There are plenty of management gurus and other miscreants out there these days encouraging organizations to spend some time navel-gazing to find that next big idea. Easier said than done. I was involved in one of those exercises recently, and it mercifully came to an end when someone suggested that the only reasonable idea was to adjourn for lunch.
Yet I wonder if the corporate suits at Kodak, what’s left of them, sit around these days and ponder why the next big idea, or it appears any good idea, escaped them in the early days of the digital revolution. For those too young to remember when you had to load film into a camera, Kodak was the Big Dog.
Now Kodak is essentially defunct, doing what the corporate dinosaurs do best: cut costs and employees, pay management retention bonuses, and do their best to screw retirees when it comes to health care and other benefits. I digress.
Here’s from the NYT, when Kodak filed for bankruptcy in January:
The American legend had tried a number of turnaround strategies and cost-cutting efforts in recent years, but the company — which since 2004 has reported only one full year of profit — ran short of cash.
“Since 2008, despite Kodak’s best efforts, restructuring costs and recessionary forces have continued to negatively impact the company’s liquidity position, ” Kodak’s chief financial officer, Antoinette P. McCorvey, said in a court filing on Thursday.
Citigroup is providing Kodak with $950 million in financing to allow the company to keep going. Kodak plans to continue operating normally during bankruptcy.
The company will also seek to continue selling a portfolio of 1,100 digital imaging patents to raise cash for its loss-making operations.
Kodak has become the latest giant to falter in the face of advancing technology. The Borders Group liquidated last year after having failed to gain a toehold in e-books, while Blockbuster sold itself to Dish Network last year as its retail outlets lost ground to online competitors like Netflix.
Founded in 1880 by George Eastman, Kodak became one of America’s most notable companies, helping establish the market for camera film and then dominating the field. But it has suffered from a variety of problems over the last four decades.
First came foreign competitors, notably Fujifilm of Japan, which undercut Kodak’s prices. Then the onset of digital photography eroded demand for traditional film, squeezing Kodak’s business so much that in 2003 the company said that it would halt investing in its longtime product.
Maybe Kodak management couldn’t see a big idea, couldn’t agree on one, or couldn’t implement it. Or maybe it is just too difficult for a large corporation to change directions, even when you can see the iceberg ahead.
Anyway, the founders of Instagram had a big idea. And Facebook liked it a lot — agreeing yesterday to buy for $1 billion the photo-sharing company that has about a dozen employees and no revenue. That price puts a higher value on Instagram than the value investors place on Kodak, or the New York Times, for that matter.
I’ve never used Instagram, since until recently it was an app available only for iPhones.
And I’m clinging to my BlackBerry.
Probably not a big, or good, idea.
PR on the run 