Many of us remember the good old days of film. Even though we had our difficulties we knew how to deal with them. Then came digital and with it a disruption to the market we thought we understood.
In the article Why Kodak Died and Fuji Thrived: A Tale of Two Film Companies, Oliver Kmia wrote, “In 2001, the film sales peaked worldwide but as the president of Fujifilm remembers: “a peak always conceals a treacherous valley.” Kmia continues, “First, the market began shrinking very slowly, then picked up speed and finally plunged at the rate of twenty or thirty percent a year.”
Since that peak some legendary names in volume photography have evaporated; Kodak, Olan Mills, Herff Jones, Bryn Allen, Jostens Photography, and CPI Corp. among others.
So why do companies, including photography companies, fail? For the sake of brevity, let’s look at five leadership related issues.
First: Arrogance and pride on the part of leadership. Second: A lack of vision, Third, Leadership failing to see the warning signs. Fourth: Leadership doing something, just not the right thing. Fifth: Leadership ignoring the need for high performing systems and process.
While any one of these factors can be troubling a combination of the factors can be and most likely will be…deadly.
Arrogance and Pride on the Part of the Leadership.
Arrogance shows up several different ways inside of a business. For example, when something’s not working as planned – sales miss their target or yearbook copies fall short of the goal and the leadership goes around blaming external factors instead of looking internally for the cause. They are never to blame instead adopting an attitude that says, “It can’t be us. It’s not our fault.”
Arrogance shows up when leadership ignores or devalues the input of others in the company or when leadership discounts negative news or puts a spin on what they don’t understand or don’t want to believe.
It shows up when leadership believes that they are immune to the things that negatively impact others. “That couldn’t happen to my company.” “We’re not the size of Lifetouch, we don’t have to worry about that.”
Pride gets in the way when leadership escalates their commitment to a losing course of action. Rather than acknowledging that something’s not working they double down and push harder. Think about how gamblers can get caught up believing they’ll win the next hand.
Kodak successfully pushed digital camera sales capturing 21% of US market share by 2005. Unfortunately doubling down on a strategy that loses $60 for every digital camera sold is expensive and flawed.
Pride can perpetuate myths about the business that are inaccurate and sometimes harmful to its future. The fascinating thing about a long-standing myth in a company is that almost everyone else knows it’s not really a fact, but who is going to be the one to take-on the Keeper of the Myth especially if it’s the boss?
Arrogance also shows up when leadership becomes stuck in the past thinking that because they were once successful they are guaranteed success in the future. They can do no wrong. According to George Eastman biographer Dan Alef, “In law, we call it, a bird that likes to fly backward. Because it’s more comfortable looking where it’s been than where it’s going.”
Success can do that to a company. Success breeds arrogance and arrogance breeds complacency and complacency is the best reason for a lack of innovation. And the lack of innovation leads to evaporation – to failure.
That reminds me of what a Decca Record Company executive said after turning down a new rock band seeking a recording contract, “We don’t like their sound, groups of guitars are on the way out.” Can you guess which 60’s rock band he turned down?
You guessed it, the executive decided to turn down the Beatles. He couldn’t get past what had worked for the company in the past and as a result he passed up the biggest innovation in music at that time.
In short, pride and arrogance are dangerous behaviors that devalue people, perpetuate falsehoods, limit creativity and stifle innovation. But add that to my second major factor and we’ve got a recipe for evaporation in the making.
A Lack of Vision on the Part of Leadership
We’ve all heard the Proverb, “Where there is no vision, the people perish”. Another translation of the verse reads, “Where there is no vision the people run wild.”
The proverb implies that without a clear vision in our business to act as direction for our employees they just might run wild.
Why? According to organization transformation expert, Linda Ackerman, a clear vision creates an attractive picture of the future for the company. “Vision gives work meaning, purpose, and direction; it captures the imagination, inspires creativity and mobilizes energy.” The vision becomes the primary driving force for all decision-making, planning, and action. No need for anyone to run wild. They know which direction to go.
A lack of vision on the part of the leader leads to a company being reactive rather than proactive forgetting about the long haul and the long-term consequences of actions or decisions. You end up with a company busy chasing after the competition or recklessly reacting to something that’s happened.
Interestingly, a lack of vision can create a company culture that is risk and innovation-averse. It’s surprising how easily a leader can shut down risk-taking and creativity among employees. The result is mediocrity.
A company without a clear vision may embark on the continual search for the “silver bullet.” PPA CEO David Trust calls it, “Grasping at straws to compete.” The company thinks, “If only we had that one big idea, that new piece of equipment or new product…that would make the difference.”
According to Oliver Kmia in his article Why Kodak Died and Fuji Thrived: A Tale of Two Film Companies, Kodak’s inertia and strategic pursuit of evolutionary change rather than conducting a revolution contributed to their demise. He contrasts Kodak’s actions with that of Fuji’s CEO. “In 2004, Komori came up with a six-year plan called VISION 75 in reference to the 75th anniversary of the group. The goal was simple and consisted of “saving Fujifilm from disaster and ensuring its viability as a leading company with sales of 2 or 3 trillion yen a year.”
That leads me to my third reason why companies fail.
Leadership Failing to See the Warning Signs
Leadership failing to see the warning signs, and the warnings are always there. Said another way leadership seeing only what they are prepared or expect to see.
That tendency can cause us to overlook some pretty obvious things. I found this example interesting. A recent study asked a group of radiologists to examine a series of chest X-rays for lung cancer. The researchers inserted an image of a gorilla, 45 times larger than the average cancerous nodule into the x-rays. 83% of the radiologists missed the gorilla even though they looked right at it. They didn’t expect to see a gorilla in an x-ray, so they didn’t. While most spotted the cancerous nodule – most missed the obvious. They had deceived themselves.
Ralph Waldo Emerson said it, “People only see what they are prepared to see.”
In addition to seeing what they are prepared to see sometimes leadership’s perspective is too narrow or worse… They just stick their head in the sand failing to scan the markets and the competition and as a result, miss the need for change and innovation.
All of which contributes to the gap between the consumer and the company. The consumer shifts and the company doesn’t.
Kmia writes, “Fujifilm, which was always the challenger in the shadow of Kodak, learned to be bold and innovating to close the gap with the historic leader. As a necessity, its corporate culture was more adventurous and prone to risk.”
Add the fourth ingredient, Leadership Doing the Wrong Thing and our recipe for evaporation is nearly complete. To be continued…
Watch for Vaporized: Why Companies Fail – Part 2, for a discussion of the remaining factors and a prediction of the next disruptor to the photographic industry.
Mark Schoenrock, President PSPConsulting