Kodak Knew

Kodak is usually told as a story about missing the future. The facts say otherwise. As Dambisa Moyo notes in How Boards Work, the company created its first digital camera in 1975. Its board and leadership were aware of the technology shift and of the need to innovate. Kodak still filed for bankruptcy in 2012, because, in Moyo's words, it "was unable to execute new plans and products in a timely manner."

Kodak didn't fail because it couldn't see. It failed because seeing wasn't enough.

The gap between knowing and doing

I have said for a long time that knowing something's right isn't enough to start doing what's right, and knowing something's wrong isn't enough to stop doing it. Kodak is that sentence written in corporate history.

Knowledge was never Kodak's shortage. It had the engineers, the patents and the early prototype. What it lacked was the capacity to act on what it knew while its existing business was still profitable and its future business was still uncertain. Those two conditions, a comfortable present and an unproven future, are exactly when action is hardest. They are also exactly when it matters most.

That's why I define conviction as the earned capacity to act on what you believe before the outcome is certain. If you wait for certainty, someone else has already acted.

Why smart organizations freeze

Moyo describes a trap she calls cannibalization. Established business lines consume most of a company's capital, talent and management attention. The people running them often resist change, because the new venture threatens the very business that pays everyone's salary. Leaders fear killing the golden goose. So the new idea gets studied, piloted and starved.

What makes this so hard, Moyo points out, is that the existing businesses are usually viable. They make money. Nobody is panicking. The danger is visible only in the forecast, and forecasts are easy to argue with.

She also observes that many board crises are slow. They "settle in over a long period of time, gradually eating away at the value of the company but seemingly going unnoticed, often until it's too late." A slow crisis doesn't trigger an emergency response. It just quietly narrows your options until there's only one left.

Conviction is built before you need it

Here is what I take from Kodak. You can't summon conviction at the moment of crisis. By then the window has usually closed. Conviction is built earlier, through a clear sense of who you are and what you're for. An organization that only knows itself as "the company that sells film" will defend film. An organization that knows itself as "the company that helps people hold on to their memories" can let go of the format and keep the purpose.

The same is true for individuals. People who know only their job title will defend the job. People who know what they uniquely bring can carry it into the next chapter, even when the current one is still paying well.

A few questions worth asking now

What do we already know that we're not acting on? Most organizations have a Kodak prototype somewhere: an insight, a pilot, a warning someone raised two years ago. Find it.

Who benefits from waiting? Be honest about which parts of the organization would lose influence if you moved. Their resistance is understandable. It shouldn't be decisive.

What would we protect if the format disappeared? Separate your purpose from your current product. The purpose is what conviction defends. The product is what conviction is willing to change.

The real lesson

It's tempting to look back at Kodak and feel superior. I think the more honest reaction is recognition. Most of us, as leaders and as individuals, already know something we're not yet acting on. We are waiting for the outcome to become clear.

It rarely does. The leaders who move anyway aren't reckless. They've simply done the harder work of knowing what they stand for, so they don't need the future to prove them right before they begin.

This essay responds to ideas in How Boards Work by Dambisa Moyo (Basic Books, 2021). The Kodak example and the analysis of cannibalization and slow crises are hers.

Explore more essays in the Conviction practice.

Want to explore these ideas further? Learn more about my work on leadership, identity and conviction at www.theglennllopis.com.