Sacred cows really aren’t

by Jack Stapleton, Jr.

Speaking the other day to a room filled with some of the nation’s top corporate officers, the President of the United States offered this view: “Many of today’s problems in Washington could be solved by applying the know-how that is characteristic of America’s industrial, commercial and financial leaders.” Not surprisingly, the president’s audience, praised for being at the top of the country’s corporate heap, applauded long and loudly, hailing his speech one of the most brilliant observations they had heard outside their own offices.

I guess a case can be made for rearranging our republic to resemble an anything-for-profit corporation. But I hope whoever is in charge of reconstituting new ideas and ideals from our founding fathers will use a little discretion when choosing the companies and their plans for implementation in Washington. Not that the United States doesn’t make a mean computer or foot massager or corn flake, but the record also shows that if you’re seeking a colossal bonehead idea or product, you need only turn to some of the most famous intellectuals, corporate giants and business visionaries for classic examples.

Don’t take my word for it. Listen to the admonition of a Yale University business professor who wrote this to a student: “Your concept is interesting and well formed, but in order to earn better than a ‘C,’ the idea must be feasible.” The student who received the “C” was named Fred Smith, whose term paper proposed an overnight delivery service, and who, upon graduation, went down to Memphis and started a company known as Federal Express.

Or perhaps you never heard of Edwin L. Drake, who way back in 1859 came up with an idea to “drill for oil.” As his banker asked, “You mean drill into the ground to try to find oil? You’re crazy!”

Here are a couple of other examples that might be instructive as we stand in praise of our country’s business, educational and political brain trusts. In 1959 a small research firm, named Haloid, offered IBM the sales rights to their “914” paper copier. IBM retained the Arthur D. Little Co., a major consulting firm that has made numerous studies for the State of Missouri as well as several Show-Me corporations, to advise them on the product’s potential. Little recommended against the acquisition, estimating that the worldwide potential for the plain-paper copier was less than 5,000 units. IBM rejected the idea because, as its president said, “carbon paper is very cheap.” Ten years later, Haloid, now known as Xerox, was generating over $1 billion in sales annually from their copiers.

Xerox also received some of what’s known as “expert advice,” when its advisers counseled against going into the small-copier business. The Japanese, new to the field, didn’t have the benefit of such counsel. They jumped in and before long Xerox’s share of the copier market fell around 50 percent.

There’s more. During the mid-1960s IBM experts, based on their knowledge of existing technology, estimated the potential for word processors was 6,000 work stations. By 1973 there were 100,000 units in operation. By 1990 there were over 50 million. I have no idea how many are operating today, but I’m pretty sure there are more than 6,000.

Lousy corporate decisions aren’t the exclusive property of U.S. firms. In the mid-1970s, Sony market researchers told chairman Akio Morita that they could not sell 10,000 Walkmans because the units did not have recording capability. Morita ignored their advice and threatened to resign if the product was not as successful as he predicted. Within 10 years Sony had sold more than 20 million Walkman units.

Corporate “know-how” may be Washington’s answer to greater efficiency and more brilliant public strategies, but it’s also how the country has such “advances” as tires that implode and blow SUVs off the highway, cars with engines that suddenly quit during passing acceleration, television sets that burst into flames even when they’re turned off, processed foods that taste like cardboard — and companies like Greyhound, Heilig-Myers, TWA, Willys-Knight, International Shoe, Stix, Baer & Fuller and Studebaker, to name only a few among hundreds.

Maybe George Bush is right, maybe the best policy for world dominance is American technology which, if memory serves, the Soviet Union spent years tying to steal. An look what happened when they finally succeeded.

[Missouri News & Editorial Service, Inc. Copyright (C) 2001 MNES Corp.]