Leica Angst and the departure of Steven Lee (2008)
Leica has never been known for a drive for innovation. Leica was against the SLR, against automated functions in a camera, against AF and reluctant to accept digital technology. When Leica ventured outside familiar territory, it did not so well: prime examples are the M5 and the R8. Innovation was adopted when Leica made joint ventures with other companies, like Minolta and now Panasonic. Innovation in itself does not bring sound business: Zeiss was quite innovative with its product range, but had to close the doors. So Leica choose the better option?
The Leica company has seen a decade of turbulence and five CEO’s, three of them in the last five years alone: Coenen, Spichtig and Lee. Investors came and went: from Schmidheiny over Hermes to Mr. Kaufmann’s investment firm (ACM Projektentwicklung).
The company is evidently in disarray with a product portfolio that is not well suited for a sustainable growth for the long term.
The basic problem is that Leica has not changed while the environment has changed a lot. Based on bad experiences in the past, Leica has become a very conservative company, supported by a small and equally conservative clientele. Every proposal for change is looked at with mistrust. Having such a small market share and being unable to expand that market against the superior phalanx of the Japanese electronic and photographic companies, Leica is very reluctant, if not afraid to introduce products that have a chance to fail in the market. This attitude may explain Leica’s current almost obsessive attention to internet user groups, trying to find clues about user preferences. That this approach does not work, can be seen in the example of Apple, where Steve Jobs is the creative master and innovation pusher. I wrote about this in a previous comment.
Leica in the past made daring decisions and thrived. The M3 in its day was a shockingly innovative camera and a risky proposal. It is known that Leitz himself strongly opposed the manufacturing of the M3, because he was emotionally too close to the III-series which made Leitz a fortune and that camera still sold well at the moment of the introduction of the M3. The designers of the M3 were able to look a decade ahead and created a product not for the next day but for the next period.
In an interview given in April 2007, Kaufmann expands on his views about the restoration of the Leitz name and he gives hints that the forthcoming Leitz-Park in Wetzlar will be the start of a Leitz company that can be compared to the Volkwagen Group, with brands from Lamborghini to Bentley.
Steven Lee was appointed as CEO of the Leica company because the “ Californian vibe was desperately needed at the stuffy hidebound German firm”.
The ‘sacking’ of Steven Lee as CEO was certainly not the result of his interview with Amateur Photographer as the editor with hardly concealed pride of its impact on the German company notes. Most probably it was this culture clash that is at the root of that decision. In general American ways of leadership find seldom a fine reception in the Deutschland AG culture. Jurgen Schrempp of Daimler Benz is a famous but certainly not the only example.
I have had several very lengthy discussions with Steven Lee about all kinds of topics, and one of the themes that recurred every time was the difficulty of changing the culture of the management and the workforce. Where Steven Lee operates on a time scale of a year, the company prefers to think in a five year period. Lee tried to change that attitude of Angst for new ways of thinking and managing that fit more in an Apple style of company.
In an email letter to customers the owner of Camera-meister in Hamburg ( a well-known Leica dealer) is quite blunt in his pleasure that Lee has been removed from office. He gives a number of arguments why Mr Lee has been ‘sacked’ and these are quite different form the AP story. What is hardly disguised behind the arguments listed by Mr Meister is the attitude of conservatism regarding the product line and future developments.
If Mr. Lee is not the right person for the job that Mr Kaufmann had in mind, so be it. He at last had a clear vision for the future of Leica and strong ideas about what products were needed and how to design and manufacture them. But his departure comes at an awkward moment in time. The Photokina 2008 is only six months ahead and Leica needs to bring new products to capture the public’s mind and money. The Upgrade program is hardly a show stealer. For the price of the upgrade you can buy an excellent quality dSLR, but what you get is a new scratch-resistant glass and a silent shutter (not a new one, but the old one with some parts removed and replaced).
Reading the expectations that Leica watchers and magazine editors are spelling out almost weekly now, the company is about to launch a broad portfolio of new and exciting products from an M9 with 35mm sensor size, an R10 with the same sized sensor, a host of new lenses to fit onto the new AF body of the R10, a new series of Panasonic related cameras and as many of 14 new Leica lenses. Throw all these wishes into one basket and you will agree that this is impossible for a small company like Leica. Strong and consistent leadership is required to get even a few of these products on sale in 2008.
The removal of Steven Lee could also imply that California is from Venus and Solms is from Mars. Then the removal of a CEO is a minor stir in the restructuring of the company.
It could imply that the conservative powers within the Leica company will gain prominence, which would bode ill for the company.