Category Archives: innovation & management

Kodak Prosper S10 inkjet print heads

How the mighty fall…?

It’s remarkable that reports in the general media — including the numerous stories putting a gratuitous, how-the-mighty-have-fallen spin on the travails of Kodak — have had almost nothing to say about the condition or even the existence of its graphic communications product lines.
Patrick Henry, WhatTheyThink, January 20, 2012.

Oh yes, Kodak missed the opportunity to prosper from their innovations in digital imaging and the digital camera. So how come they didn’t see what was coming? I guess they were just too stuck in their old business model of making film that had made them fortunes over decades. When you’re feeling comfortable with the old and the old still brings in some money, it seems impossible to look up and get a grasp of the long view. At least not without taking help from a outsider that isn’t trapped in the present.

Another similar example is Nokia, who were so certain on their own technology and design that they ignored the iPhone as just a geeky gadget with no commercial potential. Frank Zappa and the Mothers of Invention met a similar reaction from a record company director – no commercial potential. The favorite act of that record company later ended up doing background singing for the Mothers!

In their time, Kodak used some of their money to become the main supporter of the College of Imaging Arts and Sciences at the Rochester Institute of Technology, and the RIT School of Print Media. This might have been a unplanned foresight of their more recent focus on digital production printing systems. Rumors say that Kodak will launch a newspaper version of the Prosper inkjet press that will run at 300 meters/min and will be able to print the impressive equivalent of 3,098 64-page tabloid newspaper/hour. Ironically, this may be another mistake, putting their hope to another industry that is reluctant to understanding the need for change. Most newspaper companies just don’t get it! It seems however like Kodak is making moves towards other business areas within printing and publishing, like magazines.

You can read more about Kodak’s reorganization on the web. Under the heading Leadership Insights you can find two informative videos.

  • Chairman & CEO Antonio Perez discusses Kodak’s restructuring
  • President & COO Philip Faraci answers top questions on customers’ minds
Lego businessman on bench

Maximizing Shareholder Value

“On the face of it, shareholder value is the dumbest idea in the world. Shareholder value is a result, not a strategy… your main constituencies are your employees, your customers and your products. Managers and investors should not set share price increases as their overarching goal. … Short-term profits should be allied with an increase in the long-term value of a company.”
This statement came from the one person who might have been the best CEO ever to run the trick of maximizing shareholder value. It was Jack Welch who said this to Financial Times in 2009.
When I came to STORA (now Stora Enso) in 1996, the first words I heard from the CEO Lars-Åke Helgesson were that his job was to increase shareholder value. To me this was back then a major surprise; I thought that the products were the core. Well, that’s what it all comes back to in the paper industry – tonnes! There was soon a chicken race between the newly formed Stora Enso and International Paper. IP had always been the biggest of them all – in tonnes. This race continued several years, seemingly resulting in big bonuses for the kamikaze pilots Jukka Härmälä and John Dillon.
Early on, I started to believe that it was the customer that should be in focus. This was however not often a standpoint we saw in leaders of the paper industry. They often referred to their business as “the industry”, and were regarded as highly arrogant by most of their customers. This attitude was present on almost all levels, the standard answer to a complaint on poor performance in a printing press being it is not paper related. An answer that actually never resulted in happy customers.
Recently, there has been some improvement in the attitude from paper companies. I have even heard the concept of “customer success” being mentioned by at least one CEO. It may never be to late to change…

For more comments on shareholder value not being a wise strategy, please read Steve Denning’s column in Forbes: The Dumbest Idea In The World: Maximizing Shareholder Value.

Killing creativity…

Youngme Moon who is the Donald K. David Professor of Business Administration and Senior Associate Dean at Harvard Business School has compiled an “anti-creativity checklist” that gave me a total flash back to my earlier employer. I believe I heard at least 80% of her sentences. Numbers 1-4 relate to colleagues which make them less relevant. Most of my colleagues were just as frustrated as I was. Number 11 is about underestimating your customers – They’re not ready for that, or That’s not what they’re asking for – I heard that just too often.

Please enjoy the video!


