Kodak and Fujifilm
Kodak and Fujifilm
The stories of Kodak and Fujifilm are often presented as a classic case study in organizational change, illustrating contrasting responses to disruptive innovation – specifically, the advent of digital photography. One company famously failed to adapt, while the other successfully transformed itself.
Kodak: The Cautionary Tale of Resistance to Change
Kodak, once a dominant force in the photographic industry, held a near-monopoly on film, cameras, and photo processing. Ironically, it was a Kodak engineer, Steven Sasson, who invented the first self-contained digital camera in 1975. However, Kodak's leadership was paralyzed by the "innovator's dilemma" – a fear that embracing digital photography would cannibalize its highly profitable film business (Christensen, 1997).
Kodak's change story is characterized by:
- Denial and Delay: Despite being aware of the digital threat, Kodak was slow to commit fully. Internal resistance, particularly from middle management deeply invested in the film business, further hampered progress. The company made short-term profit-maximizing decisions favoring film over long-term digital investments.
- Lack of Strategic Vision: While Kodak did make some forays into digital, these efforts were often half-hearted and lacked a cohesive strategy. They struggled to build a complete digital ecosystem (cameras, software, online sharing) that competitors like Sony and Canon were developing.
- Culture of Complacency: Decades of market dominance fostered a conservative, risk-averse culture. The company was addicted to the high margins of film and struggled to foster an environment that encouraged disruptive innovation.
- Mismanagement of IP: Despite holding numerous patents in digital imaging, Kodak failed to fully capitalize on them, allowing competitors to take the lead.
Ultimately, Kodak's inability to embrace and lead the digital revolution led to a rapid decline. The company filed for Chapter 11 bankruptcy protection on January 19, 2012. While it emerged from bankruptcy, its business is now a fraction of its former size, focused on commercial printing and digital solutions rather than consumer photography.
Fujifilm: The Story of Strategic Diversification and Adaptation
In stark contrast to Kodak, Fujifilm, Kodak's long-time rival, navigated the digital disruption successfully by embracing proactive and decisive change. Like Kodak, Fujifilm faced a significant threat to its core film business, which accounted for a large portion of its revenue in the early 2000s.
Fujifilm's successful change story involved:
- Early Recognition and Investment: Fujifilm recognized the inevitable shift to digital early on and made significant investments in digital imaging technology.
- Decisive Diversification (Vision 75): Under CEO Shigetaka Komori, Fujifilm launched "VISION75" – a bold strategic blueprint that committed the company to a complete transformation. They didn't just pivot to digital photography but looked at their core competencies (materials science, chemical engineering, image processing expertise) and identified new growth areas.
- Leveraging Core Technologies: Fujifilm realized that the anti-oxidation properties and collagen used in film production had applications beyond photography. They strategically diversified into:
- Healthcare: Developing medical imaging systems (e.g., X-ray, MRI, endoscopy), pharmaceuticals (including contract development and manufacturing for biopharmaceuticals), and regenerative medicine.
- Cosmetics: Using their knowledge of collagen and anti-oxidation to create anti-aging skincare lines (e.g., Astalift).
- High-Functional Materials: Applying their expertise to areas like LCD film, graphic arts, and industrial products.
- Tough Decisions: Fujifilm made difficult but necessary decisions, including laying off thousands of employees and slashing costs to fund new ventures and accelerate the transformation.
- Cultural Adaptability: The company fostered a culture that was willing to take risks, learn, and adapt, rather than clinging to past successes.
Today, Fujifilm is a thriving, diversified technology company, with healthcare and advanced materials contributing significantly to its revenue. Its success serves as a powerful example of how incumbent firms can survive and even thrive in the face of disruptive innovation through foresight, strategic diversification, and courageous leadership in managing change.
References:
Christensen, C. M. (1997). The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. Harvard Business Review Press.
Image credit: https://petapixel.com
Blockbuster and Netflix
Blockbuster and Netflix
The change story of Blockbuster and Netflix is a quintessential example of how disruptive innovation can overturn established industry giants and how a failure to adapt can lead to obsolescence. It's a powerful narrative about vision, agility, and the perils of complacency.
Blockbuster: The Empire That Couldn't See the Future
Blockbuster was, for decades, the undisputed king of video rentals. At its peak in the early 2000s, it boasted thousands of physical stores globally and billions in revenue, largely fueled by its vast movie library and, ironically, lucrative late fees.
