I recently read an article in the Harvard Business Review titled, Kodak’s Downfall Wasn’t About Technology, and the author did a great job of getting to the core of Kodak’s true problems. If you’re like me and many other others, you accepted the narrative told by most in the media about Kodak being fat, dumb and happy, and ultimately getting blindsided by younger, technology savvy companies like Apple. But that explanation doesn’t quite get to the bottom of how a company formed in 1880, which at one time was the leader in their industry, met its demise.
The first thing the article points out is Kodak wasn’t blindsided by digital technology. In fact, an engineer from Kodak named Steve Sasson actually created the first prototype digital camera in 1975, and Kodak even invested billions to develop the product.
What Kodak failed to do was re-define the business they were in. Even as they saw the rise of digital pictures and picture sharing before Facebook and Instagram were household names, they clung to the belief that their core business was printed pictures. This was evident, in the way Kodak continued to invest in new technologies like the purchase of the photo sharing site Ofto in 2001. Rather than viewing the Ofto acquisition as an opportunity to pivot into the picture sharing space, Kodak saw its primary value in being a way to get more customers to print pictures.
Disruption in the Construction Industry
There are many disruptions happening today in the construction industry that are really no different than what Kodak faced in its market. Here are just a few examples:
There are more mega projects being performed today than there used to be. For some, this has led to an increase in subcontract opportunities compared to prime opportunities.
Regulations and compliance have become much more time consuming and expensive.
New technologies are being introduced in a variety of areas from accounting to operational management.
There are new competitors ranging from startup businesses to foreign or out of state companies forming operations in California.
Are Contractors Responding Like Kodak?
In some cases, I see contractors responding exactly like Kodak. They are aware of the threats to their business and have even taken some steps to improve and combat the disruptions. However, many are half-measures. For example, I’ve seen companies upgrade their accounting software, which is extraordinarily important, but they often only use the most basic features, because it would take too much time and energy to implement the rest. Meanwhile, you have startup companies with a clean slate adopting all that the new technology has to offer resulting in leaner, more efficient organizations.
Who Am I?
It’s a deep question we all need our companies to ask themselves periodically, and it’s easy to neglect when the economy is in full stride and we are doing well. The question is important not only to avoid a downfall, but also because many opportunities present themselves with disruption.
National Geographic is a perfect example. The company published its first magazine in 1888, but with dwindling print media, the company had to reinvent itself. In 1997 in a joint venture with Fox, they launched the National Geographic Channel, which now has dozens of TV shows.
The world around us never stops changing, and in order to build an enduring and successful company, we have to adapt with it. So, I’ll leave you with a question, “What opportunities do today’s disruptions offer you?”