The Kodak curve & your business
- Posted on April 18, 2016
Should you be asking yourself "where is my company on the Kodak Curve?" I was at a round-table of Innovation Leaders in New York where one of the attendees asked us if we'd heard of the Kodak Curve. He talked about how Kodak couldn't let go of their film business, and by the time they pursued digital, it was too late to escape the downward plunge. His warning to us was that all of our organizations are somewhere on the same curve and if we deny it, the end is near.
It turns out that the real story may not be that simple. In the March 2016 issue of the Harvard Business Review, Ron Adner argues that the widely accepted narrative of Kodak's demise is incorrect. Kodak did in fact react to the changing landscape. They invested heavily in new technology and absorbed the pain of closing plants and shedding their film-focused workforce. Kodak became leaders in digital printing, both with inkjet printing and photo-printing machines. They came up with important patents in digital photography, just one of which earned them close to $1 billion.
So if Kodak really did embrace change, and found ways to make good money, what happened? Adner argues that what Kodak missed was the phone-based platform change. High-quality sensors meant that people could take good enough photos on their phones, reducing the need for digital cameras. This was coupled with high-quality screens, larger on-board memory and the rise of online sharing/social tools. The result was reduced demand for printed photos, with consumers opting instead to just keep them on their phones or upload them.
From the HBR article: "When Kodak undertook the painful process of embracing disruption and transforming itself into a digital company, its planned destination was a new way of printing photos on paper. The blind spot in its strategy and the root cause of its collapse, was its failure to see how progress in the other components of its ecosystem would eliminate the value of the end goal."
Adner offers his ideas on what Kodak should have done differently, but I think the key is to continue to deliver products and services that are profitable while keeping an eye on the changing conditions around you and investing in understanding and trialing how new technologies like Internet of Things, Blockchain, Cognitive Computing and others that could be disruptors to your ecosystem. Also check out Avanade's Tech Vision 2016 for ideas on some of the new concepts and areas that you should be considering in the days and years ahead.
Maybe we are all on the "Kodak Curve," but the actual shape of the curve can shift rapidly and unexpectedly. Be ready.