Technology is opportunity. It builds like a wave in the distance, ready for those with the skills to interpret its course to ride it all the way to the bank. Great business leaders scan the horizon looking for the next swell and listening to those in the know so they can make sure their business is ready to go.
But sometimes even the best CEOs get it wrong and wipe out potential profit and future growth along the way. We take a look at three major businesses that failed to master the wave of technological change.
Wrong Time, Wrong Place, Wrong Decision
We’ve all made choices we’ve later regretted. But spare a thought for the people in charge of some of the world’s biggest brands. They get paid the big bucks to take their organisation safely into the future, securing jobs for thousands of people along the way. And when their business is closely aligned to technology, being able to spot opportunities predict the next big thing, and back the winner is a must.
Despite the enormous pay packets and the teams of experts surrounding them, CEOs make errors. Here are the stories of three major brands who got it wrong. Big time.
Kodak: Fear of Opportunity
Christmas is make or break time for many businesses with January ringing in not only the new year but a slew of bankruptcies. Which is exactly what happened when Kodak went bust at the start of 2012.
Kodak’s founder, George Eastman, invented roll film back in the 1880s. One hundred years on and Kodak was at the peak of its global dominance: the convenience of film meant photographic plates were ancient history and photography became an enduring hobby for the masses.
Throughout the 1900s, Kodak continued to innovate and the brand was the gold standard in cinematic and still film. But it all started going wrong toward the end of the century as digital and mobile began to take off and film declined.
Kodak didn’t exactly miss the boat; they poured billions into developing technology to take photos on mobile phones and other digital devices. In fact, one of the company’s research and development engineers invented the world’s first digital camera.
What sealed Kodak’s fate was fear. Executives were afraid to kill the golden goose, its film business, leading them to hold back on developing their own digital cameras for the mass market. As a former vice-president, Don Strickland, said: “We developed the world’s first consumer digital camera but we could not get the approval to launch or sell it because of fear of the effects on the film market.”
Where Kodak had initiated the wave of technological change in the past, it failed to seize its latest, and possibly its biggest, opportunity. Firms like Canon were more willing to jump in. They took the initiative and the rest is in the film archives.
The moral of the story? If you’ve already invested, trust your gut no matter how bad it seems for your existing business model.
Philips Electronics and Real Networks: Missed Their Bite of the Apple
Imagine losing out on $5.15 billion per year … that would guarantee you a few sleepless nights.
That’s what happened to Philips Electronic and streaming media giant Real Networks. One of their engineers, Tony Fadell, pitched them the concept of pairing a music player with a Napster-like content delivery system. Despite its expertise, Real Networks failed to spot the concept’s potential.
Instead, Fadell took the idea to Steve Jobs who instantly saw its possibilities and hired the engineer to bring the idea in-house. The concept became iTunes and, coupled with its iPod technology, gave Apple a digital stranglehold on the online music sector with 75% of an industry valued at $6.9 billion.
The moral of the story? Trust your technical advisors and be prepared to take a risk.
Friendster: IT Stability Issues
Ever heard of Friendster? You probably would have if this tech start-up had invested sufficiently in their IT infrastructure.
Way back in 2002, Friendster was a proto-Facebook site with friending, messaging and a wall you could leave messages on. But as it became more popular, the site couldn’t handle the traffic it was generating. Users became frustrated by lengthy page loading times and left as quickly as they’d arrived.
“The problem,” says founder Jonathan Abrams, “was that Friendster was having a lot of technology problems … people could barely log into the website for two years.” Investors weren’t focused on patching up the service properly which meant the business couldn’t respond to the threats posed by other social media platforms.
By the time Facebook and MySpace were up and running, Friendster had lost a lot of market share in the U.S. thanks to its stability issues.
The moral of this story? Plan for success and ensure your technology is ready to deliver before you need it in place.
As these stories show, the digital revolution is already here; fail to embrace it and you could be left behind. Keeping your business up to date with new technology needn’t be as risky and challenging as it was for these firms. Whether your technology projects are small scale changes with big added value or an entire digital transformation, investing in technology prepares your business for the future.