Inverting the Paradox of Excellence

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6

Sources of Variations

This chapter looks at sources of variations that an enterprise can employ for achieving business

excellence, namely, inventions, imitations, and innovations. The chapter has three parallel running

tracks of subsections that describe examples from domains (and functions) ranging from automo-

biles to electronics to computers onto the phenomenon of the Internet and the World Wide Web

(WWW). These illustrate the kind of variations that are instrumental in bringing about the evolu-

tion of markets and enterprises.

The three sections are as follows:

1. Invention or pioneering variations: Lenoir internal combustion engine, AT&T Bell

Labs germanium transistor, Ford production system, Sony pocket transistor radio, 3M

Thermofax, Psion PDAs, Xerox Alto and MITS Altair, and CERN WWW

2. Imitation variations: Otto four-stroke-cycle internal combustion engine, TI silicon transis-

tor, TPS, Sony Walkman, Xerox 914 and Canon copiers, Apple Newton and Palm PDAs,

IBM PC, and Yahoo!

3. Innovation variations: Wankel rotary engine, TI ICs, theory of constraints (TOC), Apple

iPod, Xerox laser printers, Blackberry PDAs, Apple II and Toshiba laptop, and eBay

6.1 ENIGMA OF XEROX

But before getting onto these tracks, we look at the enigma of Xerox to highlight the challenges

faced while organizing for invention, imitations, or innovations within enterprises. The enigma of

Xerox Palo Alto Research Center (PARC) is characterized by birthing of a host of breakthrough

technologies and products coupled with dismal failure in commercializing most of them. By the

late 1960s, Xerox’s success with copiers had transformed the rm into a giant, highly protable

corporation, with a virtual monopoly over the copier market. As a result, Xerox strove to ensure that

its copiers remained the very best in the market: research at the laboratory at Webster, New York,

and other facilities focused on ne-tuning the current portfolio of copiers to make them faster, more

reliable, and less costly. However, success with copiers had brought a large measure of complacency,

bureaucracy, and short-term thinking. Such an approach was more conducive to business as usual

than to a creative search for new technologies for the ofce of the future. The atmosphere at Webster

was not inspiring; nearly all of the research was geared to improving current products; there was

little attempt to bring in new research ideas or methods or technologies. In large enterprises, an

important hindrance to enterprise variations is managerial preoccupation with current customers

and competitors. As a result, managers get preoccupied with the present technology and customers

at the cost of emerging markets, causing them to overlook promising innovations that enable a rm

to leapfrog competitors by harnessing new technologies for emerging mass markets. Thus, preoc-

cupation with the present may lead to loss of a promising future.

Xerox’s CEO Joe Wilson was concerned regarding the potential of digital technologies replacing

optical imaging. Having seen how xerography rendered coated paper and carbon copying obsolete,

Wilson feared that some new technology would arise to make xerography obsolete too. Xerox’s

president at that time, Peter McColough, was concerned that Xerox’s reliance on perfecting the old

technology of optics for its existing line of copiers would not enable it to withstand competition for

more than a decade.