There is a strong connection between Mental Models and Lean Portfolio Management (LPM).
Mental Models and Lean Portfolio Management: Steve Jobs’ Strategic Reset
When Steve Jobs returned to Apple in 1997, he was confronted with a sprawling, incoherent product lineup. To cut through the noise, he posed a deceptively simple question to his leadership team:
“Which ones do I tell my friends to buy?”
This question wasn’t just tactical—it revealed a powerful mental model: clarity through customer-centric prioritization. Jobs used this model to expose the lack of strategic focus and alignment across Apple’s portfolio.
Unable to justify the clutter, Jobs applied a Lean Portfolio Management (LPM) mindset. He eliminated 70% of Apple’s products—including the Newton—and laid off thousands, a painful but necessary move to restore strategic clarity. His guiding principle:
“Deciding what not to do is as important as deciding what to do.”
This reflects a core tenet of LPM: focus over fragmentation, and value-driven decision-making.
Jobs then restructured Apple’s portfolio using another mental model: the 2×2 matrix—consumer vs. professional, desktop vs. portable. This led to just four products:
1) Power Macintosh G3 and PowerBook G3 for professionals
2) iMac and iBook for consumers
The “i” prefix signaled a new era of internet integration and simplicity.
By aligning product strategy with clear mental models and LPM principles, Jobs transformed Apple from near bankruptcy to profitability in under a year.
This lean, focused foundation paved the way for iconic innovations:
1) iPod (2001)
2) iTunes Store (2003)
3) iPhone (2007)
4) iPad (2010)
