What does Kodak have to teach us?

I am sure we are all a little sad of the passing of Kodak.

Some of us of a certain age have piles of Kodak slides and snaps, even old Kodak cameras around the place. Hearing about Kodaks resignation and demise also got me thinking about Nokia, and indeed other organisations and industries that struggle and fail as they were unable to adjust to what was them an ambiguous world.

The coming age of an uncertain world

 When faced with an ambiguous world some move into that world, and embrace it to understand it, listen deeply and think very hard about transformation - how to transform, how to design for transformation. This is a very hard thing to do and few do it well - LEGO being an example of the few. And why is that? As Carlota Perez argues in her book Technological Revolution and Financial Capital,

When the economy is shaken by a powerful set of new opportunities with the emergence of the next technological revolution, society is still strongly wedded to the old paradigm and its institutional framework. Suddenly in relation to the new technologies, the old habits and regulations become obstacles, the old services and infrastructures are found wanting, the old organisations and institutions inadequate. A new context must be created; a new ‘common sense’ must emerge and propogate.

There is indeed deep institutional resistance to real change. This is due to the voices of fear, cynicism and prejudice. And, as the forces of disruption increases often the resistance of organisations under threat does not abate but intensifies, until flailing against this unknown or misunderstood enemy they exhaust themselves.

Its why Ambiguity is the first principle of NSL. You can read briefly about the other six here - 6 challenges for a non-linear world. With ambiguity there are 5 key points,

1. Accept the uncertainties of an ambiguous world and become master of them.
2. Stepping back – seeing the world more holistically – as a system
3. It requires deep listening
4. To move from being unaware to aware
5. To seek new patterns that make sense even if they challenge pre-conceived ideas, positions and ways of doing things.

To be a little more expansive in NO Straight Lines I write:

In many ways ambiguity is the output of our current trilemma, but for that very reason it must also be a defining principle. When we individually and collectively live in an age of uncertainty, we must all become masters of managing uncertainty. As individuals or organisations we need to demonstrate the ability to face the future openly; we have to replace fear of the unknown with curiosity. We need to become aware of what is around us. To do that requires a step change in learning and self-improvement – this is achieved through continuous contemplation and self-reflection which ultimately enables the mastery of an aware self/organisation, with the motivation to pursue truly motivated goals.

There is a need to accept a lack of control, and of uncertainty, not only being prepared to accept being taken outside of one’s comfort zone but deliberately seeking it out – the consequence of which is a more disciplined mind or organisational culture, that is now capable of strong creative and conceptual thinking.

So if we look at LEGO

1. They had the wisdom to recognise the old model of commerce was broken
2. They had the courage to explore new and emergent means by which to create a new sustainable business
3. They listened deeply and evolved an internal ability to critically appraise where they needed to get to
4. They recognised the important patterns in co-creation and how they could have real benefits for R&D, organisational capability, commercial models and marketing
5. This enabled them to evolve to a new more sustainable economic / social / organizational model

The dangers of trying to innovate whilst looking in the rear view mirror

Om Malik writes,

As my friend Pip Coburn says, turnarounds never turn. Kodak has been in restructuring mode for 15 years – cutting headcount, closing factories, tightening belts and squeezing rocks for blood. In other words — the company isn’t fat in a traditional sense.  But why none of its strategies worked was  because the company took too long and sat on its duff watching digital photography come and eat it for a mid-day snack even though Kodak R&D helped with the digital photo revolution when it launched the first digital camera in 1975.

And yet they failed to do what one of their major competitors – FujiFilm did — embrace digital with both arms and is now thriving. And when Kodak finally did embrace digital in 1993 it did with hesitance that comes when companies are afraid to cannibalize their existing businesses for the sake of the future.

Disruption never asks for permission

Nokia said it would never release a touch screen phone, so someone else did - a software company. In my journey in writing NO Straight Lines, I have seen this organisational myopia as a constant red thread. So I argue, to survive organisations have to disrupt themselves before someone else does it to them. Or as Arthur C. Clarke said,

The only way of discovering the limits of the possible is to venture a little way past them into the impossible

Malik writes,

Anyone remember the Nokia 770? That phone could have been Nokia’s future, instead it is forgotten.  Nokia defined itself by a certain kind of a product – the 12-key phone. People at Nokia talked about a multimedia mobile computer, but it couldn’t look beyond those 12 keys. It took Apple and Google to show Nokia how to re-imagine the phone.

