What do Kodak, Nokia and Smith Corona have in common? They are all large, market leading businesses that weren’t able or willing to adapt to a changing market — and died as a result.
Jeffrey Hayzlett, author of Think Big, Act Bigger, was a Fortune 100 executive at Kodak. He is often asked why he believes Kodak went bankrupt in 2014. His answer is that it didn’t. It went bankrupt in 1975. That was the year that a Kodak engineer, Steven Sasson, invented the first digital camera. He believed he had revolutionised the way customers would experience a ‘Kodak moment’. The company’s C-Suite disagreed. They saw it as a dangerous invention that would kill the profits they made from film.
“Kodak’s executives forgot that they weren’t in the business of making film. They were in the business of making moments,” says Hayzlett. “They used to think big, but they didn’t act bigger. It’s not the lucky who win; it’s the relentless who win.”
The Death Of The Typewriter
In 1964, even when they knew that the computer was the technology of the future, Smith Corona grew typewriter sales 67% year-on-year. They used this fact to corroborate their belief that their version of the typewriter was better than the world’s best version of a computer. “They were right,” says entrepreneur and investor Vusi Thembekwayo. “Their mistake was that they were comparing the 100th iteration of the typewriter with only the second version of the computer,” he adds.
“This is a common mistake that leaders make when they are invested in a path or direction: They compare disparate things in their quest to prove that their direction or strategy is the correct one.”
Thembekwayo’s advice? “Measure what matters, not what moves. The obsession of management accountants to measure what moves must be shifted or complemented with a strong and external ability to measure what matters.”
Nokia made a similar mistake. Its Symbian platform was ubiquitous and Android was unstable and unreliable. Until it wasn’t. Not only that, it was compatible with a range of devices. And just like that, Nokia was irrelevant.
Are you willing to disrupt yourself to make sure you’re ahead of your competitors? Because if you aren’t, someone will do it for you.