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Beyond Boxes

In Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age author Michael Hiltzik quotes Dr.

In Dealers of Lightning: Xerox PARC and the Dawn of the Computer Age author Michael Hiltzik quotes Dr. Jacob E. Goldman, who had been recruited from Ford in the late 1960s to become Xerox's chief scientist, "Real research people tend to interact with the world at large." Although not a researcher in Goldman's parlance, I found myself, in late April, interacting with the "world at large," or at least a part of it. Specifically, I attended an event held in the roomy Vista Room at Chicago's McCormick Place, where Xerox Corp. was holding one of two world-wide events. (The other was in London.)

The press release distributed at the event opens: "Xerox Corporation today announced no new products." As I read the release, I began to wonder why I endured a cab ride from Midway Airport that took longer than the Southwest flight to Chicago from Detroit.

But that question gave way to others when Michael Miron, Xerox's senior vice president, Corporate Business Strategy and Development, said to the assembled (press people and numerous Xeroxers) that this "is the most significant change since Xerox sold its first copier 50 years ago." I don't know about you, but when I think of "Xerox" I think "copying machines," despite the company's tagline, "The Document Company." (General Motors is pretty big in the financial business with car loans, mortgages and credit cards, but I still think of it as a car company.)

"Today isn't about boxes," Miron said. And he went on to describe this non-new-product as a "catalyst for a generation of sustained growth." I didn't wonder why I was there. I figured that this would quite possibly be a place of which I could say, some years hence, that I was there when Xerox made that announcement.

What Miron announced was a push—a strong push—into what can be described as the service space. Xerox personnel use a word other than services: solutions. The solutions may include Xerox hardware and software. But fundamentally, the solutions are about the transfer of knowledge through an organization, something that Xerox people think they know something about, thanks to exceedingly smart Xeroxers at places like the Palo Alto Research Center (PARC).

Miron speculated that this knowledge-centric initiative will represent 50% of the company's revenues within 10 years. That, I'd like to suggest, is worth pondering for at least the time it takes to read a page—if not for much longer. The ramifications for your business (as well as for the one I'm in) could be fairly thoroughgoing.

Xerox makes more than copiers and printers. It has an assortment of software, too, from its companies including Chrystal Software and InConcert. And it does have consultant services, through Xerox Professional Services and Xerox Business Services. But to have its revenue from knowledge management services equal to what it makes from hardware is certainly a huge shift.

When I asked Xerox's Oliver Groues, senior vice president, World Wide Manufacturing Business, whether this signaled the transformation of the company from one that makes things (e.g., boxes) to one that provides something less tangible, he said that it isn't the case, but simply a transition to a company that is a catalyst and a conduit for new way of working, and for thinking about what one does.

To put it in a context for this audience (within the Manufacturing Solutions portfolio, one of four Xerox announced, automotive is particularly important, especially because of JIT and multilingual issues), Groues said that a business within the auto industry—OEMs and suppliers alike—operates at three levels.

One is "think." This is the area of concepts, ideas and inventions: R&D and engineering. Second is "act." This is where the ideas become cost-effective, produced products. Third, there's "transact." This is where the customer is moved into the mix.

So a business, in effect, is about thinking, acting, and transacting. Generally, Groues observed, a company tends to have more strength in one of the three rather than in all of them. Groues said that where Xerox wants to play a role is in the "interacting" activity that should work between the three.

This is not about copying machines and printers. What it is about is a recognition that the knowledge that resides within an organization—be that information between the ears of the people who are the bona fide heart and soul and brains of the outfit, or be it in some computerized data bases—is where the competitive advantage can be found. The old line about quality used to be "I know it when I see it." Quality was something hard to put one's finger on until one could actually put her finger on it. Knowledge is an even more slippery concept. You can't even see it, or put your finger on it.

Xerox may be changing its business strategy toward an understanding that what makes the real difference in the marketplace is knowledge. Each of us as individuals should reach that same conclusion and do what we can in order to become more knowledgeable, more valuable. Get out there to the world at large.

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