Accepting what we see and doing what must be done

Posted on 2nd May 2012 by Lars Göran Johansson in Blog

Recently while browsing through a magazine I noticed a picture of the world’s first digital camera from 1975. It was a robust-looking machine weighing four kilos (about 9 lbs), and in addition to the camera itself there seems to be what looks like a cassette player on the one side. The resolution of the photos is .01 megapixels – compare that with the iPhone’s 8 megapixels photos.

It’s interesting to note that first digital camera was made by Kodak, a company that is today on the brink of bankruptcy. In 1975, Kodak dominated the market for both cameras and film. They knew then that the future was digital and that consumers would, in the not-too-distant future, not be shopping for film. Kodak was the company that led this development.

In an article in the Economist on the developments in Kodak, the writer uses the famous quote from Lenin: “The capitalists will sell us the rope with which to hang them.” In this context, the company itself developed the technology that threatens to put them out of business.

There have been many analyses written on Kodak, all with the same theme: they were too confident, isolated and satisfied. I visited the Kodak corporate headquarters myself in the late 1990s with a group from Electrolux. We were learning more about the ways Kodak worked with the Internet. In spite of the fact that they anticipated the digital tsunami, they were not able to make change in their huge organization, which at its largest numbered 140,000 employees.

Admittedly, the change from traditional cameras to cameras in every mobile phone has been unique. But Kodak is a good example of the steadiness of big structures – for better or for worse.

A lot has happened since I left Electrolux more than a year ago, but this company, too, serves as a good example of internal resistance to change. We understood the strength of the Korean appliance manufactures LG and Samsung. We did studies, organized seminars and even so much as built a fictitious headquarters for LG to illustrate this threat: The Koreans had real global products and processes and strong brands. We knew we needed to change within product development and marketing and to remove complexity, but often the short term won out in the end. “It’s clear we need to change, but this quarter we’ll do what we’ve always done.”

And the same sluggishness and short-term thinking also exist in politics. All the politicians who are out and see the strength in enterprising people who want to build their companies and employ more people – they see what needs to be done regarding labor law, compensation policy, employment services and taxes. “That is surely important, but right now it’s more important to win the next election.”

This is not acceptable when global changes occur so quickly. Yesterday’s truths are not valid tomorrow.

What other obvious changes do we understand but don’t accept? Please reply with what you think, and I’ll put together another piece together with all of your thoughts.