QWERTY: The Case for New Fundamentals–How to Pack a Meaner (and Leaner) Remington

This isn’t an article about guns and ammo. It is about how to pack a meaner and leaner Remington …the typewriter. And what you can learn from the typewriter’s QWERTY keyboard, a fundamental business lesson that Business Genome is pouncing on with new tools…

…because many of us are still running our companies with old assumptions that have bred culturally-ingrained, tired habits that now dominate our thinking and rule our decisions.

1878 Typewriter Patent Drawing, featuring the QWERTY Keyboard

The story behind the QWERTY keyboard teaches us that failing to examine the “why” behind history-driven practices in our own businesses can foster institutional inefficiencies and may sometimes lead to the very extinction of our companies. The QWERTY story starts with the design of a writing machine in the 1860’s and ends with a more timely, urgent tale of what Netflix will do with its original secret sauce now that a new era is upon them. But, let’s start at the beginning—the ABCs (or more appropriately, the “ASDs”) behind the original typewriter keyboard.

Once upon a time in the 1860’s, a newspaper man and inventor named C.L. Sholes put together some prototypes for a writing machine with letters on the ends of rods. The design of the original machine had a downside: If two keys were struck in sequence, they were likely to jam.

The Persistence of Memory by Salvador Dali

So, Sholes systematically developed an ingenious way to avert the jam—the arrangement of the QWERTY keyboard. There are many urban myths, academic papers, theories, and fables about the attempts over time to change that QWERTY meme, but it still persists.

The QWERTY meme lives on despite the fact that non-typewriter devices don’t contain rods that might jam.

Business Genome won’t join the debate as to whether or not the QWERTY design is the logical choice for the new devices and gizmos that use it as a standard. We acknowledge that the pain of changing to something that might be slightly better might not be worth it. However, we believe that the failure of business leaders to at least question the fundamental reasons behind some of their core decisions can, in some cases, lead to the extinction of their companies.

This brings us to the Netflix prototype. Here is a company that revolutionized the movie watching industry just a few years ago. Very simply put, they figured out that in a world that brought us the FedEx standard (where things “absolutely, positively had to be there overnight”) and cocooning, where staying home to watch movies (in the days from Blockbuster) and Amazon online ordering and recommendation engines (“if you liked this, you might like that”), all they needed to do was to put together 3 or 4 key trends and, voila, they had a killer business model. Netflix has contributed vast knowledge to the world of commerce through the Netflix Prize, an open source competition for the killer app that would predict the next movie that John Q. Public would want to buy. They have developed cool algorithms for customer service. Netflix is clearly a trend-focused company, with nimbleness to respond to opportunity.

But last week, Reed Hastings was quoted in the Wall Street Journal as saying that his core business is doomed. DOOMED? NETFLIX? Could this be a sign of a coming apocalypse for the rest of us?

…Netflix’s chief executive officer, Reed Hastings, thinks his core business is doomed. As soon as four years from now, he predicts, the business that generates most of Netflix’s revenue today will begin to decline, as DVDs delivered by mail steadily lose ground to movies sent straight over the Internet. So Mr. Hastings, who co-founded the company, is quickly trying to shift Netflix’s business — seeking to make more videos available online and cutting deals with electronics makers so consumers can play those movies on television sets.

http://online.wsj.com/article/SB124570665631638633.html

Hastings is questioning his company’s own “QWERTY configuration” and coming to the conclusion that the unknown pain of changing trumps the known pain of potential extinction.

The Netflix response to the trends over the horizon is inspiring. It reinforces the importance of sensing the changes in our ecosystems and the mission-critical nature of embracing strategies based on responsiveness, both of which lie at the core of Business Genome.

The Netflix saga is captured in Business Genome terms as the Parable of the Two Snorkelers.

Once upon a time, there were 2 snorkelers, happily swimming in warm water. After a while, they both looked up and saw something unpredictable and unusual. On the not-too-distant horizon was a polar bear, floating on a lily-pad shaped slab of ice.

One snorkeler decided that this polar bear was an illusion—not on the maps, not anything he was prepared for. The other snorkeler thought, “Maybe the sighting of that polar bear is an early warning sign of colder waters ahead.”

The second snorkeler went ashore and put on a wet suit. Two hours later, only the wet-suited snorkeler could keep swimming.

Business Genome is committed to saving business leaders from the sense of complacency that would lead them to ignore signs of change in the competitive landscape, market conditions, or customer preferences. Because Business Genome believes that all business leaders should be equipped to swim forward.

In the spirit of translating the Parable of the Two Snorkelers into an “add water and stir” applicability, we introduce: The Top 7 Signs that Your Business Needs a Wet Suit:

1.       You’re starting to see some disconnects between customer satisfaction scores and sales (they say that they still love you, but they’ve stopped buying).

2.       You’re reading news about businesses who do something sort of like what you do but are offering new products or services (like when Blockbuster noticed Netflix mailing DVDs direct to people’s homes).

3.       Your pricing has become a commodity (people aren’t willing to pay a premium for the same things they used to—like a “slightly cooler pastrami sandwich”). They’re substituting a less cool sandwich for a lower price.

4.       Your competition is innovating and you’re not.

5.       You introduced a price increase that led to increased top line revenues at first, but now customers are disappearing.

6.       There’s a new world order that could have a huge impact on your company (recession, globalization) and you haven’t been hit with a wake-up call yet.

7.       Everyone in the company culture is more committed to “that’s how we’ve always done it” than “that’s how we’re keeping up with new market pressures.”

And, if you need more ammunition, just circulate the pictures of the snorkelers and the polar bear.

Today’s Musical Coda comes from Foreigner: Cold as Ice

You’re as cold as ice, you’re willing to sacrifice our love
You never take advice, someday you’ll pay the price, I know

I’ve seen it before, it happens all the time
You’re closing the door, you leave the world behind
You’re digging for gold, you’re throwing away
A fortune in feelings, but someday you’ll pay

You’re as cold as ice, you’re willing to sacrifice our love
You want paradise, but someday you’ll pay the price, I know

I’ve seen it before, it happens all the time
You’re closing the door, you leave the world behind
You’re digging for gold, you’re throwing away
A fortune in feelings, but someday you’ll pay
Cold as ice – you know that you are
Cold as ice – as cold as ice to me
Cold as ice

You’re as cold as ice, cold as ice, I know, yes I know
You’re as cold as ice, cold as ice, I know, oh yes I know
You’re as cold as ice, cold as ice, I know, oh yes I know
You’re as cold as ice… (to fade)