Page 8 - Risk Management Bulletin Jan- Mar 2022

RMAI BULLETIN JANUARY - MARCH 2022

BIGGEST RISK

MANAGEMENT

FAILURES

hen someone talk about the biggest Kodak’s missed opportunities in digital photography, a
W corporate world, the very first name technology that it invented. This strategic failure was
Risk Management failures in
the direct cause of Kodak’s decades-long decline into
comes to any ordinary person’s mind
is Kodak which collapsed after 124 years in operation, bankruptcy as digital photography destroyed its
filmbased business model. Corporate history is littered
just because of their failure to foresee how quickly the
with many more such examples, companies that
world would embrace digital images and was never
adopted the wrong strategy and paid the ultimate
able to catch up with the competition even after
price for their risk management failures.
eventually changing track.
BlackBerry is another good example; it ignored the
The problem is that, during its 10-year window of
threat of Apple’s iPhone when it debuted in 2007
opportunity, Kodak did little to prepare for the later
because it thought that iPhone is a substandard device
disruption. In fact, Kodak made exactly the mistake
and moreover BlackBerry was overconfident of its two
that George Eastman, its founder, avoided twice
million users. The rival product proved a hit with the
before, when he gave up a profitable dry-plate
public, however, and BlackBerry fell out of favor.
business to move to film and when he invested in color
Blackberry could not replicate its earlier success and,
film even though it was demonstrably inferior to black
in 2013, it was acquired by a group of investors and
and white film (which Kodak dominated for years).
broken up.
There are few corporate blunders as staggering as
HIH was Australia’s second largest and renowned
insurance company which went into provisional
About the author
liquidation on 15th March 2001. This was the largest
S. G. Afzal Biya Bani corporate collapse in Australia’s history, with total
Senior Insurance Specialist losses up to $5.3 billion. The members of HIH
Resident Editor - The Insurance Times management were charged as culprits, which led to
Saudi Arabia
their imprisonment.

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