The Holden drama, or soap opera as one of my colleagues calls it, that we have seen play out in the last few weeks has raised commentary from many quarters on what should have been done and what could be done.
As a Business Coaching firm, Beckon Business has followed the scenario closely. My business partner Akram Sabbagh asked me “Are we seeing the Battle-for-a-Brand or Death-of-a-Business-Model?” Whatever the answer there is a lot of passion – feeling and angst about Holden’s shut down. The brand was/is loved. It has a cult like following.
The question made me think – is there anything Holden could have done differently to keep their business alive? I’m not going to make a list of dos and dont’s. Instead, I’m going to reflect on similarities in leadership approach with the fabled business story of Kodak and what brought about its demise.
It seems the one big thing that happened with Kodak is that Management/Leadership failed to keep their company relevant. Let’s consider:
1. Shift in consumer mindset: Leadership at Kodak were out of step with the changes in their market and didn’t get that there was a shifting sentiment from taking high quality photos for high quality printing to simply capturing the moment. The renowned ‘Kodak Moment’ no longer needed printing.
Sounds familiar with the move in car industry from developing a replacement Monaro to meeting the demands of environmentally friendly transport.
2. Shift in market values: The digital disruption changed the entire process of capturing the moment and impacted on the value placed on archiving family snapshots. Kodak’s leadership failed to see that their market was no longer women recording the family history, but everyone and anyone snapping the experience. The market also moved from “trusted relationship” with their brand to transactional convenience. Consumer’s wanted instant, quick and Kodak was still working on a quality and lengthy turn-around model. They got the “moment” confused with the “chemistry.”
Fast forward to today and we have the same situation in the car industry where, despite a romantic/passionate bond to history with a brand name, the market is no longer looking for a legacy investment in the set of wheels that will be a family heirloom. Instead they value something that is going to be transitory and has minimal impact on the entire planet.
3. Weakened by your strength: Kodak leadership were proud of their role as a chemical company and saw their strength as producing high quality printed images with a consumer who valued this.
Despite having invented the digital camera, they minimised the digital aspect because it could never achieve the quality they saw as their leading market position. This was their weak spot. They didn’t see what the market loved about Kodak – that they could be trusted to capture the ‘’Moment.’ Again, the car industry has the same issue, especially those brands that have a cult like following. If you see your strength as a local car manufacturer when in reality it is your weakness then you may be going to end up like Kodak. That the manufacturing of vehicles in Australia was a loss-making venture has been known for years. The closure of the production plants is sad but predictable. But I wonder if the people at GM are having their Kodak moment by seeing this as a manufacturing problem only?
Have they worked out the real value in the Holden brand itself? Even if not manufactured in Australia, have they asked how ‘the Aussie’ cultural attachment to a century-old brand could be leveraged going forward right now to reinvigorate sales and imagination.
With the speedy changes in consumer sentiment, values, needs and beliefs, have the GM leaders missed the mark by seeing this as a manufacturing issue only? Do they really know what their modern customers want from them? What do the consumer’s value about their industry? What makes them relevant today? What are they very good at other than being a local car manufacturer in a globalised world?
And as a final thought… If you take out the brand names and industry specific references in this blog and replace it with your own, how does the above relate to your business and industry? What are you doing to keep relevant?
Coach & Mentor