Why KODAK has failed in its Change Management
Kodak has been one of the reputed organizations in the photo industry, and with the revolution of the digital era, the company started envisaging challenges to its core business functions. When the company has realized the need for the rapid changes in terms of their business services, the product lines and the overall transformation, the company had to undergo the change management process, (Economist, 2012) the kind of initiatives that has been taken up by the company and the process of implementation they have adapted have led to the failure of organization due to varied challenges. In this research study report, the focus and emphasis is on how effectively KODAK could have implemented the change management scenario and which model of change management theories would have been more fit to the KODAK case context has been discussed in this report.
The rapid revolutions that are taking place in terms of technological revolutions, business dynamics and the process of business management has force many organizations to adapt to the changing trends and ensure that they are being part of the competitive environment. (Wharton, 2012)
There are instances where many of the leading industry players who have dominating the industry are today in nowhere position due to the issues of organizational change management. When there is intrinsic need for the organizations to focus upon the issue of change management the companies have to ensure that they understand the need for change, evaluate the possibilities and develop a strategic plan for the change and most importantly should be able to execute such change effectively. (EngageInnovate, 2012)
In the recent past the kind of technological revolution that has taken place has impacted the way many organizations had their business portfolio. The digital revolution that has come up in the last decade or so has transformed the way people do communication and the visual data management. Until last decade of time, the photo studios, photo films and the printing of photos has been a trendy business and has been the job feed for millions of employees worldwide. “Kodak” as a company has been one of the leaders in the photo industry and has been providing employment to thousands of people worldwide. Today the company is fighting for its existence. (Hamm & William C. Symonds, 2006)
Relatively there are two key reasons why such a scenario is being envisaged by the organization. The one time pioneers of the industry has failed to understand the dynamics of the changing trends and haven’t initiated the required strategic approach to compete in the changing world. Secondarily when the organization has realized the need for change and the change management process has been initiated there were plethora of challenges that the company had to encounter towards effective change management process. (EngageInnovate, 2012)
Keeping in view the need for advent change in the organizational business model, the products and services and the scope for effective development, the management in the organization has taken adequate plans to ensure that the revival of the business could be worked upon, but the kind of encounters related to the organizational culture, the lack of charter and many issues put together had reversed the conditions and has created a significant impact on the change management plans of KODAK and today the issue of change management in KODAK has become a case study for analyzing the challenges of change management in an organization. (Economist, 2012)
In this research paper, the focus and emphasis is upon the attributes that had to be considered by the KODAK for the change management plans and the intrinsic reasons, challenges and the problems that are envisaged by the company and what could have been done better by the company during the process of change management implementation has been discussed in the following sections of the paper. (Mui, 2012)
There were many research studies that have been carried out on the topic of failure in the change management and in majority of the failures that has been known in the business, there are few critical success factors and the essential components of change management dynamics which haven’t gone well with those companies. In this paper the emphasis shall be on what are the key issues that lead to the organizational failure in terms of change management. (Mendes)
Kodak has been one of the pioneers in the film production, film processing, printing technologies and the camera manufacturing business and has been a global player with high market share in terms of camera equipment sales, camera film production, and distribution and also in the printing technologies. It has been an undisputable leader in the industry for decades and had majority of the global market share. (Wharton, 2012)
The kind of growth that has been envisaged by the organization is phenomenal and the company had been positive in terms of introducing new technologies in the printing, focusing upon improving the quality standards, and expanding its operations in the global market. However the major factor which the company failed to focus is upon the changing technological trends away from its industry. The rapid revolution of the digital technologies, the consumer electronics industry gearing up for the global markets has been missed in sight by the KODAK management. (Economist, 2012)
The introduction of the digital cameras has been an alarming sign for the organization to gets its act right, but the relentless focus on the print technologies have made the organization take the blow of the digital revolution. Over a period when the mobile manufacturing companies started providing the high resolution cameras in the mobile phones as an integrated feature, it has hit the business of KODAK directly. (ICMR, 2012)
The kind of digital revolution that has taken place has evaded the scope for survival of the Film based cameras. The revolution has been accepted by the market due to convenience, clarity, cost of taking photos and the storage facility has impacted the core business of KODAK. Despite the fact that the company has taken up the challenge and revived the business at one level and has made efforts for comeback, the organizational change management has not been carried effectively by the change management team in an effective manner. (Mui, 2012)
There are few critical reasons that can be attributed to the failure of the KODAK in terms of effective change management. One of the critical reasons is that the company has not envisaged the need for new ways of coming up with the business at right time. This is one of the major reasons that have impacted the downfall of the organization. (EngageInnovate, 2012)
The company which was known for its ability and the leadership in the technology innovation in the American history is currently envisaging the crisis of survival due to the issue of late recognizing of the problem, the way they have reacted the changing trends were very slow and when the management decided to act on the new approach for business, the innovation trends have taken a wrong path. (Hamm & William C. Symonds, 2006)
The kind of delays in the strategic approach and reaction to the development, and due to the internal issues of the organizational culture, the entire task of change management has been affected and the company is fighting out the survival scenario. (ICMR, 2012)
According to Jay Desai of Institute of Global Competitiveness, “Business model innovation is harder than product innovation. It’s harder to visualize, and the scope is larger and much more complex. It includes everything the company does. Everything has to be changed”. (Hamm & William C. Symonds, 2006)
In overall there are various challenges that are envisaged by the organization in terms of effective change management strategies and the kind of challenges that are encountered by the organization in current scenario has made its future a very challenging way ahead. (ICMR, 2012)
It is evident from the case inputs from various research articles that there are combinational reasons for the failure of KODAK. The reasons ranging from the late reaction to the market trends, to taking wrong , directions of innovation, to the level of issues with the organizational culture, the leadership, and the issue of communication process. (Mendes)
When we take in to consideration the change management initiation which the company has taken up, it is evident from the scenario that there is essential need for the organization to focus upon the strategic approach for change management and should have had a proper implementation plan that should have been communicated to the team and (Hamm & William C. Symonds, 2006)accordingly worked on the new product innovation strategies and the product developments.
