Here’s how it worked: One – Find a market space; Two – Stretch the elastic of the status quo to dominate the space for as long as possible. Sometimes, of course, the elastic snapped. Call it a Kodak moment.
Now, because connectivity and choice have transformed Customer-Supplier relationships, making Customer Value the key success driver, and Marketing & Innovation a corporation’s key functions, stretching the status quo no longer works. So what are corporations founded in the “stretch the elastic” era to do? Well, obviously, the answer is “Change!” But are they able? Some are, obviously, but many seem unable to change enough, even when they recognise the need.
The problem is greatest for the most successful of the long-established corporations. As Peter Drucker wrote, in 1985, in Innovation and Entrepreneurship: “It is not size that is an impediment to entrepreneurship and innovation: it is the existing operation itself, and especially the existing successful operation.”
This point really crystallized for me after I attended a recent round table (organised by experts in entrepreneurology, Contexis) devoted to the question, “Why can’t corporations think more like entrepreneurs?” Many of the corporations now most at risk of “Kodak moments” are those that were most successful in the past.
Survival of the most responsive
If a corporation has been hugely successful for a long period, it will likely find it especially hard to change. Why? Because it is faced not just with working out how to modify or replace its offerings, but also to change the culture and structure of the organisation, and the mind set of everyone involved. Building a responsive, innovation culture is particularly hard when it hits the brick wall of a long-term success story.
So who is facing a brick wall?
Keeping in mind that, right now, we are at the start of the digital era (a.k.a. the Third Industrial Revolution), here’s one way to answer that question.
First, identify the last mega change in corporate history. For example, the second half of the 19th century when oil power (trigger for the Second Industrial Revolution) replaced steam power (trigger for the First Industrial Revolution).
Second, identify industry sectors where digitization has a particularly acute effect. (I know, I know, everything is affected, but some activities, like photography, have been particularly directly impacted.)
Printing is a major candidate. In the mid-19th century circumstances combined to create huge new opportunities for printers in the United States. In 1856, Rand McNally was formed; in 1861, M.A. Donohue; and, in 1864, R.R. Donnelley. These enterprising Irish-Americans, all operating out of Chicago, were able to capitalize upon technological developments (for example, Richard Hoe’s 1847 invention of the rotary press), social changes (caused by the U.S.-wide expansion of the railroad) and political factors (particularly after the end of the American Civil War in 1865).
Of the three great printing companies, M.A. Donohue went out of business in the 1960s. Rand McNally, specializing in cartography and travel support, recognized the power of GPS when it emerged and got into digital. But it is R.R. Donnelley who probably faces the greatest challenge, competing in a dramatically different corporate print world. Ironically, the biggest inhibitors to its ability to adjust to the new world are likely to be the very structure and culture that have enabled it to enjoy 150 years of success.