A Fresh Start
Chris Houstonon 21 March, 2014 at 03:03
This is the first in a year-long series of posts on the growing movement toward unified purpose and authenticity in enterprises—a movement that the author, Chris Houston, calls Telosity. These posts will lay out a new system—and system of thought—for business in a series of interlinked narratives. We’ll see the waning days of Kodak from the inside, hear from up-and-coming young people grappling with their place in the professional world, dive deeply into new ideas of corporate organization and priorities, and reflect on how businesspeople at all levels and in all functions of an organization can help shape—and maybe even accelerate—a welcome change to the face of corporate enterprise.
He seemed so sure of himself, his story, and his insights. Each element fit neatly with the others—a theorem that had gathered enough examples to become fact. “They completely missed the point,” the smug management guru intoned in the concise and oft-rehearsed phrases of the TED talk circuit. “Kodak should have owned digital photography like Google owns search, but they didn’t see it coming.” It was a familiar barb, hurled usually from the sidelines—the location from which a considerable amount of management literature tends to flow. But despite his persuasively delivered message, I knew it was far too simplistic. He wasn’t there while it all unfolded. I was.
This story plays in the background of both my personal and professional life, but in a way the well-rehearsed yet arms-length speaker was right, for the story of Kodak does not end happily. While it is littered with many individual successes, most of those would later disappoint. As a whole, the Kodak story grounds us not in a theory of success but rather in the inescapable reality of failure. Kodak’s story is instructive precisely because it was such a colossal and very public business failure.
George Eastman built an empire of sorts, and, as a ruthless monopolist, had infused the organization with a sense of its destiny. George Eastman was a driven man—generous, yes—but determined to build and to acquire and to demolish competitors. He created a commercial juggernaut infused with an unquenchable zeal for more. From the first day that I read the story of his suicide, I have wondered about the effect this founder (whose life and career reflected an obsession for achievement), had on his company when in 1932 at the age of 77 he put a bullet in his brain because “his work was done” and he felt he no longer had any more to achieve. When there simply could be no “more,” he shot himself. Where did that leave his company? What legacy of purpose was left in Kodak’s DNA by that attitude and that act? Many years later, when the real test came and analog images gave way to digital ones—did this company still have a star to follow? Had the old true north become unreliable in the transition the company faced?
George Eastman had infused his company with a passion for secrecy. “Patents expire but secrets last,” was his famous phrase. This was both an ethos and a practice. For example, as every secret chemical moved from building to building, and from hand to hand in the manufacturing process, it changed numbers across each threshold, and its name was never used. Thus, Eastman ensured that no one would know the formulae necessary to reconstruct the alchemy that was silver-halide chemistry, which had revolutionized image capture and made Kodak the global leader in film and development technology. What becomes of a corporate culture that does its best work in the dark, in the secret world reverentially referred to as “behind the silver curtain”—literally behind the light locks of the factory doors, bathed only in infra-red?
And so when the tsunami of digital substitutions closed in upon the secretive tendencies of a management team that until 1990 had never even seen its market share position versus its competitors, an island of secrets was swamped by an ocean of transparency.
In the end, the final shot that felled mighty Kodak was fired not by Sony, Canon or even Apple, fierce competitors though they were. Rather, Kodak was brought first to dismissal from the Dow Jones, and then, eventually to its knees, not by its competitors, but by its owners, the shareholders. It was a suicide. Those who desired a “successful” Kodak, measured by the traditional metrics of revenues and share price are perhaps most responsible for the demise of their own prized asset. This was not a company marked by foolish managers, but by foolish owners. Certainly there were mistakes in management, but they are dwarfed by the colossal error of the regular and shrill insistence by owners, the shareholders and their representatives—the Board of Directors—that the immensely profitable film business be preserved at the expense of an inherently less profitable digital business. At the precise moments when clear and long-term thinking was most needed, it was much more attractive to extract one more pound of flesh from today’s business than to risk it for an uncertain tomorrow.
What if George Eastman had infused his foundling with a clarity of purpose and mission that was neither lost in the despair of a powerless old age, nor overwhelmed by owners who demanded supernormal profits both today and tomorrow? What if the public identity of this much loved brand had the flexibility and range of movement to adapt from one technology to another, infused with a meaning that transcended mere technology substitution and stood for less transient value? What if the DNA of an organization filled to the brim with genius had the resilience and adaptive capacity to embrace both its great and known past alongside a still developing and yet unknowable future? What then, I wonder?
While I am no turn-around expert or distressed asset wizard, I am comfortable in the world of the complex and uncertain, and perhaps that is why I was valuable to Kodak as it faced its end. While I do not freeze in the face of opacity, I am curious and determined enough to attempt to pierce it. It has been 2 years since Kodak went into bankruptcy protection, and a few more since I last worked with the people there. Looking back, I realize that I have undergone a personal Chapter 11 reorganization along with it. Kodak’s undoing caused me to look again at the picture I held of my life and work. Had I been missing the path through the complexity as much as Kodak had? Yes, I had—because, like Kodak, I didn’t know where to look.
I do now, and in the coming months I will share what I have learned. Kodak’s bankruptcy isn’t the failure of a company or of a management team. It is, instead, an image in time capturing the fundamental failure of a way of viewing and doing business that is so familiar to us all. I’ll tell the story of Kodak as a series of snapshots from the inside—as I lived it—and I’ll point out what we must learn from the tale. Along the way, I’ll introduce you to a new way of thinking about business and the company, an approach which elevates purpose and authenticity (demanded by the return of social accountability) expressed through brand and company culture. This next era of business we are entering will bring profound changes—and good ones if we embrace them properly—in the personal, corporate, and societal spheres.
I am a coach and consultant, a mentor and advisor. However, the first two decades of my work and success have led me to rethink and refocus my efforts within the last 5 years. In that time, I have been developing and articulating a new theory for business which informs my practice at companies such as Ogilvy & Mather, LoyaltyOne, RMS, McCain, and others. Telosity, as we have begun to call it, is based on the intentional pursuit of purpose and authenticity in view of changing societal and cultural dynamics, shifts in the understanding of human identity and piercing relevance of a biological principle to economic theory. That principle is called panarchy, and you’ll learn more about it later. To fully explain Telosity, I’ll use the story of Kodak to illustrate key elements, and expand on them clearly, pausing to give color and texture through a series of letters with colleagues and clients. I hope you’ll follow along.
For other posts in the Telosity series, click here.