Researchers at Eastman Kodak Co. invented the first digital camera in 1976. In January 2012, it filed for bankruptcy protection.
How could a company that had one of the most well-known brands in the world, dominated the film industry and had the means to keep itself from becoming obsolete have fallen so far? Simple: No one transformed the company.
Kodak’s old model was fairly basic: You sold cheap cameras and made a fortune on the disposable supplies that were used in them. It was the old razor blade model — give away the razors and make your money on the blades. This model worked exceptionally well for a long time and made the company the envy of many.
What brought the company down was digital photography. Film became obsolete as more people switched to the conveniences of digital photos taken with either digital cameras or, increasingly, mobile phones. It has to be incredibly frustrating to the leadership of Kodak to look back at what might have been. The company was already the No. 1 player in the market and invented the digital camera, the very device that could spell its doom if developed by a competitor.
But the leadership of Kodak couldn’t envision a world where film didn’t exist. When profits are rolling in, it can be difficult to see changes in the marketplace that can adversely affect your business. Why transform to digital when film is what is making everyone money?
While Kodak was clutching onto its old business model, the digital market took off, leaving film manufacturers behind. Kodak failed to transform itself to face a new reality and is a shell of its former self. It is now left to the mercy of bankruptcy proceedings.
Don’t be like Kodak.
Here are four things that need to happen to transform your business to reflect the reality of the marketplace.
• Have a clear vision of what direction your company is going and communicate that to your management team and employees.
• Get everyone to buy in. Start with your managers and have them help you get buy-in from everyone else. You can’t afford a disconnect between management and staff. Provide as many facts as possible to win over skeptics. Many people don’t like change, so it may take some time to get everyone on board.
• Make sure you have the right people. Do your people have the ability to execute the plan to transform your business? You don’t need to maintain the status quo anymore; you need to become something completely different. That may require difficult personnel decisions.
• Persevere. You are not going to transform your business overnight. You need to create benchmarks and measure your progress toward your goals. It’s not glamorous. As CEO, you can never stop believing, because people are watching you for cues. If you aren’t a true believer, how can you expect them to be?
Some of you are already working your way through this process or may have even finished it. If that’s the case, then I congratulate you on having the foresight to make the changes you need to survive.
For those of you who haven’t started, as you work through your transformation, expect there to be pain and a lot of hard work. There will be times when you feel like you are not making any progress. But there cannot be growth without pain.
In today’s economy, every company has to transform itself, because everything is changing. In the end, there are only two types of companies: those that transform themselves into market leaders and survivors that are just getting by.
Which one are you?
Fred Koury is president and CEO of Smart Business Network Inc. Reach him with your comments at (800) 988-4726 or firstname.lastname@example.org.