April 9, 2024
There is an old saying that nothing happens in a comfort zone because you are neither hot nor cold, so your motivation to act is virtually non-existent.
In the context of past successes being comfortable can create an aversion to discomfort and a lack of agility to respond to changing business dynamics.
For example, how many realize that the very first digital camera ever developed was by Kodak, yet how many Kodak digital cameras do you see today? In fact, how prominent is this once-dominant brand?
According to an August 2020 Wall Street Journal article, once a household name, the company has “spent much of the last decade attempting to maneuver out of bankruptcy and into new business areas.” The old money is now a stale currency in which the remaining value are memories of better, bygone days.
How did this happen to Kodak and other companies like it? How did they allow the digital opportunity to slip through their fingers and fade into oblivion? The answer is simple – leadership was far too comfortable with the old business model and failed to challenge its ongoing viability.
The Wrong Kind of Fear
"It is thought that the pain of losing is psychologically about twice as powerful as the pleasure of gaining." – Behavioral Economics
Having developed one of the first digital cameras, Kodak was "ideally positioned" to become a first mover in a new and exciting market. By capitalizing on their traditional film brand's dominance, they were virtually guaranteed to emerge as the "big player" in the coming digital age. In short, the stars were in alignment for a successful transformation.
Unfortunately, and because traditional film sales accounted for the lion's share of their revenue, they instead saw a threat rather than seeing the opportunity in digital. They were fearful that introducing a digital camera meant that they would cannibalize their core business model – one with which they were extremely comfortable. Seeing digital tech as a threat rather than an opportunity, they scrapped any meaningful effort to develop and market the new cameras, which was the beginning of the end.
Lacking the agility to pivot and seek ways to ensure a controlled transition from an old product to a new product, company leadership chose to hunker down. Like the last manufacturer of buggy whips made the best darn product, Kodak was the best at manufacturing products to serve the traditional film market. But, just as the demise of the horse and carriage brought about the end of the buggy whip manufacturer, the inevitability of the digital age reduced this once great global icon to a cautionary tale and a business footnote.
Courageous Agility
In my recent series of interviews with Microsoft’s Jason Brommet about effective leadership through turbulent times, he talks about "the right response" to a dynamically changing market.
During our discussions, Jason emphasized that "the need for leadership" increases during periods of change and uncertainty. He then went on to say that “the differences between good leadership versus ineffective leadership becomes more recognizable” during periods of volatility.
So, what is the hallmark of good leadership? According to Jason, a good leader is willing to run towards danger (and change) and not away from it, confident that their "experience, knowledge, and acceptance of imperfection” will ultimately get their team where they need to be.”
In other words, good leaders are willing to recognize change and have the courageous agility to respond in a manner that enables them to exit their comfort zone to achieve the best outcome from any situation.