Kodak created the digital camera, but refrained from investing in it early enough because it made most of its profits from the sale of developing chemicals. Kodak is an example of a business that froze when the market moved around them.
Compare the commercial destinies of Kodak and Apple. In 1997 Kodak had a market capitalisation of $23 billion, at the same time Apple’s market capitalisation was only $3 billion, my how the tables have turned.
In its golden years, Kodak was one of the most respected companies in the world, years ahead of competitors. In May 2005, Kodak’s fortunes changed when a new CEO, Antonio Perez walked in on the job, from Kodak’s competitor Hewlett Packard.
The market reacted to Perez’s appointment with a fall in share price from $35 to $25. The first fall in a steep decline. From the time of Perez’s appointment onwards, Kodak stopped being an innovator.
Today Kodak’s annual losses amount to some $1.2 billion per year, that is 7 times its market capitalisation.
So what can we learn from the collapse of a golden empire
1. Let the customer led, don’t try and control the market
The decision to try and control the market rather than listen to customers, is a key reason for Kodak’s demise.
2. Keep up, commit to a pathway of innovation
Check your position in the market, know your direction and keep innovating down that pathway
3.Teamwork leds to productivity
Analysts described Kodak as a deeply siloed company, which history shows works against efficiency and productivity.
Hearts and Minds