Change management Storyof Kodak
Change Matters:
What Kodak managed to do well for over 100 years and got them to the market leadership status, did not guarantee continued survival and get them to where they wanted to go in next 100 years. By mid 1980s, just about 100 years after George Eastman invented paper-based film, the digital revolution had started ushering in the sweeping change. This disruptive innovation wasn’t seen as big threat by Kodak and they did probably not realize exactly how to adapt and change. Instead of focusing its strategic moves on the emerging digital technologies. Kodak was made few diversification moves like acquiring pharmaceutical giant Sterling Drugs for $5.1 billion and trying to establish a brand in the battery business. These only added to Kodak's woes and losses.
The decline started in 1990 and by 2012 and Kodak went on to file bankruptcy petition under chapter 11. Finally, after series of strategic moves of patent sell-outs and downsizing, restructuring Kodak managed to emerge out of bankruptcy in 2014 only to finally shut down its largest research and production facility in Rochester, known as Kodak Park. Kodak brand thus disappeared and was gone.
Steuben and Kodak examples prove the point that change is not an option and hundred years of existence is no guarantee for survival for next hundred years. The answer lies in Change and transformation.
The Eastman Kodak story:
Steuben dug its own grave despite catering to the super rich and famous. On the other hand Eastman Kodak was mass market consumer product company which created the huge
market for photography and defied the need to change .Kodak remained blind and
refused to adapt and change to fight the emerging threat from technological changes
and got killed by disruptive technology innovations.
George Eastman the innovator and philanthropist founded Kodak in 1892 and the Eastman Kodak brand became the undisputed king in USA and the world over. Born in a city known for its industrial giants, Kodak became the American icon along with Bausch and Lamb, Xerox, Gannett. Anyone who was born and lived till death in Rochester USA by default that person would have been a y Kodak employee only to retire there with a hefty pension and happy life till end. Kodak boasted of 80 % market share in film sales and 85 % of camera sales at one time. Kodak employed 145000 people in 1988 which had to downsized to 20000 in 2009 and to 6500 in 2015.Kodak's competitor Fuji was making moves aggressively to pose the biggest threat. In 1990, the company launched the “Photo CD” as digital image medium and that was a huge investment gamble. Despite this threat Kodak, was stuck in its status quo mind set that film would never die. This attitude is similar to that of Steuben's attitude in not wanting to change. This status-quo mindset was amply demonstrated when at peak performance level the CEO stated that “Kodak was convinced that there never had been a better time to be in picture business".
George Eastman the innovator and philanthropist founded Kodak in 1892 and the Eastman Kodak brand became the undisputed king in USA and the world over. Born in a city known for its industrial giants, Kodak became the American icon along with Bausch and Lamb, Xerox, Gannett. Anyone who was born and lived till death in Rochester USA by default that person would have been a y Kodak employee only to retire there with a hefty pension and happy life till end. Kodak boasted of 80 % market share in film sales and 85 % of camera sales at one time. Kodak employed 145000 people in 1988 which had to downsized to 20000 in 2009 and to 6500 in 2015.Kodak's competitor Fuji was making moves aggressively to pose the biggest threat. In 1990, the company launched the “Photo CD” as digital image medium and that was a huge investment gamble. Despite this threat Kodak, was stuck in its status quo mind set that film would never die. This attitude is similar to that of Steuben's attitude in not wanting to change. This status-quo mindset was amply demonstrated when at peak performance level the CEO stated that “Kodak was convinced that there never had been a better time to be in picture business".
What Kodak managed to do well for over 100 years and got them to the market leadership status, did not guarantee continued survival and get them to where they wanted to go in next 100 years. By mid 1980s, just about 100 years after George Eastman invented paper-based film, the digital revolution had started ushering in the sweeping change. This disruptive innovation wasn’t seen as big threat by Kodak and they did probably not realize exactly how to adapt and change. Instead of focusing its strategic moves on the emerging digital technologies. Kodak was made few diversification moves like acquiring pharmaceutical giant Sterling Drugs for $5.1 billion and trying to establish a brand in the battery business. These only added to Kodak's woes and losses.
The decline started in 1990 and by 2012 and Kodak went on to file bankruptcy petition under chapter 11. Finally, after series of strategic moves of patent sell-outs and downsizing, restructuring Kodak managed to emerge out of bankruptcy in 2014 only to finally shut down its largest research and production facility in Rochester, known as Kodak Park. Kodak brand thus disappeared and was gone.
Steuben and Kodak examples prove the point that change is not an option and hundred years of existence is no guarantee for survival for next hundred years. The answer lies in Change and transformation.
Change management is very fascinating subject because it deals with
rewriting and reshaping the destiny of not only organizations but also of
people and their emotions. For anyone who has responsibility to manage people,
and leaders who love initiate creative intervention, this is the subject to
explore and learn to make life meaningful for many who come with dreams to be
with the organization.
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