It’s a Kodak Moment: 3 Innovation Lessons
Whilst the ubiquitous advertising phrase “It’s a Kodak Moment” was part of most Americans households, the same phrase brings back nostalgic moments as the more than 130-year old company filed for Chapter 11 Protection for Bankruptcy mid January 2012. The news covered the headlines of mainstream business magazines with reports diving deep into the reasons for the strategy that went wrong. With a strong past glory, the last of Kodak moments steered me along the lines of what could have been its blunders that led to its downfall, almost like a freefall.
The company was founded by George Eastman ‘Kodak’ in 1880 after inventing a machine that captured images on large plates of glass. The company flourished with pioneering technology and became renowned with its innovative marketing, for decades. It was almost indestructible back then. A common root-cause discussed in most reports is its failure to reinvent itself in the face of new challenges. The past glory and successes continued to delude the company and its strategy, slowly chipping away the light the cameras once captured and leaving a near permanent shadow that will remain to remind others of the need to avoid complacency.
- Innovation Lesson #1: Self-image is a potent barrier on the road to self-reinvention. Whilst it is easy and quite natural to take shelter under a legacy reputation, the fast changing world and consumer demand force us to step out of complacency and adapt or face inevitable ejection.
A cornerstone of innovation is the ability to push forth with radical and new ideas, from conception to implementation, taking lessons from the past, both glorious and inglorious. The obvious fact that most reports discussed was the first digital camera that Kodak actually invented in 1975. It was undoubtedly a flagship invention, which they called “Film-less Photography” in demonstrations to internal Kodak audiences.
Another pioneering invention was their Digital Camera System (DCS) 100, which in 1991 was a technological revolution and considered nearly the first commercially available digital single-lens reflex (DSLR) camera in the era. It was their clear breakthrough from photography relying on chemical reactions to record images on an analogue film to images that could be captured as a series of numbers. In addition, Kodak ran its own Centre for Creative Imaging in coastal Maine, acting as its teaching outpost to attract artists working in photography, illustration, animation and graphic design. Although it was not until the end of 1990s that the cost of digital camera applications dropped, yet back then, this device put Kodak a decade ahead of its time.
The examples above elucidate the fact that they were not thin on innovation ideas, which, had they chosen to push forth, would have been what we presently coin as disruptive technology. However they decided to shelve the inventions, letting them to collect dust and focus on their legacy film business, which they were invariably comfortable and familiar with.
- Innovation Lesson #2: An invention will fail without a strong team and the perseverance to push it through the innovation funnel and ensure it is brought to the marketplace at the right time with elegance and different value propositions. This would also involve targeting the right customer segment that can afford the product or see immediate use i.e. niche markets to position the product before penetrating across wider segments.
This risk-averse trend continued despite their budding competitor then, Fujifilm of Japan. The latter with its aggressive marketing strategy, lower cost film and photo supplies, continuous churning of new products, development of new business lines and adaptation to the changing marketplace steadily eroded Kodak of its market share, thus further entrenching Kodak in a defense of its traditional business. Where Fujifilm was fast to adapt, Kodak was sluggish. Startlingly, Kodak’s CEO Antonio Perez was quoted calling digital cameras a “crappy business”.
- Innovation Lesson #3: Fresh ideas, if let to mature for too long, will eventually face the competition of similar ideas coming from others who do not shy away from targeting entirely different customer segments with these ideas, leveraging new advanced product features, and pressing on with bullish implementation strategies.
It is clear that Kodak had its moments of technological bubbles, several in fact, which however did not last long and quite obviously burst, leaving them crippled now and void of technologies to keep them competitive in the marketplace. Were they oblivious to the rapid and dynamic changes in the marketplace? They chose to get stuck in their old beliefs, which eventually brought them down.
In a competitive era that we live in – to change, to innovate, to invent and to implement – are no longer optional, instead are must-do’s to ensure we remain, not even ahead, but simply in the race.