It is said that the shots you take are more important than those that you miss. However, for firms sometimes the shots they miss can mean devastation. This has happened to many firms – they missed critical opportunities and as a result had no future.
In my book “the dark side of innovation” I go extensively into the Kodak and Polaroid history and showed how two excellent companies failed to take several opportunities arising from the digital imaging innovations.
In hindsight, one can ask the question as to why did Kodak and Polaroid miss the major opportunities around them. Why did they miss the PC penetration rates in the US and rise of the internet later on? Why did they not become the dominant software maker for all digital imaging and manipulation? Why did they not dominate online image sharing and image printing businesses? What prevented them from seeing the opportunities such as these? Why did they come up with duds such as Kodak CD and printer on cameras when a PC drive would easily have replaced Kodak CD and LCD (and perhaps projector) on camera would have provided the benefit of instant gratification. These are important questions for any firm.
Kodak believed that the future of photography would be a convergence between chemical science and digital science. Based on this belief it created several products that catered to this anticipated convergence. Both photo CD and $500 CD player catered to this expected demand. Kodak believed that people will continue to buy film and convert it into digital copies. This transition would allow Kodak to make even more money than before. Since this meant that their core capabilities in chemical science and psychophysics (the science of making images pleasing to the human eye) would remain most relevant, it appeared to be a compelling future.
On similar lines, Polaroid believed that the future of instant photography would be tiny printers on top of cameras. It didn’t think that a digital image itself would provide the instant gratification that instant photography was providing to consumers. Again, this future appeared compelling to Polaroid as it would be easy to succeed in this scenario; Polaroid’s key capabilities (creating instant photographs) would continue to be relevant.
It is as if these firms were looking at the future of the industry from a rosy lens of their current capabilities. This alone provided sufficient comfort to these firms that they perhaps didn’t look into the emerging trends in their ecosystem. We all stop searching beyond a point of acceptable answers. Sometimes, we stop far short of necessary answers and it appears these firms did the same.
Spatial myopia (an inability to see broader trends in adjacent ecosystems), and temporal myopia (an inability to see far into the future to predict end states based on current trends) are two important factors that often prevent firms from seizing emerging opportunities. Kodak’s and Polaroid’s examples make this quite salient.
Although firms, especially dominant firms, do create their industry’s future with collective action, sometimes there are far stronger forces that significantly affect the evolution of an industry. The wisdom to understand this difference is critical. The irrational bravado that underestimates such forces (including technology and potential impact of competitors) and ignores their own myopic tendencies can add to the blinders firms already face. This often leads to firms missing out on some critical opportunities.
Which of these blinders does your firm suffer from? Do you know how to overcome them? How often do you think about your organizational myopia?
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