Now various observers commented on Kodak, because this was such a, a big event.
it was so hierarchically oriented that everybody looked to the guy above him for
what needed to be done. arrogance fueled a nightmarish
bureaucracy, so entrenched that it could have passed for a government agency.
Do everything by company rule books. Here's, again, this comments about having
meetings prior to the meetings, to avoid confrontations.
No matter what they said, they were a film company.
Executives abhorred anything that looked too risky or too innovative, because a
mistake could cost thousands of dollars. The company built itself up around
procedures and policies intended to maintain the status quo.
If all you want to do is maintain the status quo you will never respond to a
disruptive technology. This is an interview with Carly Fiorina,
former CEO of Hewlett-Packard. Kodak sat on a mountain of cash and
profitability in their traditional photography business, and their thinking
was that digital photography would eat into their traditional most profitable
businesses. And they didn't want that to happen.
What Kodak miscalculated was, that they weren't in charge of whether that would
happen. Consumers were in charge.
And this is a lesson for us. For a lot of companies as well.
Individuals were in charge. An individual will always choose what
gives them greater control, flexibility, and freedom of choice.
So suddenly consumers had a new way of taking pictures that gave them more
control. The consumer became in charge of how fast
Kodak's traditional business would be eaten away.
Kodak, unfortunately, didn't see that in time.
So if you remember, we talked about a box score, of the factors that inhibit a
response to a disruptive technology. And so, you know, what, what kind of
numbers would you put here? You know, how, how much did Kodak deny
what was happening in the world? On a one to ten scale, you know, I'd tend
to give this maybe a ten. History prevented them, I'd give them a
ten on that. Resistance to change, mindset.
So maybe a 9, maybe an 8, maybe a 9, and maybe a 10.
So these are all factors that came in that, that kept, that prevented Kodak
from responding to this threat of digital photography.
Now, what did I score this as when I prepared the slides?
Let's see. Well, pretty close.
So, Kodak has the closest I've seen to a perfect score.
I guess we'd give them a grade of an A on resisting a disruptive, and this is not a
place where you want a grade of an A. So what's next?
Well does Kodak have a future? Let's see in the next video where Kodak
is now.