In Relentless Innovation one of the conclusions that I draw late in the book is that any firm seeking to become a Relentless Innovator must have a Cortez moment. That is, some dramatic event must take place that forces the organization to come to grips with the fact that things have changed, and nothing will be the same as it was anymore.
The idea of a Cortez moment comes from the potentially apocryphal story that describes Hernando Cortez’s landing in the new world. The story goes that he burned his boats to deny himself and his conquistadors any chance of turning back. Their only choices were to hunker down on the beach or to push on into the unknown.
A corporate example of a Cortez moment is when Arthur Lafley, the CEO of P&G announced his goal that 50% of all P&G products would originate from ideas generated outside the company. This, from the firm with the largest R&D staff in the consumer packaged goods space. He admitted, then and later, that regardless of the size of his R&D staff there were far more ideas outside the firm than inside the firm. This, and his continued focus, changed everything.
At Kodak, Anthony Perez, one of the former CEOs of Kodak, declared a Cortez moment when Kodak realized that the film business that had been its bread and butter was being decimated by digital photography. He even declared it a Cortez moment to Businessweek Magazine. However, instead of pushing on into the unknown, it seems much of the Kodak culture decided to hunker down on the beaches rather than disrupt the status quo. This article, written in 2006, captures much of the challenges that Kodak faced, and its clear that Kodak hasn’t embraced the changes necessary for survival. Six years on, Kodak has withered away rather than pushing on into new spaces. This was an attempt at a Cortez moment, but the culture didn’t follow.
If your culture is already innovative, you may not need a Cortez moment to become a Relentless Innovator. If your culture is a business as usual culture focused on short term financial goals and efficiency, you’ll need a Cortez moment to wake the culture to the need for change, and enough leadership acumen and commitment to lead them into the unknown in order to effect the change.