Strategic Agility: Flexibility Is Key
Pignataro, Richard G., Chief Executive (U.S.)
What does it take to become strategically agile in today's rapidly changing global market? At Eastman Kodak's second-largest revenueproducing unit, the $2.5 billion Professional & Printing Imaging division. we had to reinvent ourselves to anticipate and adapt to fast-changing environments and customer needs by moving quickly and resourcefully.
Kodak was not always driven by this strategy. In fact, we have changed from a vertically driven manufacturer organized by product sets to a market-focused organization driven by customer need. We determined that we would seek the best imaging solution for customers, not just one based on traditional photographic imaging using silver-halide film. In the process, we are striving to reach leadership in silver halide, digital imaging (which does not use film), and hybrid imaging (a combination of the two).
How management deploys assets in reaction to market changes and customer needs makes the difference between agility and inflexibility. Strategic agility coordinates marketing, manufacturing, and R&D. It assumes you have reached, or are moving, toward flexible manufacturing, and you have, or are building, a skilled and knowledgeable work force. Companies such as Hewlett-Packard, Motorola, and Boeing show uncanny ability to stay at the leading edge of technology while not outdistancing their customers.
Strategically agile manufacturers know clearly what they must do. It is hard enough to integrate work force and technologies in one marketplace, much less two or three. The decisions by AT&T, ITT, and Hanson plc to split themselves were a recognition of that reality. Kodak, too, divested its non-imaging business to give the company one clear vision, and spun off its chemical company to focus on its core imaging business.
THE BIGGER PICTURE
When strategic agility is fully implemented,it prevades every level of an organization. Over the last 10 years, Eastman Kodak and all other imaging manufacuturers and marketers have had to face marketplace changes and competition, many of which were born of technological advancws in imaging.
Some industyr background: Silverhalide imaging is a core competency that our customers need and want. Silverhalide film still leads in cost, quality, familiarity, notability, and availability.
Digital systems, on the other hand, lead in speed and creative flexibility for deadline and budget-sensitive projects and where images are used repeatedly. As bandwidth and digital technology advance, these attributes will shift, even though the information-recording power of silver-halide imaging has not yet reached the limits of technology.
Digital applications now complement and, in some cases, replace traditional silver-halide film imaging. It would have been painful-but easier-to switch our focus to digital applications and harvest the silver-halide market. But our customers do not want just leading-edge digital solutions-they want both digital and silver-halide film technologies that work together in familiar and productive ways for each printing, publishing, commercial, and scientific applicaiton. We think imaging producers who have not integrated both will fail.
We have watched market failure happen in one industry after another, particularly among manufacturers of digital equipment that are driving changes in imaging. High-tech manufacturers have taught us that supplying breakthrough technology is not enough. Technology often runs ahead of a customer's ability to invest in and use it productively. Even the most user-friendly technologies have learning curves.
As a vertically integrated chemicalbased manufacturer, Kodak did not have all the skills needed to provide the best solution, whether digital, silver-halide, or hybrid. P&PI now balances its strengths and weaknesses by pooling resources based on the core competencies of its partners. For example, Kodak co-develops digital cameras with Canon, Nikon, Hasselblad, and Sinar, among others. …