4 Lessons from the Kodak "Moment of Truth"



Steve Towers
02/14/2012

Kodak's death spiral into Chapter 11 hell is a clarion call for all organizations struggling to come to terms with a new business landscape. Can you cross the rubicon and change your world? asks columnist Steve Towers in this month’s column.

We should avoid the ‘gone in a ‘flash’ or the Kodak moment puns but the lessons of this once great corporation are clear to see. It isn’t as though this is something new, so why do companies like Kodak fail so often and end up in this death spiral?

Let's look at the history. Kodak invented the portable photography market. Better than that they went on to introduce the world to digital photography, the very thing that would eventually decimate this former innovator.

With the advent of digital taking photos became a universal obsession accessible to anyone with a cheap device. The ability to distribute and share, in the moment, grew a new market which expanded rapidly as the cost of storage reduced and social media expanded our horizons. Effectively the traditional film camera became the preserve of specialists and hobbyists, no longer attractive to a new generation seeking flexibility, economy and speed of use.

Last week Kodak finally admitted they had completely missed that boat, and with the final blow to their reputation – they withdrew from the digital camera market.

The trials and tribulations of Kodak are hardly anything new. W. Edwards Deming, said more than half a century ago "It is not enough to do your best; you must know what to do, and then do your best." Or to paraphrase you may be good at doing things right, but if you are not doing the right thing, you will fail. So was anyone listening in Kodak, or Nokia, or Motorola or Comp USA or British Airways to name several more contenders for the wooden spoon?

It would be tempting to attribute all the changes to technology with the move to the cloud, the availability and flexibility of digital formats, the ease of use of apps and so on. We should however look directly at the fundamental cause of all this transformation: the customer. More promiscuous, switched on, informed and in control - the customer makes decisions before they even approach your organization and has changed the business landscape forever. Yes they are using all this fancy new technology to achieve enlightenment but let’s not kid ourselves. The technology itself is no different to the original proliferation of pen and paper. It is what you can do with it that counts. Or in Kodak’s case what you don’t.

By way of a comparison with Kodak let’s look at a few organizations and how they might define their business:

Inside-Out organizations

Outside-In organizations

Company

Core competence

Company

Core competence

British Airways

Flying planes

Southwest Airlines

Moving people

Kodak

Making cameras

Amazon

Delivering success

Volvo

Building cars

BMW

Creating Joy

Nokia

Making phones

Apple

Connecting people

All State

Selling Insurance

State Farm

Managing lifestyles

Yahoo

Web searching

Google

Enabling lives

Tom Tom/Garmin

Building GPS

Google

Integrating journeys

How would you define what you personally do? Inside-out or Outside-In?

So what lessons can we decipher from the ruins of these once industry giants to help us on our day to day process journeys?

Lesson #1: Define the Successful Customer Outcome

This is a time when a company needs to define itself by what it does for customers and not by the how of what made it great originally. It is not just how you do what you do, but what you do to achieve success that matters. So what is your Successful Customer Outcome? Or are you still focused on the how of efficiency and productivity?

Lesson #2: Welcome and create Process Innovation

Innovation has to be embraced and welcomed, even if it is disruptive and damaging to existing businesses. If you are in a steady state how can you create the necessary disruption? To stand still is to go backwards. Are your processes aligned to customers or are they just delivering outputs? If you can move the processes closer to customer need you can keep you finger on the pulse as those needs evolve and change.

Lesson #3: Design for the Customer Experience

That means moving beyond the current start and end points of your process and embracing all the moments of truth in your processes. Proctor and Gamble are well known for their analysis of the FMOT (First Moment of Truth). When you are stood in the store reviewing the shelves. Google have pushed that starting point out into the genesis of the Customer Experience and defined their Zero Moments of Truth concept. Have you captured all your Moments of Truth and are you in control of them, thereby managing your customer expectations?

Lesson #4: Change your mental model for processes

My colleague John Corr, BP Group President, tells us this Olympic story: "I’d like you for a moment to think of ‘high jumping’. This is a sport that has been pursued actively from the ancient Greeks in the original Olympics to modern times. And for nearly 3,000 years people jumped using similar techniques until an innovator, Dick Fosbery thought of a new approach that was incredibly simple and yet at the same time delivered ‘breakthrough performance’ levels enabling him to win the gold medal in the 1968 Olympic high jump competition. In retrospect, it was incredible obvious that the most effective approach was to run up to the high jump bar and leap over it backwards overturning thousands of years of ‘best practice’.

In other words change your mental model of what is possible and how. Don’t find the reason why it can’t be done, go demonstrate how it can be.

Oh and finally, make sure you don’t get Kodaked.

Could your company be gone in a flash? If your BPM software is having problems that need solving, or you are planning to invest in BPM and want to get a first hand look into how the process works to implement it in the best way then PEX network’s BPM Open House is a free online event which will give you insight into everything you need to know about Business process management.