So what happened to Kodak? Unfortunately, the company failed to keep pace with the shift from film to digital technology. Somewhat ironically, Kodak actually invented the cause of its demise, the digital camera, way back in 1975. Not only did they invent it, but a Kodak executive predicted in some detail how digital photography would ultimately become the industry standard. Now hindsight really is a wonderful thing, but it's hard to understand how a company who had brought so many world-changing innovations to market could have failed quite so spectacularly to exploit its early digital lead.
Many industry insiders feel that Kodak had developed a rather unwieldy, risk-averse corporate culture. Leaders were not very open to a game-changing new technology that might undermine their dominance in photographic products and processes. The problem was, competitors were only too quick to see the digital opportunity. Today it is the industry standard, and Kodak is a long way away from the industry leader.
Many organisations are open to fostering innovations which can enhance their standing in existing markets, but a lot less keen on ideas that might tear that market apart. Often leaders become increasingly cautious and risk-averse in the kind of tough economic climate we're currently experiencing. However it is precisely during tough times that innovation needs to be prioritised, and new ideas brought to market quickly. Leaders need to create climates for innovation, where people can experiment, use their initiative, and feel free to make a few mistakes without fear of retribution.
IBM is a great example of a brand which transformed itself in order to sustain its success in a rapidly changing marketplace. Once renowned as the world's leading provider of mainframe and PC hardware and software, the company found itself losing its virtual monopoly when it began to source vital components from Microsoft and Intel, who were quick to seize new opportunities to carve out market-leading positions of their own. The company averted disaster with a renewed focus on customers, transforming itself into a global services business, which rapidly led to IBM becoming the leading technology integrator we know today.
Recently, there have been ripples of unrest around another apparently bulletproof market leader. Tesco's market share has dropped slightly and the company has issued its first profit warning in 20 years.
Like Kodak, Tesco's success has always been closely linked to innovation. CEO Philip Clarke has pledged to shake up the business, and the big challenge is to maintain the innovation and agility which have been so central to Tesco's success. Tesco has always had a reputation for great leadership and high levels of employee engagement. Now its leaders really need to engage employees with a new vision and strategy, to encourage and nurture the innovation needed to secure the ongoing success of its hugely successful brand.
Kodak, IBM and Tesco have all been great innovators. Kodak failed to capitalise on an invention which revolutionised its marketplace. It wasn't open enough to innovation or swift enough to bring it to market. IBM was also unreceptive to innovative ideas beyond its successful core business, but realised this in time to avert complete disaster by embracing new opportunities. Tesco has always been innovative and swift to bring new ideas to market. Can its leaders, now under pressure, continue to build a culture which encourages innovation and ground-breaking ideas ? And just as importantly, can it turn these ideas into a profitable reality?
Nicky Little is head of leadership development at Cirrus
