Kodak – Lessons learned
Eastman Kodak has filed for bankruptcy protection. This, barring a massive turnaround, spells the end for one of the icons of early photography. Kodak leaves behind a huge legacy that included many firsts including the first pictures taken by humans on the Moon. It saddens me to think that a brand that made so many pioneering achievements in photography and has been instrumental in bringing so many of our childhood memories to life might be on its way out.
Looking back at Kodak as a company, I wonder what may have caused its demise. It had it all going for it – excellent sales, market cap, strong revenues and brand loyalty. How did it fall from its heights in the 90′s to this today? Does Kodak’s story have a lesson for us to learn?
Kodak’s story isn’t new, it is an ageless story. This story may have different names but the moral is generally the same – The fittest will survive.
What defines who the fittest is? I believe that the answer to this is simple. The companies or the people who are the slowest to adapt to change will be the first ones to implode. What can cause a company that relied heavily on innovation to lose its way?
Explosive Growth: Most companies today realize this. With explosive growth comes a radical change in company culture that almost always means some level of departure from its roots. Google is a good example of this. They always wanted be a start up and take advantage of the huge benefits a company that’s in start up mode has. They realize that they have grown now and they try really hard to stay nimble. This is one of the biggest challenges that they have to overcome – be quick to adapt to changes and maintain growth while increasing profits.
Glacial Behavior: Large companies tend to develop inefficiencies as they grow. Cisco is a good example of this. Cisco let departments grow unchecked and allowed unwanted inefficient redundancies creep into the system. Left unchecked, these inefficiencies spread across different areas of the company and it soon got to a point where the company found it really hard to trim the fat. Fortunately for us, they worked hard at finding and fixing these issues. Unfortunately the process was painful and jobs were lost.
Failure to recognize the future: Research in Motion is a good case study of a company that failed to see what the future was and instead of embracing change, they resisted it and banked on their huge installed base and customer loyalty to compensate for their lack of vision. Time will tell if their recent efforts to change course will bear fruit.
Kodak was guilty of all the above and the results are there for all to see. We can learn from this while we pose for our final Kodak moments.