Right from the new innovation approach, to the leadership issues and the communication to the stakeholders the company had issues and challenges from different perspectives that have been raising concerns and the troubles of change management for the organization. (Economist, 2012)
This case is an evident illustration that even the change management has to be taken up at right time and if there is delay in the process it could hamper the entire process flow for the organizations effectively and when the companies have to handle the all-round transformation right from business dynamics to the internal process management, then the companies need to adapt an integrated approach that could facilitate the process for the organization. (JOSEPHSON, 2012)
The key attributes which the company should have aimed at are the corporate management, IT management, project management, Human resource management when transforming from one level of the organization to the other kind of organization. (Hamm & William C. Symonds, 2006)
Though the company has taken up the practice, there should have been much effective adaptation of change management theories in place in order to ensure that there is an integrated approach. For an effective change management implementation, in the case context of KODAK, it is very essential that the company should have focused on “Kotter’s change phase’s model”. In the model defined by the kotter, it is very evident that the companies focus on their intrinsic issues in a phased approach. (JOSEPHSON, 2012)
In the first stage of the process, the company could have informed the sense of urgency to revise its product line and services. When an informed approach takes place, the contribution from the internal stakeholders could have been more effective. (JOSEPHSON, 2012)
Building guiding teams, providing them the clear vision for the change and enabling them to carry with the given tasks for change is a phased approach which the leadership of the organization should have carried out. (Mui, 2012)
When the implementation teams are set and the strategic approach is devised for the organization, it is very essential that the teams communicate the change and have a buy-in and acceptance from its internal resources. (Economist, 2012). In the case of Kodak, had this phased approach been implemented the strategic approach would have yielded better results for the organization. (JOSEPHSON, 2012)
In the further steps the organization could have focused on providing short terms goals and working on the phased manner towards restructuring the organization rather than enforcing an overall transition at force. Sustaining the change which is the last phase of the Kotter’s change management model would have been more effective for Kodak had they taken in to consideration the strategic approach which could provide them a consolidated transformation. (Hamm & William C. Symonds, 2006)
Form the case scenario of Kodak, it is very evident that the companies need to have to choose and adapt right kind of change management theories that could facilitate the organization to have wider perspective of the challenges and prepare themselves for the transformation. (Wharton, 2012)
Kodak has been a front runner in the camera and the films production, printing technologies and has been known for technology innovation and has been one of the reputed American companies for innovation and technology. However, when the digital revolution has developed and has given scope for new developments like digital cameras, mobile cameras, digital storage of pictures rather than having it on films; the core business of KODAK has taken a hit.. Though the company has realized the need for change management and has initiated the steps towards the same, it has been delayed approach and in addition to that the direction in which the innovation has been focused has become a major concern for the organization. The case context of KODAK is an evident illustration of how if the organizations not focusing on timely change management and adapting right kind of change management theories and practices could fall out for the competition.. It is very essential that organizations of any size should focus upon the change management process at right time in right direction and shall execute the transformation plans based on effective change management practices. (Hamm & William C. Symonds, 2006)
Economist. (2012, Jan 14). THE LAST KODAK MOMENT. Retrieved Dec 04, 2014, from economist.com: http://www.economist.com/node/21542796
EngageInnovate. (2012, Feb 07). Kodak and its inability to change: a tale for many. Retrieved Dec 04, 2014, from https://engageinnovate.wordpress.com/2012/02/07/kodak-and-its-inability-to-change-a-tale-for-many/
Hamm, S., & William C. Symonds. (2006, Nov 26). Mistakes Made On The Road To Innovation. Retrieved Nov 04, 2014, from Business Week: http://www.businessweek.com/stories/2006-11-26/mistakes-made-on-the-road-to-innovation
ICMR. (2012). Rise and Fall of Kodak. ICMR.
JOSEPHSON, M. (2012, Feb 16). Leadership Insight: Kotter’s 8 Steps for Leading Change. Retrieved Dec 04, 2014, from The Joesph Institute.org: http://josephsoninstitute.org/business/blog/2012/02/leadership-insight-kotters-8-steps-for-leading-change/
Mendes, G. (n.d.). What Went Wrong at Eastman Kodak? . www.thestrategytank.org.
Mui, C. (2012, Jan 19). How Kodak Failed. Retrieved Dec 04, 2014, from FORBES: http://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/
Wharton. (2012). What’s Wrong with This Picture: Kodak’s 30-year Slide into Bankruptcy. Knowledge@Wharton.
Skype Id: hari.reddyc
Phone: +91-9502542081(IND) (Whats App, Viber)
phone: +1-2089086040 (US)