How Ratan Tata avoided a ‘Kodak Moment’
Imagine the scene. It’s the early hours of the morning. A young engineer lies awake, unable to sleep because of the excitement. After what seems like an hour of trying to find a comfy position to nod off, he checks the clock.
Just fifteen minutes have elapsed since the last time he looked! He worries about how tired he’ll be in the meeting.
Even after minimal sleep, he bounces out of bed when the alarm finally releases him. Because today is the day he will show the management board the invention that will catapult an already great company to the next level.
The demo goes well. Much to his relief, the prototype works perfectly. He looks expectantly at the assembled executives. Their response leaves him stunned.
“That’s cute—but don’t tell anyone about it.”
The company was Kodak, and I’m only imagining engineer Steve Sasson’s inner thoughts, but I’m sure you’ll agree it must have been a shock.
Most people know that Kodak invented the digital camera but failed to commercialise it, leading to their dramatic fall. A big part of the problem—which they recognised but failed to address—was that they had power barons running chemical-based film businesses who wouldn’t allow their revenues to be cannibalized.
You can get yourself the best strategy money can buy, but if people won’t implement it because they fear it will disturb their well-feathered nests, you’re sunk.
In the words of one former Kodak CEO, the company “regarded digital photography as the enemy, an evil juggernaut that would kill the chemical-based film and paper business that fuelled Kodak’s sales and profits for decades.”
Faced with key influencers who hope to wish away business reality, stewardship of the organization demands courage. It’s tempting to kick the can down the road.
And that’s a temptation that Ratan Tata resisted. Earlier in its history, executives at Tata Group had treated their parts of the business as their personal fiefdoms to run as they alone saw fit. But when Ratan Tata became chairman in 1991, he squared up to the issue. He began easing the barons out, and, when easing wasn’t enough, he forced the issue, insisting on a compulsory retirement age.
It was confrontational, but it created dozens of opportunities for new talent to rise and helped Tata become India’s largest private corporation.
I’ve seen many leaders who—unlike Ratan Tata—failed to confront recalcitrant power barons. It never goes well for the leader if key influencers are undermining strategy.
Andy’s Advice: Give people a reasonable opportunity to get on board. But realise that these things don’t get better on their own – kick the can down the road at your peril!
Does this take courage? Often, yes! For help thinking these kinds of issues through, check out my whitepaper: Rationally Fearless.
Image credit: Nikkei Asian Review
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Andy Bass is the founder and principal of BassClusker Consulting, and helps leaders to bring their strategic goals to fruition more quickly and completely, wherever possible using resources they already have. He has worked across a wide range of industries and sectors including professional services, technology, media, health, financial services, packaging, automotive and education.
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