Avoiding a “Kodak Moment”
The ability to recognize that the winds have shifted and take action ‘before you wreck your boat’ is crucial to the future of an enterprise—and to individuals.
- Being paranoid and proactive can be positive attributes as you navigate through life and your working career.
- Think of yourself as a one-person corporation. What skills do you need to change in order to move forward in your career and in life?
- Creative destruction doesn’t just wreak havoc for large corporations; it impacts anyone with a job or business to run.
- Don’t ever stop learning or stop expanding your network and skills
If you follow what’s going on in the technology world, you’ve probably heard the term “creative destruction.” It was coined in the 1940s by the Austrian economist, Joseph Schumpeter. But the term creative destruction has been used ubiquitously over the last 20 years because microchip processing speeds are doubling every 18 months or so. That’s caused enormous change to almost every industry worldwide.
I remember in 1987, the first time creative destruction really hit a big American corporation. Andy Grove was running Intel, a world leader in memory chips. He went to his board with a radical idea. He said, “Look, we’re getting our ‘you know what’ handed to us by Japanese companies in our space. Let’s ditch memory chips completely and go into processor chips.” The Intel board almost didn’t go for it, but ultimately they did and, of course, the rest is history.
The power of being proactive and paranoid
Many of you may have read Groves’ 1996 book, Only the Paranoid Survive in which he writes, “The lesson is, we all need to expose ourselves to the winds of change.” He also wrote that “the ability to recognize that the winds have shifted and to take appropriate action before you wreck your boat is crucial to the future of an enterprise.”
Groves’ philosophy applies to your life as well. Think of yourself as a one-person corporation. What skills do you need to change in order move forward in your career and in life?
Eastman Kodak is a company that probably wishes it took Groves’ advice more seriously when it had the chance. Back in 1975, Kodak had a huge 89 percent of the film processing business. That’s also the year they developed a digital camera. Now it’s interesting that Kodak decided not to market the digital camera because they didn’t want to take away from their core business at the time—film! So fast-forward to 2012. Kodak is going through bankruptcy and comes out with only 16,000 employees left. By comparison, it had 140,000 employees and a $29 billion market cap as recently as 1996.
If you work (or worked) for Kodak and you kept working harder and harder at the film business without developing anything else, eventually your livelihood got “creatively destroyed” as Joseph Schumpeter would say, by digital.
It’s a classic case of two corporations with two different stories. Intel being proactive and paranoid and Kodak deciding to preserve the status quo and cause 140,000 working folks to lose their jobs.
Unfortunately, creative destruction is not only a problem for the Fortune 500. It happens on a daily basis to individuals in individual jobs and for those working in corporations that aren’t seeing that bright light coming down the tunnel. It’s very important to create your own transition, to move yourself out of a potentially bad situation before it moves you.
You can get more education and transition upstream. You can go into an entirely different industry where there’s real growth taking place. Whatever it happens to be, you must become more focused on your skill set and the value your skills deliver to the world. The days of staying in the same job for 30 or 40 years and collecting a gold watch at the end are gone forever. Young folks understand this very well. You see that very clearly in the marketplace.
If you’re not sure that you’re seeing the forest for the trees, go to your friends and discuss what you think’s going on in your profession. Or maybe talk to a trusted adviser. Talk to us. Get a second opinion. It’s essential to be very proactive if you want to avoid being obsolesced, outsourced, downsized or all those wonderful other things that happen to hard working people when they least expect it.
So until next time, enjoy life but never forget to smell the coffee. Gary
Coyle@coylefinancial.com | 1-800-480-7913
Seminars – Position Your Wealth for Protection and Prosperity