Standing at the edge of the adaptive range of our industrial world

We have arrived at the edge of the adaptive range of our industrial world. At the edge, because that world, our world is being overwhelmed by a trilemma of social, organisational and economic complexity. We are in transit from a linear world to a non-linear one. Non-linear because it is for all of us socially, organisationally and economically ambiguous, confusing and worrying. Consequently we are faced with an increasingly pressing and urgent problem, WHAT COMES NEXT? And also we are therefore presented with a design challenge: HOW do we create better societies, more able organisations and, more vibrant and equitable economies relevant to the world we live in today? No Straight Lines presents a new logic and inspiring plea for a more human centric world that argues we now have the possibility to truly transform our world, to be more resilient, to be more relevant to us both personally and collectively, socially cohesive, sustainable, economically vibrant and humane, through the tools, capabilities, language and processes at our fingertips.

The key to unlocking this opportunity, so we can design for transformation is through understanding the interlocking concepts of the six key principles of No Straight Lines, these are:

[1] Ambiguity [2] Adaptiveness [3] Participatory cultures and tools [4] Openness

[5] Craftsmanship [6] Epic – designing for transformation

It means we can then ask this question: How do we find the best possible solution to seemingly intractable problems, and be able to answer them?

NSL Store

 

Comments

[zlutor]

@Baron95: Man, are you serious?! London, The City, SAP or Symbian do ring the bell? Just to name a few...

Oh my Godness, saying no innovation outside of the US is - well, what term should I say - nonsense, at minimum...

[PERUS]

@Baron95:
Dude, I guess it's Allan Moore not Tomi Ahonen. Otherwise you'll read more "fire elop, bad evil microsoft" or similar. Can't you read the differences? Hehe.

[Alan Moore]

Thanks Perus ! yes its me Alan Moore.

Dear Baron95 - I know Silicon Valley is important, in fact I write about innovation eco-systems. However LEGO did not move to Silicon Valley.

You do get epicentres of innovation - true.

But skype came from Estonia, and others here have made their own observations in the comments sections.

So I suggest you need to adjust your perspective somewhat - otherwise you will exist forever in an ambiguous state.

[Sir Not Appearing In These Comments]

It has been interesting to read about Kodak's role in the development of digital cameras and their subsequent failure to build on that. It seems that companies that are particularly successful in one field really are hostages to their own success. Afraid of new products that compete with their existing business, they are apparently unaware that if they don't make them someone else will. It's preferable to see a competitor take your business when that competitor is yourself.

I think it was Simon Phipps who said in an interview (http://twit.tv/show/floss-weekly/113) that companies really need to fail before they can meaningfully change and, although Nokia didn't really face a paradigm shift like Kodak did, I think this observation still applies to Nokia. The tragedy is that there are people working there who have recognised that fundamental change to the company is required, yet only lip service has been paid to the idea of change.

When Stephen Elop arrived at Nokia there was a huge opportunity to effect this much-needed fundamental change, but that opportunity was discarded in favour of taking what must have seemed like a safer course of action. I think fans of Nokia will have to wait for a new CEO if they want to see meaningful change.

[cycnus]

Some innovation is not innovation at all. It just a natural evolution of technology.

For example, after car were build, they found problem, how to alert the car in front of them, and how to tell the car behind them they want to change lane. Therefore, horn and signal light were a natural evolution, not innovation at all..... and so on....

So, in the era of everything analog transform into digital counterpart. I think the management of kodak were really not the best person to run the company if they don't foresee this.

[svensson]

My first compact digital camera was a 2Mpix Kodak, it died on me soon after warranty expired, never bought Kodak again. But it is an institution and I am going to be equally sad when Nokia falls through the floor as well.
I use Nokia, my wife uses Nokia (the new N9, she loves it) but I see no future in it, Nokia has lost the respect it once had with the youngsters and the general public.
Looking forward to Belle on my N8, 2 weeks until official release here in Sweden, fingers crossed.

[incognito]

(Argh... The stupid comment system swallowed my comment, I'll try to split it)

@Baron95, you don't have to look far - Slumdog Millionaire, easily, a British production movie (with a British director, and most of the crew being British as well) that has pretty much nothing with Hollywood. Of course, there were some Hollywood-based companies and co-producers involved, which enabled it to compete at the Academy Awards outside of the foreign film category, but that's like claiming that Nokia is a Silicon Valley company because there certainly are some stockholders from the Silicon Valley, and not only that - Nokia has a research center at Silicon Valley (Palo Alto) since 2006.

Also, keep in mind that the term 'blockbuster' has lost its original meaning a long, long time ago - from a term to describe particularly powerful bombs, over the term to describe successful theater plays, and then a term to describe movies that were well received by the audience or grossed more than $100m, to a term that today represents a specific genre of movie that has high-production cost and advertisement budget no matter of its actual success (Godzilla being one of the shiny examples). If you use the more conservative meaning of it, then certainly `My Big Fat Greek Wedding`, an independent movie, would fall under the blockbuster umbrella with it being the officially most successful USofA movie of all time, with its return of investment topping ~6100%!

