In 1881, a “not especially gifted” high school dropout named George Eastman started up the Eastman Dry Plate Company. He did so with four bedrock principles:
- Focus on the customer – pay attention to what they tell you
- Mass produce the product at the cheapest price possible so customers will invent new uses for it
- Sell by demonstrating your product’s value
- Be the first to embrace new technologies
Eastman held a strong conviction that fulfilling customer needs and desires was the only road to corporate success. A century later, Eastman Kodak was a multinational titan. At its peak in 1996, Kodak had more than 145,000 employees, $16 billion in revenue, and a company valuation of more than $31 million. Kodak was the fifth most valuable brand in the world.
Incredibly, less than 20 years later Kodak was gone. The rise and fall of Kodak is well documented. The explanation is also sadly simple. Kodak failed to heed its own bedrock principles. It discarded new technology, rather than embrace it. It also failed to hear the voice of its customers.
The opportunity was certainly there. At its peak in 1996, Kodak introduced a digital camera, pioneering the technology that would eventually be its downfall. Kodak decided it was a film company and didn’t want digital photography to disrupt its core business.
Interestingly enough, 1996 is also the year GM introduced the EV1. It was the first mass-produced electric vehicle in the modern era. Leased in select markets in the Western US, GM’s foray into a more eco-friendly mode of transportation received rave reviews from owners.
However, in 2002, GM CEO Rick Wagoner pulled the plug on the EV1 program, calling it an unprofitable venture.
Since EV1s were leased, not sold, GM was able to round nearly every EV1 it had produced and destroy them.
In the process, GM also destroyed a major lead it had in the development of electric vehicles. Some analysts now project that by 2040 electric vehicles will make up 35% of global car sales. within 20 years, the global EV market could approach one trillon dollars. Having forfeited its early technology lead, GM is now struggling to make up lost ground. Time will tell how successful GM will be.
Innovation is about embracing new technologies, but it is also about heeding the voice of your customers. You don’t need to come up with a brilliant new product to be an innovator. Finding better solutions to meet your customers’ needs is innovation. Process improvements can be innovation. Listen to what your customers are really saying, explore new ways of meeting their needs, and don’t be afraid to be a disruptor.