The “Kodak Moment” is a defining brand position. It still evokes a sense of nostalgia, family, loved ones and a bygone era in which our memories were recorded through years of pictures. Yet the “Kodak Moment” came to represent something darker, and more emblematic of what not to do in business. The company not only missed the shot at digital as the market shifted from film to silicon, but Kodak also missed how consumer behavior, preferences and values changed during the rise of the digital revolution. At the heart of the matter was Kodak’s snub to disruption and an over-confident C-Suite and board who insisted on growing the company’s core business (film and processing) at all costs.
Kodak’s dire blunder unfortunately represents a common corporate behavior and mindset that manifests itself as company culture. If the company doesn’t take risks, the culture becomes risk averse. If executives fixate on pursuing just one revenue source, or sources that over the years have consistently delivered, instead of mining new ones, then the culture becomes rigid and closed. If stakeholders and shareholders project their cognitive biases and beliefs on consumer behavior and market shifts, then the culture becomes insular and defensive.
These conventional and potentially destructive culture-sets are the result of neglect, ignorance, or both. Either way, orthodox (“same ol’”) management perspectives, mindsets and approaches, along with the celebration of traditional success metrics, are in fact the enemies of innovation and progress. More so, business as usual opens the door to disruption instead of proactively empowering a culture to chase innovation and R&D to disrupt others.
Culture is the key to innovation and transformation
Over the years, I’ve dedicated my research streams to studying innovation, digital transformation and organizational modernization. The common thread in understanding the future of businesses is culture. In each research track, time and time again, culture emerged as the number one catalyst – or inhibitor – to innovation, progress, and pretty much everything else.
To better understand culture and also the cultures of more progressive companies, I partnered with CapGemini and the result was the report, “The Digital Culture Challenge”. The research found that 62% of companies cited corporate culture as the number one hurdle to digital transformation and innovation. We also learned that only 7% of organizations were empowered to test, learn and deploy new ideas rapidly. Part of the problem is that executives don’t see culture as a problem. When asked, 75% of executives told us that they fostered a culture of innovation compared to only 37% of employees who agreed. That wasn’t the only gap between executive and employee perspectives we found either: Across the board (as the chart below shows) there is a gap between how leaders and employees view the culture at their organizations.
Source: The Digital Culture Challenge: Closing the Employee-Leadership Gap, CapGemini Consulting & Brian Solis, 2017
As Professor Ethan Bernstein of Harvard Business School shared with us in the report, “Culture is the glue that either keeps us doing things well or keeps us doing things poorly.”
You can’t compete for the future based on yesterday’s understanding of how to compete in the present. Executives must challenge their own conventions and beliefs to seek the truth within their organization. Every company, even the most progressive, hosts gaps between executive and employee perspectives and expertise when it comes to innovation and transformation. Culture is the answer to innovation – and why you don’t, can’t and can innovate. Without investing in people, incentivizing them to learn new skills and unlearn old ways, and rewarding those who take chances and who express ideas and concerns, your culture will anchor you to the past while the world moves forward.
And none of us wants our own Kodak Moment.