Exceptional times require exceptional leaders and there aren’t many of those around these days.
Isn’t it ironic that the company that invented the digital camera now needs some breathing room to sort out problems caused by the success of digital photography? Not only that, it is trying to sell off some of its most valued assets – intellectual property to do with digital photography – to make ends meet. I am, of course, talking about Eastman Kodak, which has now filed for Chapter 11 bankruptcy protection in the United States.
Technological change of the kind that caught Kodak out leads to new competitors and substitute products. It also happens at a faster pace than the average business, or business leader, is able to respond to. Many businesses that I have worked with have struggled with this. A compelling response to such change inevitably involves vision, investment, and risk. Responding can be avoided for a while, but there is a point of no return after which it becomes almost impossible to recover. Human nature is such that people often hope a problem will just go away. The bigger the business, the more successful the business, the more dominant the business, the more difficult all this becomes.
All long-lived organisations have survived critical moments and if they are lucky they have the right person in charge at the time. Nokia is of a similar age to Kodak: Nokia was formed in 1865, Kodak in 1889. Nokia has negotiated more than one radical change of direction since then, but probably the most important strategic change in its history was made in 1992. The new CEO Jorma Ollila made a crucial decision to concentrate solely on telecommunications. During the rest of the 1990s, the rubber, cable and consumer electronics divisions were gradually sold as Nokia divested itself of all of its non-telecomms businesses. It worked out rather well for them at the time.
Good leadership is most vital in exceptional times. You need equally exceptional people in charge, but more than that, I think the fact that Ollila was new to the role of CEO was key to Nokia’s success. Winston Churchill became Prime Minister just in time, in 1940, too. The radical change necessary to win the most difficult fights is less likely to come from the old guard.
Kodak, like so many companies before it, faced an enormous leadership challenge and I guess it wasn’t lucky enough to find its Churchill, or Ollila, in time.