Gutenberg to Zuckerberg: How to handle disruption without hitting an iceberg
- It is commonly thought that the main problem incumbents have when facing disruptive change is myopia — but they often see disruption coming.
- When Kodak declared bankruptcy in 2012 it was widely assumed the company had simply missed the shift to digital imaging. The true story is more nuanced.
- Rather than try to reinvent itself, Kodak tried to get more people to print more pictures. Facebook had a different vision.
The printing press [invented by Johannes Gutenberg in the 1440s] accelerated the spread of knowledge. That’s generally a good thing. But it had downsides as well. It also accelerated the spread of what you could reasonably politely call propaganda and what you could less politely call manipulative, destructive lies. Also, the spread of knowledge had unanticipated knock-on effects.
The Catholic Church was thrilled with the power of the press when the innovation helped raise cash for the Church’s crusades and get more Bibles into the hands of more people. Perhaps it was less thrilled when the press provided propaganda for both sides in Mainz’s 1462 civil war. And, of course, many Church leaders likely cursed the technology the Church had helped create when rapid printing hastened Martin Luther’s ability to spread the ninety-five points of disagreement he had with the Church, sparking the Reformation that splintered the Catholic Church’s influence. A third of the books printed in Germany from 1518 and 1525 were from Luther.
“The noises that accompanied Luther’s message of doom were probably not hammer-blows; they were the squeaks and bangs of busy printing presses,” [historian John] Man writes. And the story replicated across England as the religious and civil landscape was transformed.
Perhaps the Catholic Church ultimately rued its decision to help spur an innovation that spurred the decline of its dominance.
Disruption casts a shadow. The printing press was a boon to some—scientists, revolutionaries, entrepreneurs who built businesses around it—and a curse to others: scribes, cardinals, and anyone else who profited from ignorance.
The participation of the Church in a technology that ultimately hurt it reflects a common theme in more modern disruptive changes. There’s often a perception that the fundamental problem incumbents have when facing disruptive change is myopia. That is, they simply don’t see the change coming until it is too late. I have never once met a market leader that didn’t see the disruption coming. In fact, in many examples, the incumbent, like the Catholic Church, plays a critical role in its development.
Consider Eastman Kodak. In the 1980s, Kodak was one of the world’s powerhouse companies. Its rise to prominence began when it launched its affordable Brownie camera in 1900. In the decades that followed, Kodak established a dominant position in the lucrative film business, with its “you press the button, we do the rest” slogan demonstrating its commitment to making photography accessible to the masses. On January 19, 2012, Kodak declared bankruptcy.
The lazy story is that Kodak missed the shift to digital imaging. But the true story is more nuanced. The company created a working prototype of a digital camera in 1975. The engineer behind that project, Steve Sasson, offered a memorable one-liner to the New York Times in 2008 when he said management’s reaction to his prototype was “That’s cute—but don’t tell anyone about it.” A cute line, but not an accurate one. Kodak invested heavily in digital imaging—billions of dollars—to carve out a strong position in the digital camera space with its EasyShare line of products.
What ultimately got Kodak was the merging of cameras and mobile phones. People didn’t stop taking pictures, of course; they just shared them on social media instead of printing physical copies. And here’s the thing. Kodak wasn’t unaware of this shift, either. The company started the aughts with a bold bet—buying photo-sharing site Ofoto in May 2001.
Imagine a world where Kodak executives say, “What’s our tagline again? Share memories, share life? Let’s make it as easy as possible for people to share photos on Ofoto. Heck, why don’t we let them share updates and links to news stories as well?” Mark Zuckerberg did just that when he created Facebook. Three years later. Imagine a world where early social networks were run by large corporations rather than freewheeling startups. That world might be better. It might be worse. It would certainly be different.
In this world, of course, that didn’t happen. Kodak stuck its brand on the Ofoto website and then made it harder, not easier, for people to share pictures. Rather than try to reinvent and reimagine itself in the face of disruptive change, Kodak tried to get more people to print more pictures.
Disruption is hard. It threatens power dynamics inside organizations. Modern research by behavioral psychologists shows that people prefer avoiding a loss to receiving equivalent gains. It’s no surprise then that disruption places a market leader in a real dilemma. Even if a leader rationally knows that investing in disruption is a smart long-term decision, the short-term pain of a transition from one state to another can lead to natural hesitation.
Disruption casts a shadow.
