COMMENTARY | Kodak is bankrupt. It filed for Chapter 11, as announced in a letter to customers today by Antonio Perez, Chairman and CEO. Kodak’s moment is now, and it is not smiling.
As the star of films — photographic films, that is — Kodak was bypassed by the digital imaging age. Slow to take up with technology, Kodak saw the likes of photo masters, Nikon and Canon, abandoning the darkroom for a complete reinvention of the imaging process. Capturing an image would still require a camera, but converting and viewing the image would require digital electronics, not film.
In the innovation business, we call this jumping to a new S-curve, also called a learning curve. It is the place and time where old companies die because they have learned all there is to learn about their own products, while new companies are born because they are learning fast about something new. The new product is similar, maybe even looks the same, but the process by which it functions is entirely new and different.
Kodak clung to its old S-curve, producing pictures on paper through film for image capture and processing chemicals for developing the image. The new S-curve changes all that, taking images — from start to finish — into the domain of electronics.
Kodak’s R&D labs in Rochester were among the first to actualize the idea of an Office of Innovation. It was the late 1980s when Kodak scientists scoured their collective inventiveness for new ideas and new directions for products. Others saw the coming of “electronic photography” but Kodak didn’t, preferring to stick to what it knew best — the chemistry and materials science of films and film processing. It monopolized the domain of film photography and perfected that technology to be all it could be.
But, companies like Kodak face the assault of change that challenges its core competencies. A quandary presents itself in that painful place between S-curves. This is the place where companies do what they do well but are being usurped by completely new ways of doing the same thing at much less cost. While the new technologies are expensive at first, costs reduce dramatically in time. So, we can still take pictures on film, but oh so much cheaper to go digital. In the meantime, companies that cling to the old technologies simply don’t make it for the lower cost and greater convenience of the replacement.
Kodak says it is poised to move into the digital world and will continue to serve its customers. Kodak may even continue to serve die-hard color-print film photographers like me. But, Kodak had decades to get on board with electronic photography and didn’t.
I’m wondering whether I’ll ever have another Kodak moment again. Kodak had its moment and chose — or couldn’t — move on.