Posted the following comments today on interesting Forbes.com article ” The Entrepreneurial Failure of Eastman Kodak” submitted by Panos Mourdoukoutas examining why Kodak failed to capitalize on the digital film market. I like to use 3M as an excellent “best practices” model for managing and leveraging innovation. My posted comments are as follows:
Entrepreneurial failure is a key driver, but I suggest think about two other related factors that determine corporate success- disruptive innovation and a ‘willingness to fail’ corporate culture. I like to use 3M as an excellent example to make these points. Innovation drives 3M, starting with their mission statement “To solve unsolved problems innovatively”, and an impressive $1.4 billion R&D budget in 2008, about 4 percent of net sales revenue.
New technologies create disruption, and the need for new business processes, the need to retool and efficiently manage production, marketing, logistics with major business segments changing every several years. And 3M does it well, an example of effective “tops down” innovation management. It also takes courage to innovate and change current business directions given public market impact- 3M, Corning and others do this well- Kodak not so well.
Next look at corporate culture. At 3M, an innovation-driven corporate culture mandates that researchers are expected and encouraged to push the envelope, make mistakes, and pursue new opportunities. 3M management reinforces this by mandating that all researchers spend at least 15 percent of their time pursuing ideas that have nothing to do with their normal tasks—pushing the envelope, looking beyond even mistakes to take the time to understand, research, dig deeper—all consistent with 3M’s innovation management leadership position. Given today’s technology innovation tsunami, leveraging disruptive innovation and developing an innovation-driven corporate culture are today’s critical success factors which separate winners from losers. Looking at the digital film revolution, Kodak clearly missed the mark here.
Paul B. Silverman is the author of a new entrepreneurial management strategy book Worm on a Chopstick: Understanding today’s Entrepreneurial Age: Directions, Strategies, Management Perspectives; serves as CEO of Sante Corporation creating a new vision for personal health care management; and is an Adjunct Professor in the Center For Entrepreneurial Excellence in the School of Business at George Washington University