King Solomon And The Throne Of Results
To everything (Turn, Turn, Turn),There is a season (Turn, Turn, Turn),
And a time for every purpose, under Heaven.
This is the opening verse of a 1965 rock and roll song. Inspired by the 3rd chapter of Ecclesiastes, legendary songwriter, Pete Seeger, turned the profound words of King Solomon into a beautiful ballad. Recorded by The Byrds, "Turn Turn Turn" is one of the most cherished songs of those of us who grew up in that era.
There was a company that was doing some rocking and rolling of its own in 1965, and I want to tell you a little bit about it. The story of what happened to this company (for purposes of this series, I'll call it Company #1) over the last quarter of the 20th century provides valuable information and perspectives for entrepreneurs in the 21st century.
Company #1
"We have an unsustainable business model." That is what the CEO of Company #1 said in November, 2000. He was providing a warning that desperate measures were going to have to be taken - perhaps very desperate.
There has been a lot of that lately, hasn't there?! What with so many dot coms turning into dot bombs. Lot's of unsustainable business models. Lots of desperate measures.
But it's not just dot coms that are in trouble. Company #1 is certainly no dot com. Its origins can be traced back over 60 years to an invention that literally revolutionized the marketplace - arguably, the world.
While The Byrds were reminding us of Solomon's wisdom, Company #1 was growing at such an unprecedented pace that it became one of the most chronicled corporate success stories in history, and one of the most revered of all brands in the world. Indeed, one of the models of Company #1's invention is actually on display in the Smithsonian Institute.
But shrines are for museums and religion. The marketplace worships at The Throne Of Results, and the words over that throne say, "What have you done for me lately?" And sadly, to that probing question, Company #1 must now hang its head.
Company #1 knows all about the words over The Throne Of Results. Motivating their employees with those words actually created their storied success. I know, because I worked for Company #1 from '76 to '82.
How could a world-wide organization go from being a Blue Chip to a blue story? There are many fundamental business reasons I could cite, but as much as anything else, I believe Company #1's "unsustainable business" model has its origins in corporate ego.
Here's what Company #1's corporate ego sounded like: "We have the best product available, and if you want it, you will purchase it the way we want to sell it." Perhaps no one in Company #1 actually said those words to a customer, but that's what their marketing and pricing strategies said to customers.
In 1976, something happened that was nothing short of an invasion. Companies from abroad launched market penetrating offensives offering products similar to the ones with which Company #1 had had so much success.
This wasn't the first time a formidable competitor tried to play in Company #1's backyard. In fact, it had become the best at minimizing the competition and winning. But this was different. Not only were the insidious Invaders bringing in products that were functionally competitive, but they were marketing them differently than Company #1.
Here's the bad news for Company #1: Customers didn't necessarily like the Invaders' products better than Company #1's products, but they did like the Invaders marketing and pricing strategies.
Have you figured out who Company #1 is?
It's Xerox. The company that capitalized on Chester Carlson's 1930s "dry writing" invention.
The Invaders were Japanese companies like Savin, Canon, and Mita, to name a few. And if the issue was only that the copies shooting out of the Japanese copiers were a little cheaper than the ones coming out of Xerox machines, which they were, Xerox could have handled that. But the Invaders gave customers the opportunity to purchase instead of just rent plain paper copiers, and at affordable prices; something Xerox refused to do prior to the invasion.
There were plenty of people making decisions for Xerox who knew the words to The Byrds' popular version of the wisdom of King Solomon, but they didn't heed them. There is a season for everything, and one thing we know about seasons is that they have a beginning and an end. I place the beginning of the end of the Xerox season at approximately 1976.
The interesting thing to me is that the season for Xerox copiers was not actually over in the late 70s. That wouldn't really happen until years later as technologies converged, and as the Internet and email created another revolution. I believe the end for Xerox began when corporate ego blocked the view to the advent of an era where companies must offer products and services the way customers want to buy - not the way companies want to sell.
There are many factors that brought Xerox to the point of having an "unsustainable business model" over 20 years after the Japanese invasion. But in my opinion, this once great organization never recovered from the way it disregarded how customers wanted to do business.
By the way, do you know who developed the first personal computer? Xerox, but they chose not to pursue that business model.
There are few unique products anymore. What can you sell today that isn't available 6 different ways in 10 different places within a 5 minute drive of your storefront, or a click away from your web site?
The lesson in this story for us actually comes from the Invaders: The key to success for most small businesses in the future will be found in your customers' answers to the following questions:
• What do you want?
• When do you want it?
• Where do you want it?
• What kind of help do you need getting it?
• How much help do you need using it?
• How much maintenance/follow-up service will you need?
• How much are you willing to pay for service and follow-up?
• When will, and what will make, any of the above change?
Notice that only one of these questions involves a product. And the only question about price isn't about a product. Rather it asks what value customers place on their own time, and the ability to avoid inconvenience.
Write this on a rock... From Solomon to Seeger, the concept of "a time for every purpose, under Heaven", has not changed. If Xerox had understood the concept of seasons, asked their customers the right questions - and listened to the answers - perhaps today they would still have a sustainable business model.
