For BlackBerry, for all brands: Three lessons learned from the demise of Kodak

November 01, 2013
Allen Adamson
Managing Director,
based in Landor New York

Black Berry -Logo -Black

Shoulda. Coulda. Woulda. It was way back in August 2007 (an eon ago in the digital market) when shares of the Canadian maker of BlackBerry smartphones peaked at $236. As I write this, company shares are trading at about $7.

About six months earlier in January 2007, Apple introduced the iPhone and BlackBerry, then called Research in Motion, was not fazed. It decided to focus on products for business and government usage, letting Apple play around with smartphones for the rest of society—those happy-go-lucky folks for whom a smartphone was just a cool thing to have.

Apple—for those of you who may not have read the recent news stories—just surpassed Coca-Cola as the most valuable brand in the world. BlackBerry? Well, I’ll sum it up this way: One of the companies that had the first-mover advantage in the smartphone industry may soon end up with nothing but a lot of scrap metal.

BlackBerry, sad to say, is nearing the same fate as yet another major brand name—Kodak, a company that, yes, shoulda, coulda, woulda maintained its leading edge as the world began its ascent into digital technology. But, as we all know, it didn’t, instead filing for bankruptcy protection in January 2012.

How can a really big brand, a brand whose name is associated with so many positive memories, disappear? When we look at the parallels between BlackBerry and Kodak, we learn three primary lessons from which all brands, big and small, new and old, could—and should—learn a thing or two.

Lesson one: No matter how big or well known a company may be, without a meaningful business strategy, brand is meaningless.

To put it bluntly, while Kodak may have recognized that the category in which it was competing was being reinvented, it didn’t think it was necessary to change its business strategy. Or as Andrew Salzman, former Kodak vice president of worldwide marketing and now global market strategist for the Chasm Group told me in a conversation on the topic:

Kodak did not put the necessary resources in place to make what I would call “asymmetrical bets” on what would be its next generation revenue drivers. Kodak recognized as early as 1987 that digital was going to be an interesting framework. It had tomes of research on how digital would develop, how the whole notion of image capture, storage, manipulation, retrieval, et cetera, would reinvent the category. But from a go-to-market point of view, from an organizational prioritization vantage point, it was tethered to the 95 percent of revenue coming from paper and chemicals.

It failed to seize the day in terms of moving away from the existing cash cow to figure out how to live and fight for the future. It was thinking about what it knew would probably be significant, but it was unwilling to bet the future on it, which put it at a significant disadvantage.

Lesson two: No matter how paranoid you think you are, you’re not paranoid enough.

I thank Andy Grove, former CEO of Intel, for this piece of wisdom. In his book, Only the Paranoid Survive, Grove writes of the strategic inflection point which a company can reach as an effect of just about anything: increased competition, a change in regulatory issues and, of course, changes in technology. When a strategic inflection point occurs, ordinary business rules must go out the window.

Kodak and BlackBerry just weren’t paranoid enough. They didn’t spend enough time looking at the intensely increasing competition in their respective categories or studying the drivers of brand choice, and they suffered the consequences.

In the digital realm, innovations are very quickly launched, copied, and improved upon, and in Kodak’s case, the company didn’t look up, down, right, or left. It couldn’t—or wouldn’t—compete with a differentiated and sustainable product. As Andrew Salzman told me, “Kodak had an ad campaign developed by Ogilvy & Mather in the late 1990s titled ‘Take Pictures. Further.’ It was the right promise, but because the product wasn’t competitive, the promise couldn’t be substantiated.”

Lesson three: No matter how deeply entrenched the culture, all companies must be open to revolution.

I had the privilege of working with the Kodak brand early in my career. Great, smart people. But, among the things I noticed was how entrenched they were in doing things the way they had always been done. There’s something to be said for tradition and strong company values, but not when culture becomes a barrier to success.

Kodak was built on a manufacturing mindset, a business model in which you build something, put it in front of consumers, and they come. It knew how to play this game very well. It believed if film was put within arm’s reach of consumers, they would buy it. If it ran tearjerker ads about kids growing up too fast, people would buy more film.

Despite an abundance of superior technology, it was this intransigent culture that was among the reasons Kodak failed to move forward. The world is moving so much faster that no matter how strong or powerful your brand name may be, you have to think in terms of revolution, not evolution.

Lessons were learned the hard way by Kodak, and now by BlackBerry. The only thing certain in today’s marketplace is that things will change and change fast. Innovation will happen with or without you. Know what business you’re in and revolutionize it before the next guy does. That’s the best way to ensure you’re not the subject of a shoulda, coulda, woulda column. 

 

This article was first published in Digital Imaging Reporter (October 2013).
direporter.com



Industries: Technology, Telecommunications & wireless
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