Blockbuster's downfall is a classic case of failing to embrace change:
- Dismissing the Threat: In 2000, Netflix's co-founder Reed Hastings famously offered to sell his then-nascent DVD-by-mail company to Blockbuster for a mere $50 million. Blockbuster's CEO at the time, John Antioco, reportedly laughed them out of the room. Blockbuster saw Netflix as a niche player with an unviable business model.
- Addiction to the Status Quo: A significant portion of Blockbuster's revenue came from late fees, creating an internal disincentive to adopt Netflix's no-late-fee subscription model. The company was deeply invested in its physical infrastructure and the retail experience, making a digital pivot seem like cannibalization rather than necessary evolution.
- Slow and Ineffective Response: When Blockbuster finally did attempt to compete, its efforts were fragmented and half-hearted. They launched their own DVD-by-mail service, Blockbuster Online, in 2004, and later a limited streaming service in 2010. However, these initiatives were often poorly integrated, lacked the strategic focus and user experience of Netflix, and were too late to gain significant traction.
- Leadership Missteps and Debt: Internal leadership struggles and a heavy debt load (especially after being spun off from Viacom in 2004) further constrained Blockbuster's ability to invest aggressively in digital transformation.
Blockbuster ultimately filed for Chapter 11 bankruptcy protection on September 23, 2010, and most of its remaining stores closed by early 2014. A single franchised store in Bend, Oregon, famously remains as a nostalgic relic.
Netflix: The Visionary Adaptor
Netflix, founded by Reed Hastings and Marc Randolph in 1997, began as a DVD-by-mail rental service. Its initial innovation was the subscription model, eliminating late fees and offering unparalleled convenience by delivering movies directly to customers' homes.
Netflix's success is a testament to its willingness to continuously evolve and disrupt itself:
- Customer-Centric Innovation: From the start, Netflix focused on customer pain points (like late fees and limited selection at video stores) and sought to provide a better experience. Its subscription model, coupled with data-driven recommendations, built strong customer loyalty.
- Strategic Foresight and Self-Disruption: Even while its DVD-by-mail business was growing, Netflix's leadership recognized that the future was streaming. They began investing in streaming technology and content licensing early on, launching their streaming service in 2007. This was a deliberate act of self-cannibalization – pivoting away from their successful DVD business before it was forced upon them.
- Building a Digital Ecosystem: Netflix didn't just offer streaming; it focused on making the streaming experience seamless across various devices and investing heavily in original content production starting in 2013 (e.g., House of Cards). This allowed them to control quality, differentiate their offering, and become less reliant on licensed content.
- Agile Culture: Netflix cultivated a culture of "freedom and responsibility," empowering employees to innovate, experiment, and make data-driven decisions, which allowed for rapid adaptation and growth.
Today, Netflix is a global streaming powerhouse with hundreds of millions of subscribers, demonstrating how strategic foresight, a willingness to disrupt one's own business, and relentless focus on evolving customer needs can lead to unparalleled success in a rapidly changing world.
References:
- Hastings, R., & Meyer, E. (2020). No Rules Rules: Netflix and the Culture of Reinvention. Penguin Press.
- Blockbuster Files for Bankruptcy Protection. (2010, September 23). CBS News.
- How Blockbuster Collapsed and Netflix Took Over. (2025, May 22). CEO Today Magazine.
Image credit: Thomashawk.com
We can design training solutions based on real cases. Schedule a meeting to explore.
Nokia and Blackberry
Nokia and Blackberry
The stories of Nokia and BlackBerry are strikingly similar to that of Blockbuster and Kodak, serving as stark reminders of how even dominant market leaders can fall when faced with disruptive technological change and a reluctance to adapt. Both companies once defined their respective eras of mobile communication but failed to pivot effectively with the rise of the smartphone.
Nokia: The Feature Phone Giant's Missteps
Nokia, a Finnish company, was the undisputed global leader in mobile phones for over a decade, known for its robust hardware, long battery life, and user-friendly feature phones. In the early 2000s, Nokia's market share was astounding, peaking at over 40% of the global mobile phone market.
However, Nokia's downfall began with its reaction to the smartphone revolution, particularly the launch of the iPhone in 2007 and the rise of Google's Android ecosystem.
- Underestimating the Smartphone and Software: Nokia's leadership was slow to recognize the profound shift from hardware-centric feature phones to software-driven smartphones with app ecosystems. They initially dismissed touchscreen technology, believing consumers preferred physical keypads, and underestimated the importance of a rich app developer community.
- Clinging to Symbian: Instead of embracing Android, Nokia clung to its aging Symbian operating system. Symbian was clunky, difficult for developers, and lacked the intuitive user experience and app support offered by iOS and Android. Even when Nokia finally tried to update Symbian (e.g., Symbian^3), it was too little, too late.
