What Business Are You In?Monday, January 23, 2012
The irony has to be painful.
Eastman Kodak, a historic blue-chip American company, filed for bankruptcy because it didn’t adapt to the digital age. The irony is that it was Kodak who developed digital photography.
How can that be? It’s simple.
They didn’t know what business they were in.
They weren’t the first to make this mistake. In the late 1800s, no business matched the financial and political dominance of the railroad. Trains dominated the transportation industry of the United States, moving both people and goods throughout the country.
Then a new discovery came along — the car — and incredibly, the leaders of the railroad industry did not take advantage of their unique position to participate in this transportation development. The automotive revolution was happening all around them, and they did not use their industry dominance to take hold of the opportunity.
In the video presentation developed to accompany the bestselling book The Search for Excellence, Tom Peters points out the reason: The railroad barons didn’t understand what business they were in. Peters observes that “they thought they were in the train business. But they were actually in the transportation business.
Time passed them by, as did opportunity. They couldn’t see what their real purpose was.”
Another example: if anyone had been asked in 1968 which nation would dominate the world in watchmaking during the 1990s and into the 21st century, the answer would have been uniform: Switzerland.
Why? Because Switzerland had dominated the world of watchmaking for the previous 60 years. The Swiss made the best watches in the world, and were committed to constant refinement of their expertise.
It was the Swiss who came forward with the minute-hand and the second-hand. They led the world in discovering better ways to manufacture the gears, bearings, and mainsprings of watches. They even led the way in waterproofing techniques and self-winding models. By 1968, the Swiss made 65 percent of all watches sold in the world and laid claim to as much as 90 percent of the profits.
By 1980 they had laid off thousands of watchmakers and were down to less than 10 percent of the world market. Their profit domination dropped to less than 20 percent. Between 1979 and 1981, 50 thousand of the 62 thousand Swiss watchmakers lost their jobs.
Why? They had refused to consider a new development — the Quartz movement — ironically, again, invented by a Swiss. Because it had no mainspring or knob, it was rejected. It was too much of a paradigm shift for them to embrace.
Seiko, on the other hand, accepted it, and along with a few other companies, became the leaders in the watch industry.
The lesson of the Swiss watchmakers is profound. A past that was so secure, so profitable, so dominant, was destroyed by an unwillingness to consider the future. It was more than not being able to make predictions — it was an inability to rethink how they did business. And even more foundationally, a misunderstanding of what business they were in.
Eastman Kodak thought they were in the yellow film box business. In truth, they were in the picture business.
Churches can make the same mistake as culture changes, methods become antiquated, and technology progresses.
Yes, I know you can’t take business models and practices and always compare them to the church, and I know the term “business” applied to the church is both crass and theologically skewed.
But let’s at least try and make an overarching point.
Are you in the Sunday School business, or the discipleship business?
Are you in the door-to-door visitation business, or the evangelism business?
Are you in the hymnbook and organ business, or the worship business?
It is far too easy to resist innovation and change because you don’t understand what business you are really in. As a result, you cling to old methods and programs as if they are your primary product.
In truth, most of the time they aren’t.
As Lawrence R. Perkins, senior managing director at Conway Mackenzie, a restructuring and financial advisory firm, said of Kodak’s chances: “This is going to be a tough one. Just like anything else, the business has evolved. It’s going to be hard to unwind 130 years of history.”
Here is what will help: know what business you’re in, so that you are free to innovate and explore, cast aside and add, embrace and enlarge.
And that’s not just a snapshot from Kodak for the business world.
It’s a picture for the church to reflect on as well.
James Emery White
“Bankrupt, Kodak Vows to Rebound,” Andrew Martin and Michael J. de la Merced, The New York Times (Friday, January 20, 2012, p. B1 and B7.
Tom Peters, The Search for Excellence (Video).
On the Swiss watchmakers, see Joel Barker, Future Edge (1992).
James Emery White is the founding and senior pastor of Mecklenburg Community Church in Charlotte, NC, and the ranked adjunctive professor of theology and culture at Gordon-Conwell Theological Seminary, which he also served as their fourth president. His latest book is What They Didn’t Teach You in Seminary (Baker). To enjoy a free subscription to the Church and Culture blog, log on to www.churchandculture.org, where you can post your comments on this blog, view past blogs in our archive and read the latest church and culture news from around the world. Follow Dr. White on twitter @JamesEmeryWhite.