Page 30 - Insurance Times March 2022

BIGGEST RISK

MANAGEMENT

FAILURES

W hen someone talk about the biggest Risk There are few corporate blunders as staggering as Kodak’s

missed opportunities in digital photography, a technology
Management failures in corporate world,
the very first name comes to any ordinary
that it invented. This strategic failure was the direct cause
person’s mind is Kodak which collapsed
photography destroyed its filmbased business model.
after 124 years in operation, just because of their failure to of Kodak’s decades-long decline into bankruptcy as digital
foresee how quickly the world would embrace digital images Corporate history is littered with many more such examples,
and was never able to catch up with the competition even companies that adopted the wrong strategy and paid the
after eventually changing track. ultimate price for their risk management failures.

The problem is that, during its 10-year window of BlackBerry is another good example; it ignored the threat
opportunity, Kodak did little to prepare for the later of Apple’s iPhone when it debuted in 2007 because it thought
disruption. In fact, Kodak made exactly the mistake that that iPhone is a substandard device and moreover
George Eastman, its founder, avoided twice before, when BlackBerry was overconfident of its two million users. The
he gave up a profitable dry-plate business to move to film rival product proved a hit with the public, however, and
and when he invested in color film even though it was BlackBerry fell out of favor. Blackberry could not replicate
demonstrably inferior to black and white film (which Kodak its earlier success and, in 2013, it was acquired by a group
dominated for years). of investors and broken up.

About the author HIH was Australia’s second largest and renowned insurance
company which went into provisional liquidation on 15th
S. G. Afzal Biya Bani March 2001. This was the largest corporate collapse in
Senior Insurance Specialist Australia’s history, with total losses up to $5.3 billion. The
Resident Editor - The Insurance Times members of HIH management were charged as culprits,
Saudi Arabia which led to their imprisonment.

30 The Insurance Times, March 2022