I’m not convinced that Kodak’s leadership actually did make any mistakes; sometimes, you just get dealt a bad hand. They certainly invested heavily in R&D, which is why they ended up with a lot of valuable patents. But in the span of a decade, Kodak’s core business went from something that everyone used, to a common niche product, to a specialist item. Even throwing everything into digital photography wouldn’t have saved them, since that, too, has been mostly obsoleted by smartphones. (They certainly tried, but it didn’t help much in the end.)
Sometimes, even having a good management team and a strong workforce won’t help. You need awesome luck or the ability to leap into an entirely different market. That has happened - Intel famously left the Memory market to go for Processors - but it’s a difficult transition at the best of times.
Kodak fucked up. I actually wrote a grad school business paper on why Kodak was going to fail… in 2002, a decade before they did.
Here’s the thing- Kodak’s real business was in film production and processing. Cameras were a secondary business; something to use their film with, and take advantage of that branding.
Cameras are essentially the whole shooting match though, when it comes to digital photography, and the barriers to entry are a lot lower for building a camera (even a digital one) than setting up the industrial infrastructure to manufacture film. If you’re not looking for a super-duper camera with crazy optics or amazing image processing, they’re easy and cheap enough to plunk on the cheapest cell phones, or sell for $10.
So Kodak not only lost their core business, but ended up with a LOT more competitors in the camera market, and since they got a late start, and then proceeded to get stupider by concentrating on printing photos, rather than on camera sales, they dug themselves further into the hole.
What they should have done was to try and leverage themselves as THE P&S camera manufacturer. Leave the DSLR market to Canon and Nikon, and concentrate on the mid-market point and shoot cameras, which is a market that more traditional photography companies still compete in successfully, if maybe not as lucratively as before.
Kodak could have even tried selling integration packages to cellphone manufacturers- I could totally imagine a “Samsung S8 with Kodak 24 mp camera” being sold, had that happened. Instead, the manufacturers let the camera be a generic component instead of a branded one.
Many years ago I read a science fiction story (so many years ago that I don’t remember the title or author) in which a rebel army that was outclassed in terms of soldiers and supplies won the war by targeted assassinations. Rather than go after the top general or even the top majors, they went after the people at lower levels that were actually crucial to the success of their enemy. Not the head of the supply function, but the person in supplies that actually assured that units got what they needed when they needed it. Not the head of the medical division or even the top surgeon, but the skilled triage person who made sure that the soldier who could be saved with immediate attention got that attention and that resources weren’t spent on wounded who couldn’t be saved.
I always thought this was a nifty idea that holds true in many corporations. The problem of course is identifying the people who are necessary for success.
On a side note, my husband and I always have the same reaction when we read about some CEO whose poor performance has caused him to be let go with a megabucks golden parachute payment – “Hell, I would have run that company into the ground for a tenth that much money.”
When I think of successful businesses, I think of Costco.
When they started, the philosophy was, “The employee is number one”. And Wall Street countered with, “It will never work. The customer must be number one.”
What Costco management knew was, if you take care of the employee, they will take care of the customers. The contented employees took care of the customers, because they realized that without the customers, there is no job. And they enjoyed their relationship (employment) with management.
So, Costco management (CEO?) must be congratulated for getting the ball rolling. And the employees, for picking up the ball and running with it.
“Certainly one differentiator” is not worth much. Anything at all, actually.
Besides for the fact that there are differences between these systems that go beyond the CEO, as discussed above, you seem to be assuming that countries who have state-appointed CEOs pick their names out of a hat. I don’t see any reason to assume this. I would assume that they pick the best possible CEO, subject to whatever political influence might also be at play in a given instance. I would venture that the difference in quality of CEO between the two systems is probably smaller than the difference in the business environment generally. (Though again, even if it’s not, the comparison would still be completely invalid.)
I don’t really see why this is a question. The CEO is vastly more important than any other employee, at least in the vast majority of cases (Nikola Tesla and Westinghouse would be one outlier). But the rest of the workforce put together is clearly more important than the CEO.
What you’re saying is obviously true if the question is whether the company would perform better if it had a CEO and no other employees or if it had other employees but no CEO.
But the real question here - as I see it, anyway - is whether the company would be better off with an average CEO and above-average employees, or with an above-average CEO and average employees. (Understood that this leaves aside that part of the CEO’s job is getting high-quality employees.)
And here’s where I think it depends on the nature of the business, as above. In a business where the whole idea is to create some new type of reality (e.g. Elon Musk’s businesses), a visionary CEO can go further with mediocre employees than quality employees with a mediocre CEO. In an old-line established business, where everyone already knows what to do and the only question is how well it’s done, you’re better off with the better employees and mediocre CEO.
