In his latest column for Bloomberg Businessweek online, Drucker Institute Executive Director Rick Wartzman springs off of last week’s news that Eastman Kodak is preparing to file for bankruptcy.
“Just how lethal are Peter Drucker’s ‘five deadly business sins’?” Wartzman asks. “You might ask Eastman Kodak, which has committed at least a couple of them and now finds itself on the verge of bankruptcy.” [EXPAND More]
Wartzman notes that Kodak was long considered one of the world’s greatest companies. But it “has slipped,” Wartzman writes, “because it fell prey to two of what Drucker identified in a 1993 essay as a quintet of ‘avoidable mistakes that will harm the mightiest business.’
“The first is a preoccupation with high profit margins. The second: ‘slaughtering tomorrow’s opportunity on the altar of yesterday.’”
“In some ways, it’s hard not to sympathize with Kodak’s struggles to reap a decent profit with its digital offerings,” Wartzman adds. “Film, after all, constantly needs to be replaced, just like razor blades. Digital photography, by contrast, provides no such recurring income stream.
“Yet in the end, this radical shift only underscores that Kodak should have moved far more boldly—and much more quickly—into the digital universe. Doing so might have given Kodak sufficient time and space to totally overhaul its operations and better position the company for success in the 21st century.” [/EXPAND]