A Disastrous Kodak Moment
But back to the main story.
If you're not familiar with Kodak, it's the leading film and imaging brand in America. Um, check that. it used to be the leading film and imaging brand in America, long before the likes of Fuji kicked its silver nitrate-based ass in the marketplace. Kodak, at one time, had indeed been the leading brand in its space, with a stranglehold on everything and anything having to do with photography. If you're over the age of 40, chances are your first and second and third cameras were Kodaks. You probably loaded those cameras with Kodacolor film, which you took to your local drugstore to have processed on Kodak paper. If you were serious enough, you filled your own darkroom with Kodak processing chemicals and printed your family portrait of the dog on Kodak paper.
Life before 1980 was indeed a Kodak world. The brand was so strong, in fact, that people would squinch up their noses at the very thought of printing or processing on anything less. Full-length motion pictures were shot, edited and distributed on - you guessed it - Kodak film.
It was a fun party while it lasted. Another victim of Caretaker Management Syndrome, the boys over at Kodak barely sniffed when the folks from Fuji stepped ashore. After all, they reasoned, "We're Kodak. We're a Dow 30 component." It's true. They were.
They aren't any more.
I'm not sure if Kodak people walk around with their heads tilted to the side, but every graph you could find from 1980 onward showed a consistent trend pointing downward. Kodak was bleeding market share. Something had to be done. And Kodak did what Caretaker Managers do best:
Ignored it. Played a little golf. Sold a few more stock options.
Kodak had its big chance to get back in the game a few years later. These little toys called "digital cameras" began to appear. It was a letter-high fastball for Kodak. All they would have had to do - what their shareholders were begging them to do - was slap a Kodak logo on to a digital camera and leverage their brand strength into the digital market.
Kodak management thought it over. Played a little more golf. Sold a few more options. Then decided that they held too much interest in the silver market to actually hasten the demise of silver-nitrate based photography.
Once more, the Board of Directors sprang into action: They totally ignored the digital explosion.
I hope you've saved the May 12, 2005, edition of the Los Angeles Times. If you can, look up page C6, where you'll find a wonderful shot of two smiling, desperate executives. The shot depicts outgoing CEO Daniel Carp forcing a smile as he hands the reins of the company over to Antonio Perez. For those of you without a scorecard, Mr. Perez is charged with navigating the good ship Kodak off of the rocks on to which Captain Carp wrecked it.
Like Napoleon, Captain Carp is "leaving" an empire in a shambles. Of course, that's not how he's spinning it. Carp's flacks will likely tell you that he restored the company to profitability and "embraced digital technology." What he won't tell you is that he "restored profitability" by slashing overhead, employees and costs. He did it by completely avoiding any investment or innovation in Kodak's future. He "embraced digital technology" with two out in ninth, when it was agonizingly clear that everyone BUT Kodak was already in the game.
Cutting costs and starving the business to make plummeting revenue look good. Now there's a tough gig. Figuring out that digital technology is where the market is headed - almost a decade after everyone else has jumped into the market. Amazing.
And what are First Mate Perez's qualifications? Well, to begin with, he was hand-picked by Mr. Carp. Let's pause for a moment and consider that: The successor to the man who wrecked a brand giant was actually hand-picked by the man who engineered the brand's historic, disastrous decline. And what are Mr. Perez's qualifications for resurrecting the once-great Kodak brand? He's a statistical analyst who did hard time at Hewlett-Packard. They're bringing in a numbers guy to fix a brand problem. No wonder the two of them look as miserable as they do.
It's just another wonderful Kodak moment.