100 Years Of Innovation — Lesson #2

I spent more than 6 years researching my book “Machines That Count.” Along the way, I collected and restored more than 250 machines, which became a museum exhibition, and a series of short video documentaries. What did I learn?

Just two customers almost single-handedly changed the course of computer history, by defining the future of their business processes — and looking for the machine to run it.?

In the post-War boom, Americans were writing literally billions of cheques every year, when the Bank of America contracted Stanford University to create it’s Electronic Recording Method of Accounting. ERMA became the application that anyone hoping to sell computers needed to run. The change was profound. At that stage customers and accounts didn’t even have unique identifying numbers, and there was no machine could read them anyway. More than just a new font, ERMA was a profound re-design of the business of banking, and it proved to be a watershed. BoA started deploying ERMA in 1956, and by 1959 it was managing cheque processing and core accounting throughout the Bank. The unique GE computers that ran ERMA it were still running hard, long into the ‘70s.

At about the same time, an IBM salesman named R. Blair Smith boarded an American Airlines flight in Los Anegeles, bound for New York. He just happened to be seated next to the President of the Airline, C. R. Smith. In those days it was still an indirect flight, via Chicago, so they had plenty of time to get to know one another. By the time they landed, they agreed they had a problem worth solving, and the technology to do it.?

The first part of that was true, even if the rest of it was still sales hyperbole. True, airline bookings were a nightmare. There wasn’t yet a computer, never mind a network, that could handle the requirements of the airline. IBM’s Model 7090 was almost purpose-designed for SABRE. When the first reservations terminal was installed in Briarcliffs Manor, New York, in 1960, it was nothing short of a revolution in both technology and travel. The SABRE system proved to be such a profound innovation in fact, that anti-trust action forced American to spin the business off as a separate company, making the technology available to American’s competitors. SABRE is still at the beating heart of the International travel industry today.

These days we sex it all up, and call it Design Thinking, and I’m massively invested in the practise, but the lessons of ERMA and SABRE are valid 60 years later. Even the most complex, wicked business problems that almost appear to defy definition, are not beyond the collective mind of mankind to solve — but technology alone is rarely, if ever, the answer. Had American or BoA been unwilling to adapt their business, all the technology in the World could not have helped them.

The second edition of “Machines That Count” is available direct from the author, or on amazon.com and via Kindle.