Rightsizing: I’d Rather Be A Croc Than Crocked
“Every society has its protectors of status quo and its fraternities of the indifferent who are notorious for sleeping through revolutions. Today, our very survival depends on our ability to stay awake, to adjust to new ideas, to remain vigilant and to face the challenge of change.” -Martin Luther King Jr.
Deinosuchus is an extinct genus of alligatoroid crocodilian, related to modern alligators and caimans, that lived 82 to 73 million years ago during the late Cretaceous period. The name is derived from the Greek and translates as “terrible crocodile”. It would be one of the biggest and most feared reptiles with banana-sized teeth if it lived today.
Crocs belong to a group of reptiles known as crocodilians (alligators, caimans and gharials). Crocs are not dinosaurs but are the closest living relatives of dinosaurs (apart from birds, which are dinosaurs). On a recent episode of The Innovation Show, Clark Gilbert told us that crocodiles survived from the time of the dinosaurs. Why? Because they evolved and “rightsized” for their current reality.
This necessity to rightsize connected with me at a personal level. One thing you notice when retiring from professional rugby is that your body shape changes. I don’t just mean around the midsection, but after decades of running into other players, tackling and grappling, your neck and shoulders shrink, and your leg muscles shrivel. You become a smaller version of who you once were. I struggled with this transition. I had overidentified with that lean, muscular athlete, and my ego enjoyed it.
When I retired, I continued to do vanity weights. I even took protein supplements even during my “dad bod” phase. It took a hernia and varicose veins to snap me out of it. While sidelined from my training, I took stock. What was I doing this for? Whom was I competing against? What was my goal? I was training as if I was still a player, a world of yesterday.
Since then, I have radically changed my exercise regime and diet. My focus is to rightsize my body for my current reality. If I didn’t do this, I would be doing my body damage to maintain a veneer, entirely possibly ending up injured. Today, apart from intermittent fasting. I work on mobility, agility, and stabilising supporting muscles rather than bulking the major muscle groups. Hence the title for this week’s Thursday Thought, I would rather be a croc than crocked [crocked means: (especially of a sports player) unable to play or perform due to injury].
Clark Gilbert argues that organisations must act with a similar logic. To succeed, managers must play two different games simultaneously. The legacy business has to become leaner and more efficient to compete in the short term. This efficiency paradigm requires mastering the basics. This efficiency aims to earn stable earnings in the short to medium term. However, the resources released from efficiency innovation are often drawn down and returned to shareholders as dividends. The goal should be to free up investment for new market opportunities to prepare the organisation for its future reality.
Counterintuitively, this means that the core businesses must shrink to grow. As I encountered on a personal level, this means letting go of the way things were. Including freeing up those of your colleagues who might resist the required recalibration. Many of these people, maybe people you have worked with for decades. An example of such resistance comes in the tragic demise of Kodak. The leaders of this once-mighty organisation could not bring themselves to cut the business and let old people go.
Kodak — An Excessive (Ahem) Focus on The Past
“Change is the law of life. And those who look only to the past or present are certain to miss the future.” — John F Kennedy
While many of us take for granted how easy it is to take photos today, it once required specialist skills, equipment and a knowledge of chemistry. For those of you following our Clayton Christensen tribute series, photography followed the pattern of most innovations. While it was invented in the 1830s, even fifty years after its invention, photography remained limited to highly-skilled professionals who could afford the technology.
When George Eastman opened the Eastman Kodak Company, he targeted the vast nonconsumption of photography. A high school dropout from a poor family, Eastman’s innovation led to widespread prosperity, job creation, and the development of many billion-dollar industries, including advertising and motion pictures. (What our guests on The Innovation Show, Efosa Ojomo and Karen Dillon, and of course, Clayton Christensen, call “New-Market Innovations).
Despite having a great brand, R&D, manufacturing, and gross margins, Kodak clung to the old paradigm. They failed to retool operationally and mentally as their old sparring partner Fujifilm did. In 2000, photographic products delivered 60% of Fujifilm’s sales and 70% of its profit. Within a decade, digital cameras destroyed that business. In 2012, Kodak filed for bankruptcy, yet Fujifilm continues to rightsize for the future. As former Fujifilm CEO Shigetaka Komori noted, both firms faced the same threats; the question was how they prepared for that inevitable future. Knowing the future would impact the sale of film, Fujifilm applied its expert capabilities in surface chemistry to cosmetics, LCD panels, pharmaceutical development, and cameras and instruments. Kodak failed to adapt its camera and film-based business model to a new paradigm. In 2001, despite Kodak’s acquisition of the photo-sharing site Ofoto, Kodak attempted to use Ofoto to attract people to print digital images when the printing market was already in freefall. They might have adopted an advertising-based business model (like Instagram), but that was what our friend Rita McGrath would call an “adjacency” too far.
As for Fuji, in tandem with the reapplication of capabilities, Komori rightsized the organisation for its current reality, shuttering factories and facilities that supported the decaying business while reallocating resources to the emergent opportunities. Those people who were unwilling to unlearn and relearn were moved on, and those who worked in photo labs suddenly found themselves in beauty labs. Fujifilm was willing to explore alternative paradigms and new business models and acquire new capabilities, but Kodak was less willing. As Steve Sasson, the Kodak employee who created the first digital camera, told us on The Innovation Show (in a marvellous interview here), “We (Kodak) should have adopted a new business model and been broader thinking about how we would make money.”
There was also the less talked about piece of the Kodak story. Kodak’s leadership did not want to admit defeat and let people go. After all, they were Kodak, known as “The Great Yellow Father”. Kodak propped up the town of Rochester. It was hard to let people go because it was hard to be seen to let them down. However, just like my focus on physical mobility is good for my future, a certain amount of employee mobility is good for an organisation. Low employee turnover can hinder organisations and the individuals concerned. For the employer, they lose fresh outside perspectives, neurodiversity and perhaps a new modus operandi. For the employee, the longer we stay in any organisation without personal growth, the more we lose touch with a changing business world. Our change muscles atrophy and we become victims of our organisation’s mental models. This phenomenon can be exacerbated if we work in successful organisations because we might not see any need to change.
THANKS FOR READING
Originally published at https://theinnovationshow.io on April 6, 2023.
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