week, admittedly a somewhat random assortment of resources:

• Harvard Business Review, January-February 2010 issue, theme: “Reinvent Your Company, Your Strategy, Your Marketing, Your Career”
• Attracting Perfect Customers: The Power of Strategic Synchronicity, by Stacey Hall & Jan Brogniez
• Presentation Zen Design, Garr Reynolds
• Making Meaning: How Successful Businesses Deliver Meaningful Customer Experiences, by Steve Diller, Nathan Shedroff, Darrel Rhea
• Unstuck, Keith Yamashita & Sandra Spataro
• Brain Rules: 12 Principles for Surviving and Thriving at Work, Home, and School, by John Medina
• Social Media Marketing for Dummies, by Shiv Singh [I hate the title…]
• Hot, Flat, and Crowded, by Thomas L. Friedman
• Yoga Journal, February 2010 issue, theme: “Renew your practice, renew your Self”
• Mac OS X Server Essentials v10.6, Arek Dreyer with Ben Greisler — yes, I’m learning how to manage a small server as a future Extranet resource for client projects

Highly creative or cerebral work requires a well-exercised (and well-rested) body; there’s abundant scientific research to affirm this (see Medina’s Brain Rules for proof).

So I also take advantage of the quiet time in December for biking, hiking and extra yoga classes, or in-home yoga practice by candlelight. Not to mention socializing with friends and family. Celebrating life and relationships over home-cooked meals, potluck gourmet feasts with friends, accompanied by wonderful bottles of wine.

How do you prepare yourself and your business for the New Year?