Conversations in Management: Kodak

I have a very high threshold for the opinions of the uninformed.

Antonio Perez

Brownie_StarflexKodak emerged from bankruptcy protection on September 3. It’s a good thing the name is still atop the Rochester, NY headquarters building because if it wasn’t for the sign, you wouldn’t know it’s the same company. Gone are the easy to use cameras and the film in snappy red and yellow boxes. Gone, too, are pension and health benefits for many Kodak retirees, 96 cents on the dollar for Kodak creditors and, well, everything for Kodak investors. This comes after the closing of 130 processing labs, 13 factories and the loss of more than 47,000 jobs before entering bankruptcy. The new Kodak severs all ties with the consumer market that made it one of the world’s most recognized brands and a benchmark for product innovation. One of those innovations was the Brownie camera. Introduced in 1900, the Brownie made photography a national obsession. Overnight, albums, wallets and dresser drawers began filling up with snapshots. From film rolls to the Instamatic’s cassette to digital photography, Kodak led the way. That last item might surprise you. Digital photography was actually pioneered by Kodak in 1975 and they produced one of the first consumer digital cameras with Apple in 1994. By 2005, Kodak ranked first in U.S. digital camera sales. Then the bottom fell out. None-the-less, Kodak Chief Executive Antonio Perez was optimistic about the future of the company. “We have the right technology at the right time as printing markets increasingly transition to digital,” he told the press. The new Kodak, slimmed down to 8,500 employees and retaining the relatively few patents that weren’t sold to companies like Amazon, Google and Apple at fire sale prices, will focus on commercial printing. Only time will tell if this plan works out, but it’s pretty obvious that none of it makes for a Kodak moment.

 It isn’t easy to see what exactly caused Kodak’s demise. The market shift from high margin film to low margin digital cameras didn’t help. But other companies successfully weathered similar disruptions even without Kodak’s well-earned reputation for quality and innovation. The problem most likely resides in the murkier regions of corporate culture and decision-making. George Eastman’s Kodak of the 1890s and early 20th century was a nimble organization that bore little resemblance to the hierarchy-bound Kodak facing the 21st. Project managers and engineers complained that new ideas had to run a bureaucratic gauntlet and high potential initiatives were sidelined in favor of executive pet projects. Ironically, those at the top complained of cultural issues as well. The chief operating officer grumbled he couldn’t get people to openly disagree with him, “If I said it was raining, nobody would argue with me, even if it was sunny outside.”

That brings us back to the, “opinions of the uninformed.” Kodak made photography accessible to anyone. And for over a century they introduced better ways to make better pictures. Yet somewhere along the way, they came to believe that only leadership knows best. They continued to innovate, but without urgency or enthusiasm. They relied on plans and strategy and stopped taking breakthrough risks. Kodak had a rich and committed talent pool. Listening to those voices might well have saved the company but they were uninformed. Leadership didn’t hear them. What about you? Are you listening to the uninformed? Are you mistaking differing opinions for being uninformed? Are you willing to take a chance?  Don’t miss your own Kodak moment.            —Ebert

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