Success Can Be A Dangerous Thing

By on July 29, 2015
Success Can Be A Dangerous Thing

“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”- Bill Gates

Success can be a very dangerous thing. Consider these companies.

It was August of 1986 and I was sitting next to the pool at the Hamilton Princess Hotel in Bermuda with a group of Polaroid Corporation sales and marketing folks. I was there to collect information that the performance improvement company for which I worked would use in structuring a sales incentive program for the Polaroid sales force. The next day, I made a presentation to their sales force, soliciting their observations about the state of their marketplace. Optimism filled the air. Everything was looking up. Polaroid’s revenues in 1986 were $1.6 billion. By 1994 they had reached $2.3 billion. But there they peaked. Reacting to stalled sales, in 1996, Polaroid moved into digital photography, but it was too little, too late. And in 2001 they declared bankruptcy.

They thought that today would last forever.

Eastman Kodak invented the core technology upon which digital photography is based, developing a digital camera in 1975. But they were very slow in moving on this technology because they were in the film business and film sales in the 70s were just great. Why would they shift their focus to digital? In 1976, Kodak commanded 90% of film sales in the United States and 85% of camera sales. However, by the late 90s, film sales started to decline and Kodak moved more aggressively into digital. In 2001, Kodak was number two in digital camera sales in the United States, behind Sony. But they lost $60 on every camera sold. The digital marketplace continued to shift in the early 2000s with cameras on cellphones, smartphones, and tablets. And Kodak couldn’t keep pace with this fast changing marketplace. In 2012 they declared bankruptcy.

They thought that today would last forever.

“What’s good for GM is good for the country” said a supremely confident General Motors CEO, Charles Wilson, in 1953. And why would Wilson think otherwise? General Motors had led the world in global vehicle sales since 1931. In fact, it continued this streak of great success until 2007. Through the 90s, SUV sales were driving very good profits and GM had little interest in manufacturing fuel efficient cars. Then the big decline started. Beginning in 1999, sales fell precipitously, dropping 45% between 1999 and 2009. By 2007, a prosperous GM had become a company in a nosedive, with a loss of $38.7 billion. On June 1, 2009, GM filed for Chapter 11 bankruptcy, reporting assets of $82.29 billion and debt of $172.81 billion.

They thought that today would last forever.

General Motors, Polaroid Corporation, Kodak. Great names in manufacturing. Industry leaders for years. Their stock prices boomed. Sales grew steadily. They were on the mountain top in their industries. They were the companies that young college graduates wanted to work for. It was very cool to be able to say, “I work for GM, or Polaroid, or Kodak.” And then within a span of a little over ten years their walls came tumbling down.

What happened?

They thought that today would last forever. It doesn’t.

General Motors, Polaroid, and Eastman Kodak lived in a kind of enchanted forest, their ability to see the realities of their rapidly changing marketplaces diminished by the successes they were experiencing. Examples of the degree to which they were disconnected from reality abound. For example, we have GM’s long time CEO, Alfred P. Sloan, saying, “We’re not in the business of making cars, we’re in the business of making money.” Keep churning out today’s products. Keep selling SUVs. Keep selling film. Keep thinking that today will last forever. It doesn’t and it didn’t.

Americans quit buying film and started buying digital cameras. America’s infatuation with SUVs started to fade. Americans started buying small cars. Upstart companies from the east invaded American shores. One of these companies, Toyota, driven by a force known as Kaizen Thinking, grew from being a company so inconsequential that Alfred P. Sloan probably never heard of it in the 50s to being the world leader in automotive sales in 2015.

And just what is Kaizen Thinking? It’s all about being intensely focused on continuous improvement. It’s about being very dissatisfied with the status quo. It’s about knowing that continued success in the marketplace belongs to the agile. It’s also about believing that world class continuous improvement can only happen when all employees have become Kaizen thinkers. It’s about continually talking with line workers to solicit their insights into ways of improving products and production processes. Henry Ford was a Kaizen thinker and his Highland Park, Michigan, automotive plant was a model of what this kind of thinking can do to optimize production processes. Toyota read Henry Ford’s books, My Life and Work and Today and Tomorrow, and based on Ford’s thinking and their own creativity, developed what has come to be called Lean manufacturing.

Our Corporate Services Group has a wide variety of resources that you can use to harness the power of Kaizen Thinking in your company. Kaizen Thinking is a powerful force. It’s driving high levels of productivity in companies worldwide, across a wide range of industries. If you’d like to learn more about these resources, just call me anytime at 314-303-0612. I think you’ll find this time very well spent.

Not taking full advantage of the power of Kaizen Thinking can be a very dangerous thing.

About George Friesen

George Friesen serves as Business Practice Leader - Lean Manufacturing for the Workforce Solutions Group of St. Louis Community College. He has led the College's Lean business practice area since 2000. Prior to joining the College, George worked for Maritz Performance Improvement Company. Over the past 35 years, he has served a wide variety of Fortune 500 companies, specializing during the past eleven years in Lean Manufacturing, focusing especially on the 5S System, Lean leadership and thinking processes, Value Stream Mapping, and Lean team building. George is a graduate of Washington University (AB), Webster University (MA), and United States Air Force Flight Training.

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