Apple has quietly ended its self-driving car project after nearly a decade and billions of dollars. But the failure of Apple's big bet shouldn't scare CEOs away from high-profile bets. Rather, it highlights the importance of making sure big, ambitious projects are tightly aligned with the company's vision, mission, and capabilities.
So what happened to Apple's car ambitions? The unusual failure of one of America's most innovative companies, coupled with a slump in its stock price, has people in the industry concerned worried.
Project Titan was supposed to produce Apple's next iPhone, a groundbreaking consumer product that would continue Steve Jobs' legacy of giving consumers products they didn't even know they wanted.
Self-driving electric cars would seem to fit that bill, but Apple faced the reality of development: self-driving cars placed bigger demands on the product team than executives had budgeted for.
After what seemed like years of internal strife and disagreement, with executives leaving and returning but no consensus on a single idea, Apple pivoted away from its ambitious plans and instead focused on developing an electric car.
In an already crowded market with established automakers and electric-first challengers, no one was excited about an Apple EV. It was not a project that aligned with Apple's vision as an innovator and probably did little to inspire enthusiasm in the team. When you bet 10 years into the future, it's key to get the foundations of the project right. If your big bet doesn't align with the essence and what your company is, it will never be successful.
Apple may have started with such a project initially, but when it became clear development was not going well, management balked.
In these situations, hiding failures serves little purpose: openness is essential both for teams to work together effectively and for managing stakeholder expectations.
Creating clear ROI metrics and success measurement helps foster this culture. Rather than pouring money into black box projects, create gate posts where clear, regular evaluations can capture successes and failures. Rather than allowing problematic projects to continue indefinitely, setting ROI metrics helps leadership know when to stop projects and provides the opportunity to reevaluate as economic conditions change.
Self-driving cars were all the rage when Apple started the project, but a series of dangerous accidents by other developers and increased regulatory scrutiny likely caused the company to change its mind about the project.
When I talk to executives about how they should think about this work, I'm reminded of a phrase the Mayo Clinic uses: Think big, start small, act fast. Creating something new is like making a stew: you put ingredients in the pot, stir them together, and don't necessarily know what the exact outcome will be. Sometimes it works, sometimes it doesn't, but if you carefully track and measure your progress along the way, you can learn from it.
Leaders who can communicate this will perform better than those who can't, especially when these projects fail.
Tim Cook is unlikely to lose his job over this. Mature boards generally understand that these bets are an essential part of running a successful company, and even the smartest bets can go wrong. That's why instilling an ROI management model is so important.
Bets like the one Apple made are smart ones in the long run, especially in an industry like tech, where maintaining the status quo means being left behind. But facing obsolescence isn't just a Silicon Valley phenomenon: Companies like Blockbuster, Xerox, and even Hostess Brands show how quickly advantage can turn into irrelevance.
It's inevitable that some of these projects will fail. And when they do, CEOs need to be ready to answer key questions: Why did this project fail? Was the market not ready? Was the technology not right?
Even if these projects don't work out as intended, they still have a kind of incidental beauty: Coca-Cola, for example, learned the extent of its customer loyalty to its products after the backlash against New Coke.
Similarly, while Apple failed to develop its own car, it managed to gain a dominant position in the automotive industry, with 90% of new cars now equipped with Apple CarPlay.
In a world where success often hinges on timing and luck, a mentality of invincibility can lead a company in the wrong direction: As Apple has learned, abandoning the ultimate vision is a costly way to avoid admitting defeat.
Big bets require a CEO who is inquisitive and takes the time to clearly articulate expectations and ROI. Even if they fail, they learn from it.
