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No matter how Eastman Kodak Co.'s Chapter 11 reorganization ends, it's likely that CEO Antonio Perez will be known as the guy who steered a great American company into bankruptcy. Many people blame Perez for Kodak's plight and say that if he isn't fired, there's no hope for the firm.
Kodak's chief executive has bigger concerns than what company watchers think, but he might take some small comfort in knowing he's hardly the first Kodak leader to be called clueless or incompetent or simply in it for the money.
Scathing criticism is understandable, given Kodak's epic decline. But is it accurate? Has Kodak been led by deer-in-the-headlights CEOs who stood frozen in place as disruptive innovation ran over the company?
I've had the chance to talk at length with each Kodak chief executive since the late 1980s. All of them-Kay Whitmore, George Fisher, Daniel Carp and Perez-struck me as intelligent, thoughtful and not daunted by the challenges Kodak faced. They also seemed capable of acknowledging and learning from mistakes. The fact that all four-two seasoned insiders and two highly regarded outsiders-struggled to reinvent Kodak says something.
I talked with Whitmore in May 1990, less than a month before he succeeded Colby Chandler at the helm. After peaking at 60,800 in 1982, Kodak's local employment had fallen below 43,000. He readily acknowledged that critics were losing patience with the company.
"If we are to be criticized," he said, "I believe it's for not continuously changing. ... We suffer the problems of a tremendously successful company. And when you're a tremendously successful company and the world changes, you have difficulty making the culture change."
Kodak engineer Steven Sasson had created the first digital camera in 1975, and Whitmore clearly grasped what it meant for imaging. "We will not be successful," he observed, "trying to do things in an electronic (imaging) environment using the same set of skills that it takes to be successful in a chemically based environment."
Whitmore was let go three years later; Wall Street was disenchanted with the $5.1 billion acquisition of Sterling Drug in 1988 and thought he'd been too slow to cut costs.
The interview with Whitmore's replacement, Motorola Inc. star George Fisher, took place in May 1994, roughly six months after he'd arrived at 343 State St. and a few weeks after he had disclosed plans to divest Sterling and unveiled his imaging strategy to the investment community.
Fisher possessed an easy confidence and a technologist's grasp of Kodak's core problem. He believed in a future with room for both digital and conventional photography. "You have a choice in life with technologies like silver halide to say, 'OK, it's dying. Let's milk it,' which is what the financial analysts tend to want you to do. Or you have the chance to say, 'Hey, there are fundamentals in this technology ... that can't be replaced by any other technology.'"
Asked whether he'd ever failed, Fisher replied: "Oh yeah, lots, lots. ... I hope at Kodak that we can get to the point where people don't fear failure, that the sin is not trying."
But, of course, failure has consequences too. In 1997, as Fisher was forced to announce another huge downsizing, he told the Street: "We are out of denial now. We were wishing (the problems) would go away. We were deluded by our own thinking."
Fisher stepped down at the end of 1999, a year before his contract was up. His successor, Dan Carp, was a nearly 30-year Kodak veteran. Fisher, the first outsider to run Kodak, left with the turnaround job, at best, incomplete. Many thought he had been shown the door.
When Managing Editor Mike Dickinson and I interviewed Carp, he'd been at the helm for three and a half years. The local workforce had dropped below 22,000, and on his watch Kodak's stock had lost roughly two-thirds of its value.
Carp described Kodak's four growth strategies: expanding the benefits of film, driving output in all forms, making digital easy for consumers, and pushing into new markets and businesses. When we asked him to grade the company in each of those areas, he opted to answer the question more broadly.
"The piece I'm not comfortable with is we are not executing very well. We've made progress. ... But we're really not great executors.
"And it's not really clear to me why that is," he continued. "Other than manufacturing, there is not really much of an appetite for very good execution."
His candor stunned us. It also was revealing: He knew that Kodak's difficulties were not limited to the decline of film.
The Perez interview occurred in June 2010, at the five-year mark in his tenure as CEO. Since he had joined Kodak in 2003, it had become a much smaller company-down to some 7,400 local workers and $7.6 billion in annual revenues from $12.8 billion seven years earlier. Kodak also had ceased to be the photo giant; it was a digital enterprise focused on consumer and commercial inkjet printing.
By 2003, Perez said, Kodak's board was keenly aware of film's secular decline. The directors wanted him to create a new digital company using the know-how and assets Kodak already possessed.
"Some would say we were 20 years late," he noted. "And this is not a criticism of the past; I know the people that managed this company before, and I think they were very competent people. Things happen in industries and technologies, and the life cycle of certain technologies may last longer or not as long as you might think they will.
"In this case film obviously was not lasting as long as the company thought it was going to last. In fact, it was disappearing very rapidly-maybe even faster than any other technology that we know that has disappeared."
Perez talked fluently and with quiet passion about Kodak's technological strengths in both digital imaging and material sciences. Its future, he said, lay at the intersection of both. "If you look at businesses when you need to be excellent at both," he explained, "we're the No. 1, and that's why we look for businesses where you desperately need to be the best in both of those."
Reflecting on Kodak's remarkable run of success, Perez said: "(It) was a very successful company for 100 years that ... stayed too long in the old path. And then we're trying to recover from it and it's going to take a while. ... I have complete faith this is going to be the best turnaround in the industry that I've ever heard of."
Perez still might secure that turnaround. Or maybe he's another Kodak chief who has seen the future with clear eyes but finds it is forever just beyond his grasp.
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