Kodak - After 130 years in development, will it go in a flash?
This coming summer will play witness to my 5th wedding anniversary. In that time my wife and I have honeymooned, bought a family home and filled it up with two (sometimes) lovely children. In short, in the last half decade, we’ve had more Kodak moments than there have been EU regulations defining the shape that a banana needs to be in order to be a banana. Now, as I think about our friend the curved yellow fruit, what I do find bananas is the cruel fate of Kodak this month.
So what’s happened to one of the world’s most-loved brands?
At around about the time that I was exchanging my wedding vows in the Alps, an avalanche of misfortune was already being dislodged and wreaking havoc on the once rock-solid foundations of this popular business.
Its once picture perfect share price went downhill faster than Franz Klammer’s skis and it posted losses in 6 out of the past 7 years.
Robert Burley, professor of photography at Ryerson University in Toronto, puts it nicely:
“There’s a kind of emotional connection to Kodak for many people. You could find that name inside every American household and in the last 5 years, it’s disappeared”
The demise of Kodak is clearly down to a lack of vision by the management of the company in the 1980’s.
Unwilling to give up the golden goose that was photographic film through the fear of the cannibalisation of its products, Kodak’s senior executives missed the future trend in digital photography like a drunken slalom skier might miss the gates of his run. This mistake enabled their competitors to skate right over their share of the photography market. The irony is that Kodak developed the first digital camera back in 1975.
Errors of this magnitude are explained in psychology by loss aversion. This is the phenomenon where people are more worried about what they stand to lose, in Kodak’s case film, than what they stand to gain from the new opportunities that are available to them, e.g. digital – sound familiar Sony? The key word is also fear. Fear kills economies. Fear kills growth. Fear prevents individuals from reaching their full potential.
This is happening in boardrooms all over the world today. And it’s not surprising. It is estimated that up to 70% of all new product launches fail, as consumers need to feel that a new product will offer them SEVEN times the value of their current product. This makes executives very fearful of change.
So, if we anticipate an avalanche heading for our markets how do we ensure safe passage down the mountain?
We can do this by understanding which short-term hot topics are forecasting growth in the next 5 years whilst redesigning our longer term piste maps to allow for the longer term mega trends ten years out.
If Kodak had seriously taken heed of the mega trends for the 90s back in the late 80’s, it may well have been able to eat its baby and still be number 1 in the photography market. So how do we demist our goggles to get a clearer view of the future horizon for our businesses?
In December I helped design and launch a research survey with many members of the Growth, Innovation and Leadership Community in Europe. The aim of this project was to see which of the 600 hot topics selected by Frost & Sullivan’s leading industry analysts were poised for the greatest future success.
The full findings will be posted soon, and thanks again to those of you that participated in the survey, but for now here’s a few of the highest ranked hot topics and mega trends that will start to get their crampon spikes into 2012 and beyond:
Automotive - Mega trends that will impact the cars of the future / Telematics and Connectivity Markets
Security - Safe cities 2012 - Including urban mobility, energy security, building security
Chemicals - Cradle to cradle white biotech and bioplastics / demand for specialty chemicals for construction and waste water
Energy - Opportunities in renewable value chains / growth in solar power technologies
Healthcare - Medical imaging in cardiology applications / Computed and Digital Radiography
Environment - Smart water and the digitisation of the market
Aerospace – Training simulation
Information and communication technologies - Momentum in cloud technologies / disruptive technologies and new business models
Interestingly, 54% of the respondents also stated that they are now seriously looking at mega trends as they shape their strategy for long-term success. Back in the 90’s the key mega trends that were doing the rounds were:
- China as an Emerging Super Power
- Internet Retail and E-Commerce
- From Industrial to Information Society
Today, the top mega trends with the greatest future potential were identified by our respondents as:
- Smart is the new green
- Infrastructure - Mega cities, corridors and regions
- And beyond BRIC – the next game changers
So if you want to grab the button-lift to the top of these peaks of prosperity, then you should look at your business today and imagine how it will fit into the economy of tomorrow. You might even want to consider getting a helicopter to a new mountain; market diversification never did Richard Branson much harm.
So can Kodak survive? I hope so. Their approach to social media has been nothing short of remarkable and the brand and its patents could be a veritable gold mine for the right partner or investor. But the caution in this tale is that the best marketing and branding in the world is useless unless you have the right innovations, products and services to back it up.
To round off this post and make it particularly poignant please allow me to go full circle and return to the ‘big day’ 5 years ago. Then it was customary to have disposable cameras on every table for people to capture those Kodak moments. However, such was the quality of the digital snaps taken by our guests that, to this day, my Wife and I never bothered to develop the disposable film cameras from the tables. That is a perfect example of how the death knell can ring for an outdated technology.
But you never know, the trend towards retro products could mean that film photography might one day have a cult fan base that is similar to the one that exists for vinyl records today. In fact, I now have a strange urge to reclaim that unbeatable feeling of excitement from holidays past, when you picked up your photos from the Kodak shop and viewed them for the first time with your friends and family, thumbs over the lens and all.
With that in mind, does anyone know where I can get 30 disposable cameras full of wedding pictures developed this week? Let's hope that those Kodak moments never die.
Thanks for reading and till soon,
29 May 2012 06:36
Vice President - Consulting, INTERN
Very well written Noel. I often use this example in my talks and speeches on Mega Trends. I also use some of the other relevant examples in the Indian context - about CRT Tubes. Imagine just like the Film Cameras, where is are those familiar CRT Televisions? Same is the fate of these companies who still insist on manufacturing these outdated products. As you correctly said, 'fear' of the unknown make them behave in the way they do.
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