On January 19, 2012, camera company Kodak filed for bankruptcy.
It was a failure of epic, unimaginable proportions.
For decades, Kodak had completely dominated the photography market.
In the mid-1970s, it sold 90 per cent of the photographic film in the US and 85 per cent of the cameras. As late as 1996, it was ranked the fourth most valuable brand in America – behind only Disney, Coca Cola and McDonalds.
Its advertising was so successful that the phrase ‘Kodak moment’ had become synonymous with a moment so meaningful, it was worth capturing on film.
So how did Kodak fall so far, so fast?
Simple. Even though it had invented digital photography (as early as 1975), it was too slow to recognise that this would render film photography obsolete.
This was partially a conscious choice: It didn’t want to kill its own core product. It was partially a failure of imagination: Kodak’s leaders couldn’t believe people would give up printing pictures and did not foresee that they would prefer the convenience of digital.
Their market revolutionised without them.
Unfortunately, if it can happen to a company the size of Kodak, it can happen to anyone. It’s crucial you ask yourself today: Could this happen to us, too?
Recently I wrote about how political and economic instability is challenging companies. Swift technological change is another factor which is dramatically changing entire industries.
For example, the Internet has upended many companies, because it has allowed new competitors to emerge with cheaper business models. It has also allowed sellers to reach their customers directly without any middlemen.
Think of how newspaper advertising has been decimated by the ability to advertise much more cheaply on social media. Consider how websites allowing consumers to quickly self-publish has revolutionised the book publishing industry.
I’ve seen first-hand how companies in very traditional industries with several big players are thrown into disarray when small start-ups start to invade their space. The formerly dominant companies end up playing catch-up.
It changes everything for suppliers to the industry, too. They need to rethink who their target market really is, and what they’re delivering to them.
One company I know lost one of its largest customers overnight, when that customer decided to seek a cheaper supplier. The reason? That customer was coming under financial pressure because its own market was changing. The company I know – which was taken completely by surprise – paid the price.
As the business owner, you need to be intensely aware of what is going on in your market, so you can see change coming.
All too often, I see business owners who are so caught up in the day-to-day running of their business that they have lost sight of the bigger picture. When change does happen – and usually this happens very fast – they are taken unawares.
Take the time to work on what’s important, not just what’s urgent. As a business leader, you need thinking time, so you can just sit and watch, and identify trends.
The bottom line is: The world is changing fast. Few businesses are immune.
Are you ready?
