Organization learning....

Post #235,221 by Simon_Jester 11/20/05 11:52:14 AM Reply	Organization learning.... part of the reason the organization as a whole can't make these radically changes is that by and large it's leaders have been promoted under the old system. Everything they know, what they can do, will be rendered worthless if they (as an organization) change. Take Kodak...it's middle managers (and upper managers) knew film. They'd lived and breathed it for their entire lives. They can possibly acknowledge that digital is coming and what they know is going to be worthless. They cannot acknowledge that the kid down the hall knows what it necessary to keep the company in business over the next few decades.
Post #235,225 by ben_tilly 11/20/05 12:22:31 PM Reply	And that is reinforced... by the fact that at all points the customers that the company has contact with (and knows how to contact) prefer film. And at all points the people who work with film have better economic opportunities. (Larger sales, higher profits, all stuff that is hard to ignore.) This is why the only successful strategy for disruptive innovations seems to be to start a spin-off, and then after the disruptive wave is well established, re-merge. However even with that you have to be careful - you can't subsidize the spin-off very much. If it is subsidized, then it becomes dependent on the subsidy and will find it hard to succeed. The Innovator's Solution has more to say about this, but it boils down to the maxim, "Good money is impatient for profit but patient for growth. Bad money is impatient for growth but patient for profit." Cheers, Ben I have come to believe that idealism without discipline is a quick road to disaster, while discipline without idealism is pointless. -- Aaron Ward (my brother)
Post #235,227 by Another Scott 11/20/05 12:43:34 PM Reply	It's not so black and white. So to speak. :-) As Ben's link above points out, Kodak has been doing digital photography for years and they still do. They also still do film. Part of Kodak's problems were due to heavy competition from [link\|http://internationalecon.com/fairtrade/fairpapers/ddaniels.html\|Fuji]. Whether the competition was fair or otherwise, I can't say. There was also the expensive battle with Polaroid in the 1980s over instant cameras. But Kodak is still around, and according to [link\|http://www.kodak.com/US/en/corp/annualReport04/financials.shtml\|this] they had $13.5B in sales and 55,000 employees in 2004. They did have a big restructuring charge, but they're not in horrible shape. A better example of a company that was done in by digital imaging was [link\|http://www.signonsandiego.com/news/business/20050427-1329-polaroid-bankruptcy.html\|Polaroid]. E.g. almost no-one uses film for microscope or oscilloscope cameras any more. And you don't see camera phones that spit out polariods. ;-) Their [link\|http://www.dpreview.com/news/0110/01101201polaroidch11.asp\|stock price] went from $60.31 to $0.28 in a little over 4 years. Digital photography ate Polaroid and resulted in its bankruptcy. (Yes, a company called [link\|http://www.polaroid.com\|Polaroid] exists now, with some of the same products, but it's not the same entity. It was purchased for its brand name (they sell TVs and DVD players too now)). Cheers, Scott. (Who seems to be in a contrary mood on this topic. :-)

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