Since today the term 'blockbuster' has nothing to do with the actual success, quality or a historical impact of the movie, and with it redefined by the Hollywood industry itself (and movies are 'awarded' the blockbuster 'title' arbitrary) it's no wonder that most blockbuster movies are Hollywood-based.

[incognito]

(Part 2)

Also, same goes for the Silicon Valley 'argument' and its determinable effect on the IT-based companies. Are you saying that Texas Instruments will perish if they don't relocate to the Bay Area? How about ARM Holdings, a British company that has been making fun of Intel in the low-powered arena for almost a decade, and to make it worse a lot of Silicon Valley companies prefer to use ARM silicon (no pun intended) than that of their neighbor Intel? I've been hearing this claptrap about the Silicon Valley for the past two decades while one-hit-wonders and long-term successes were popping all over the world. Sure, with probably the largest venture capital market in the IT world, the Silicon Valley is (still) one of the greatest places to start your IT-oriented business at, but if you're already successful you certainly don't need to relocate there to stay at the top of the game. And keep in mind, for every Silicon Valley's Google, there are thousands of others that die-off. And for every Hollywood's E.T. the Extra-Terrestrial there are thousands of movies that fall under the radar of even straight-to-DVD arena.

You have way, way too USA-centric view of the world.

[Alan Moore]

I am with Incognito on this (good list btw) - Did you mention Lord of the Rings trilogy from - New Zealand!!

Also look at a company like GrowVC - the worlds first venture fund funded by a global community.

11,000 members in 200 countries.

[Alex Kerr]

> It took Apple and Google to show Nokia how to re-imagine the phone.
(I know this a quote from someone else, but it's used here)

Did it? It took the iPhone's success to show an arrogant and internally bureaucratic Nokia that it had to sharpen up it's game in the highest end phones a bit, but that is all.

Nokia had touch screens, icon layouts, etc etc in fact everything the iPhone offers, including ecosystem, apps and all the rest, out long before the iPhone. As for Android - pah! It's nothing but a poor man's Symbian. Android is GREAT. But it's STILL nothing but a poor man's Symbian at least in terms of software and the hardware it presently runs on. And it will not have the success people forecast for it either. (Though it will be extremely successful, it just won't rule the world by a long shot).

Anyway, I digress - Apple just polished what Nokia already had done. Android did a poor copy of iPhone and Nokia. Nokia's fall is generally pretty much it's own fault - something that the continually astoundingly ignorant press continue to miss.

Further, Tomi (yes I know the above article is by Alan) has written extensively on how Nokia did not fail because of touchscreens, Apple, iPhone or anything else, and how phones with a keyboard are still way more popular than touch screens and will continue to be so (I believe).

So...let's not have revisionist history just because it fits neatly into a point an article is trying to make. In the context of Kodak, it failed because it failed to recognise and respond to the threat Nokia was (everyone else was just copying Nokia) with their world-leading cameras, their market leadership over years, the sheer number of cameras they were selling (in the guise of phones) AND the picture sharing and other capabilities built into their phones (Nokia have always had by far the most capable and best performing phones at the low and high end). Look at Carl Zeiss for a contrast. Shifted themselves from lens for stand alone cameras to seeing the future, and teaming up with the best phone maker (Nokia). THAT'S how you end up with something like the N8 (in part - I recognise the lens is only one part of the N8 camera's genius). (And again, Nokia's INTERNAL failures alone explain how the N8 does not have the slick responsiveness of the iPhone user interface and the marketing to the public and developers that gave the iPhone it's app base).

[darwinphish]

@Baron: Your belief that "Kodak could only have prospered, if they had moved their R&D and headquarters to Silicon Valley" ignores the fact that not all Silicon Valley companies succeed. Furthermore, companies, like Xerox, did not prosper despite having R&D there.

Kodak's problem is simply that they refused to disrupt themselves and then had to watch others do it to them. Their's was a failure of vision and leadership, not a failure of technology or lack of innovation. Likewise, Microsoft's problem is not that they are in Redmond, Nokia's not because they are in Helsinkin, nor RIM's because its in Waterloo. Bad leadership trumps geography.

As for the comment about blockbuster movies, I guess you have never heard of Bollywood.

[KPOM]

In similar news, RIM's co-CEO/Chairmen finally accepted reality and stepped down. Unlike Kodak, they did actually attempt to react to Apple, but didn't move quickly enough. Like Kodak, they couldn't believe that "outsiders" could move as quickly as they did. I've heard that 5 years ago, after the original iPhone announcement, RIM executives claimed Apple couldn't possibly deliver on what they had promised.

[HCE]

@Baron95

I generally agree with much of what you say but this time I beg to disagree. I do agree that Apple and Google disrupted the smartphone industry. However not all disruptions begin in the Valley. Microsoft has dominated desktop software for so long and they are not a Silicon Valley company (though they do have a branch here). Amazon did to retailing what Microsoft did to software and they are, like Microsoft, based in the Seattle area.