- The Microsoft Gamble: In a desperate attempt to regain relevance, Nokia's then-CEO Stephen Elop (a former Microsoft executive) announced a strategic partnership with Microsoft in 2011, making Windows Phone its primary smartphone platform. This "burning platform" memo famously described Nokia's dire situation. While Windows Phone offered a modern interface, it suffered from a severe lack of apps compared to iOS and Android, and failed to gain significant consumer traction. This move alienated many existing Nokia users and developers.
- Internal Bureaucracy and Culture: A once innovative culture became rigid and bureaucratic, stifling creativity and slowing decision-making. Internal conflicts and a lack of unified vision further hampered their ability to respond to market changes.
Nokia eventually sold its mobile phone business to Microsoft in 2014, marking a dramatic end to its consumer device dominance. Today, Nokia primarily focuses on network infrastructure, patent licensing, and technological research.
BlackBerry: The Enterprise King's Missed Consumer Wave
BlackBerry, developed by the Canadian company Research In Motion (RIM), pioneered the smartphone market, particularly among business professionals. Its iconic physical QWERTY keyboard, secure email, and BlackBerry Messenger (BBM) made it indispensable for corporate users and early adopters from the late 1990s through the mid-2000s.
BlackBerry's decline mirrors Nokia's in several ways:
- Underestimating the Consumer Shift: Similar to Nokia, BlackBerry's leadership initially underestimated the consumer market's embrace of full-touchscreen devices and the burgeoning app ecosystem. They believed their stronghold in enterprise security and messaging would protect them. The iPhone's launch in 2007 was initially dismissed as a toy for consumers.
- Failure to Innovate Fast Enough: While BlackBerry did try to introduce touchscreen devices (like the Storm), they were often buggy, lacked the intuitive user experience of competitors, and were late to market. The company was slow to adapt its own operating system (BlackBerry OS) to a touch-first environment and struggled to attract app developers compared to Apple and Google.
- Clinging to the Keyboard and BBM Exclusivity: BlackBerry remained stubbornly committed to the physical keyboard even as consumers increasingly preferred virtual keyboards. They also kept BBM exclusive to BlackBerry devices, missing a massive opportunity to expand its user base when cross-platform messaging apps like WhatsApp emerged and proliferated.
- Dual-CEO Structure and Strategic Missteps: For a critical period, RIM operated under a dual-CEO structure (Mike Lazaridis and Jim Balsillie), which often led to indecision, internal power struggles, and a lack of clear strategic direction in a rapidly evolving market. Subsequent attempts to reinvent themselves with the BlackBerry 10 operating system and new hardware models were too little, too late.
BlackBerry eventually ceased designing its own devices in 2016, licensing its brand to partners. Today, BlackBerry Limited has pivoted entirely to enterprise software and cybersecurity solutions, a stark transformation from its hardware-centric past.
Both Nokia and BlackBerry serve as cautionary tales, illustrating that past success is no guarantee of future survival in the face of disruptive innovation. The ability to recognize fundamental market shifts, embrace new technologies (even if they challenge existing successful business models), and foster an agile, adaptive organizational culture are paramount for long-term relevance.
References:
For Nokia
- "Burning Platform" Memo by Stephen Elop (2011, February 8). (Widely available online via various news and tech blogs).
- Palmberg, C., Martikainen, O., & Savin, J. (2009). Nokia, the Rise and Fall of a Mobile Phone Giant. IEEE Potentials, 28(2), 29-34.
- Virta, K. (2018). The Nokia Revolution: The Story of an Extraordinary Company That Transformed an Industry. Greenleaf Book Group Press.
For Blackberry
- Gryphon, T., & Vella, A. (2014). From RIM to BlackBerry: A Case Study on Strategic Changes and Their Impact on Organizational Performance. Journal of Management and Marketing Research, 14, 1-17.
- The Rise and Fall of BlackBerry: An Oral History. (2015, February 19). The Globe and Mail.
- Vengurlekar, A., & Balan, M. S. (2012). Research In Motion Limited: The Innovator's Dilemma. IIMB Management Review, 24(4), 223-233.
Image credit: Amazon.com
Microsoft and Satya Nadella
Microsoft
Microsoft's change story is a compelling narrative of a company that experienced immense early success and market dominance, then faced a period of stagnation and missed opportunities, only to orchestrate a remarkable turnaround under new leadership.