Stuff that doesn’t work – yet

I just remembered a really inspiring talk at Guldäggsdagarna 2010. This was almost a year ago, but I believe it is still well worth sharing.
Faris Yakob

Click image to play video.

Faris Yakob was Chief Technology Strategist of McCann Erikson in New York, and is today Chief Innovation Officer at MDC Partners. In his presentation, Faris used a mind-provoking definition by Bran Ferren that technology is stuff that doesn’t work yet!

Faris referred to Douglas Adams, stating that

  1. everything that’s already in the world when we’re born is just normal;
  2. anything that gets invented between then and before we turn thirty is incredibly exciting and creative and with any luck we can make a career out of it;
  3. anything that gets invented after we’re thirty is against the natural order of things and the beginning of the end of civilisation as we know it until it’s been around for about ten years when it gradually turns out to be alright really.

Please enjoy the video!

Links to stuff not shown in the video

Moore’s law: page 26 in Deloitte – The 2009 Shift Index
Kryder’s law on computer storage costs: page 27
Gilder’s Law on cost per communication bit. Eventually the cost of a telephone call, or of a bit transmitted, will be “free.”
Media fragmentation by Millward Brown
PS – Can’t view flash on your device? View this post on a regular computer (Mac or PC).

Crowd-Accelerated Innovation

Chris Anderson taught me a new concept: Crowd-Accelerated Innovation.
Three thing are needed for this:

  • a (big) crowd,
  • light (open visibility)
  • and desire.
  • This is most easily achieved by utilising web video such as YouTube, where it is possible to realise global innovation. It is however my strong belief that the concept of crowd-accelerated innovation is applicable also to smaller groups such as companies, universities and other organisations. There are several reasons against openness in many organisations; it may be fear (don’t upset the boss – I might lose my bonus), personal power (my knowledge gives me my position) or many other reasons. Real innovation is so much easier achieved in a truly open climate.

    Watch Chris Anderson’s TED talk here:

    Increasing innovative work behaviour

    An old friend of mine actually reads my blog and gives me comments via e-mail. After reading about the Linchpin story, he gave me a link to Gisela Jönsson’s interesting blog. What really caught my eye was an intriguing short version of her thesis on Factors explaining innovative behaviour of employees. So I embedded the prezi here. Enjoy!

    Johnny Johnsson

    Johnny kicks ass at last day on the job…

    Johnny Johnsson was celebrating his last day at work with a three-hour presentation of his achievements as company doctor at Stora Enso Fors over a period of more than 20 years. During the first 10 years, Fors became the healthiest company in Sweden. In 2004, he was presented with a medal by the Swedish king His Majesty Carl XVI Gustaf.
    His impression of the recent development in the Stora Enso group was however less than positive. Centralisation and efforts to create a global identity have created anonymity. Endless reorganisations, rigid company directives, shared service centres, outsourcing (Bangalore!) and centralised software systems (SAP) have reinforced this negative development. Only by developing a local identity in a global context can a positive company culture be established.

    Bitter return to home

    Helsingin Sanomat has summarised the rise and fall of Finnish paper industry’s conquest of American and European paper companies. In the year 2000, the three companies Stora Enso, UPM and M-real were all very confident that their acqusitions were truly adding value to the owners. Ten years later, the truth is that it all was a gigantic loss of money.
    See also another Helsingin Sanomat article on the same topic.

    Dumbest business decision of the decade

    The Swedish business paper “Dagens Industri” has listed ten candidates for the not so flattering distinction “dumbest business decisions of the decade” in Sweden. Stora Enso tops the list for the decision to acquire Consolidated Papers for EUR 4.9 billion in the year 2000.
    Stora Enso’s CEO Jukka Härmälä and Chairman Claes Dahlbäck burned additional billions in restructuring the North American paper company, before finally divesting the remaining assets to NewPage for EUR 1 billion in 2007. The deal also comprised 19,9% of the shares, which recently became practically worthless.
    On top of this, the duo sold Finnish and Swedish forest resources and hydropower assets, just before the booming of wood prices and cost of electricty.
    The total loss for Stora Enso has been between EUR 5 and 7 billion according to the newspaper.