Kodak's case was very interesting too. I have an aunt that worked at Kodak's medical imaging division in the early 2000s (if memory serves.) At the time, Kodak was actively taking the most profitable new divisions and selling them off to keep the core film business in operation. Essentially it was a case of executive-assisted company suicide.
My aunt's division was sold to the Canadian conglomerate/private equity firm Onex, and the employees for the most part retained their jobs.
Revenue has been flat at around $2.6 Billion, not having grown much under Onex, which as a PE firm focused initially on cutting costs (terrible strategy in the land grab that was medical imaging in the mid-2000s.)
Sure, Kodak made a huge strategic error, one that is common to older firms, to stick to its original bread and butter of film at the expense of new profit centers, even as that medium collapsed.
But the real lesson is that the process for helping companies die is in dire need of study and executive education. There has to be a better way than the status quo.
"But the real lesson is that the process for helping companies die is in dire need of study and executive education. There has to be a better way than the status quo."
Priceless.
Kodak's actions do indeed strike me as insane. I can't even fathom the reasoning that must have led to them. It must have emerged from some set of perverse incentives at the executive level, like pay based on sales numbers in the film business or some other kind of ham-fisted silly bonus structure.
I think it's just an attribute of old, dominant companies. It's why Microsoft just announced Windows would be a free upgrade going forward. The difference between Microsoft and Kodak is that Microsoft still had a lot of profitable businesses to prop them up until a more forward-thinking CEO took over.
My aunt's division was sold to the Canadian conglomerate/private equity firm Onex, and the employees for the most part retained their jobs.
Revenue has been flat at around $2.6 Billion, not having grown much under Onex, which as a PE firm focused initially on cutting costs (terrible strategy in the land grab that was medical imaging in the mid-2000s.)
Sure, Kodak made a huge strategic error, one that is common to older firms, to stick to its original bread and butter of film at the expense of new profit centers, even as that medium collapsed.
But the real lesson is that the process for helping companies die is in dire need of study and executive education. There has to be a better way than the status quo.