The nature of change

The nature of change

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Most of us face technological changes and it affects most parts of our lives. Thanks to the advances made by computer science and communication, every imaginable thing is only a few clicks away. Technology has impacted the pace of how we run our businesses. Business processes today have been modified hence enabling organizations work a lot more efficiently than they ever did. It has also changed means of communication giving businesses a chance to collaborate beyond the borders. This is the same case for Kodak. Technologies bypassed the organization and it impacted their service delivery. In the text below, we will dig deeper and get to understand how this happened, how it was handled and what they could have done to prevent the failure of the organization.

The problem with Kodak is that it did not make a digital transition fast enough. According to Lucas Jr & Goh, (2009), there were people inside the business who saw the problem that the organization was getting itself into but they did not act early enough. Kodak faced technological discontinuities challenge. New technologies have fierce competitors and low margins. The company did not take any decisive actions to counteract the inevitable challenges. Kodak made poor strategic decisions. They hired a technology expert, George Fisher, in 1993 as the CEO. The new CEO who was buried in the hierarchy was much respected and believed to have had very good ideas. It was unlikely that they would make poor strategic decisions.

The challenge to technological change was due to overflow of complacency in the organization Lucas Jr & Goh, (2009). In the 1980s, Kodak failed to keep up way before the technological revolution while companies like Fuji were doing well with old technology. With complacency in place coupled with lack of management focus on the problem at hand, they did not make any progress. The strategy sessions with the much respected CEO did not yield any fruits. The organizational members who were buried in the hierarchy and saw this problem coming did not make any move. In fact, were also ignored by their peers and bosses. As Kodak became a lot more successful, complacency on the other hand grew and hence leaders created a big margin between themselves and the subordinates. This led to increased growth of complacency. This can be a vicious circle and for Kodak, this was certainly the case.

Another factor that led to its decline was the ignorance to the new technology. With time, the use of films and printing sheets reduced. This was caused by the invention of new cameras. This meant that people wanted to transition and wanted to be associated with digital apparatus. Kodak at this time was well known for producing portable and efficient cameras. It occupied almost 80% of the global market and thus enjoyed the incomparable feat. It hence looked down upon the competencies of digital cameras and thus took no action as the business was profitable at the time. This led to a great downfall when people were transitioning to the digital cameras as they had nothing to offer.

The core competencies for the company are very vital for their success and influences the way they promote their business as well as gaining competitive advantage against their rivals. The major core competency is the brand, Kodak’s brand. As much as they went down financially, and filed bankruptcy, Eastman Kodak was ranked by MPP Consulting as one of the most valuable brand in the United States in 2011 being at number 77. The second core competency according to Gupta, (2013), is Kodak’s distribution system as this was still unrivaled in the film industry. The utilization of the brand’s loyalty and the distribution system could have yielded hybrid solutions when the company was going through a transition period during the shift from traditional to digital imaging. The final core competency is the Research and Development for technology. For about two decades, Kodak possessed one of the biggest imaging research efforts. In 2000-2005, the company employed over 5000 scientists and engineers in their labs in Australia, China, Japan, France, UK and the US and they had more than 600 PhDs. This thus ensured they were at the top of the research industry and provided suitable solutions where need be.

The idea to brand the company an imaging company was a big mistake which led to their failure. The company at that point made films which deals with chemicals. Concentrating on films at that point and branding themselves as an imaging company was a major fail as it closed their doors to many opportunities (Shih, 2016). It is just recently that the company was able to acknowledge that they are not an imaging company but a chemical company after they almost closed their doors. They were able to venture into the manufacture of medical ingredients thus associating itself chemicals rather than the photos and cameras which gave it fame.

Kodak set up several approaches to help manage strategic change. They put in place vertical integration which they combined with product development and continuous innovation Przybylowicz & Faulkner (1993). They also strategized on how to increase speed which required cutting down of cycle times in product development and manufacturing. Secondly, in order to accelerate and systemize product development as well as improvement of product-launch and quality, Kodak put in place new methodology of product development which is referred to as “Manufacturing Assurance Process” (MAP). For Kodak to remain relevant in the market and to increase its competitive advantage, they went into joint venture with Microsoft and HP for them to bring into the market new products which were needed in the market. They took this step for them to collaborate with the experts for them to enhance their competency. This brought forth digital strategies so as ensure better coherence among the multiple digital projects owned by Kodak. Finally, the company scaled down from diversification strategy to Fisher focus in the imaging business (Przybylowicz & Faulkner, 1993).

The failure of Kodak was evitable as there are several measures that would be put in place to avoid the failure. If one had followed the rise of digital imaging for the past 15 years, they would say that the company’s downfall was inevitable but in real sense, the company put in place several measures to ensure that it remained relevant in the market though it wasn’t enough. In the 1990s and 2000s, Kodak made several changes like unveiling a line of quality digital cameras, selling inkjet printers and also went ahead to buy a sharing site for photos known as ofoto which was rebranded later to Kodak Gallery (Gavetti et al 2005). All these sound like smart and reasonable decisions that the company made, but that wasn’t enough. Kodak unfortunately was still reliant on outdated business models which depended on individuals printing their photos. The photo sharing site for instance was basically a site for ordering prints and thus the company failed to realize that the photography dynamics have changed.

There are some suggestions that Kodak could have implemented to prevent its failure. Kodak should have come to the realization that people were no longer interested in printed pictures but wanted to share them online. They would thus deemphasize on its printer business and instead build its online property, ofoto, into something better than just the upload and printing of photos. Digital photography as a business model was destined toward social media. Kodak should have as well thought wider about digital photography in that they could have shifted to manufacturing sensors and sell them to the camera companies. They could have made it a requirement that the companies put a Kodak logo on the camera body as well as in their advertising.

Technological change is inevitable in every organization and in our day to say lives as well. Technological advances are happening every day and it is important to be at per with them as they occur especially when in business. Technological advances in business need to be taken seriously and transformation done as soon as possible as any lagging behind might cost the business a great deal as is in the case of Kodak. As much as Kodak tried to keep up with the changing technology in its field, it failed to keep up with the rapid changes leading to its failure in the film industry. This could have been prevented by ensuring some smart measures were put in place. Technological backwardness prevents customer satisfaction which translates to reduced profits which if not carefully tackled could lead to closure of business.

References

Gavetti, G., Henderson, R., & Giorgi, S. (2005). Kodak and the digital revolution (A). Harvard Business School drafting.

Gupta, R. K. (2013). Core Competencies-Concepts and Relevance. Prabandhan: Indian Journal of Management, 6(2), 48-54.

Lucas Jr, H. C., & Goh, J. M. (2009). Disruptive technology: How Kodak missed the digital photography revolution. The Journal of Strategic Information Systems, 18(1), 46-55.

Przybylowicz, E. P., & Faulkner, T. W. (1993). Kodak applies strategic intent to the management of technology. Research-Technology Management, 36(1), 31-38.

Shih, W. (2016). The real lessons from Kodak’s decline. MIT Sloan Management Review.