Kodak the once mighty leader of photography has filed for bankruptcy protection. Ten years ago Kodak employed approximately 64,000 people worldwide – today that number has plummeted to 17,000. What happened that made the stock market darling of the 50’s, 60’s and 70’s come crashing down?
Founded in 1880, Kodak started off making photographic plates. They quickly moved to making roll up film and introduced the first handheld cameras. Like Apple or Google today, Kodak launched an imagery revolution. For the first time people could capture events in an image that could be stored forever. Widely successful Kodak transitioned from the brown hand held cameras to color photography and to instamatics. Kodak also was famously the camera used on the Apollo space missions. Many believe it was the transition to digital cameras that was Kodak’s undoing but ironically it’s Kodak who produced the first digital camera.
In hindsight technology trends are clearly visible. Getting out in front of one is like catching the elusive perfect wave. In this case Kodak did get out in front but failed to capitalize on the digital photography tide. Kodak saw digital largely as a threat to the chemical film business and rather than lead and embrace the digital future they entrenched and tried to protect their traditional turf. Kodak never saw themselves as the leaders in digital photography – that ground they conceded long ago to Sony, Cannon, Minolta, etc. Kodak diversified into pharmaceuticals, photocopiers, medical equipment all in a vain attempt to replace their film business but never invested into the digital imaging market.
Regardless of the current market strength no firm can count on continued success. What can companies do to prevent themselves from fading to black?
- Make small bets: Growth companies make many early small bets on promising new technologies. Kodak bet early on digital photography but instead of embracing it they saw it as a threat to their film business.
- Build Innovation into everything: Current market success is a powerful destroyer of innovation! Kodak being a case in point. Identify and focus your company on three or four growth strategies and ask all managers to identify opportunities in those areas and invest liberally in them!
- Leaders must create a vision for the future: Kodak never developed a credible vision for competing in the digital world. Instead, everyone was holding on to the status quo hoping their retirement would vest before the digital Tsunami hit.
- Fat and Happy leads to slaughter: Calculate how much of your revenue comes from products launched within the last 3 years (don’t count minor upgrades and tweaks). If it’s less than 30% you’re likely resting on your laurels! Kodak rested on their laurels far too long!
Managing a company means growing a company and that means aggressively bringing innovations to market. Kodak forgot about innovation and fighting long ago. Bankruptcy is a fitting end for any company that has forgotten how to fight and deliver value to its markets!