Kodak is probably the most referenced anecdote of a company that failed to adapt. It’s a story about a traditional organisation that went from the peak of American industry, to bankruptcy. A story of a household brand that didn’t see the digital revolution coming and toppled.
It’s much easier to tell a binary story about Kodak, but in all the telling and retelling, there was one crucial aspect that got forgotten: Kodak did see the digital revolution coming. In fact, they invested a huge amount over a significant amount of time, in order, to respond to it.
Way back in 1983, CEO Colby Chandler created a division to explore digital imaging. Over the next decade they would spend $5b on research and development. They would hire former executives from Apple and IBM. They would even meet with Bill Gates to explore possible joint ventures.
So what went wrong?
In a later interview, John White, the guy who was hired to spearhead much of Kodak’s digital R&D, gave a quote that summed it up:
“ Kodak wanted to get into the digital business, but they wanted to do it in their own way, from Rochester and largely with their own people. That meant it was never going to work. The difference between their traditional business and digital is so great. The tempo is different. The kind of skills you need are different. Kay [Whitmore, President] and Colby [Chandler, CEO] would tell you they wanted change, but they didn’t want to force the pain on the organisation.”
Ultimately, Kodak got stuck trying to deliver fundamentally new outcomes using the same business model they had always had. They had a serious commitment to innovation – they just weren’t doing it fast enough, or with enough courage.
What we’re talking about is urgent stuff. Innovation can’t be one of five priorities for management anymore. There’s this great quote from Jack Welch, which brings it home:
“If the rate of change on the outside exceeds the rate of change on the inside – the end is near”
There’s the behavioural aspect too – where people are resistant to change, fearful of change or apathetic towards change. So many people are still chained to their desks, or managing their teams by sight.
This challenge isn’t going away. Where in the past, there were incremental advancements made by either you or your competition – and if you course correct you could catch up – we are now seeing a J-curve. If you sleep through a major innovation today, you will never catch up.
There are infinite possibilities – but finite time and attention: it’s about human ingenuity, speed to market and courage.
So how can you bridge the innovation chasm – get a jump on your competitors and disrupt the major players – with small, incremental changes?
It needs to be a cultural shift, I have shared the following story with countless customers;
A group of scientists put five monkeys in a cage, and in the middle of the cage was a ladder with bananas on top.
Every time a monkey went up the ladder, the scientists sprayed the others with cold water. After a while, whenever one monkey started up the ladder, the others would pull it down and beat it up. Eventually, all the monkeys stayed away from the ladder.Then the scientists replaced one of the monkeys. The newcomer started making its way up the ladder and was immediately set upon by the others. After a few beatings, the new monkey also stayed away from the ladder. Another monkey was substituted and the same sequence unfolded. A third monkey was changed, same result, and then the fourth and fifth were replaced as well.
What was left was a group of five monkeys which – without ever having received a cold shower – continued to beat up any monkey that tried to climb the ladder.
Now if those monkeys could talk and we asked them why they were beating up anyone who headed to the ladder, their most likely response would be, “We don’t know, it’s just the way things are done around here”.
You have to selectively forget your past.
And it’s hard, because this change is different to changes we’ve made in the past. This time, it’s not just about adding new capabilities in order to effectively compete. It’s not about learning new tricks or using new technologies in order to become more efficient. In fact, we’re finding that all the skills and tricks which made us successful in the past are not only less effective today, but are actually becoming counter-productive.
So before we can learn a new way to operate, we have to un-learn many of the principles that made us successful in the past.
Start small. Think about the culture you drive at your own organisation. Do you trust your people? Do you reward them for being open and contributing to the success of others? Are you tapping into a global talent network? Are you brokering new partnerships?
Innovation is simply change that adds value. And it’s achieved through human ingenuity, speed to market and courage.