Context

You are to consider the situation from the point of view of Mr. George Fisher, Kodak, CEO.

Situation[1]

How Kodak Failed (Adapted from: Mui, C. (January 19, 2012). How Kodak Failed. Forbes Leadership).

There are few corporate blunders as staggering as Kodak’s missed opportunities in digital photography, a technology that it invented. This strategic failure was the direct cause of Kodak’s decades-long decline as digital photography destroyed its film-based business model.

Steve Sasson, the Kodak engineer who invented the first digital camera in 1975, characterized the initial corporate response to his invention this way:

“But it was filmless photography, so management’s reaction was, ‘that’s cute—but don’t tell anyone about it.’”

Kodak management’s inability to see digital photography as a disruptive technology, even as its researchers extended the boundaries of the technology, would continue for decades. To understand how Kodak could stay in denial for so long, let me go back to a story that Vince Barabba, a former Kodak executive, recounts from 1981 when he was Kodak’s head of market intelligence.

Around the time that Sony introduced the first electronic camera, one of Kodak’s largest retailer photo finishers asked him whether they should be concerned about digital photography. With the support of Kodak’s CEO, Barabba conducted a very extensive research effort that looked at the core technologies and likely adoption curves around silver halide film versus digital photography.

The results of the study produced both “bad” and “good” news. The “bad” news was that digital photography had the potential capability to replace Kodak’s established film based business. The “good” news was that it would take some time for that to occur and that Kodak had roughly ten years to prepare for the transition.

The study’s projections were based on numerous factors, including: the cost of digital photography equipment; the quality of images and prints; and the interoperability of various components, such as cameras, displays, and printers. All pointed to the conclusion that adoption of digital photography would be minimal and non-threatening for a time. History proved the study’s conclusions to be remarkably accurate, both in the short and long term.

The problem is that, during its 10-year window of opportunity, Kodak did little to prepare for the later disruption. In fact, Kodak made exactly the mistake that George Eastman, its founder, avoided twice before, when he gave up a profitable dry-plate business to move to film and when he invested in colour film even though it was demonstrably inferior to black and white film (which Kodak dominated).

Barabba left Kodak in 1985 but remained close to its senior management. Thus he got a close look at the fact that, rather than prepare for the time when digital photography would replace film, as Eastman had with prior disruptive technologies, Kodak choose to use digital to improve the quality of film.

This strategy continued even though, in 1986, Kodak’s research labs developed the first mega-pixel camera, one of the milestones that Barabba’s study had forecasted as a tipping point in terms of the viability of standalone digital photography.

The choice to use digital as a prop for the film business culminated in the 1996 introduction of the Advantix Preview film and camera system, which Kodak spent more than $500M to develop and launch. One of the key features of the Advantix system was that it allowed users to preview their shots and indicate how many prints they wanted. The Advantix Preview could do that because it was a digital camera. Yet it still used film and emphasized print because Kodak was in the photo film, chemical and paper business. Advantix flopped. Why buy a digital camera and still pay for film and prints? Kodak wrote off almost the entire cost of development.

In 1989, the Kodak board of directors had a chance to take make a course change when Colby Chandler, the CEO, retired. The choices came down to Phil Samper and Kay R. Whitmore. Whitmore represented the traditional film business, where he had moved up the rank for three decades. Samper had a deep appreciation for digital technology. The board chose Whitmore. As the New York Times reported at the time,

“Mr. Whitmore said he would make sure Kodak stayed closer to its core businesses in film and photographic chemicals.”

Samper resigned and would demonstrate his grasp of the digital world in later roles as president of Sun Microsystems and then CEO of Cray Research. Whitmore lasted a little more than three years, before the board fired him in 1993.

For more than another decade, a series of new Kodak CEOs would bemoan his predecessor’s failure to transform the organization to digital, declare his own intention to do so, and proceed to fail at the transition, as well. George Fisher, who was lured from his position as CEO of Motorola to succeed Whitmore in 1993, captured the core issue when he told the New York Times that Kodak:

“Regarded digital photography as the enemy, an evil juggernaut that would kill the chemical-based film and paper business that fuelled Kodak’s sales and profits for decades.”

Fisher oversaw the flop of Advantix and was gone by 1999. As the 2007 Kodak video acknowledges, the story did not change for another decade. Kodak now has a market value of $140m and teeters on bankruptcy.

Instructions

Describe the current state of Kodak. You may make reference to recent history;
Describe the existing leadership from the lens OF PERSON, PURPOSE, POSITION and PROCESS within the industry;
Thoroughly review the main challenges facing Kodak.
Discuss the impact of these challenges on Kodak over the next 5-10 years. Your concept(s) must be justified and supported so you need to refer to theories, principles and models from some academic journals.
Provide recommendations as to how your will address these leadership challenges. Remember, this is a class in leadership, so stay focused on all leadership in your report.

Report Requirements

The student is to prepare and deliver a report which discusses the findings of your analysis. The report length is not to be less than 2500 and not more than 3500 words.
The report may take a number of different formats for submission. However, the report is an academic piece of writing and requires that you form a case and put forward an argument. You are required to demonstrate your understanding of the topic/issue, and ability to state an argument for a particular point of view or justify your analysis, the findings reached, recommendations made, and conclusions reached. You are required, as in any piece of academic writing, to provide theory references to support your report where required and appropriate.
Remember that the audience for this report would be senior management at one of the world’s largest companies. Let’s avoid the use of jargon, trite phrases and generalizations and don’t talk about “the case”, talk about the situation Kodak is facing.

You are required to cite all your sources! Please refer to only acad
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Posted on May 1, 2016Author TutorCategories Question, Questions