"Story posted: January 27, 2009 - 12:31 pm EDT
Orlando, Fla.—Xerox Corp. CEO Anne Mulcahy is optimistic about the prospects for U.S. business innovation despite the current recession.
“There is no more important time for research and innovation investment than now,” Mulcahy told a packed room of marketing executives Tuesday at the American Marketing Association’s M.planet conference here. Mulcahy added that she was hopeful that the new administration’s economic stimulus package would take innovation into account.
“At times like this, success or failure depends on research and innovation,” Mulcahy said. During a previous economic downturn, she noted, Xerox executives considered cutting the company’s research and development funding. Instead, they cut $4 billion from elsewhere in the company’s budget and left R&D intact.
Marketing leadership within an organization also plays a vital role in tough economic times, Mulcahy said. “This is not a time to be quiet and subdued,” she said. “It is time to be bold, and marketing has to have a strong role.”
With all due respect, here's what's wrong with that approach:
It's 20th century language for a Google-Mart, Obama defined world. Success or failure does indeed depend on research. But innovation depends on reflective practice in solving real world problems, either now or as close to now as possible.
For example, erasable paper. If the market does what it plausibly might do, E (as in erasable) -paper could change the rules. Sure, right now we are beneficiaries of the old rules. But I'm sure our people can figure out a way around that one.
So why not do a Google or a Wal-Mart. Start a beta, now. Maybe small design studios is a good place to test it out. Then get real people to use it. Then tell everyone about what they figured out. Then keep refining it - not the tech, the business model- until it is ready to scale. Then scale. And reap the benefits of disruptive innovation on the ground.
If someone focuses, I bet this could be done in 6 months.
Or we can keep having focus groups and meetings and . . . .Until some Indian company or a start up in Iowa figures it out, grabs market share in India. Then moves through the Middle East. Then comes to America. Then we buy them, ignore them, or compete with them or pay to partner with them.
Postscript anyone?
As for the $4 billion cut from other parts of the organization and funding research. Great. I assume the new toner farms and the last two years of equipment came from this research. Hats off, to our brilliant engineers and scientists.
But maybe we should consider starting a University and getting a revenue stream and a place to work with the next generation directly. Instead of grants to "institutes of Higher Ed", why not set up Xerox University. Pixar did it many years ago. You can read about why it's such a good strategy here and here and here. Just leave it to Steve Jobs. After all the money he made from PARC, I think it would only be fitting to make alot of money from what Pixar figured out.
Wouldn't it be cool if we didn't have to hunt through design schools to find creatives who get it. And think of all the time our people waste holding hands with folks in "Higher Education." Meanwhile all of our customers are desperate for designers who get it. The design schools don't know how to teach it. How about an employment service for people who buy boxes? We sell them the boxes. And give them access to the talent they need. Plus the smart kids go into printing. Plus our scientists can get the cred of being in a University.
Now that's post sale revenue that just goes on and on. Plus we get paid on the front end by the government! Economic stimulus program, anyone?
After all, education is the best business in America. Given what's going on in Washington it's only going to get bigger. So while, we're figuring out where the print business is going to end up. Let's consider going into the education business. Since we are really smart and don't have the legacy structure to worry about, I'm positive we could do it better, faster, cheaper than most of the players out there. Educate more kids. Support our research.
Maybe we could staff it with some of the baby boomers we have to excess to get our SG&A down to 16+%? Or with our staff who love to teach. And waste their time "educating customers." Take the same budget and educate the future generation directly.
No matter how I look at it, I can't figure out why this wouldn't work.
And marketing?
Very few people still know what we really do. Xerox is still not any where near as cool as it should it, and most of the design community thinks our latest rebrand is lame. If you don't believe me, read here.
So marketing? yes, it would probably be a good idea to get some marketing.
The good news is that our competitors are not much better. But sooner or later someone is going to figure it out.
Xerox YouTube channel, anyone?
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