UNC Men’s Basketball is Having a Kodak Moment–and Not in a Good Way

University of North Carolina at Chapel Hill men’s basketball coach Hubert Davis is a Carolina guy all the way through. For better and for worse. 

Davis played for coach Dean Smith from 1988 to 1992. While UNC won a national championship in 1957, it was Smith’s reign from 1961 to 1997 that established and defined Carolina basketball as elite. Smith was consistently excellent. He won two national championships, coached his teams to 11 Final Fours in four different decades, and retired as the winningest coach in college basketball history. 

Smith was a great teacher who viewed himself as an extension of the faculty. He loved to win, but he was also a grounded man who wanted to prepare his players–stars and scrubs alike–for life after basketball. His players revered him. Kenny Smith, a Carolina star in the 1980s (and Charles Barkley’s sidekick on TNT’s “Inside the NBA”), once said of his coach, “It was like playing for Gandhi. It wasn’t playing for a basketball coach. It was a life lesson every day.” 

Dean Smith wrote a book called The Carolina Way about pursuing excellence with integrity. At the core was the belief that team-first organizations could act ethically and succeed. The Carolina Way, which was unofficially adopted by the UNC athletic department as its mantra, was The Right Way. Whether The Carolina Way was much different from how competitors like Duke University or the University of Virginia operated is open to debate. But Davis cherishes the idea that it was special. 

Davis’ fourth season as head coach has been a disappointment. After being ranked No. 9 in the preseason, the six-time national champion Tar Heels are struggling to qualify for the 68-team NCAA tournament. If they come up short, it would be the second time in Davis’ four years that UNC didn’t make the field. 

Perhaps paradoxically, Davis’ belief in the uniqueness of The Carolina Way and the former players who helped build it might be an obstacle to attaining the excellence for which the program is known. It wouldn’t be the first time that a highly successful organization was a victim of its own success.

An Insular Culture

Like UNC basketball, the Eastman Kodak Company had a powerhouse brand. The company brought photography to the masses in 1900 when it launched its affordable Brownie camera. Kodak became synonymous with quality photography and dominated film-related sales in the era before digital took over. Its ad campaigns featured “Kodak Moments”–the memories we wanted to cherish, captured forever on film and printed photographs. 

The company, which was founded in the 1800s in Rochester, New York, once employed 145,000 people worldwide. But in 2012 it filed for bankruptcy, unable to adapt to consumers’ switch to digital. It left its legacy businesses, sold its patents, and became a much smaller company.  

Kodak’s fall was dramatic, and much has been written about the company’s decline. It’s not that Kodak didn’t see change coming; it invented the digital camera in 1975. But Kodak wanted to preserve print photography, which was an important part of its business.

It made a prescient purchase when it acquired a photo-sharing site called Ofoto in 2001, wrote Scott D. Anthony in the Harvard Business Review in 2016. Kodak could have pioneered a network where people shared photos, personal updates, and links to news. It could have been Facebook before Facebook, which launched to the public in 2006.

But Kodak used Ofoto to try to get more people to print digital images. It sold the site to Shutterfly as part of its bankruptcy plan in 2012. “Where they failed was in realizing that online photo sharing was the new business, not just a way to expand the printing business,” Anthony wrote.

Why did Kodak fail? Numerous business school and journalistic autopsies cite a variety of factors, but one is perhaps most relevant to the current malaise of Carolina basketball–Kodak’s insular culture. 

The New York Times published one of the early articles about Kodak’s challenges in 1988, even before the widespread use of digital cameras, as the company was struggling to thrive in a faster, more competitive, and more international business climate. 

“If any one word could have described Kodak’s old culture, it would have been insular,” the Times’ Claudia H. Deutsch reported. The company, which had a yellow-and-red logo, was known as the Great Yellow Father for its cradle-to-grave relationship with employees. 

“Kodak’s world was bounded by its Rochester headquarters,” Deutsch wrote. “It was international in the sense that up to 40 percent of its revenues came from outside the United States. But as far as Kodak was concerned, the only worthwhile ideas or processes were those that originated within its labs and offices.”

Kodak sensed that its business was changing. It invested in research and development, created the digital camera, and had a portfolio of more than 1,000 patents in digital imaging. But it could never quite adjust to the disruption caused by changing consumer habits. 

