How Do Enduring Businesses Operate? Understanding Xeroxâ€™s Story

Businesses that adapt survive

In her bestselling book Mindset, psychologist Carol Dweckargues that people who see their skills as a fixed set of strengths and weaknesses tend not to achieve much. On the other hand, those that see their skills as dynamic and changeable are able to continually grow their abilities and soar to great heights.

Businesses are the same way. Most see their business models as a permanent facet of their DNA, so when their environment changes, they fail to adapt. That is why 87 percent of the companies on Fortune’s original list of 500 top firmsare no longer there. Over time, most companies get better and better at things that people want less and less.

.Firms like Procter & Gamble, General Electric and IBM still thrive after a century or more. The reason they endure is that they do not see their business as fixed, but have continually reinvented themselves and are vastly different enterprises than when they started. In an age of disruption, the only viable strategy is to adapt.

As an example, Chester Carlson was a prototypical inventor. Self taught and brilliant, he worked for years tinkering with his invention even while holding down a day job and going to law school at night. When his wife grew tired of the explosions he made mixing chemicals in the kitchen, he moved his work to a second floor room in the house.

After working on it for over a decade, he finally teamed up with the Haloid corporation. They built a superior product, but it cost nearly ten times what competitive machines did. They tried to interest the great companies such as Kodak, IBM and GE, but all demurred.2. . Then Joe Wilson, the President of Haloid, had a billion dollar idea. Instead of selling their machines, why don’t they lease them? The idea took off and the company we now know as the Xerox Corporation was born.

Over the years, Xerox continued to innovate along its business model. New products came out that could print more copies faster, which not only increased customer satisfaction, but made Xerox a lot more money. It plowed those profits back into more innovation, a legendary direct sales operation and even better and faster copiers.

In 1961, the company listed on the New York Stock Exchange and, as it continued to grow by leaps and bounds, it attracted a cadre of highly qualified executives who honed its model further. Because it made the bulk of its money on the number of copies printed, that became Xerox’s key metric of success.So when new Japanese competitors arrived with cheaper, slower copiers for smaller businesses, it did not seem like much of a threat. After all, those customers could not generate enough copies to be attractive to Xerox anyway. But before long, big firms started to see the benefits of machines that could fit in each office, rather than taking up an entire room.

By the late 1970’s, Xerox’s copier business was in trouble, but it had an ace up its sleeve. ItsPARC division had developed a new kind of computer, the Alto, that had many of the features we would recognize today, such as a mouse, a graphical user interface and an ethernet that could link the machines together in a network.

.Although there was no lack of interest in the Alto as a standalone machine, the executives at Xerox did not see its potential. Instead, they integrated it into a much bigger system, the Star, which cost $16,00 per unit and $50,000 to $100,000 for a full installation.In short order, IBM launched the PC, Apple came out with the Macintosh and Xerox’s computer business – as well as its position in the top echelon of American industry – was finished.

Within Xerox, PARC was like a world unto itself. While the headquarters in Stamford, Connecticut was a bastion of corporate staidness, a 1972 profile by Stewart Brand portrayed the hackers at PARC as freewheeling hippie geniuses, creating their own personal brand of revolution with long hair and bare feet.4.Up to that point, computers were massive machines that were divided among a group of highly trained specialists through time sharing systems. However, the visionaries at PARC saw that computers could become much simpler devices that ordinary people could use by themselves. A full two thirds of the Alto’s power was devoted to the display to make it as user friendly as possible.

Nevertheless, in their own way, the hackers at PARC were just as myopic as the suits back in Stamford. For example, two of the scientists at PARC, Dick Shoup and Alvy Ray Smith, were working on a new graphics technology called SuperPaint. Unfortunately, it did not fit in with the PARC’s vision of personal computing; the two were ostracized and eventually both left.Smith teamed up with another graphics pioneer, Ed Catmull, at the New York Institute of Technology. Later they joined George Lucas, who saw the potential for computer graphics to create a new paradigm for special effects. Eventually, the operation was spun out and bought by Steve Jobs. That company, Pixar, was sold to Disney in 2006 for $7.4 billion.

It is easy to look at any of these stories and say, “how could they be so dumb?” It seems obvious, in retrospect, that there would be a large market for desktop copiers, that personal computing would grow to be a major industry and that tremendous value would be unlocked from sophisticated computer graphics.Yet the unfortunate truth is that we evolve to survive, not adapt. We fear losing what we have more than we desire winning something we do not. The better we get at doing one thing, the less we want to work on something else.What is more, we tend to surround ourselves with people who think like we do and they reinforce our inherent biases.

.The executives at Xerox were trained at business school to maximize profitability by optimizing the value chainand those around them thought the same way. The scientists at PARC were part of an early culture that was resolute on developing personal computers, advanced graphics were not on their radar screen.

It is easy to complain – as so many do – that others “don’t get it.”

Patrick Finnis a New York-based Head of Marketing, focusing on developing, implementing and driving marketing strategiesfor Cynergy Data. Previously, he worked at Konica Minolta and Microsoft for over 10 years managing marketing, brand awareness and ad technology.Patrick has recently been named Top 40 Social Media Marketing Expert You Need to Know by LinkedIn.

Validity: Patrick Finnis who is a New York-based Head of Marketing has written the above text. He is focusing on development, implementation and driving marketing strategies for Cynergy Data. He worked at Konica Minolta and Microsoft for over 10 years managing marketing, brand awareness and ad technology. Patrick has recently been named as the top 40 Social Media Marketing expert. The text has been adapted from the article, ‘Innovation Starts and ends With Mindset’. The text has been divided into the mindset of the innovator, the mindset of the corporate and the simple mindedness of the single mind. There is also stating the reasons for failure to adapt.
Objectivity: The text informs us that the businesses are just like the strengths and weakensses in a human being. These skills grow and nurture with time. The companies are able to endure and sustain the business by adapting and reinventing themselves and differ from the enterprise when they had started. The truth is that we evolve to survive, not adapt. There is the fear of losing what we possess more than we desire winning something we do not. The better we get at doing a particular thing, the less we want to work on something else. We surround ourselves with people who think like us and they give support to our inherent biases.
Credibility: The text has elaborated and discussed on the invention of the Xerox Corporation by Chester Carlson. The text analyzes the business corporations and the strategies used by them to reinvent their business corporation. The companies are able to sustain the businesses by adapting and reinvention.

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Word: inequality

Sentence: Although the gap is closing, there is still inequality between pay for men and women.