Back to the Future
In addition to prompting a jaunt down memory lane, a recent New York Times article serves as an excellent example of marketplace dynamics and how the global economy should function. The story was on a mundane cog in the wheel of commerce: the bar code. That ubiquitous little label that goes unnoticed until the checkout scanner fails to read it. Soon, the world of bar coding will change, as the United States will adopt the European standard.
One sentence in particular within the story caught my eye. It read: "Europe won this one." Those four words speak volumes as to what ails the world. It referenced the fact the keeper of bar codes in the United States, the Uniform Code Council, had agreed to conform to the method utilized by European Article Numbering International. Further, the two bodies have agreed to merge to create a unified global standard.
From this the author assumed the United States had somehow lost. In reality there are no losers, only winners. A global standard benefits everyone. And the fact is the bar code used by the Europeans is superior to the one used in the United States. Thus, adopting the European standard is the prudent business decision. It wasn't driven by emotion or the need to protect one's turf. It was a simple matter of common sense.
You see, the European Article Numbering system or EAN incorporates 13 digits in its code. The Universal Product Code or UPC method used in the United States only has 12 digits. With its extra digit EAN can accommodate many more products. The Europeans were either quite lucky or possessed the foresight to understand that someday the extra digit would come in handy.
Thus, adopting the EAN scheme was a no-brainer. I applaud the Uniform Code Council's ability to rationally accept a merger of the two bodies for the good of international commerce. If only all business decisions were made in that fashion the world's economic engine would quickly reach new heights of productivity.
However, this decision is the proverbial exception to the rule. More often than not business decisions are encumbered with personal biases and short-term self interests. Not that one should ignore self-interests. That would be absurd. But placing one's self-interests in a longer-term context can often yield common ground whereby everyone benefits.
That's the case here. The Uniform Code Council could have thumbed their noses at Europe and simply modified its own standard. That would have been supremely stupid but I've seen worse decisions made for worse reasons.
So as straightforward as this agreement may appear, it wasn't. That fact is evidenced by the reference to winners and losers by the story's author. Then again, why would anyone expect someone who likely hasn't done anything but write about the business world to know that?
In contrast, those that have done more than simply observe, and possess the ability to think logically and rationally, understand the valuable lesson the story teaches. Striving to find that long-term common ground is often the best solution.
But what about the article caused me to wax nostalgic? Well, at one time bar codes were my life. I knew practically everything there was to know about the luxuriant labels.
My career started at a company called MSI Data. They made devices that back then were referred to as portable data collection devices. These devices read bar code information and transmitted the data back to a central location. MSI's products were the first implementation of the technology that allowed retailers to improve inventory control and order processing.
MSI was the leader in the market. They had developed one of the first bar code reading "portable" device. I enclose the word portable in quotes because what constituted portable 25 years ago is laughable today.
The company's initial bar code reader, the MSI 100, consisted of a recording device that employed a cassette tape four times larger than a music cassette. The keyboard is now a museum piece: a Victor adding machine. Those of you old enough to remember adding machines likely know the Victor. It was brown and from the side looked like a ski jump. Complete with its rolled paper printout, the "keyboard' was about the size of a small watermelon.
The funniest part of the contraption was what gave it its portability: its power source. When not attached to a fifty-foot extension cord, the MSI 100 was powered by a lead acid battery. You know, the kind that you find under the hood of your car.
Back then trial lawyers hadn't recognized the lucrative nature of product liability lawsuits. At the time, no one was particularly concerned about wheeling a car battery up and down the aisles of a supermarket. Including the cart, the darn thing must have weighed about 100 pounds.
The data was collected by scanning the bar codes located on the shelves. Once collected, it was transmitted acoustically. That was accomplished by physically sticking a phone into two rubber cups. The data was converted to a series of scratchy sounds akin to a fax machine and sent to a data processing center.
In the last three decades that technology has morphed into non-contact laser scanners located at the cash register. And the bar code has become an essential component of the world of retailing. It has dramatically increased efficiencies and saved untold amounts of money. So much so it's hard to imagine life without them.
As part of my first marketing job, I headed the evaluation team for the initial laser scanners. Twenty years ago that meant looking at two companies. One called Spectra-Physics and the other Symbol Technology. I ultimately recommended Spectra-Physics because of their higher quality.
In one of life's little ironies, the other company, Symbol Technology, became the dominant player in the industry and eventually acquired MSI Data. In another comical twist of fate, Symbol Technology was recently embroiled in its own scandalous "cook the books" scheme. A number of its senior executives have been indicted and its former CEO is now a fugitive living in Sweden.
So why am I prancing down the pathway of the past? To point out the long and arduous road new products and technologies travel before they become ever present. The technology industry often loses sight of the time it takes for the market to embrace anything new regardless of its benefits.
Generally, people are resistant to change. Inertia is one of life's great forces. Though acceptance was inevitable, when the innocuous bar code was invented many failed to recognize its merits. The first implementation occurred in 1974 and the vehicle was a pack of Wrigley's Juicy Fruit gum. According to the Times article, on June 26th of that year Marsh Supermarket in Troy Ohio inaugurated the future of retailing.
Nonetheless naysayers abounded. Consumers were worried about being cheated because price tags would no longer be affixed to individual items. The labor unions as they are prone to do, couldn't see past the loss of jobs that would ensue. And there were those that even thought the light source posed a health threat.
None of that deterred the industry from predicting a thousand stores would be using the scanners by 1976. As usual, adoption was a might slower. Only about 50 leading-edge thinkers installed the new technology.
That prompted the nitwits that write for business publications to trumpet the failure of the idea. A BusinessWeek article, no doubt written by someone who hadn't spent a single day involved in creating or bringing a product to market penned an article title: "The Supermarket Scanner That Failed."
History proved that writer wrong. Supermarket scanners no more failed than today's fledgling technologies will fail. Broadband, wireless, HDTV, all seemingly experienced a lukewarm market reception. All will also become ubiquitous some day. When the market is ready, and not moment sooner.
That's the second lesson of this obscure article. Success or failure can rarely be measured in a handful of years. That's particularly true with technology. Regardless of how beneficial it may be, it often takes a minimum of 10 years for products to achieve critical mass.
With technology, part of the reason is it frequently takes time to perfect and bring the costs in line. Independent of that, shortening the cycle requires more decision-makers not bound by inertia. An army of logical thinkers capable of comprehending the future benefits would do wonders to accelerate rate of progress. One can only dream.
Copyright 2002 Paramar Consulting
