There is much to be learned from Kodak’s misfortune.
If your company is flying high and all signs point to a bright future, maybe you should celebrate by buying a big new picture for your office wall: the Kodak logo. The onetime industrial giant Eastman Kodak, which went to court in January seeking Chapter 11 bankruptcy protection, is a grim reminder that no amount of success guarantees more success in the future. The world will always be asking, “What have you done for me lately?”
If your company is not doing so well and there are dark clouds on the horizon, maybe you should buy a Kodak logo for the wall and a smaller one for your desk. That red-and-yellow emblem represents an enterprise that 30 years ago had 130,000 employees around the globe; the current number is about 17,000.
The bankruptcy filing was hardly a shock. The company had been on the downswing for about a decade as digital photography—which Kodak invented in 1975 but failed to exploit—devastated its core film business, which had already taken some sharp hits from Japanese competitors. Shifting the focus to inkjet printers was not what you would call innovative thinking, and it did not help.
Kodak may emerge from Chapter 11 as a stronger company with a viable business model. That remains to be seen. But a far better outcome would have been not to get into this mess in the first place.
The company’s decline has been analyzed extensively in the business press, and while many of the pressures on manufacturers are different from those on retailers, there are lessons for businesses of all types. The consensus seems to be that Kodak, which had superb mastery of its core competencies, focused on them too much when it should have been looking for significant new directions in which to grow. Excellence just was not enough to maintain leadership. Vision was also required, but by many accounts it was lacking.
Vision is more than just looking around at your company and its competitors. Even if you are great, a rival who is merely good can still attract a sizable customer base for reasons like price, convenience or location. So it is a given that you have to share the market with grocers that look a good bit like you. Where true vision comes in is in seeing where the broader world of retailing is headed and what you will have to do to thrive in the face of all kinds of changes, from economic to technological. It may even involve inventing an entirely new way to go to market.
The job will not get done by fixating on the next quarter’s results. In any mature industry there is always the danger of stagnation, and short-term thinking is a great way to make that come true. Growth depends on investment and innovation, both of which are risky, require a lot of hard work and often take years to pay off. At many companies fear of failure has kept that from happening. However, the bigger worry should be not what happens if you jump off the treadmill and take risks but what happens if you do not.
So walk into the office every morning, look at the Kodak logo you just put on the wall and keep busy staying ahead of those who would rather play it safe than play to win.