Kodak – Change in Organisations

In todays’ volatile business environments, change is the only constant that keeps an organisation moving towards success. Usually, changes within an organisation occur when external or internal factors are tipped off balance. This results in management taking the necessary steps to steer the organisation back to better positioning and stability via the changes implemented. Was Kodak, the company once worth $31 billion be filed for bankruptcy, under chapter 11 (Merced) be solely because of its refusal of going through organisational change?

With the slogan “you press the button, we do the rest,” George Eastman introduce the first camera into the hands of a world of consumers during the year 1888. By doing so, he made a complicated process, so simple to use, to nearly everyone. Kodak the world’s largest producer and marketer of imaging products (Yu 1-3) had a strong branding and was one of the most respected brand name around the world that celebrated many remarkable milestones.

By looking at change as process with specific stages, organization can prepare itself for what is about to knock on it’s door and make a plan to manage the transition – looking before you leap, so to speak. Usually organisations go into change and make decisions blindly, causing much unnecessary turmoil and chaos or in the worst case scenario of needing to shut down. One of the cornerstone models for understanding organizational change; Lewin’s Panned change model was developed in 1940 by Kurt Lewin.

Through this model, he describes how change goes through three-stage process “unfreeze – change – refreeze” (Organization Development ; Change 21-23). The first stage also known as the ‘Unfreeze stage’ is about preparing everyone in the organization before the change. The ‘unfreeze’ stage involves getting to a point of understanding that change is necessary, and that it is time to move away from the current comfort zone. Second stage regarded as the ‘change stage’ according to Lewin is where intended change is executed: action is taken, changes are made and people are involved.

Support and communication is crucial here, it can come in the form of coaching, training and mistakes are encouraged and expected to occur as part of the process. During the ‘Refreeze stage’ change is adopted permanently, establishing new ways of how things are supposed to be done and there after it is incorporated into everyday business. At this stage it is important to celebrate success or reward to let employees feel appreciated and assured that their hard work is truly valued and has been paid off. Steve Sasson, an engineer of Kodak created the first prototype of a digital camera.

It was the size of a toaster, captured an image in 20 seconds and was required to be connected to a television to view the images that were taken. Kodak may have invented the technology. But by investing in it and further developing the idea it could have achieved another milestone, but unfortunately they didn’t invest in it. Furthermore, Sasson told The New York Times (Deutsch -) that management’s response to his creation was “that’s cute – but don’t tell anyone about it. ” This first prototype of a digital camera had massive disruptive potential, but it overseen just like that.

Applying this to Lewin’s change model, at the ‘Unfreeze’ stage, Kodak was determining the change. From the above article it could be inferred that upper management was not keen in Sasson’s creation. Change is a two-way approach it works both top down and bottom up. The ‘unfreeze’ stage is not strong, as the digital camera proposed had no strong support from the upper management. At the ‘change’ stage only minimal can be done as there is no action plan developed, and even if so the green light and proceeding ahead has to be approved from the management before being executed.

Since there was no strong support to drive the change, there is no change to be anchored. Thus Kodak continues to function the same way at the “refreezing’ stage. It is important for an organization to welcomes and embraces new ideas proposed, failure to get support from upper management could be one reason for Kodak’s fall. The nature of business keeps on changing so the revolution in the market place and evolution of the strategy of the company to meet the expectation should constantly match. Kodak knew that consumers’ preferences are ever changing, but they failed to embrace it.

Relying on their strengths (“Eastman Kodak”), they believe they would continue to do well, resulting in not favoring the idea of going from film to digital. Kodak believed that consumers would never part with hard prints and valued film- based photos because of its high quality (Munir). But Kodak was proven wrong, when digital cameras started dominating, as consumers found it more convenient. Besides, consumers didn’t feel the need to hard print their photos as they could easily save a soft copy and use it for multiple purposes. Kodak was known to have performed frequent Research and Development (R;D).

What it may have failed to do during the ‘unfreeze’ stage is to survey to understand the current state of why change has to take place and what exactly consumers were demanding and are willing to pay for. Kodak believed they will continue to do well and that in one way or another consumer will definitely come to them for hard prints. This may have resulted in them not being able to have strong supporting evidence or statistics to explain the benefit during the ‘change’ stage. Due to this mindset, Kodak might have also not exactly found a need for change to take place.

Thus when it goes through ‘refreezing’ not all employees will be supportive due to the fear of uncertainty and lack of confidence in the decision that has been made by Kodak. The key stumbling block of being ignorant and believing they would never be replace, resulted in its inability to convert its technical expertise into tangible products that could be sold generating high profits (Pangarkar). As scary as risk-taking may sound, it can actually be seen as a way to step out of the comfort zone, and explore new possibilities, anticipating in change and staying relevant.

If not for the existence of ‘dare devils’, some companies would not have been this renowned. Kodak stagnated and ultimately stumbled due to lack of diversification into new barrier growth. On the other Fujifilm, a distant second from the film business to Kodak explored new opportunities (McGrath). For example, Fujifilm found market that is growing and made some key acquisitions to it. Some adjacent market they viewed as business growth (Nielson) were, preventive fields, functional cosmetics and treatment field. During ‘refreezing’ stage Kodak discovered the need for diversifying.

The emphasize of ‘why’ change needs to take place was strong, due to the competition from the competitor. During the ‘change’ stage Kodak tried to diversify, but it displayed an unwillingness to give up on photography and move into something else. One example of its decision to diversify was it created a platform for people to share their phots online. At the ‘refreezing’ stage although changes are done and everyone is informed and supportive, it may not have generated much of a favourable result as the change implemented is not sufficient enough.

Although Kodak may have been seen as a monopoly, it is important for it to have a competitive edge and step ahead of its potential competitions. Kodak could have change the company’s direction if they had tried to be a little adventurous and venture out. What Fujifilm succeeded in doing that Kodak did not, was its execution. Fujifilm pumped in major efforts to sustain its film business, there after they made investments in digital technology and business diversification. But Fujifilm would not have become what it is today, if not for a strong management that has a clear purpose and end goal in mind.

Kodak failed due to the late move into digital photography, lack of market research and unwillingness to change. It is recommendable for Kodak to ensure that it keeps in touch with the market always. By doing so it will allow Kodak to come up with products that reflects the expectations and needs of the consumers. Moreover, this will allow Kodak to closely monitor the actions that are taken by its competitors to create and sustain competitiveness. Secondly, Kodak should lean on its loyal customers to launch new products since the customers’ trust Kodak to come up with quality products.

But on contrary, it should not entirely lean on loyal customer base. As a result, this will make sure that Kodak does not create a technology and then back off in fear thinking that it’s going to negatively impact the business. Thirdly, Kodak should conduct market audit to aid in determining how its activities are perceived by the market and proceed on with what should remain or must go. This will help Kodak to concentrate on the expectations, needs and demands of the market. To be successful, it is vital for a company to adapt itself to the customers’ expectations and needs.

No matter how well known Kodak maybe, without a meaningful business strategy, brand in meaningless. In conclusion, change management is a growing trend that every organization need to adopt and execute to bring about new strategic goals and growth that will push the business higher on the competitive landscape. While change is implemented it is important to ensure the change elements are granular, achievable and relevant (Coyne). At the end of the day, it’s all about: manage it well and you will be able to grow your business, stay ahead of the curve and take full advantage of every new opportunity regardless of its size (Coyne).