In the 1970s, Kodak was close to synonymous with photography. Photos were everywhere, capturing family moments to large functions to vacations in faraway lands. If you held a photo in your hand, it was more than likely made with a camera or film or paper from Kodak. The Rochester, NY, based company was the world’s leading expert on Silver Halide compounds, which were made with Silver and one of the Halogens such as Bromine, Chlorine, Iodine and Fluorine. These compounds are light-sensitive and are commonly used in photographic film and paper. Kodak was proud of its expertise that it had built over decades of research and refinement. Its position looked unassailable (at its peak, it controlled nearly 90% of the global market).
In 1975, one of its young engineers, Steve Sasson (pictured above), developed “a portable, battery-operated self-contained digital camera”. It was crude, used only 10,000 pixels (compare today’s cell phone images with over 10,000,000 pixels), recorded only black-and-white images and took 23 seconds to capture one image. When Sasson presented it internally, the reaction wasn’t of excitement, but of discomfort and skepticism. His leaders saw the technology as interesting but distant, inferior and potentially disruptive to their core film business. He patented the camera in 1978 but was told not to talk about it outside the company.
Sasson continued to work on the camera as a side-project, and in 1989, he and a colleague created the Ecam, the first modern SLR (single lens reflex) with memory cards and a 1.2-megapixel sensor. And yet the company wouldn’t have any of it. Why? Because digital photography threatened Kodak’s core business of film, chemical processing and recurring revenue. In a classic case of cognitive dissonance, the company knew it had something valuable but did not want it to succeed.
Meanwhile, competitors like Canon and Sony, having no such baggage, moved fast, and boldly. By the late 1990s, digital cameras improved rapidly, costs dropped and consumers’ behaviour shifted. Kodak pivoted but too late. They were competing in a space they no longer led, and in 2012, filed for bankruptcy.
What went wrong at Kodak was a failure in leadership, not technology. The company did not miss the future. They saw it but chose to protect the past. They:
- Dismissed the invention out of fear of losing existing business
- Focused on products but not on customer outcomes (capturing and sharing memories)
- Failed to see the potential of the new product and considered it a side-project
- Underestimated how much technology can improve with time
- Suppressed internal discussion of the invention
- Failed to give space and resources to the new technology
- Acted too late
Today’s leaders can learn much from the missteps of Kodak. They can listen carefully to the good ideas their top innovators bring them. They can put some psychological distance between themselves and their ‘cash cows’ and ask, “What could make this obsolete?” They can recognize that even large disruptions start as small blips on the fringe; they rarely arrive fully formed. They can build a culture that does not punish disruption but rewards it. In Sasson’s own words, “it's difficult for companies that have been successful for so long to actually change their approach. That's what you have to do, but it is not that easy.” As we face our own “Kodak moments”, (AI vs traditional workflows, automation vs manual expertise, new revenue models vs legacy revenue, old skills vs new skills), can we see with courage and clarity what we are holding on to because of comfort and stasis and what really needs to be done?
Do you know of any examples of how companies and individuals have pivoted with guts and thoughtfulness? I would love to hear your stories.