The following is an excerpt from Rita McGrath | January 24, 2012 | Forbes.com |
This article is by Rita McGrath, an associate professor of management, at Columbia Business School and co-author of The Entrepreneurial Mindset (2000), MarketBusters: 40 Strategic Moves That Drive Exceptional Business Growth (2005), and Discovery Driven Growth: A Breakthrough Process to Reduce Risk and Seize Opportunities (2009).
The stunning collapse of a legendary American company has left many scratching their heads. How could the custodians of this storied brand have managed things so badly? With the firm’s fate now in the hands of the courts and its creditors, one has to wonder what went wrong. Its once-humming factories are literally being blown up, and the company’s brand, which Interbrand valued at $14.8 billion in 2001, fell off the list of the top 100 brands in 2008, with a value of only $3.3 billion. Although the bankruptcy announcement is shocking in its newness, the factors that undermined Kodak’s competitiveness are not unique to the Rochester-based firm. Indeed, if you take an honest look, some may pose risks for your organization, too.Here they are:
A sense of entitlement. In its day, Kodak was not just successful; it was super-successful in a way that other companies could only dream of. It had dominant market share, was hugely profitable, and was represented by a brand that practically became a cultural meme. It seemed to be unstoppable. One could understand why its leadership felt pretty good about what they had accomplished. Problems with this? Several. First, it’s easy to confuse good luck with good management when all is going smoothly—you don’t really ever test the caliber of your leaders until they have been through a difficult patch and have learned the lessons that only failures can teach. Second, it becomes inconceivable that the profit engine might start to sputter, so leaders don’t take threats seriously. Finally, the people in power, the ones who control careers and resources, usually succeeded in the old regime. They have zero interest in even thinking it might end and are going to make sure everybody else has zero interest in even thinking about that too.
Kodak Failed By Asking The Wrong Marketing Question Avi Dan Avi Dan Contributor
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Kodak has good company in this regard. Before more astute leaders turned them around, Procter & Gamble, Xerox, and of course IBM all had leaders who simply couldn’t….
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