Say Cheese! The Danger of Not Keeping Up

Times are a changing aren’t they?  Just this morning I got my Wall Street Journal, opened it up, and saw that Eastman Kodak had filed for bankruptcy.  Yes, the Eastman Kodak, the largest retailer in the film industry for oh I don’t know a hundred plus years, declared that it had finally run out of financial funding.  Kodak got its start in 1881 and invented the first flexible and rolled film.  At its peak in the early 1980s, the company employed 62,000 people in Rochester, NY and over 130,000 people worldwide. Today, Kodak employs only a fraction of that; 17,000 people worldwide, 8,000 of them in the U.S, which is nearly a 90% reduction in work force. To understand that visually, take your body, chop every part, and keep one hand and a little bit of your forearm- doesn’t really work does it?  This got me to thinking about how many other businesses were ultimately doomed because they too failed to keep up with the ever changing world of technology. We all know about the GM fiasco, and how the Japanese Big Three; Toyota, Honda, and Nissan scooped up a majority of the profits due to quick reflexes that adjusted to customer’s ever changing demands.  While GM was throwing money into the 8 mpg Hummer, Toyota was putting the finishing touches on the Prius; while GM haphazardly launched an entire new company in Saturn, Honda was honing its design and developing its premium brand Acura to strike a mighty blow to the likes of Cadillac. GM finally came face to face with the reality that every other American encounters; a nation that has acquired an appetite for financial greed, even if it means their own catastrophic failure.  Thanks to the Good Ol’ Government, GM was allowed to save face and stay in business (I wonder if the President would give me bailout money), meanwhile their CEO’s were busy giving themselves bonuses and raises while their stocks continued to plummet.  Greed and an inability to keep up with the new demands of a savvy consumer market that now demanded higher MPG and safer vehicles is what eventually ruined the profitability of General Motors.  I think the same obstacle of not adjusting to the ever-pressing needs of the consumer is one of the key reasons Eastman Kodak is also now facing financial ruin (again a 90% reduction in employees over 20+ years).

The fascinating part of this is that Kodak was actually the first company to invent, patent and bring to market the first digital camera.  Weird huh? So what happened? Kodak took an overly conservative approach to the predicted needs of digital photography and allowed other companies to move ahead in the race to conquer the digital world.  Companies like Sony and Cannon became the front runners for this new digital method of capturing photos and video, and what profits those two companies left on the table, were taken by other smaller start-up digital companies.  

No one wants to talk about failure, but you have to admit, if you are anywhere under the age of sixty, that we too must recognize the lessons of these two former industry icons and continue to sharpen our minds, adapting to the technology that surrounds us.  I’ll admit, I was one of the last hold outs in the anti-smart phone campaign, however I finally succumbed and now, I stand in awe of just how much my little smart phone can process.  It’s like having a small computer on my hip. Those that elect to close their eyes to this new technology will eventually learn the similar lesson that GM and Kodak are now experiencing.  They have been left behind; whereas only two choices remain; change, or get out of the business.  For us hard-working Americans, we can exercise our rights to enjoy the high-tech world we now live in, or be desperately left in the dark wondering why nobody buzzes our pager anymore (Admit it, you had one at one time.)

Until Next week, Cheers!

-Lou