Proof Kodak Was Doomed 14 Years Ago
Resistance to change apparently a long problem for EK
Eastman Kodak (NYSE:EK) is in it deep. While Kodak is is trying to stave off bankruptcy via restructuring, crippling debt and troubles turning a profit mean there isn’t much time on the clock. Back in November I wrote that Kodak stock was headed to zero, and at less than a dollar it looks like that prediction could be true before the year is out.
Amid all the mayhem, I got a great note from a reader last week. Floyd, who now lives in sunny California but was an employee of Kodak from 1965 to 1991, passed on an article written about the Rochester, N.Y., company’s trouble amid a changing business landscape.
Floyd passed on an article from the Democrat and Chronicle dated Jan. 5, 1998. The headline? “Can Kodak Make Necessary Changes” One excerpt reads, “The solution to Kodak’s problems is deceptively simple, but thwarted by a culture of fear in which management cannot afford the risk of ‘looking bad.’”
Click on the image to the right to enlarge it and take a peek for yourself.
Considering Kodak invented some of the first digital camera technology but refused to move beyond traditional film until it was way too late, that seems like an eerie commentary of a culture that persisted over the last 14 years and probably persisted long before this article was written.
Floyd adds his two cents:
“Thinking back to the late 80′s when I was a technician in the Copy Products Division, my co-workers and I would have discussions about the future of Kodak’s copiers. Back then, the digital age was just coming to light, so of course, we had no idea where that would end up.”
Later he wrote:
“I saved the story because back in October, 1988, I had submitted an idea to Kodak’s Office of Innovation describing a device wherein one could write with a stylus on an electronic display and that information would be sent to a large screen or a computer monitor. In spite of the fact that the company claimed it was looking for new ideas, this one, after being bounced around, went no place. Of course today, these things are everywhere.
Mr. Tuite’s article came out 10 years later and it kind of hit home. Kodak is a wonderful company, and I received three patents during my time in Copy Products, but I believe the thinking was too conservative when it came to pursuing certain new ideas.
I was fortunate to have been able to take advantage of the 1991 early retirement program. Actually, I had a 5-day window in which I qualified. Best move I ever made!”
Many thanks to Floyd for sharing his experiences, and this throwback article.
imagecredit: techgadget & democrat&chronicle
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Jeff Reeves is editor of InvestorPlace.com, where this article first appeared and a regular contributor to the Huffington Post. Write him at email@example.com. Follow Jeff Reeves on Twitter: www.twitter.com/JeffReevesIP
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When I worked in Kodak we submitted several ideas formally to Kodak Leadership in early 1990s. 1) Couple camera to a cell phone. This idea literally received giggles from management. How would you do that? Its far simpler for a person to get their pictures from a dug store from film! 2) Before Kodak Gallery went live, the idea was strongly pitched to management to host video clips as well as static images – Managemnt turned it down citing cost was high and nobody looked at video clips the way they do shoebox photos and customers couldn’t order prints of video clips – an important part of their so-called “model” of how to make money on digital. Kodak had their chance to be as good as Youtube or Apple with the Iphone But they always had an dillusion that printing pictures had to be involved, otherwise they wouldn’t make money – well look where it got them.
Funny to read this. I was also a copy tech with EK (1982-1999). sSome time in the 90’s, a friend’s father (who was quite savvy with investments) asked me my opinion of Kodak’s future prospects. I told him that with digital photography appearing sure to eclipse silver halide film technology, Kodak was sure to lose its cash cow and it a best case scenario, trade it for a ‘Me, too’ position in the digital arena. I did not know that Kodak would untimately fail, but I told him that barring an unlikely change in direction, that the company was sure to languish and decline.
It is interesting to hear an insider perspective. Looking from outside there appears to be so many points when Kodak could have changed its future and avoided the position it’s in today.
The most obvious being to embrace the opportunity ‘Disruptive Innovation’ like the Digital Camera presented and therefore shape the future of their category rather than try and prevent it changing.
I have pulled together some more thoughts on what Kodak should have done differently at https://blog.clear-ideas.com/