Musk’s importance to Tesla and SpaceX really isn’t as CEO, though. It’s as CTO for SpaceX and as chief of design for Tesla. Arguably, even that pales in comparison to his importance as a shareholder who is willing to invest huge amounts into long-term strategy at the expense of short-term profit.
I’d also argue that the nature of the work has a lot to do with it; if it’s a company that’s doing fundamentally innovative, new, groundbreaking work, you kind of HAVE to have excellent employees, regardless of the CEO, as the best CEO in the world can’t compensate for mediocre concepts and engineering. Steve Jobs wouldn’t have achieved a thing at Apple had their engineering and conceptual people been mediocre, and there’s a lot of question as to just how good of a CEO Jobs actually was. But there’s no denying that their products are well executed, and have a very tight design aesthetic, none of which was going to happen with mediocre workers.
Similarly, if you’re doing something that’s characterized by being very steady-state and very un-innovative, you’re probably better off with a mediocre CEO and better workers.
Commodity manufacturers come to mind; if you make toilet paper, you’re probably better off with good marketing wonks and line-workers than with a super-awesome CEO.
I strongly disagree. I wasn’t there so I can’t comment on the degree to which her request was justified, but that isn’t even the point. According to what I’ve read, she had been with him for many years and had become a close and trusted assistant. When his companies became major enterprises she felt, rightly or wrongly, that the caliber of her responsibilities had risen commensurately. If for some strange reason he didn’t agree, there are any number of ways of dealing with that constructively. What he did demonstrated a complete and total lack of empathy, to a degree that was pathological. It shouldn’t be a “standard in business” for a simple request to improve your circumstances to become a career-ending, life-changing risk. It turns out, unsurprisingly, that this kind of behavior is typical of Musk and coexists along with his good and valuable qualities in a sort of Jekyll and Hyde combo.
Agreed, and you probably also need a good CEO to provide vision, navigate new and changing markets, and attract and keep those excellent employees. Some companies just need excellence across the board.
I would make a slightly different argument. If you’re doing something very steady-state you’re probably fine with a mediocre CEO and may also be fine with relatively mediocre workers, too, depending on the nature of the business. Banking, insurance, cable, and many telecom industries tend to be like that.
But with commodity manufacturers, yes, marketing is usually key, but where a good CEO can really shine is in the very difficult business of successfully identifying adjacent markets and growing into them. If you make toilet paper as in your example, the key to long-term success may be, for instance, to figure out how to exploit your strengths to become a much larger paper products company or even a diversified consumer products company.
Except when you think your market is steady state and it is in fact changing around you.
Growing into adjacent markets is an easy strategy to decide on, but there are usually companies there already. Remember how during the bubble all sorts of companies were going to expand by going on-line?
Intel did an excellent job with new processor design and manufacturing - and still lost market share in the new mobile market. Now they are renting out fab space. They are a good example of the difference between being ultra-competent and having the vision to see the next big thing.
Absolutely. But then your product isn’t really the “commodity” you thought it was. Hence the other poster’s example of toilet paper, which presumably we’ll always need.
But there are lots of examples of the truth of what you said. Among them Digital Equipment Corp and many of its peers, but DEC alone had achieved some $15 billion in revenue after decades of spectacular growth. Changing markets killed them all, and threatened the viability of even IBM.
My understanding was she was offered another position, declined, then received 12 months severance.
But yes, at higher levels, ask for a lot and the stakes are very high. Ask to be an executive and that’s the game she was playing. If she was that good, she should have known it. If she wasn’t, well then she wasn’t.
Right… I was trying to think of a bit of a contrived extreme example to think through in my head, and the idea of a something like a small, family-run boutique (think organic, renewable, gluten-free, extra-soft, or some such) toilet paper company came to mind. Basically a company where there’d always be a relatively steady demand, and where the owners aren’t in it to get fabulously rich by expanding and growing, but just to basically keep themselves reasonably wealthy and keep their workforce employed.
In that situation, if you had good workers, you could easily suffer through a succession of knuckleheaded family-member CEOs, because the long-time, competent workers would basically make up for whatever the CEOs lacked. And without that drive to get big and rich, a really effective CEO wouldn’t be terribly useful either- maybe he could spearhead some efficiency drives or do some sort of lumber futures hedging to make more money, or branch out into baby wipes or something, but fundamentally, the “big” decisions aren’t really ones that the company’s future hinges on.