One of the most important things any business needs to do in order to survive in the long term is reinvent itself. Every day, you have to be open and willing to change, never letting yourself get locked into a single way of doing things. In a notable example in recent years, Kodak, one of the iconic businesses in this country, declared bankruptcy because it wasn’t able to successfully reinvent itself.
When it comes time for reinvention, small businesses have a real advantage as long as they have the right mindset. Big companies have bureaucracies and entrenched interests that are more interested in protecting their own pet projects than in innovation and reinvention. Reinvention means change, which is very hard for a big company, even when some of the people involved understand that it’s necessary.
At a small business, the entrepreneur who recognizes the need to change and reinvent has a much easier time implementing that change.
Kodak’s bankruptcy comes after the company was never able to successfully adapt to the new reality of the digital photography age. However, it’s not that Kodak didn’t see change coming. The company tried to change, but it was never able to move quickly enough to retain its advantage, and was dying slowly for nearly a decade.
Scott Anthony of Innosight wrote a great piece for the Harvard Business Review Blog Network, titled “Kodak and the Brutal Difficulty of Transformation.” He pointed out a few of the lessons that we can learn from Kodak’s struggles, highlighting the importance of reinvention and just how hard a big company has to work to accomplish it.
It was a great piece, and I think you should read the whole thing. Here are a few of his main points:
- Rethink the Business Model. Anthony believes one of the main problems Kodak faced was that they never thought big enough. Even when they were thinking of ways to change their business, they were still thinking in terms of photography, without considering ways to expand beyond that niche. For instance, Kodak was ahead of the curve when it bought Ofoto, a website for sharing photographs. But instead of using that to pioneer social media, ahead of innovators like Facebook, Kodak never expanded it beyond simple picture-sharing.
- Start Early. Big companies often don’t change until they absolutely have to, when there is no other choice. However, when you let yourself be backed into a corner, it also limits your options of what you’re able to do to change. If you start the process of change before too late, it gives more freedom to choose your own destiny. That sense of urgency, of needing to change, was missing at Kodak until too late.
- Have Diverse Options. For every idea that works, there are many that don’t work out. Putting all your eggs in one basket is a recipe for disaster in a world where more ideas fail than succeed.
- Develop Partnerships. No one can make it on his or her own. That holds true for businesses, too. You need partners and allies. Having a number of related companies touching your own can help lead to innovation and spur creativity, while also preventing a company from becoming over-confident in its own abilities.
Other businesses, large and small, must realize how important reinvention is, and how hard they must push to achieve it. No one is exempt, so learn from the examples you see around you!
What are some other lessons you’ve learned from watching big businesses?