Kodak Case

Kodak embarked on many scenarios that opened the horizon for them to develop and implement a digital strategy. They were so engrossed with the short term outlook and profitability of film and developing pictures, that Kodak was not interested in entering a market with lower profit margins that encompassed high competition. “When disruptive innovations, [such as digital cameras have emerged], the values of the full-service firms reject such business, because it cannot be priced profitably.”[1] George Fisher’s initiatives to reallocate Kodak to be a high tech company were met with resistance from the middle managers. Values, processes, and resources reflect the principles identified in the “Putting Your Finger on Capability” article were the causes of Kodak’s difficulties in developing and implementing a digital strategy.

An organization’s processes comprise the patterns of communication, interaction, and coordination that transform the inputs such as information, supplies, and labor into products or services of greater value for consumers. An organization’s values constitute the unspoken and embedded criteria by which decisions are made.

Looking at the Kodak case, we see that the company’s processes included “’procedures and policies to maintain the status quo’” (2), effectively exposing the company to the innovator’s dilemma. As is best articulated in the interview with George Fisher, the company had also internalized processes for communication that were overly polite, resulting in passive aggressive and non-confrontational behaviors, especially among middle management. This process of non-confrontational discourse even caused the company to ignore internal analysis of Kodak’s eroding market share in the 1970s and again in the 1990s. Because processes and communication were focused on maintaining the status quo, the company missed early signals that Americans would buy another brand of film and later, that the market as a whole was ready to give up photo...