Don’t Be Kodak

File under: Global Pharma Marketing, Patient Engagement, Pharma innovation

Kodak recently announced that they expect to come out of bankruptcy this year. Founded by George Eastman in 1888, Kodak became a cherished household brand name, and the “Kodak Moment” entered the American cultural lexicon.

It’s really sad to see what happened to them. Today Kodak is merely a shell of the company it used to be.

Kodak’s Fork in the Road Moment

Kodak fork in the roadTen years ago, I happened to have a ringside seat at Kodak as they were wrestling with what to do about their future. Initially, I had been hired to create an external positioning and marketing campaign targeting Wall Street. The stock price was languishing, and they wanted to announce how they were innovating around digital.

I went to Rochester and met with their senior marketing team and the innovation group. After looking at their digital pipeline – the “naked truth” of their digital capabilities – I recommended that they not approach Wall Street at that time. They weren’t ready to go digital in an authentic and sustained way and if they made that claim, they would lose all credibility once results came out in a quarter or two.

Instead I recommended that we focus on building a comprehensive internal communication plan that would change the mindset of the organization from print to digital. Bureaucracy to innovation.

We used the powerful language and imagery of a fork in the road. One direction continued down the path they were on in which they owned 80% share in a market that was essentially flat and predicted to shrink. (At least that’s what it was back in 2003; it fell off of a cliff a couple of years later.)

Or, they could choose the alternate path and move into the new digital world – the world of imaging converging with information technology – but where they would be a niche player with only 8% market share. But it was a market that was growing 10-12% a year.

Market Share vs. Market Growth

Do you want to own a market that’s becoming commoditized, or do you want to become a smaller but strategic player in a larger growth economy?

This was 2003. It was time to make a full commitment to digital.

Because of the success of our work framing and communicating the business opportunities and risks, I was asked to facilitate a series of business strategy workshops with much of the strategic product group leadership. The goal was to outline a path for the product leadership to transition from the seductive but ultimately toxic print revenue to the digital opportunity. Re-invent the company.

Ultimately they made their choice, and unfortunately they chose the wrong path. We all know what ended up happening.

I remember the thought process and the frustration that many people at the organization felt. At the end of the day, it came down to poor strategic choices. Yes, there were cash flow challenges in moving from one business to another, but there was also an internal, very personal aspect to the decision process: it was quietly noted that the people who ultimately had to make the decision were all within five years of retirement. No one wanted to rock the boat.

Kodak completely missed out on a digital imaging industry that they created.

What Does This Mean for Pharma?

Is healthcare and pharma facing a similar fork in the road? What are the changes in the market telling us about the future viability of expensive products with nominal outcomes metrics? Are we seeing a transition from products to more complete health solutions that could threaten the traditional product margins of pharma?

If this is true, there are decisions that have to be made. Some of them could have short-term adverse effects on financial performance, but there are important bets that need to be made around expanding pharma’s value proposition beyond the pill.

Outsiders seem to be able to see what needs to happen. As always, it’s up to internal leadership to make the hard choices.

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