What Can Higher Education Learn from Digital Cameras?
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What Can Higher Education Learn from Digital Cameras?

By failing to recognize the evolving needs of their customer base, Kodak and Blockbuster found themselves obsolete; a critical lesson for higher education administrators.

Many scholars see the MOOC (Massive Open Online Course) phenomenon as the latest in a long line of disruptions that have occurred across different industries as a result of digital technology. If this is indeed the case, then we should be able to learn from the missteps made in other industries in order to avoid being the hapless victims of the changes currently affecting the higher education sector. This article will present a brief history of two companies undone by the digital revolution. By examining the ways Kodak and Blockbuster failed to react to the emergence of digital technology in their respective industries, we can learn a valuable lesson about how higher education might avoid a similar fate.

Successful Beginnings

In its earliest days, Kodak actually benefitted from technological change. With the advent of its “Brownie” personal camera, Kodak democratized photography, taking it out of the realm of professionals and making it affordable for the average consumer. Accompanying this was a very astute understanding of its key audience. Kodak targeted its marketing approach to women, who drove sales in order to keep mementos of family moments.[1] In a sense, Kodak’s genesis was brilliant on two levels: firstly, it arose out of an industry-changing technology and, secondly, it successfully identified and targeted its key audience segment and their reasons for engaging with the technology. Blockbuster also emerged from a technological advance.[2] It was founded by a computer programmer-turned-entrepreneur who invented a new system for keeping track of stock in each store based on what people were actually renting. Like Kodak, the combination of the novel use of technology plus a deep willingness to know its customers contributed to Blockbuster’s great success.

Lack of Foresight

Fast forward to 2011, and the fortunes of these companies had surely changed. Kodak’s first mistake was to underestimate the influence of digital photography on their business. Kodak assumed people would never switch to digital cameras over film, since the quality of digital was initially inferior. They did not take the time to find out how their customers were using the technology.[3] Thus, Kodak was not in a position to realize, until it was too late, that digital cameras were attractive despite inferior picture quality because people were using them for different reasons than they had used analog cameras.

Blockbuster made a similar error to Kodak after Netflix emerged as a competitor. Blockbuster initially assumed nobody would pay to stream video over the Internet since the quality of streaming video was initially so poor. Also like Kodak, Blockbuster didn’t really understand its customers’ usage of this new technology.[4] Netflix was attractive to people mostly because they didn’t charge late fees. Thus, when Blockbuster finally started trying to compete with Netflix by offering a similar service, it failed because it continued to annoy customers with late charges.

The Lesson: Understand your Customers

In both cases, the trouncing these giants received at the hands of their competitors could have been avoided. David felled Goliath, not because of some quality inherent in the technology, but because the smaller (more agile) competitors were listening to what customers wanted and using the available technology to deliver it.

This was something Kodak and Blockbuster did in their early days, but once they had grown too big to listen, they were unable to recapture their initial success. Pride comes before a fall.

Applying the Lesson to Higher Education

It isn’t a stretch to think the higher education industry in North America has become somewhat of a Goliath, and may have some smaller challengers to worry about. If this industry is going to stay relevant in the face of these challenges, it has to listen and remain responsive to the needs of its customers. It’s not enough to think those of us in higher education can understand the needs of our students based on what is essentially a model of education that is more than 100 years old. Instead, we need to find out how people want to access education now and be responsive to that. It’s basic user experience design. And if we don’t do it, someone else will.

In “A Short History of the World,” published in 1922, long before the digital revolution, H. G. Wells wrote the famous axiom, “Adapt or perish, now as ever, is nature’s inexorable imperative.” Kodak and Blockbuster are two examples of companies that failed to adapt in the face of new digital technologies.

Now, higher education is faced with a similar challenge. We can either hide our heads in the sand and risk succumbing, or we can do whatever it takes — before it’s too late — to adjust to the new environment in the hope we can not only survive, but also continue to learn and grow.

After all, isn’t growth the ultimate purpose of higher education anyway?

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References

[1] Ali Heriyanto, “Kodak Marketed Cameras to Women Back in the 1900’s,” ChipChick, July 14, 2010. Accessed at http://www.chipchick.com/2010/07/kodak-cameras-women-1900s.html

[2]”Video Venture: Taking Charge of Blockbuster,” Bloomberg Businessweek, September 22, 2010. Accessed at http://www.businessweek.com/chapter/chap0009.htm

[3] Chunka Mai, “How Kodak Failed,” Forbes Magazine, January 18, 2012. Accessed at http://www.forbes.com/sites/chunkamui/2012/01/18/how-kodak-failed/

[4] “Blockbuster Bankruptcy: How Bad Business Led to Demise,” Time Magazine, October 17, 2010. Accessed at http://www.time.com/time/magazine/article/0,9171,2022624,00.html

 

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3 Responses to What Can Higher Education Learn from Digital Cameras?

  1. Aaron Stark Reply

    2013/08/19 at 10:16 am

    It scares me when we talk about “understanding your customers” as an important lesson for businesses in general, and higher education institutions specifically.

    How is this not front and center in annual discussions about what to teach and how to teach?

    • Lisa C Reply

      2013/08/19 at 1:41 pm

      For higher education, at least, I think it’s because we haven’t actually decided whether or not our students are our customers.

      It’s increasingly frustrating that we need to cross this hurdle before any of what seems like it should be standard busintss-like thinking and innovation can happen.

  2. Melanie Khan Reply

    2013/08/19 at 11:04 am

    Great piece. I would just add that institutions must keep their eye on innovations within their industry. It makes sense that Kodak initially underestimated digital cameras; in fact, many other companies and even consumers did. What doesn’t make sense is why, when the quality of these cameras started improving rapidly, Kodak still didn’t catch on. Institutions have no excuse not to know the latest trends and technologies that are being offered in higher education, whether they choose to adopt them or not.

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