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The Value of Vision: The Success (and Failure) of Kodak 

Updated: Jun 22

By Aaron Bazin



[This article is adapted from the new book The Vision Advantage: How to Curb Quiet Quitting, Build Resilience, and Create Growth currently available for pre-order] 


Born before the American Civil War in 1854, George Eastman was the youngest of three children and, by all accounts, had an unfortunate childhood. His father passed away when he was five, and he dropped out of school at fourteen to become a messenger boy for a local insurance firm. Although considered “not especially gifted,” he had the motivation and belief that he could move up in the world. He studied accounting during the evening and landed a job as a junior clerk at nineteen, making fifteen dollars weekly. 

 

A Picture-Perfect Vision 

 

At twenty-four, he bought a camera and photography gear for an adventurous trip to South America. He found the complete set of equipment expensive, cumbersome, and unwieldy. He saw an opportunity and formulated a vision that he would bring photography to the masses. Eastman was a true innovator in every sense of the word. He sought local experts and researched the latest technical publications on photography from London at the time. He began working in his mother’s kitchen to experiment with different ideas to reduce the equipment’s weight and simplify photography. Eastman worked tirelessly, sometimes falling asleep beside the kitchen stove. After three years of working during the day and conducting experiments at night, he had perfected a dry plate formula and a machine that allowed for their simple production. He quickly moved to patent his inventions and had early success, catching the eye of Henry Strong, who became a partner and investor. The business grew and, in 1892, became known as the Eastman Kodak Company, with Eastman inventing the word “Kodak” because it was short, easy to remember, and pronounce.

 

Eastman developed a simple short phrase that captured his enterprise’s unique vision: “You press the button, we do the rest.” This idea became central to his business and would later become the center of his marketing strategy. As he built this enterprise to deliver value as envisioned, Eastman held four core principles to lead his team. The first was a focus on the customer. Second was mass production at a low cost. Third was worldwide distribution. Fourth was extensive advertising. Later, he would add three policies to foster growth through continuing research, reinvesting profits in the business, and treating employees in a “fair and self-respecting” way. He stayed faithful to these principles, paying “dividends on wages” by distributing his profits to every employee, setting up a retirement annuity, and extending life insurance and disability benefits to his people, a proper caretaker.

 

The formula worked well for Kodak. They created the market by bringing both professional and amateur photographers groundbreaking technologies such as roll film, movie film, daylight film, the 35mm format the portable camera, nonflammable photographic film, and 16mm and 8mm home movies. At the time of his death in 1932, the company employed over 20,000 people, and he left behind over $1.6 million, which would be worth over $37 million in 2023 to his family and the Rochester Institute of Technology. Kodak’s success spanned decades and grew after Eastman’s death. By 1962, Kodak employed 75,000 people and earned more than $1 billion in US sales annually. By the 1970s, sales reached $3 billion. But unfortunately, the incredible success of Kodak is only half of the story.

 

The Picture Begins to Fade

 

Kodak brought on Steve Sasson in 1973 and set him to work on a charge-coupled device, an integrated circuit having an array of coupled capacitors. Steve began to work feverishly on how this technology could capture an image digitally. He scavenged a lens from a spare parts bin, constructed a series of circuit boards in series, and bolted a cassette recorder to the side. The Frankenstein monster of a device was about the size of a toaster. Finally, after two years of trial and error, he got it to work. Even though it took twenty-three seconds to capture an image and the resolution was .01 megapixel, 

 

Sasson did it. He had invented the world’s first working digital camera.

Precisely as George Eastman had done, Sasson had a vision and even brought it to life, but as he soon would find out, his leadership at Kodak did not share his vision. The first reaction from his managers was, “That’s cute, don’t tell anyone.” The company was confident that people looking at pictures on television had no potential. The print film had been around for decades, and no one was complaining. Their logic was that film was cheap and convenient, and the customer was happy, so there was no incentive to pursue digital photography.

 

The vision that Eastman had almost one hundred years earlier was dead. When Sasson patented his invention two years later, Kodak did not allow him to use the word “digital.” They called the device “A Hand-held Electronic Still Camera and its Playback System.” This moment was a tipping point for Kodak. Even though they had invented the most popular camera of the day, the lack of adherence to the vision of its founder was the first step toward its downfall. In 2012, Kodak declared bankruptcy. In 2023, the digital camera market topped $7.5 billion. Why had Kodak failed to follow the path to their earlier success, lost their drive for innovation, or gotten lazy? The answer, a lack of vision.

 

Conclusion

 

Kodak's rise and fall underscores a critical lesson for strategists: the peril of losing sight of a vision. When Steve Sasson invented the digital camera, Kodak's leadership failed to recognize its strategic potential, clinging instead to the comfort of their established film business. This myopic focus on short-term stability over long-term innovation led to their downfall, illustrating the dangers of neglecting second- and third-order effects in strategic planning.


Strategists must have a mindset where they can appreciate the cumulative and interconnected nature of strategic environments. Visionary strategies, like Eastman's, anticipate and lead change, ensuring adaptability and resilience. Kodak's story is a cautionary tale: without a forward-looking vision, even the most successful enterprises can falter. Thus, maintaining a dynamic, vision is paramount for enduring success in any complex, evolving environment.






 

 


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