Kodak leadership issues
A good engineer could buy all the building blocks and put together a camera. All of that is moot, the next argument goes, because the real disruption occurred when cameras merged with phones, and people shifted from printing pictures to posting them on social media and mobile phone apps.
History tells us that innovative firms can overreach and fail; it is too soon to tell whether Xiaomi will successfully navigate the roadblocks and chicanes that will challenge its ability to innovate in the future.
But the criticism is overblown. How does the balance of power in our ecosystem change as technology shifts impact different parts of the value chain differently?
Among them are: Is our core technology converging to the point of being replaced by a general-purpose technology platform? Decades later, Kodak blew its chance to lead the digital photography revolution. Our colleague Clark Gilbert described more than a decade ago a great irony of disruption. Scaling Down Is Hard While the technology presented one set of problems, figuring out how to manage declining film sales while trying to extract maximum profits presented another. Another great irony is that incumbents are best positioned to seize disruptive opportunities. But having the space and capital for innovation is not enough. People went from printing pictures to sharing them online. A good engineer could buy all the building blocks and put together a camera. This explains how hundreds of companies, many of them startups, could move into imaging and how a company such as GoPro Inc. It was a motto that opened the door to mass-market consumer photography — a popular culture pioneered by Kodak, but which its recent sorry decline has shown it failed to keep pace with. The next explanation is that Kodak mismanaged its investment in digital cameras, overshooting the market by trying to match performance of traditional film rather than embrace the simplicity of digital. For Kodak, it might also have meant holding on to Eastman Chemical Co. The camera was as big as a toaster, took 20 seconds to take an image, had low quality, and required complicated connections to a television to view, but it clearly had massive disruptive potential. Maybe in it would have lured a young engineer from Google named Kevin Systrom to create a mobile version of the site.
Suppliers selling components offered the technology to anyone who would pay, and there were few entry barriers. Disruption always grows markets, but it also always transforms business models. In real life, unfortunately, Kodak used Ofoto to try to get more people to print digital images.
Responding to recommendations from management experts, from the mids to the company set up a separate division which I ran charged with tackling the digital opportunity. Although it was a pioneer in the technical aspects of digital imaging, it lacked skills in areas such as lens making and manufacturing making efficient and reliable electronic devices to successfully commercialise products based on its innovations in digital imaging.
Recent articles dig a bit more and find that there were people who saw the problem coming — people buried in the organization — but the firm did not act when it should have, which is decades ago.
The real lessons from kodak?s decline
But the criticism is overblown. Learn the right lessons, and you can avoid its fate. The key stumbling block was its inability to convert its technical expertise into tangible products that could be sold profitably Complacency also played its part. Yet another potential path for Kodak might have been proactively exiting its legacy businesses in a timely way, as IBM Corp. Consider Fuji Photo Film. Kodak faced the technological discontinuities challenge, first clearly articulated by my colleague Clay Christensen: a new technology has fierce competitors, low margins and cannibalizes your high margin core business. From to he was a senior vice president at Eastman Kodak Co. Another great irony is that incumbents are best positioned to seize disruptive opportunities. Institutional conservatism, timidity and short-termism are tempting pulls for leaders. From the early s through the s, IBM managed to do this very efficiently, exiting markets that included printer manufacturing, flat panel displays, personal computers, and disk drives. Indeed for much of the twentieth century Kodak was an American industrial icon — at one point enjoying a similar status as tech giant Apple does today.
These building blocks abstracted almost all the technology required, so you no longer needed a lot of experience and specialized skills.
After decades of being an undisputed world leader in film photography, Kodak built the first digital camera back in
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