Motorola announced a great profit leap this week.  Sales keep going up in all markets, and most notably sales of Motorola handsets have been gaining share.  It was just 2 years ago that most analysts had given up on Motorola.  They tagged the company as unresponsive to customers and a bad investment.  But now, analysts all over are trumpeting the success at this aged, but recovering, company and recommending investors buy the stock (as well as the products).

Unfortunately, the same can’t be said for Kodak.  Since dropping off the DJIA Kodak has been struggling to re-orient the company toward markets and renewed growth.  Kodak announced a loss last quarter, and longer delays before returning to profitability.  Although Kodak has been working on its "turnaround" for over 5 years (from film to digital photography) they still are saying that reaching their goals is at least 18 months away.  Eighteen months ….. that’s longer in the future than Motorola has been executing its turnaround.  And analysts are far from optimistic about the Kodak’s future.

Motorola is opening two new R&D centers, while Kodak is planning to lay-off 20,000+ employees. 

Last January (2004)  Motorola undertook a pattern interrupt and launched a host of new white space initiatives.  The new leader (Ed Zander) escshewed massive layoffs in favor of reigniting his employees and seeking new growth markets.  In fairly short order, Motorola has unleashed creative energy trapped in the organization and taken new products to market which are growing the company again.  Motorola, in about a year, moved from the Swamp back into the Rapids by effectively disrupting itself then creating and managing White Space projects.

On the other hand, Kodak keeps trying to Defend and Extend its old business while "transitioning" to a new future.  The leaders at Kodak won’t let go of the past and unleash their own organization to seek the future.  Kodak has plenty of talented people, a great brand, and good distribution.  But it keeps trying to defend its past instead of taking the actions to reignite growth in new markets.  Its a shame, since Kodak was one of the early pioneers in digital imaging (they held many of the first patents) and its employees have had a clear view of "the future" for 20 years.  But management has let lock-in to an old success formula keep them from unleashing their own resources.

Two big and "mature" companies found themselves stuck in the Swamp.  Growth had stopped and financial results tanked.  One followed the Phoenix Principle, and the other followed traditional management practices.  One is now regaining share and growing again, the other remains seriously troubled.