Guest blogger Ken Cameron talks about the lessons learnt from Kodak film.
Picking The Right Transition Strategy In The First 100 Days Is Crucial To A New Leader. That’s how the CEO of Fujifilm saved his company while Kodak disappeared.
There are plenty of reasons you might fail when transitioning into a new role.
If you’ve ever stumbled or fallen when tackling a new position or taking over a new team, you can probably make a list of reasons that is as long as your arm. If you start jotting down some causes now you might get finished by this time next week.
But if you take a step back and look at your list from a broader perspective you might make the same realization my colleagues and I have. Most failures come from a misreading of the situation and a failure to match appropriate actions to the situation.
You can't succeed unless you know what situation you’re walking into. Otherwise you’re effectively stumbling around blindfolded. Unfortunately, you can't easily read the label of the jar you’re in.
Imagine for a moment that you’re a new leader taking over a company that has been around for decades. Let’s say this company dominates a particular market. There are signs that technology is advancing, but most of your colleagues feel that things will be fine in the long run.
This was the situation that Kodak found itself in in the 1990s. They were the world’s leading processor of colour film, an expensive and time consuming process that they had refined. The technology was expensive and the logistics were daunting to new entrants to the field. Kodak and Fujifilm dominated the market. Other competitors, Agfa and Konica, were a distant third and fourth.
You all know how this story turned out. Digital cameras invaded the market. Thinking that customers would prefer the superior quality of film over digital, Kodak thought their position in the market was secure. Executives resisted initial efforts to change. They failed to recognize the extent of danger. When Kodak finally did try to pivot, their actions were too little, too slow and too late.
Even if you’re not responsible for a giant multi-national, you may still see yourself reflected in this story. Perhaps you’re a leader who has taken over a team but the team is resistant. Perhaps you’ve been tasked with leading a new initiative, but executives in your company don't recognize the need for change. Or perhaps the opposite is true; you’ve been asked to consolidate recent gains, but you’re more interested in innovating new products.
In all of these cases, knowing the situation is vital to success.
That’s why today Fujifilm is still in business and Kodak is nowhere to be found. Shigetaka Komori was appointed president of Fujifilm in 2000. He recognized that market had shifted abruptly and that his company didn't realize that it was no longer in a sustaining success mode but was actually desperately in need of a turn around. He quickly carried out massive reforms and saved the company. .
Harvard professor Michael Watkins has developed a useful model that can help frame your thinking. He calls it the STARS Model.
Broadly speaking any company could be in one of four distinct phases:
Start Up: a company in its early stages may be lean and fast moving, developing and launching prototypes rapidly. If you’re more used to a deliberate development cycle you could find yourself in conflict with those around you.
Turn Around: an organization that is in trouble needs its leaders to take decisive action now. Taking the time to engage stakeholders and develop a long-term strategy isn’t going to cut it. The CEO needs to know what he can do to staunch the bleeding.
Accelerated Growth: managing a rapidly growing business presents its own unique challenges. We often think of growth as good thing: but poorly managed growth can be painful and potentially devastating. You’ll need to successfully integrate many new employees and put in place systems that will permit scaling without subverting the elements that lead to initial success.
Realignment: Despite the order of words in this acronym, a company rarely goes from sustaining success to full turn around. Usually there is an opportunity for a carefully considered realignment, which requires redirecting resources, cutting an entire line of business or changing strategy. The danger is that the impetus to change is less. In a Turn Around situation there’s very little resistance because the need for action is obvious. In a Realignment you will need to gather data to bolster the case for change.
Sustaining Success: Once a Start Up has gained traction the needs transform. The company needs to switch from building an exciting offering to monetizing that product. Once a Realignment is completed, the company needs to refocus its attention on consolidating those gains. Once a Turn Around is completed and the crisis has stabilized, the company need to begin scaling up again. These require different skills and a lot more patience.
My colleagues and I have found these four phases to be a useful framework for individual teams as well. If you find that you’re a leader within an organization, try substituting the term “company” or “organization” with your “department” or “division” or “project”. You may find, as I have, that the same four phases apply at al levels.
And the same perspective shift is required: you need to be able to read the situation to understand what actions are going to have the greatest impact.
Unfortunately, you can't always read the label of the jar you're in.
If you find the ideas behind the STARS Model compelling then you might be interested in our Workshop “The Crucial Next 100 Days”. We’ll be discussing and apply the STARS Model during a Lunch n Learn on November 21.
Our 75 minute Lunch n Learns offer practical information and a sneak peak at our “Crucial Next 100 Days” program. I’m co-presenting this new program with my colleagues James frail of Stevenson Frail Consulting and Russell Stratton of Bluegem Learning. Its hands-on learning that provides real value in a compacted time frame that you can apply immediately. I hope you’ll join us.