What’s the story of Xerox’s innovative efforts? Where did they go wrong?
People can spend years working hard to achieve success, then relax once they get there. John Brooks explains how this complacency can make you blind to threats and weaknesses. He describes how Xerox’s commitment to innovation led to its success—and how its subsequent neglect of innovation led to its decline.
Continue reading to learn what happened to Xerox.
What Happened to Xerox
Brooks narrates that Xerox initially invested all its resources and energy into developing the first automatic xenographic office copier, spending several years and over $75 million on the project. The copier became an all-or-nothing venture, with some executives taking their pay in the form of stocks and even mortgaging their homes to support the endeavor.
Xerox finally debuted its first copier in 1959, and it became a massive success. By 1964, the company landed in the Fortune 500, the annual ranking of the 500 biggest companies in the US. However, Xerox became a company that failed to innovate. It lost the strong sense of innovation that drove the company in its early days: By 1966—the year Brooks wrote about what happened to Xerox—the company showed signs of faltering. It faced dozens of new competitors that were eating into its share of the office copier market, and its stock price took a dive. The price rebounded later in the year, but the experience served as a wake-up call to Xerox executives, reminding them that they couldn’t continue to rely on the copier business alone. The company had to explore other fields if it were to sustain its success.
|Xerox’s Innovations and Missed Opportunities
After the publication of Business Adventures, Xerox continued to struggle to balance innovation with complacency. In pursuit of innovation, Xerox established the Xerox Palo Alto Research Center (PARC) in 1970. The center was tasked to imagine the “office of the future” and was given a brilliant team and a big budget to develop groundbreaking tech. Out of PARC came the first compact computer and Ethernet networking, which was instrumental in the invention of the internet.
However, Xerox was unable to turn these PARC innovations into profit, because company executives remained hyperfocused on the core business of photocopying. Some of PARC’s inventions instead became the basis of other wildly successful products: In exchange for Apple shares, Steve Jobs gained access to PARC’s inventions, which purportedly led to the creation of the Apple Macintosh. Microsoft’s Bill Gates has also said that PARC’s graphical interface led to the development of Windows.
Though Xerox missed out on these opportunities, the company still managed to diversify its business, expanding into other areas such as laser printers and financial services. As of 2021, Xerox planned to grow three areas of business: software, financing, and innovation.
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Here's what you'll find in our full Business Adventures summary :
- A collection of essays about the unpredictability of corporations and Wall Street
- How businesses and economies can rise and fall based on people’s behavior
- A look at the major events that shaped the financial world as we know it