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the Western Union problem revisited. The telephone replaced the telegraph. It was cheaper, was instantaneous, and gave you a lot more words. Next, the company needs to build a new brand and business as the old one slowly fades away. This will not be easy, as the world is a lot more difficult than it was in 1900. Pitney Bowes has had a good run, but let s see how the next 100 years go. Since we re using a horse analogy, it s a long shot.
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Silicon Graphics Sad Saga
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One of those no-longer-with-us companies is a story that we got to see up close and personal. Back in July 1995, no computer maker was flying higher than Silicon Graphics Inc. Here s what BusinessWeek had to say:
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Its dazzling three-dimensional graphics computers had a starring role animating the fearsome dinosaurs in Jurassic Park. Nintendo was using the same technology to give the Mario Brothers a face-lift and to design a new generation of arcade-like game machines. And sales were soaring. For the fiscal year ended that June 30, revenue skyrocketed 45%, to $2.2 billion far outpacing all rivals. To top it off, CEO Edward R. McCracken was a White House regular, hobnobbing with Bill Clinton and
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Al Gore. SGI s sexy image prompted a Wall Street analyst to label it The new Apple. *
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Well, all you can say now is, It was no Apple. In April of 2009, the assets of this fallen high-tech star were sold for $25 million. A combination of mismanagement and disruptive technology did the firm in. Could it have survived Maybe. We got a chance to weigh in on answering this question at a time when the Windows and Intel technology (Wintel) was getting into 3D computing and offering it for a lot less than Silicon Graphics proprietary system. Our advice was that Silicon Graphics should not chase after Wintel, but stick to its niche of high-performance computing, where it had the credentials to support this concept. Sure, sticking to this niche meant giving up the chance at big spurts in growth. The company could reposition itself as the Porsche of computer workstations and servers. What IT person doesn t want to drive a high-performance computer The alternative was to chase after Sun and the PC makers, which is what the company did. My view was that it was better to be niched than to be dead. Obviously, the firm didn t take our advice.
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* The Sad Saga of Silicon Graphics, BusinessWeek, August 4, 1997.
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Sustaining Technology
The most popular way to evolve is to use new ideas to update your brand. Finding new uses for existing products has sustained many brands. Scotch tape began life with a list of 300 unduplicated uses, courtesy of its manufacturer 3M. Everyday consumers dreamed up hundreds more. Fiberglas shows up in fishing rods, acoustic insulation, fireproofing, air filters, and textiles. (In 1941 alone, 350 patents were issued for glass wool products.) Helicopters became famous as tactical devices in warfare. Today, they herd sheep in New Zealand and shepherd the well-to-do to their getaway cottages. Another way to keep a product relevant is to add a service. In Watsonville, California, the Granite Rock Company was selling rock and sand to local contractors. Renting trucks to move large quantities of construction material can cost a dollar or more a minute, so time was important. What would speed things up The company developed an automated loading system similar to a bank ATM machine. It accepted an identification card, released the materials, and printed a receipt. It called this
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the GraniteXpress system. Loading time used to be 24 minutes. Now customers could rock and roll in only 7 minutes. If you value your customers time as much as their money, you might want to look into automating a straightforward transaction. Substituting speedy machinery for clerks can make a real difference. It can also free up your people for more scintillating work. It s no coincidence that Granite Rock has been named to Fortune magazine s 100 Best Places to Work list for five consecutive years.
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