The Era of Dominance and the Challenges of the 2000s
Founded by Bill Gates and Paul Allen in 1975, Microsoft rose to global prominence by dominating the personal computer operating system (MS-DOS, then Windows) and office productivity software (Microsoft Office) markets. By the late 1990s and early 2000s, Microsoft was a tech titan, seemingly invincible.
However, this period of immense success also sowed the seeds of future challenges:
- Antitrust Scrutiny: Microsoft's aggressive tactics in the browser wars (Internet Explorer vs. Netscape Navigator) led to major antitrust lawsuits in the late 1990s and early 2000s, which consumed significant management attention and limited its ability to innovate freely.
- Missed Mobile and Search Waves: Under Steve Ballmer's leadership (who took over as CEO in 2000), Microsoft largely missed the boat on two critical emerging technologies:
- Mobile: Despite early efforts with Windows Mobile, Microsoft failed to anticipate and respond effectively to the rise of smartphones, particularly the iPhone (2007) and Android (2008). Its attempts to catch up with products like Windows Phone and the acquisition of Nokia's phone business proved largely unsuccessful.
- Search: While it launched Bing, Microsoft struggled to challenge Google's dominance in internet search, a crucial gateway to online services.
- Internal Culture and Silos: Microsoft developed a highly competitive and often dysfunctional internal culture, famously characterized by "stack ranking" (a performance review system that forced managers to rate a certain percentage of employees as underperformers). This fostered internal competition over collaboration, led to talent drain, and created significant organizational silos that hindered cross-product innovation.
- Focus on Legacy Businesses: The company's vast revenues from Windows and Office created an "innovator's dilemma" – a reluctance to fully commit to disruptive new technologies (like cloud computing) that might cannibalize their highly profitable legacy software license model.
By the early 2010s, Microsoft was often perceived as a slow-moving, uncool, and less innovative company, struggling to keep pace with agile competitors like Apple, Google, and Amazon. Its stock price stagnated.
Satya Nadella's Transformative Leadership
The true inflection point in Microsoft's recent change story came with the appointment of Satya Nadella as CEO in February 2014. Nadella, an internal veteran, embarked on one of the most remarkable corporate transformations in modern history:
- Cultural Revolution (From "Know-It-All" to "Learn-It-All"): Nadella's most profound impact was a cultural overhaul. He championed a "growth mindset" (inspired by Carol Dweck's work), moving away from internal competition to empathy, collaboration, and continuous learning. He dismantled the stack-ranking system, encouraged risk-taking, and empowered teams to innovate without fear of failure. This shift fostered a more open, inclusive, and agile environment.
- Bold Bet on the Cloud (Azure): Nadella recognized that the future of technology was in cloud computing. He aggressively pivoted Microsoft's core strategy towards its cloud platform, Azure, investing heavily to compete with Amazon Web Services (AWS). This involved shifting resources, re-training staff, and focusing on providing comprehensive cloud services for businesses. Azure's rapid growth became the engine of Microsoft's resurgence.
- Embracing Openness and Collaboration: In a radical departure from its past, Microsoft under Nadella embraced open-source technologies (once seen as anathema) and fostered partnerships with former rivals. This included making Office available on iOS and Android, acquiring GitHub (a major open-source platform), and collaborating closely with Linux communities.
- Strategic Acquisitions: Nadella made key strategic acquisitions that aligned with the new vision, including LinkedIn (professional networking), GitHub (developer community), and Activision Blizzard (gaming, expanding into a huge consumer market).
- Focus on Core Competencies with a New Lens: While moving into new areas, Nadella also re-energized Microsoft's traditional strengths, reinventing Office as a cloud-based subscription service (Microsoft 365) and integrating AI capabilities across all products.
The results of Nadella's transformation have been extraordinary. Microsoft has regained its status as a leading technology innovator, its market capitalization has surged, and it is widely admired for its renewed focus and cultural shift. The company has successfully adapted from a desktop software giant to a cloud-first, AI-powered enterprise and consumer solutions provider.
- Ballmer, S. (2025, June 5). Steve Ballmer Admits Microsoft Missed Mobile By Clinging To Windows: 'We Were Too Confident'. Benzinga.
- Nadella, S. (2017). Hit Refresh: The Quest to Rediscover Microsoft's Soul and Imagine a Better Future for Everyone. HarperBusiness.
- Nadella, S. (2025, July 24). Recommitting to our why, what, and how. The Official Microsoft Blog. Retrieved from https://blogs.microsoft.com/blog/2025/07/24/recommitting-to-our-why-what-and-how/
Image credit: Thesoftwarereport.com
We can design training solutions based on real cases. Schedule a meeting to explore.
