72 - Corporate_dementia

Why the 1000-Pound Gorilla Couldn’t Swim

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How Kodak got marooned on an island of irrelevance because of a fundamental misunderstanding of its purpose.

In the early 1990’s, Kodak had an elevated opinion of its own power and greatness—a legacy of its founder and ownership, and confirmed, it seemed, by generations of success and strong market position. But even then, as the waves of the digital revolution rolled in, Kodak was scrawny compared to the likes of Sony and Canon in this new and innovative space.

“The digitization of imaging,” wrote one brilliant mind at Kodak Labs, was turning Kodak into, “a one thousand pound gorilla on a small island.”

The mainland, of course, was the real competitive landscape, now populated by the new royalty of the digital re-colonization. And Kodak, mired in the hubris of success, was betrayed by a blindness to its own identity.

A few of us embarked on a serious effort to encourage this gorilla to swim. Like many others at the time, we felt that some answers lay in the work of framing the company’s mission statement. Knowing what I do now, I realize that the very task of working on the mission of the organization presented two fundamental challenges we would not be able to overcome, neither of which we were aware of at the time.

What we missed was Kodak’s meaningful purpose (telos) – its “best self” and the social tension to which it was relevant.

In a helpful concept they call “The Big ideaL,” Ogilvy & Mather describe two distinct elements that form the basis of a company’s reason for existence. One, the cultural tension (I prefer the term “social” to “cultural” and will use it hereafter), reflects the social landscape in which a business finds itself and the way it relates to that external reality.

The other element, the “brand’s best self”, reflects the unique heritage of the company and how the present company relates to that intrinsic core. Where these two elements overlap is where telos is found. Telos derives from both these elements and provides some answers to the basic question, “who are we in service to others?”

The Social Tension Misunderstood:

On the surface, it was confounding. Kodak was packed with brilliance, its labs stuffed with technological treasures and digital wonders. This was, after all, the same collection of genius that invented digital photography (yes, you read that correctly).

And yet, despite that pedigree and capability, Kodak was unable to free itself from the bondage of its own previous innovation—the alchemy of silver halide chemistry.

The genius of this chemistry was not the magic of its crystals that captured light and so retained an image, remarkable as that alchemy was. The true brilliance was in what the chemistry captured and stored for later retrieval.

Silver halide chemistry made memories tangible. After all, “Kodak moments” are not memorable for the technology that serves them up; rather they are memorable for the faces and personalities and relationships that they preserve for later years and subsequent generations. Photographs of any sort are (or rather, in Kodak’s case, were) collages of memories that connect people together.

As my own mother slips into the darkness of dementia, I am anguished to see just how much influence memory has over identity. My mother’s inability to identify others and trace her own connection to them pushes her toward a fearsome place where she no longer knows even herself. My father is now 91, and he is one of the few she still recalls. In a tender way, he often reassures her that she is known, and in that way safeguards her identity for her. And being known to my father provides some relief to my mother from the piercing fear of her own unknowing. Pictures of her children, grandchildren, and newly arrived great-grandchildren spark the occasional synapse of recollection and for a moment she recognizes her place in the world, but in an instant it is gone. Such is the power of memory. In its absence, our sense of self evaporates.

Kodak mistakenly believed that it existed to fulfill a desire for photo capturing technology. The desire for memory, for the recovery of events, of places, of people, of relationships is the social landscape in which Kodak existed and had thrived. Yet the company’s own recognizance of that fact was limited, and as we worked on a mission statement, we fell into the same error. We focused on imaging and film—entirely the wrong subject.

The Brand’s Best Self, Undiscovered:

On the other half of Ogilvy’s insightful model, the “brand’s best self”, we missed again. When in 1993 a triumphant group of middle managers rose to applaud the chairman who had resisted an assault on “Kodak values” by a newly appointed CFO and his restructuring plan, they cheered not because the essence of the company was preserved, but because its structures and way of working was protected.

At the time, we didn’t see that Kodak’s valuable heritage lay not in current practices, but in the values represented by six early leaders whose pictures (and the stories they represented) hung on the 6th floor of building 20 at the Kodak offices in Rochester. Kodak never thought to dwell on its own photo album – that archive and safeguard of memory and stories so dear to most families that it is the one thing they are certain to grab should a fire threaten their house – to uncover the people, events and stories that had formed its own identity.

And here, of course, is the great irony: the company that gave us “Kodak Moments” could not locate its own.

There was a rich history and a strong identity to sift through that would have yielded those important “best self” moments that could have helped lead Kodak forward into an uncertain future, but the Board never asked for such self-reflection. It never demanded that the company really understand its purpose beyond mere profitability; it only demanded earnings growth in the next quarter. And those of us working from the management side never thought to look for the telos that undergirded everything, even as we worked to craft a new mission statement for a company that was losing sight of who and what it really was.

And so there we were, groping for Kodak’s identity through the darkness of corporate dementia, adrift on a sea of our own unknowing.

I wonder: how many of us really understand what our business is for?

If Kodak provides any insight, we had better find out or all may be lost. And yet, hopefully, many have started asking the right questions about purpose and the identity it captures, and so, I am certain, they will have more encouraging stories to tell.

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