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The Last Word: For BlackBerry, for All Brands: Three Lessons Learned from the Demise of Kodak

October 2013 By Allen Adamson
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Shoulda. Coulda. Woulda. It was way back in August 2007 (an eon ago in the digital market) when shares of the Canadian maker of BlackBerry smartphones peaked at $236. As I write this, company shares are trading at about $7.

About six months earlier in January 2007, Apple introduced the iPhone, and BlackBerry, then called Research in Motion, was not fazed. It decided to focus on products for business and government usage, letting Apple play around with smartphones for the rest of society—those happy-go-lucky folks for whom a smartphone was just a cool thing to have.

Apple, for those of you who may not have read it in the most recent business news, just surpassed Coca-Cola as the most valuable brand in the world. BlackBerry? Well, I’ll sum it up this way: One of the companies that had the first-mover advantage in the smartphone industry may soon end up with nothing but a lot of scrap metal.

BlackBerry, sad to say, is nearing the same fate as yet another major brand name, Kodak—a company that, yes, shoulda, coulda, woulda maintained its leading edge as the world began its ascent into digital technology. But as we all know, it didn’t, instead filing for bankruptcy protection in January 2012. How can a really big brand, a brand whose name is associated with so many positive memories, disappear? It’s interesting to look at the parallels of BlackBerry and Kodak, which provide three primary lessons from which all brands, big and small, new and old, can—and should—learn a thing or two.

Lesson One: No matter how big or well known a company may be, without a meaningful business strategy, brand is meaningless.

To put it bluntly, while Kodak may have recognized that the category in which it was competing was being reinvented, it didn’t think it was necessary to change its business strategy. Or as Andrew Salzman, former Kodak CMO and now Global Market Strategist for the Chasm Group, told me in a conversation on the topic, “Kodak did not put the necessary resources in place to make what I would call ‘asymmetrical bets’ on what would be their next-generation revenue drivers. Kodak recognized as early as 1987 that digital was going to be an interesting framework. It had tomes of research on how digital would develop, how the whole notion of image capture, storage, manipulation, retrieval, etc., would reinvent the category, but from a go-to-market point of view, from an organizational prioritization vantage point, they were tethered to the 95% of revenue coming from paper and chemicals. They failed in seizing the day vis-a-vis moving away from the existing cash cow in order to figure out how to live and fight the future. They were thinking about what new would probably be significant, but they were unwilling to bet the future on it, which put them at a significant disadvantage.”

Lesson Two: No matter how paranoid you think you are, you’re not paranoid enough.

I bow to Andy Grove, founder of Intel, the world’s largest chip maker, for this piece of wisdom. In his book Only the Paranoid Survive, Grove writes of the “Strategic Inflection Point,” which can be set off by almost anything: increased competition, a change in regulatory issues and, of course, changes in technology. When a Strategic Inflection Point occurs, ordinary business rules must go out the window.

Kodak, and BlackBerry, just weren’t paranoid enough. They didn’t spend enough time looking at the intensely increasing competition in their respective categories or studying the drivers of brand choice, and they suffered the consequences.

In the digital realm, innovations are very quickly launched, copied and improved upon; in Kodak’s case, the company didn’t look up, down, right or left. It couldn’t—or wouldn’t—compete with a differentiated and sustainable product. As Andrew Salzman told me, “Kodak had an ad campaign developed by Ogilvy & Mather in the late 1990s titled “Take Pictures. Further.” It was the right promise, but because the product wasn’t competitive, the promise couldn’t be substantiated.”

Lesson Three: No matter how deeply entrenched the culture, all companies must be open to revolution
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I must let it be known that I had the privilege of working with the Kodak brand early in my career. Great, smart people. But, among the things I noticed was how entrenched they were in doing things the way they had always been done. There’s something to be said for tradition and strong company values, but not when culture becomes a barrier to success. Kodak was built on a manufacturing mindset, a business model where you build it, put it in front of consumers, and they’ll come. It knew how to play this game very well. Put film within an arm’s reach of consumers around the globe and they’ll buy it. Run tearjerker ads about kids growing up too fast, and people will buy more film. Despite an abundance of superior technology within, it was this intransigent culture that was among the reasons Kodak failed to move forward.

The world is moving so much faster now that no matter how strong or powerful your brand name may be, you have to think in terms of revolution, not evolution.
Lessons learned the hard way for Kodak, and now for BlackBerry. The only thing certain in today’s marketplace is that things will change, fast. Innovation will happen with you, or without you.

Know what business you’re in and revolutionize it before the next guy does. It’s the best way to ensure you’re not the subject of a shoulda, coulda, woulda column.
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Allen Adamson is the managing director of the New York office of Landor Associates, a global brand consulting firm founded in 1941, which pioneered many of the research, design and consulting methods now standard in the branding industry. Adamson is the author of The Edge: 50 Top Tips from Brands that Lead, Including Apple, Zappos, GE, P&G, and even Justin Bieber, as well as BrandSimple: How the Best Brands Keep It Simple and Succeed and BrandDigital: Simple Ways Top Brands Succeed in the Digital World.

 

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