The Need for Organisational Resilience - Chapter 2

Kodak’s top management never fully grasped how the world around them was changing.

They hung on to now obsolete assumptions about who took pictures, why and when.”

(Munir 2016).

Recent generations of Kodak manager were too wedded to the past business model to take

the radical steps needed to reposition their company as a digital leader.

Limitations in Forecasting

Forecasting is a management process that attempts to make predictions based on past and

present events, patterns or trends. The selection of a forecasting method, such as the Delphi

method, depends on factors such as the availability of historical data, or the time horizon to

which predictions are needed. And there lies the problem: the availability and accuracy of

historical data. The past has much to tell us about how we might manage future events but it

is never a template for the future. What is certain is that the future will be different from the

past. The longer the planning horizon, the worse is the past’s accuracy in predicting future

outcomes. Long-term planning is a leap of faith, assuming that the world will not change at

all or will only change as predicted. In the case of Kodak, the introduction of an iPhone was

a one-time event, unlike any in the past, that changed consumer attitudes in a very short

period of time.

Limitations in Control

Given that, in the long term, organisations have considerable difficulty in predicting the

future, there will be events that, even if predicted, remain uncontrollable. A Linear Strategy

should mean that an organisation is sufficiently robust to withstand changes in the

environment. Kodak believed that its current strategy would weather the change in

technology and consumer attitudes. Their optimistic bias towards – now redundant − ways of

taking pictures prevailed for too long; when they eventually realised that their organisation

was in a downward spiral, it was already too late.

In principle, a linear strategy may well drive – as we see in a range of organisations – an

illusion of certainty and controllability, working towards a pseudo-future, reinforcing

assumptions such as ‘Uncertainty will not happen to me!’ and/or ‘Uncertainty, if it happens,

will not affect me.’ (see following textbox).

[Text Box starts] Battle of Kursk

The winter of 1942 saw the defeat of the 6th Army at Stalingrad. With it, the German Army lost

considerable resources in men and materials. It was also the first time since the start of WWII on 1 st

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