I don't see why you think that moving Kodak to Silicon Valley would have done anything for them. It isn't as if there is some special magic in the Valley that causes innovation to spontaneously spring forth. The reason the Valley produces so many software innovators is because there is a huge pool of software talent here. The valley does not have much talent in photography-related technologies. Most of the talent in the photography industry is in Japan. By your logic, Kodak should have shifted their headquarters to Japan!!

IMHO Kodak's problems started long before the digital revolution began. It started when they decided to basically give up on their camera business and become primarily a purveyor of film and other photography technologies. It also should not be forgotten that Kodak was one of the early pioneers of digital photography. It's just that there were no cameras to put their sensors in! Turns out that CCD and CMOS sensors weren't that hard to make and many of the major camera manufacturer have ended up making their own and Kodak ended up competing with a whole host of electronics companies to supply sensors that did not have their own sensor manufacturing technology. If Kodak had retained its camera and lens division (the way its chief film rival Fuji did), they would not be in their current sad shape.

- HCE

[darwinphish]

@Baron: Dude, read what you actually wrote previously before responding. Your exact words, copied and pasted from above: "Kodak could only have prospered, if they had moved their R&D and headquarters to Silicon Valley at the beginning of the digital revolution". Kodak's problem was not the location of their R&D and headquarters. Using your horse and buggy analogy, they invented the internal combustion engine but never took car making seriously. By time they did, it was too late.

The most obvious counter example to your argument is Xerox. They had R&D in Silicon Valley, invented amazing technologies and basically did nothing with it.

[Tomi T Ahonen]

Hi all

Excellent discussion. I removed a few spam comments and Baron95 - you stepped across the line on being rude on this blog, you know the rules, I removed the comment you criticized someone for using terminology you felt was not modern. This blog has a vast international readership as you know, not all speak or write English as their native language, we will let them use the terminology they want. If you start to accuse writers of using wrong words, I will delete all such comments. You know this. Play nice, Baron and your comments can stay.

PS this is obviously Alan's posting not mine, I will let Alan do most of the comments, but I will also join in the discussion as Kodak alone is a very relevant tech story - and I would have written a similar blog (probably far longer knowing my style haha) not to mention the reference to Nokia.

Tomi Ahonen :-)

[Ryan Tracey]

Excellent post, Tomi.

Another factor that I would add to Kodak's demise is simply the fact that they forgot how to do the simple things right.

Recently I needed to buy a cheap but handy video camera for my work team. (Mobile phones are great, but we needed a single item to share among multiple people.) Given the demise of Flip, and after reading a few reviews on the web, I decided to buy a Kodak Playfull.

When it was delivered and I took it out of the box - silly me - I realised I needed an SD card. Annoying, but fixable, so I popped out to the local tech store and bought one.

My point is, if Kodak informed me during the online ordering process that the camera needs an SD card - and by the way would you like us to add one to your order? - they would have extracted a few extra bucks out of me.

[ノースフェイス]

価に（2 +1）が含まれているかどうかわからない場合は評価、ない古き良き時代から多くのプライマリとセカンダリの学校の生徒。

[Visio Professional 2010 Download]

When the economy is shaken by a powerful set of new opportunities with the emergence of the next technological revolution, society is still strongly wedded to the old paradigm and its institutional framework. Suddenly in relation to the new technologies, the old habits and regulations become obstacles, the old services and infrastructures are found wanting, the old organisations and institutions inadequate. A new context must be created; a new ‘common sense’ must emerge and propogate.

[onenote 2010]

We have arrived at the edge of the adaptive range of our industrial world. At the edge, because that world, our world is being overwhelmed by a trilemma of social, organisational and economic complexity. We are in transit from a linear world to a non-linear one. Non-linear because it is for all of us socially, organisationally and economically ambiguous, confusing and worrying. Consequently we are faced with an increasingly pressing and urgent problem, WHAT COMES NEXT? And also we are therefore presented with a design challenge: HOW do we create better societies, more able organisations and, more vibrant and equitable economies relevant to the world we live in today? No Straight Lines presents a new logic and inspiring plea for a more human centric world that argues we now have the possibility to truly transform our world, to be more resilient, to be more relevant to us both personally and collectively, socially cohesive, sustainable, economically vibrant and humane, through the tools, capabilities, language and processes at our fingertips.

[グッチ]

しかし昨秋、国土交通省や亘理町などが堤防の拡幅を検討していると知り、修復工事を中断した。国交省は拡幅に必要な川沿いの住宅地で用地買収を進める方針だが、買収範囲は未定。男性は「範囲が決まらなければ、自宅を移転させるか手放すか、決められない」と嘆く。