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Kodak and the Brutal Difficulty of Transformation - Scott Anthony - Harvard Business Review

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Kodak and the Brutal Difficulty of Transformation
by Scott Anthony | 12:46PM January 17, 2012

2012 has not gotten off to a great start for Eastman Kodak. Three of the company's directors quit (http://blogs.hbr.org/cs/2012/01/protecting_boards_from_disrupt.html) near theend of last year, and word recently emerged (http://www.reuters.com/article/2012/01/05/us-eastmankodak-idUSTRE8031TQ20120105) that the company was on the brink of filing for Chapter 11 bankruptcyprotection. The easy narrative is that Kodak is a classic case of a company blind to the disruptive changes in its marketplace. Like many easy narratives, this one is not quite right. In the 20thcentury, Kodak was truly one of the world's powerhouses. Its rise to prominence began when it launched its affordable Brownie camera (http://en.wikipedia.org/wiki/Brownie_%28camera%29) in 1900. In thedecades that followed Kodak established a dominant position in the lucrative film business, with its "you push a button, we do the rest" slogan demonstrating its commitment to making photography accessibleto the masses. Of course, being a dominant film provider became increasingly irrelevant in light of recent technological shifts. Today people turn to digital cameras embedded in their mobile phones,share pictures over the Internet, and eschew prints altogether. Kodak wasn't blind to this shift. It created a working prototype of a digital camera in 1975. The engineer behind that project, SteveSasson, offered a memorable one-liner (http://www.nytimes.com/2008/05/02/technology/02kodak.html?pagewanted=all) to the New York Times in 2008 when he said management's reaction to his prototype was,"That's cute — but don't tell anyone about it." But Kodak did invest heavily in digital imaging — billions of dollars — and carved out a reasonable position in the digital camera space with its line of...