Failure to innovate is oft cited as the death knell for businesses, particularly the brick and mortar behemoths of old. That’s likely true for Kodak Company, once seen to be at the cutting edge of camera and film technology, moving seamlessly from black and white to rich color (remember Kodachrome?); from large, clunky equipment to the Instamatic and one-time use cameras; and from time-consuming hand developing of film to computerized machines that printed thousands of customers’ photos daily. So much has been written about Kodak’s rise and fall, culminating in Chapter 11 filing for bankruptcy in 2012. And, while Kodak is alive today (and continues to produce quality imaging products), its journey remains a cautionary tale for many.
For me, there are two key lessons from Kodak’s story:
1. Know the business you’re in. From the start, Kodak manufactured cameras, film, and photo paper. And for most people that’s the business it was in. As early as 1900, Kodak created the idea that pictures are everywhere, and then, made it possible for anyone to make them. Over time, competitors entered the industry, destroying Kodak’s previously high margins on film and photographic paper. For years, “Kodak moments” were a cornerstone of their branding and embedded in ads. Still, Kodak remained firmly in the business of photography.
2. Think constantly about how and why your product will become irrelevant. Kodak developed the first digital camera in 1975 – ahead of the competition. Yet, it dropped the line, fearing it would cannibalize its traditional, high-margin film sales. More importantly, Kodak leaders saw no future in which traditional film would not be paramount. They simply could not imagine how or why their product would become irrelevant or invalid. Consequently, they failed to accurately assess the potential impact of digital imaging technology, that later disrupted the industry.
Thinking about Kodak, it’s hard not to consider “what if?”
What if Kodak had realized early that they were actually in the business of moments, rather than photography?
What if Kodak leaders had thought about how to make their traditional film and cameras irrelevant, rather than shelving digital technology back in the 1970s?
What if you identified what might disrupt your industry – then re-considered the ideas you’ve previously discarded for your business in that context?
What if you asked your senior leaders to identify the business you are in? Would they all respond the same? Is that the business you should be in?
In 2017, Kodak Moments – the digital consumer arm of the Kodak brand – launched a comprehensive ad campaign celebrating the moments and (on the surface) finally claiming the business they are in. Yet, the Kodak of today looks nothing like the innovative, dominant player of old. And having sold most of its patents, Kodak today is largely about licensing. For Kodak, moments still aren’t in the picture.
Are you making the Kodak mistake in your business?