Tagged: digital

Kodak: its all about the separation of information from distribution

Here is my take on the demise of Kodak.  Whenever I am doing my “What is social media?” stand-up routine, I say that the social media revolution is about the separation of information from its means of distribution.  That inevitably creates a moment of what I like to think is ‘creative dislocation’ within the audience who are expecting to be told that the social media revolution is all about Facebook, blogs and Twitter.  The separation of content from distribution is causing a whole host of other separations: the separation of news from newspapers, journalism from journalists and the separation of many businesses from their business models – Kodak being a case in point.

The problem for Kodak was that information (a picture) became separated from its means of distribution (film and print) and Kodak’s business model was based around providing the means of distribution, hence the reason its business model became separated from its business.

As some have already pointed out, Kodak didn’t suffer from a lack of understanding of the digital environment or a lack of innovation.  It was a very innovative company and was a leader in many aspects of digital technology – but perhaps this ended up as being a distraction.  Kodak should have focused its innovation on changing its business model, not on developing new technology.

There are many lessons here, not least the misplaced belief that the social media revolution is all about technology and tools and that if you understand and use these tools you will be OK.  The technologies and tools of social media are crushingly simple to understand and use – that’s the whole point.  But the mass adoption of these tools is fundamentally changing the rules of communication and the relationship between citizens / consumers / customers and institutions such as brands, the media and government.  You don’t deal with the fundamental consequences of this change without making some fundamental changes to the way you do business.  Having  a Facebook page, being on Twitter and posting videos on YouTube is not a sufficient response.

Don’t be a Kodak.  Don’t get caught up in the technology and tools.  Only the organisations that understand how social media is going to affect their business model, and adapt accordingly, will avoid Chapter 11.  And this isn’t simply about media or digital businesses – it is about any business that still wants to have a relationship with a customer or consumer.