The University of Pennsylvania’s Wharton School of Business assembled a team of five professors in early 2012, a few weeks after Kodak filed for bankruptcy, to discuss why the company had failed to adapt. 

Kodak tried to protect its existing cash flow rather than look at what the market wanted. The company’s isolation didn’t help, said marketing professor George S. Day, co-director of the school’s Mack Center for Technological Innovation.

“They had a very insular culture, sitting up there in Rochester,” Day said. “They recognized the threat, but tried to deal with it on their own terms.” 

As the company emerged from bankruptcy a year later, marketing consultant Avi Dan, writing in Forbes magazine, also referenced the company’s “insular corporate culture.” Successful companies can become myopic, he wrote, and Kodak underestimated the digital revolution. 

“Kodak’s story of failure has its roots in success, which made it resistant to change,” Dan wrote. 

Ruffling Feathers

Which brings us to Coach Davis. For his most prominent staff jobs, Davis has hired almost exclusively people like himself–Carolina basketball guys. Brendan Marks, who covers UNC basketball for The Athletic, has noted this theme several times recently, as UNC has struggled through a disappointing season. 

All five of Davis’ assistant coaches are former UNC players. 

“Davis believes that only one-time UNC players can fully understand what it takes to be successful at UNC, that someone must have walked in those exact shoes to take flight in Chapel Hill,” Marks wrote after Duke routed UNC a few weeks ago. “Never mind that [former UNC coaches] Dean Smith, Roy Williams, Frank McGuire and Bill Guthridge never suited up for the Tar Heels, and they all seemed to work out OK.” 

Williams, Davis’ Hall of Fame predecessor, had several long-time assistant coaches who did not play for UNC. 

Kodak’s chief competitor was Fujifilm, which was subject to all the challenges Kodak faced. But Fujifilm recognized early that print photography was a doomed business and successfully diversified by matching its existing in-house technologies with future growth markets, wrote the filmmaker and consultant Oliver Kmia in his 2022 analysis, “Why Kodak Died and Fujifilm Thrived: A Tale of Two Film Companies.”

Davis, 54, also faces a younger, more adaptable competitor, this one just down the road in Duke’s 37-year-old Jon Scheyer. Like Davis, Scheyer also is coaching at his alma mater, another highly successful program that, until he took over in 2022, also was insular. 

Marks noted that while Davis has focused on hiring Carolina guys, Scheyer has gone beyond Duke in filling key positions, even hiring a woman with no Duke background, Rachel Baker, to be his general manager. Scheyer cited her “decade of experience in the business of basketball” working at Nike and in the NBA. 

He also hired Jai Lucas, then a University of Kentucky assistant coach, who also did not attend Duke.

“Did it ruffle a few feathers?” Marks wrote. “It almost doesn’t matter now because Baker and Lucas have become integral to Duke’s success.” 

Lucas, 36, who built Duke’s stout defense, is reported to be the top candidate to become the University of Miami’s next head coach, an indication that Scheyer has an eye for spotting coaching talent, regardless of whether it matriculated at Duke. Another Scheyer assistant coach also did not play at Duke.

Carolina fans are restless. From 1975 to when Davis took over in 2021, UNC missed the NCAA tournament only three times; Davis is in danger of missing the tournament for the second time in three years. UNC’s record against its highest-rated opponents this year (known as Quad 1 games) is 1-10. 

Overall, Carolina is 18-11. UNC, which owns a current four-game winning streak, has played better lately (albeit against lesser teams), and Davis seems likely to return next season; his contract was extended in December and runs through 2030. If for some reason Davis leaves, Marks says the school should not hire another Carolina guy as coach. “It frees North Carolina to strictly hire the best basketball coach it can,” he wrote. 

If the next Carolina coach comes from outside the family, it would be the first time since 1961 that the UNC men’s basketball team was not led by Dean Smith or one of his former players or assistants. 

‘Carolina’s Carolina’

Davis didn’t invent UNC’s keep-it-in-the-family approach, but he’s taken it up a notch. 

