Many subscribe to the theory that the worst of times bring out the worst in people. At Kodak, that became the communal theme, and much of that thinking was directed right at the very top of the organization.
It was obvious to anyone working at Kodak that the business was losing ground to competitors at an alarming rate. As one of the marketing leaders once said, “Our members are fleeing us!”
That observation was echoed at town hall meetings by leaders from various parts of Kodak, but no one had an answer for what exactly to do to stop it. We had a new and young President and CEO/Vice President Eastman Kodak, who was brought into the organization to breathe new life into the company and lead us back to prosperity. But instead, he constantly reminded us all that he inherited the problems and the bad economy only compounded his challenges. His hands were tied--that became his mantra--but he was our leader, and he knew that he had to do something. And so he did.
He focused his attention on the Kodak Gallery website, with the goal of making visitors’ “experience” more pleasing, meaning he wanted visitors and our members to be able to navigate the site, quickly find what they wanted, add multiple items to their shopping cart across various product categories, buy and check out, all in quick and seamless fashion.
This would require a major effort, far beyond anything that had ever been attempted. And it would require the most skilled and experienced talent available. They would have to renovate the new website behind the curtain while maintaining the current face to the customers.
On the surface, it seemed reasonable and, if need be, a defensible initiative. After all, how could we expect our customers to waste their time and effort at our site, which was slower and didn’t offer the functionality as our competitors who had virtually the same product line and quality? For the new President and CEO/Vice President Eastman Kodak, this perceived scenario may have seemed the perfect smokescreen.
Leaders throughout the company questioned if it was the right move, taking into account the critical financial state of the company. It would by no means be easy, and considering the magnitude of the total cluster, it seemed equivalent to spitting into the wind. Simple refinements to critical processes may have instead been the way to go. But no, our new leader’s mind was made up. And it was quite apparent that he didn’t embrace the Gemba Kaizen principle that states when it comes to making your business more profitable and successful, don’t look to re-engineering for answers.
So the plan was rolled out to stakeholders, and it was billed as the blueprint that would provide the edge needed to return Kodak to the leadership position in the highly competitive and coveted digital space. The entire company seemed to rally around the concept, but then again, what else was there?
I first heard the proverb “All that glitters isn’t gold” when I was a small child. If there was any innocence remaining in me after I understood what that meant, all of it was certainly wiped away after I learned that not all spoken words are intended to be true. And that seemed unequivocally to be the ailment at Kodak Gallery, as the “plan” soon appeared to be nothing more than a smokescreen.
And here is why:
The President and CEO/Vice President Eastman Kodak first assembled a team of internal leaders from various departments of the company to form a cross- functional think tank that would, by design, deliver to our customers a robust website that would not only help retain our existing members, but also attract new ones. That was the (high-level) pitch.
The team spent months and hundreds of hours brainstorming on exactly how to accomplish that mission. The effort was exhausting, to say the least, and was a tremendous drain on internal resources, as each member of the team was pulled away from their primary roles. There was recurring frustration with the process and some began to express that the mission was not only impossible, but also not the right one. Conditions got so bad that my boss, the Director of Supply Chain Management and Legal Council, threatened to leave the company in order to be released from the team.
That was just one more piece of evidence that the team did not have the technical ability or background to take on such a monumental task.
But in reality, I question if our new leader actually believed that the makeshift cross-functional team constructed on off-the-cuff groundwork could really pull it off? I wasn’t the only one who didn’t think so.
As conditions became more unraveled, guess who he hired to save the day? None other than his former colleagues from his prior employer, Intuit, who just happened to form their own consulting team around the same time to help companies manage such projects.
One would be correct in stating that it is not an unusual practice to hire someone a manager is familiar with; however, the chatter reached a high point when it became known that not only did they seem to lack the resume for such an undertaking, but they were being paid well above what other consultants who were working on the same project were being paid.
The consultants were very young. Neither of them--nor our new leader, for that matter--had reached their 40th birthday. The new President and CEO/Vice President was of Korean descent, which was likely a first in any leadership role at Kodak, and so were the two highly-paid, former co-worker buddies/consultants. Some might say “big deal” and ask what race has to do with anything. But seriously, what are the chances that this was just a coincidence at a major US-based company like Kodak?
It seemed quite apparent to most that this was nothing more than an opportunity for the President and CEO/Vice President to hook up his buddies from his former job and show them how powerful he was now, working at Kodak. He paid them a king’s ransom, certainly enough for them to grow their small consulting business and pad their resume at the same time. And he probably hoped that someday they would repay the favor if he ever needed to cash in that chip. Some call that networking.
The President and CEO/Vice President also circumvented the procurement process altogether when he did not engage me in the due diligence process for selecting a service provider. The rates were not negotiated by procurement and likely not reviewed by anyone at all. There was not a competitive bidding process, or even an introduction to purchasing of who they were or their scope of work. Yet soon the procurement department began to receive very large-sum and obscure purchase requisitions for their services.
These guys were paid millions of dollars in a very short period of time. The Director of Supply Chain and Legal Council (my boss) was livid about the situation. On one occasion, after seeing several of the purchase orders that we issued to them, he commented bitterly, “Their kid’s college is paid for.” But there wasn’t much that he felt that he could actually do, so instead, he frequently commented that he would report these observations to the parent company, Eastman Kodak.
But he was not the only one who was distressed by what was happening. Marketing employees began to leave the department almost as fast as our customers were fleeing Kodak. They saw tons of money being paid to the consultants for a project that really didn’t have anything to do with Kodak’s real problems; meanwhile, the marketing department was starved for marketing funds.
After one of our highly respected “go to” marketing managers announced his resignation, his boss sent an email message out to the company letting them know and credited him with teaching the consultants “all they know.” Apparently that audacious remark was not received very well by the President and CEO/Vice President, and shortly thereafter the former boss also departed rather covertly.
If it was ever unclear to the President and CEO/Vice President that employees were not only aware of but completely unhappy with his methods, I’m sure that there was little doubt about it at that point.
I don’t think anyone criticized the consultants for taking on the monumental task of trying to rescue Kodak from its troubles. However, their claim to fame that they draw attention to on their website is that they “launched the new Kodak Gallery 3x faster…” The problem with that statement is that it only underscores the fact that they were aiming at the wrong target. People were not excited by Kodak Gallery anymore. That requires a well-executed marketing plan. What good is a faster website if customers aren’t coming to the site and existing customers are going to the competition? It was another botched marketing opportunity. And as far as 3x faster, I would trade that for best-in- class marketing any day of the week.