Wednesday, April 4, 2012

Will Your Association Face a Kodak Moment?

The Last Kodak Moment?  From Claudio Munoz in The Economist
Remember the marketing phase “Kodak moment?” Well, technology has changed the definition.

This winter, the Kodak moment changed from a rare moment captured in a gorgeous photo to the near death of a large (seemingly stable) American corporation at least partly because technology and its customers (members) passed it by.

A couple of recent headlines and a blog post got me to thinking about whether associations will adapt or die in their version of the new Kodak moment.
The two headlines:

The blog:
Will your Organization Survive? Rate its Capacity for Flexibility, Relevance and Innovation.

Like Kodak and BlackBerry, many associations are facing monumental change from technology, retiring Boomers and/or cultural changes. While they may not have reached your organization, they have certainly impacted the civic and “networking” organizations (Jaycees, Kiwanis, Optimist, etc.) whose memberships have plummeted in the last decade.

Back in January, the Economist wrote a super piece about Kodak and Fujifilm, its Japanese competitor.  As I looked at the story, I saw that the Kodak situation offers insights for U.S. associations, many of whom are facing similar challenges.

Here is a summary of the key points from the article:
  • Kodak was the Google of its day. Founded in 1880, it was known for its pioneering technology and innovative marketing. ‘You press the button, we do the rest,’ was its slogan in 1888. By 1976 Kodak accounted for 90% of film and 85% of camera sales in America. Until the 1990s it was regularly rated one of the world’s five most valuable brands. Then came digital photography to replace film, and smartphones to replace cameras.
  • Like Kodak, Fujifilm saw omens of digital doom as early as the 1980s. It developed a three-pronged strategy: to squeeze as much money out of the film business as possible, to prepare for the switch to digital and to develop new business lines.
  • Both firms realized that digital photography itself would not be very profitable. But both firms had to adapt; Kodak was slower.
  • Fujifilm diversified more successfully.
  • Fujifilm also sought new outlets for its expertise in film.
  • Kodak failed to read emerging markets correctly.
  • Kodak’s leadership has been inconsistent. A Fujifilm leader said Kodak was so confident about its marketing and brand that it tried to take the easy way out.
  • A culture of complacency. Kodak had become a complacent monopolist.
  • Another reason why Kodak was slow to change was that its executives “suffered from a mentality of perfect products, rather than the high-tech mindset of make it, launch it, fix it.”
  • Working in a one-company town did not help, either. Kodak’s bosses in Rochester seldom heard much criticism of the firm.
  • Perhaps the challenge was simply too great. “It is a very hard problem. I’ve not seen any other firm that had such a massive gulf to get across,” says Clay Christensen, author of The Innovator’s Dilemma, an influential business book. “It was such a fundamentally different technology that came in, so there was no way to use the old technology to meet the challenge.”
  • Kodak’s blunder was not like the time when Digital Equipment Corporation, an American computer-maker, failed to spot the significance of personal computers because its managers were dozing in their comfy chairs. It was more like “seeing a tsunami coming and there’s nothing you can do about it,” says Mr Christensen.
  • Fujifilm has mastered new tactics and survived. Film went from 60% of its profits in 2000 to basically nothing, yet it found new sources of revenue. Kodak, along with many a great company before it, appears simply to have run its course. After 132 years it is poised, like an old photo, to fade away.
So, as you think about your association, can you see a tidal wave headed your way?
  • Does your association culture help you adapt or does it have a Kodak culture of complacency?
  • Are you nimble and able to move quickly to meet the changes?
  • Is your volunteer board ready to meet the changes or is it mired in “returning to the glory days?” (Re-read Race for Relevancy.) 
  • Are you able to diversify or even totally change your mission? (Example: remember how the March of Dimes moved successfully from “eradicating polio” to helping achieve healthy childbirths.)

3 comments:

  1. The critical lesson of the Kodak and RIM situations is the same: organizations cannot afford an on-going systemic failure to identify and push back against disruption in their ecosystems, or they will be disrupted. If associations are going to avoid this same fate, they must start asking different questions:

    +What is it going to take for our association to thrive over the next decade and beyond? (You cannot begin to answer this question unless you develop both deep insight on the business and meaningful foresight around shifts in the environment.)

    +As disruption occurs in our strategic context, who are our future stakeholders and what outcomes will they want to achieve? (We need to invest a great deal more in building future market share, and less in protecting legacy market share that is already beginning to disappear.)

    +What organizational capabilities do we need to create and deliver new value in this context? (Associations must build more flexible business models that can adapt to new conditions.)

    +When we get it wrong, how will we use what we learn from failure to make better decisions going forward? (We must get really good at translating our inevitable mistakes into actionable learning.)

    It's 2012 and time for association leaders to stop wondering whether the "tidal wave" is headed toward their organizations. It is already here. The challenge now is to stop thinking about how to tweak for relevance (see Kodak and RIM) and start thinking about how to disrupt the status quo before forces beyond our control completely disrupt our organizations.

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  2. Great thoughts and insight Jeff. Hope association professionals are listening!

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  3. We are not only listening but thankful for folks like Steve who share their experience, advice and vision.

    Your insight keeps some of us working late, making sure we leave our association with more than just a rich history but also a bright future when our period of leadership comes to an ends.

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