Kodak died recently after a long illness. Meanwhile Fujifilm is doing quite well with a nice profit and a market capitalization of about 12.6 billion dollars. And yet, they started from the same place: an almost total dependence on film. They faced exactly the same situation: the end of the film based camera and thus, the need for film. They both saw this coming.
How is it that one failed to adapt in any meaningful way while the other transformed itself into a company able to succeed in the new world?
As early as 1979 Larry Matteson, a former Kodak executive, wrote a report detailing the shift from film to digital. He fairly accurately predicted the shift would be complete by 2010. In the early 1980s Fujifilm also realized that digital was going to replace film. Both began to think about what to do and how to change.
So how is it that their current situations are so different?
Unfortunately for Kodak, it had become a complacent monopolist that lost its ability to take big risks and move fast. It was caught in the mentality of creating perfect products before release rather than rapid development and release of products with ongoing improvement. Then there is the company town syndrome. Kodak never heard any criticism in Rochester and developed an insular management unused to divergent thinking, strenuous disagreement, and creative destruction.
Fujifilm meanwhile installed a CEO who took pre-emptive action. He rapidly attacked the situation and completely overhauled the company. He went out and purchased a collection of companies which seemed compatible with Fujifilm and were large enough to mean something to a multibillion dollar enterprise. He went on a high risk path and broke all kinds of rules of Japanese business in his quest to succeed.
If you think about this it’s kind of odd. If the names weren’t attached you might think that the Kodak story was that of a stereotypical conservative, slow to act Japanese company while the Fujifilm story was right out of Silcon Valley. In each case the current state of the company is not due to the country of origin but to the style and ability of the leader irrespective of nationality.
Which will you be?