Michelin and Florent Menegaux
Michelin
Michelin, a French tire company founded in 1889, offers a fascinating change story. Florent Menegaux's transformation of Michelin is a story of shifting a long-standing, traditional company from a product-centric model to a purpose-driven, diversified, and people-focused organization. His strategy, titled "Michelin in Motion," is guided by an "All Sustainable" vision, which aims to balance "People, Planet, and Profit."
Early Innovation and Market Dominance
Michelin's initial success was built on groundbreaking innovations in tire technology. From inventing the first detachable pneumatic tire in 1891 to developing the revolutionary radial tire in 1946 (which significantly improved safety and longevity), Michelin consistently pushed the boundaries of its core product. This commitment to R&D and quality helped them become a global leader, often vying with Bridgestone for the top spot.
Beyond tires, Michelin also demonstrated early strategic foresight by creating the Michelin Guide in 1900. Initially, this was a free travel guide for French motorists, designed to encourage more driving (and thus more tire sales). This seemingly simple marketing tool evolved into the highly prestigious Michelin Star restaurant rating system, showcasing Michelin's ability to create value in tangential areas and build a powerful, respected brand far beyond its primary product.
Navigating Market Shifts and Intensifying Competition
In the late 20th and early 21st centuries, Michelin faced new challenges:
- Commoditization of Tires: Increased competition, particularly from low-cost Asian manufacturers, began to commoditize the tire market. This put pressure on margins and threatened Michelin's premium positioning.
- Changing Mobility Landscape: The rise of new mobility services (car-sharing, ride-hailing), autonomous vehicles, and electric vehicles started to change how people consumed mobility, impacting the traditional tire replacement cycle.
- Digital Transformation: The need to leverage data, connectivity, and digital services became paramount across all industries.
Here are the key aspects of its transformation:
1. The Shift from Tires to Sustainable Mobility
Menegaux recognized that while tires remain Michelin's core business, the company's future lay in redefining its purpose. He moved the company's focus from "making tires" to "giving people a better way forward." This new purpose expanded Michelin's scope beyond traditional tire manufacturing into the broader and more lucrative market of sustainable mobility.
- Diversification into Non-Tire Businesses: The company has set a goal to derive 20% to 30% of its sales from non-tire businesses by 2030. This includes areas like flexible composites, hydrogen fuel cell systems (through its Symbio joint venture), and medical devices.
- Focus on EVs and High-Value Products: Michelin has leveraged its technological leadership to develop tires specifically for electric vehicles (EVs), recognizing this as a major growth opportunity. The company is also focusing on high-value specialty tires for mining, agriculture, and aircraft.
- Emphasis on Sustainability: Under Menegaux, Michelin has committed to achieving 100% sustainable tire production by 2050, with a 40% target by 2030. This includes a sharp reduction in CO2 emissions and a commitment to using more sustainable raw materials.
2. The Empowerment of People (Responsabilisation)
Menegaux's leadership model is centered on the concept of Responsabilisation, a French term for empowerment. He believes that the success of the company is tied directly to the development of its people. This represents a significant reversal of the traditional, centralized management style of the automotive industry.
- Empowering Frontline Workers: Michelin has dramatically increased the authority and accountability of its frontline workers, giving them more control over their work.
- A "People Development Platform": Menegaux views Michelin as a "giant people development platform" where employees are encouraged to grow and develop. He emphasizes that economic performance and people development are in sync, and that a company's success is dependent on its ability to help its employees grow.
- Values and Leadership: The company's leadership model is built on the simple phrase, "I care." This is translated into a culture where everyone is encouraged to behave as a leader, and managers are tasked with taking care of their teams.
3. Purpose as a Decision-Making Compass
Menegaux's leadership is defined by his belief that a corporate purpose is not just a marketing slogan but a tool for making critical decisions. He uses the company's purpose—"we care about giving people a better way forward"—as a compass to guide strategic choices, ensuring that actions align with the company's core values. This purpose is a reference point for all decisions, from major investments to daily operational choices.
References
- Harvard Business School (2019, January). Case studies "Michelin Group: Embracing Culture While Adapting to Change,"
- Harvard Business School (2020, March). Case studies "Michelin: Building a Digital Service Platform"
- Harvard Business School (2004, April). Case studies "Michelin in Motion: Putting Purpose to Work"
- Waterman, R. H., Jr., Peters, T. J., & Phillips, J. R. (1980, June). Structure Is Not Organization. Business Horizons, 23(3), 14-26.
Image credit: Lemonde.fr