Although originating from 4th-century Christian philosophy, the Seven Deadly Sins serve as a universal reminder of the human condition – the constant struggle with immoral behaviors and the ongoing pursuit of moral rectitude across different belief systems.
Much ink has been spilled across the centuries contemplating the original list of seven deadly sins: pride, greed, lust, wrath, gluttony, envy, and sloth. For centuries, they have been the subject of theological reflection and moral discourse. They have inspired artists such as Dante (the Divine Comedy), Chaucer (the Canterbury Tales), and Bosch (the painting by the same name), as well as more recent artists like filmmaker David Fincher (Se7en).
At Phillips Kaiser, our efforts are focused on improving the outlook for CEOs and other executives in the business world. In the dynamic and challenging world of business, the success of a company rests heavily on the shoulders of its leaders.
Effective leadership is the driving force that can propel a company toward excellence, innovation, and sustainable growth. Leaders of successful companies understand that good leadership is not just about authority and decision-making, but also about inspiring, empowering, and guiding teams to achieve remarkable results.
Looking at the qualities that embody great leadership, it’s clear enough that leaders would do well to steer clear of the seven deadly sins on a personal level. Taking a closer look at the failures and shortcomings of various businesses over the years reveals a similar list of Seven Deadly Sins that corporate leaders must avoid at all costs.
We will examine each of the Seven Deadly Sins of CEOs in this series, starting with:
In the mid-1970s, the name “Kodak” was synonymous with photography, and Eastman Kodak stood tall as one of the greatest companies in American history. It had been a component of the Dow Jones Industrial Average since 1930, and according to a 2005 case study for Harvard Business School, it commanded 90% of film sales and 85% of camera sales in the U.S.
By 1996, Kodak was the fifth most valuable brand in the world, with a stock price of over $90 per share and a market cap of over $31 billion.
Unfortunately, by 2012, Kodak declared bankruptcy. Its blue-chip stock, now worthless, was delisted.
Many assume Kodak’s reliance on traditional cameras and films led to its downfall, with the rise of digital photography. But that observation, while accurate, is made doubly tragic by the fact that it was Steven Sasson, a researcher at Eastman Kodak, who invented the digital camera, and in fact earned a patent for his invention in 1978.
Instead of embracing their virtual monopoly on game-changing photography technology, Kodak executives feared digital photography’s potential impact on their existing profit sources of cameras and films. They sat on the technology for years, forbidding Sasson from discussing or showing the prototype to anyone outside the company, and only reluctantly allowed him to continue his work.
Thus, the company continued to dominate the traditional photography market but failed to pursue a digital strategy, leading to its downfall. The appearance of digital cameras in the mid-1990s and phones with photographic capabilities at the turn of the century ultimately proved to be Kodak’s undoing.
By 2004, Kodak’s stock was removed from the Dow Jones Industrial Average. The digital camera patent expired in 2007, which combined with the company’s failure to prepare to compete in the digital technology market was the beginning of the end for Kodak.
The bankruptcy of Eastman Kodak is an example of how a lack of strategic vision spelled doom for one of the legends of American business.
Steven Sasson’s invention could have done for Kodak what the invention of the Apple Computer, and later the iPhone, did for Apple. Instead, the company’s failure to embrace new technology led to its demise.
A failure of vision is not exclusive to Kodak. In 1998, Yahoo rejected the chance to buy Google for $1 billion from then-Stanford students Larry Page and Sergey Brin.
A couple of years later, in the steaming wreckage of the dot-com crash in September 2000, former Blockbuster CEO John Antioco famously turned down an offer to buy then-struggling Netflix for $50 million, dismissing Netflix’s business model as unsustainable.
Here in 2023, Netflix’s revenues last year were $31.6 billion and its market cap, even after a 25% correction, is near $200 billion; meanwhile, unless you stage a trip to Bend, Oregon, you can’t visit a Blockbuster, which declared bankruptcy in 2010.
While Blockbuster and Netflix are examples of a lack of vision, when compared to Kodak, there is a difference in that Kodak already owned the technology and only needed to develop it to stay ahead. Blockbuster and Netflix did not have such a strategic advantage when compared to Kodak.
A lack of vision in assessing a competitor’s assets can lead to missed opportunities; failure to recognize your own assets is a flaw in strategic thinking.
There are two types of CEOs that we have observed in our research of great companies and the leaders that lead them: those who achieve success once and then plateau or decline, and those who achieve success over and over again. CEOs who can consistently and enthusiastically reinvent themselves and their companies do so not because they are more talented or have more access to resources but because they choose to see the world differently than everyone else and create a distinct culture full of talented people who, along with their leader engage in new ideas, insights, challenges, and execute a shared vision.
As experts in corporate law, we have witnessed companies succeed and fail. We have worked with successful startups and fledgling Fortune 500 companies. We have seen brilliant CEOs sink their own companies due to a lack of wisdom and counsel, while unlikely CEOs have achieved steady growth through smart strategic planning and the ability to surround themselves with great talent.
Our General Counsel Services provides CEOs, entrepreneurs, and business leaders professional advice and a fresh perspective. Maintaining perspective while growing a business can be challenging, and mistakes or lost opportunities can be costly. Let us help you minimize the errors and stay on track.
Our General Counsel Services provide the same advantages as an in-house legal team, but with lower costs.
Our range of services includes:
Mid-level companies may find in-house legal teams too expensive or more resource than is needed, while hiring a firm may come with unnecessary services. Our General Counsel Services offer customizable legal advice at an affordable price point, allowing clients to work with one or more staff members based on their needs.
We can learn from Kodak, Yahoo, and Blockbuster by taking inventory of our assets and opportunities. We should surround ourselves with talented individuals who can help us recognize those potential opportunities we might otherwise miss or ignore.