Kodak was an extremely innovative business. It led the move away from photographic plates to chemical film and from black-and-white to colour. One of its scientists even invented the digital camera in the late 1970s, benefitting from the company’s commitment to blue sky research and development.
Unfortunately, Kodak’s managers didn’t see the full benefits of this new technology, letting the company’s rivals build on its idea. As a result, Kodak ended up filing for bankruptcy in 2012.
The Kodak story is a lesson in both innovation and leadership. It’s not enough to be ‘innovative’ to succeed – you must also pursue a portfolio of innovations, ranging from incremental ‘enhancer’ ideas (Coke’s launch of Diet Coke) through to ‘disruptor’ moves that can threaten and hit the sales of your existing core business (Apple’s iPhone cannibalised the sales of the company’s hugely successful iPod).
Most managers like to pursue ‘enhancers’ where there’s no real risk to the wider business, and will happily, as a result, enthusiastically describe how their business is innovative. But few are willing to take the leap of faith required to drive ‘disruptors’.
The problem is that if your market is changing rapidly, the result of not pursuing disruptors can outweigh the risk of action. Or, to put it another way, if you don’t cannibalise your sales, your competitors will do it for you.
Don’t just ask the former leaders of Kodak. Executives from Nokia, Blackberry, Xerox, Olivetti, Blockbuster, Yahoo, Debenhams and HMV could all tell a similar story.
Off The Record: Kodachrome by Paul Simon
They give us those nice bright colours
Give us the greens of summers
Makes you think all the world’s a sunny day, oh yeah!
© Stuart Cross 2021. All rights reserved.