Kodak Bankruptcy: Strategic Planning Failure
Take heed: the smartest people leading a huge business with a dominant market position and massive resources can still allow their company to fail. How? Simply by not thinking and acting strategically.
There’s no doubt that Kodak knew that digital photography threatened their traditional business long before it killed them. But, addicted to their massive film profits, they dithered and delayed until it was too late.
Strategy is about reading the landscape and understanding the various forces at play and we’re sure that Kodak’s management did that. But strategy is also about making hard choices and it’s here that they fell down on the job.
With a clear threat aimed at the heart of their business, management closed their eyes and hoped for the best.
Some will argue that unrelenting pressure to increase quarterly results makes it difficult for public companies to make significant shifts. It may well be difficult. But senior executives, stewards of their shareholders’ company, are paid extraordinary sums to recognize risks, craft alternatives and tell their story convincingly. Apple, Oracle and Ford are just three examples.
We mourn the passing of a once great company. It’s an especially bitter passing because it may have been unnecessary.