Yoshikami: America Needs to Be Like Apple

In this week's State of the Union address, President Obama outlined the need for the United States to "out-innovate the rest of the world". We couldn't agree more. Attempting to copy others is a surefire recipe for second-class status.

The United States need to be a leader in thought, design, and execution. Economic victory requires nothing less.

But is there a model America can follow? Is there a corporation that epitomizes innovation that can be a learning lesson for other companies? The answer is yes; Apple. Apple has demonstrated what can be done with visionary leadership and courageous creativity.

Many have forgotten the dark days of Apple when the company teetered on the edge of irrelevance. A company adrift with no real strategy for success.

Enter Steve Jobs and his philosophy of disruption. Apple's philosophy was, and is, to introduce products that were not only cutting-edge but leading-edge and set consumer preferences rather than merely adapting to current wants and needs.

It's not unlike thinking 10 steps ahead in a chess match. Grandmasters that follow this path are the ones that win championships, not those that merely react to the current environment. Thinking ahead, and in a way that alters the product/service landscape, is the Apple way.

Products as far-reaching as MacBook's, iPods and iPhone's set the stage for the most recent massive new business segment for Apple, the iPad. Disruption and setting the standard for product offerings is Apple's preferred method of doing business and each of these products did just that; they disrupted the status quo in features and often in price.

Apple Store
Flickr: zbowling
Apple Store

Most pundits were shocked when the iPad was introduced at a $499 price point, but the strategy was clear. Price for mass adoption and low enough so as to not create an opening for the competition. Apple's focus was not only to launch successfully but to win on an ongoing basis. So far the strategy is paying off.

Leadership and depth of talent is critical for success and only exists when the inherent belief within the company is that greatness requires a team. This view must be embedded in a company's institutional DNA.

What is often reported is the visionary strength of Steve Jobs and that is certainly the case. But little is made about the bench strength at Apple. Great products are not designed by one person but by a team of gifted designers and engineers.

Victories cannot spring from one mind and other strong leaders are required to drive a business forward. One only needs to look at how deftly Tim Cook has stepped in for Steve Jobs during his absence to see the quality of leadership within Apple.

There are many examples where leadership issues have caused companies to stumble. The current challenges at Hewlett-Packard are a prime example. With the resignation of Mark Hurd, and now the replacement of four board members, many are asking where this once storied company is headed.

AMD's recent CEO exit also was a direct result of the board's desire (according to press reports) to pursue a strategy of innovation that the outgoing CEO might not have embraced. Leadership is the parent of strategic action. Without a clear vision and the willingness to innovate, companies stumble.

A vision of the future must not only be courageous but correct. Apple correctly recognized early on that the world was headed towards more mobility and wireless connectivity. While computers are certainly an important part of Apple's business, it is increasingly clear (and revenue numbers confirm this) that Apple is shifting towards mobility products as the driving engine for corporate profits. It's a big bet and one that will likely to pay huge rewards.

If America is to succeed and win in the marketplace, President Obama's advice must be followed. Innovation must be key and comes from the courage to be creative.

Success requires playing to win. In sports there is a common mistake teams make which sometimes sabotages success. Resting on past successes, teams sometimes focus on not playing to win but instead playing to protect a lead. This conservative strategy can lead to complacency and in the global marketplace, complacency will be economically punishing.

The United States cannot make this mistake. America must play to win and not rest on past successes. A new history begins now. The past is irrelevant. AMERICA MUST PLAY TO WIN starting today.

While the rest of the world may have been tempted to give up on the United States, they take the leader of the economic world lightly at their own risk. It takes discipline, commitment, and innovation; all of which America can summon if the desire to win is strong enough.

Yes, this is this generations Sputnik moment; will America rise up and meet the challenge? We believe the United States will shock the world with it's resilience. And we believe the challenge will be met. The alternative is second place and something America dislikes. Winning matters in America.

That’s my view. What do you think?

Michael A. Yoshikami, Ph.D., CFP®, is Founder, President, and Chief Investment Strategist of YCMNET Advisors, Inc., a registered investment advisory firm (www.ycmnet.com). He oversees all investment and research activities of YCMNET. He is a respected lecturer speaking frequently on market issues, tactical asset allocation, and investment strategy. Michael and YCMNET were ranked as one of the top 100 investment advisors in the United States for 2009 and 2010 by Barrons. He appears regularly on CNBC and CNBC Asia and can be reached directly at m@ycmnet.com