He loves The Carolina Way. Much of Tar Heel Nation has backed away from the phrase after a 2014 investigation revealed that UNC had used hundreds of phantom classes to keep athletes, including men’s basketball players, academically eligible from 1993 to 2011. But Davis still believes UNC is special. 

In preseason comments, he acknowledged the emergence of new factors, especially that players can now be paid and have the opportunity to transfer every year. But he said he wasn’t changing his foundational beliefs–that playing for UNC means being elite on the court, in the community, and in the classroom. 

“It just is what it is: Carolina’s Carolina,” he said in October. “I’ve gone through it. I believe in it. It’s proven that it works. And as long as I’m head coach, that will never change.” 

After last season, Davis knew he needed a veteran big man to replace 6-foot-11 Armando Bacot, UNC’s all-time rebounding leader. But Davis struck out on several of his top targets, who instead transferred to schools like the University of Arkansas and the University of Alabama. 

Those schools, both in the Southeastern Conference, don’t have UNC’s tradition of basketball excellence, but they very well might have offered more money. Payments to players are not public record, but CBS Sports reported in August that most coaches believe Arkansas has the most money to spend on players.

“This is not a transactional program,” Davis said. 

The News & Observer’s Andrew Carter wrote, “Just about everything about college athletics is more transactional than it used to be, and yet Davis aspires for his program to be an exception.” 

As he met with reporters before the season, Davis wore a small button on his sportcoat lapel with Dean Smith’s initials, as he also does for games. Smith’s focus on doing things the right way was admirable. But there’s another part of Smith’s career that Davis could emulate, and that’s Smith’s creative streak that made him one of college basketball’s greatest innovators. 

Smith, who died in 2015, succeeded over four decades because he adapted to the era. He started his head coaching career in tiny Woollen Gym and finished in the spacious Dean E. Smith Center. He coached against Adolph Rupp, who first led Kentucky in 1930, and he coached against Rick Barnes, who was born a half century after Rupp and whose current Tennessee team is in the Top 10. 

Smith won when dunking was banned, and he won when the 3-point shot and shot clock were introduced. He won before racial integration, and he won after integration (indeed, he led the way to integration, perhaps the best example of how he was both moral and forward thinking). He had core principles, but he was adaptable. 

Davis might be coming around about the need to change. He said recently that he would hire a general manager, which was one of the first things Scheyer did in 2022 when he took over at Duke. With players permitted to make endorsement deals and change schools every year through the transfer portal, it can be a full-time job to assemble and maintain a roster, as it has been forever in professional sports. 

“The old model for Carolina basketball just doesn’t work,” Davis said on his radio show in early February. “It’s not sustainable. It has to build out, because there’s so many things in play with NIL [Name, Image and Likeness payments to players], the transfer portal, agents, international players. You just need a bigger staff to be able to maintain things.”

On Tuesday, UNC announced that it had hired sports agent Jim Tanner to be the basketball program’s first general manager. Tanner is a 1990 graduate of UNC, where he was a prestigious Morehead-Cain Scholar, but he did not play basketball. He’s represented more than 70 NBA players, including 17 former Carolina players. 

UNC Athletic Director Bubba Cunningham said a general manager was “essential to continue to compete at the championship level in college basketball”—what Duke’s Scheyer recognized three years ago. 

In times of change, business consultants like to ask: What business are you in? If you’d asked Dean Smith that, he would have strongly objected to the question. Now, the answer for big-time college basketball coaches is clear: Like it or not, you’re in the business of professional basketball. 

When UNC hired Bill Belichick to coach football, with his six Super Bowl championships and $10 million annual salary, it showed that it considered itself a major league sports franchise. Belichick, who has hired a general manager, promised that his UNC players “will be pros in all areas.”  

In a statement, Tanner said he’d use his experience “to help position UNC as strategic, adaptive and innovative” in scouting and recruiting players, “while staying true to the principles and values that have defined Carolina Basketball over the years.” 

Kodak tried to adapt, too. Amid disruption, it’s difficult for historically successful operations to determine which of its habits to keep and which to abandon–when to stick with tradition and when to change. 

That’s part of what Harvard business professor and consultant Clayton Christensen, an influential thinker about change and management, called “The Innovator’s Dilemma.” And that’s what Coach Davis has to figure out.