A talk about Kodak...

André: To give you a bit of context, I'm doing my master's thesis at the Catholic University in Lisbon, Portugal. I'm studying the disruption in digital imaging and how it affected Fujifilm and Kodak—and how both responded so differently. I saw your paper, "Fujifilm: A Rare Industrial Pivot Success", and found it very interesting. So I thought it would be great to talk with you and get your insights.

Let me start with the first question, which is also connected to strategic foresight and disruption signals. When do you believe digital photography became an unavoidable disruption in the imaging industry?

Philippe: That’s an important question. What I’m going to say isn’t based on academic research but on about 20 years of empirical experience in business across Europe and China. Disruptions don’t typically start with a clear label. If someone calls something a “disruption” from the beginning, it likely isn’t one. Real disruptions are often only acknowledged in hindsight, after they’ve transformed the market.

Digital photography started disrupting the imaging industry as soon as the first commercial products hit the market. These early digital cameras were clunky and low-resolution, but that’s when the shift began—not when patents were filed or R&D was conducted. By the time companies like Kodak realized what was happening, it was already too late. It probably took 7 to 10 years before the disruption was undeniable—the decline of film and the rise of digital. And the shift wasn’t clean or linear. It started in B2B applications, research labs, and gradually moved into the consumer market.

André: That makes a lot of sense. I’ve noticed that early signals are often hard to interpret. Could you talk more about weak signals and trends?

Philippe: Sure. I distinguish between weak signals and trends. A weak signal is what innovators—less than 2.5% of a market—are doing. That doesn’t mean it will become a trend. It becomes a trend once it crosses the chasm into early adopters and the early majority.

Weak signals are over-analyzed in market research, and it’s often a waste of time. There’s no linear path from weak signal to business impact. We often identify them only after the fact, which creates a hindsight bias. Once the battle is over, we rewrite the story as if it was predictable all along.

André: So, when looking back, both Kodak and Fujifilm faced the same signals, but only Fujifilm managed to transform itself?

Philippe: Exactly. But it's not a story of vision versus stupidity. Fujifilm took 12 years to make its turnaround. The signals were weak, barely recognizable. Kodak didn’t fail because it ignored obvious signs. They just couldn't make the pivot culturally.

André: Can you expand on what made Fujifilm culturally more adaptable?

Philippe: Fujifilm was more business-oriented. They weren’t organized by product lines but by business lines, like medical imaging. That created internal competition for resources. So, when the film business declined, they could reallocate funding to grow areas like healthcare. Kodak, on the other hand, was more consumer-focused, more vertically integrated around film production, and didn’t have the same flexibility.

André: That fits with what I heard in my interviews with Kodak and Fujifilm. You’re confirming it from another angle.

Philippe: Exactly. That’s the big distinction: Fujifilm acted like a market company, Kodak more like a product company.

André: Could you define what you mean by "market company"?

Philippe: A market company asks: "What problems can we solve for different vertical markets?" They use R&D and patents in service of market expansion. They can act like a portfolio company, shifting focus between segments. Product companies, like Kodak, focus on perfecting their technology year over year. They build their identity around a product.

André: I see. So would you say Kodak misunderstood its identity?

Philippe: Yes. They forgot they were a technology company in the chemical industry and tried to stay relevant in photography. They could have pivoted to other chemical applications—even in areas like construction or aerospace. That’s where the opportunity was.

André: Let’s touch on national business cultures. How did shareholder vs stakeholder capitalism influence Kodak and Fujifilm?

Philippe: Good question. American companies are good at short-term adaptation. But when changes are long-term and uncertain, they struggle due to quarterly pressure from shareholders. Japanese companies, like Fujifilm, are slower, but they can invest for the long term. That gives them an advantage when responding to complex, slow-moving disruptions.

André: That aligns with what Kodak people told me: they were under constant pressure to deliver short-term results.

Philippe: Exactly. That short-termism limits strategic flexibility.

André: What do you think distinguishes firms that can pivot their capabilities?

Philippe: It comes down to decision-making timeframes and culture. Look at AMD vs. Intel. AMD is nimble, fabless, and quick. Intel takes 8-10 years to pivot. Same goes for companies like Fujifilm—they had the structure and culture to adapt.

André: Was there business model innovation at Fujifilm?

Philippe: Not really. They shifted focus to medical and professional markets but kept the same model: selling products and services to professional buyers. Maybe some recurring revenue models were added, like service subscriptions, but marginally.

André: Could Kodak have done the same?

Philippe: Yes, but they were culturally constrained. Their teams forgot they were a chemical tech company and focused only on photography. That's a core identity failure.

André: So, in the end, Fujifilm and Kodak weren’t even that similar?

Philippe: Exactly. They just overlapped in one market: consumer photography. Beyond that, they were very different beasts.

André: What is your main strategic lesson from this comparison?

Philippe: You can’t build strategy without understanding a company’s cultural operating system. Is it a tech-driven company? A market-driven one? A product-driven one? That defines what kind of strategy can succeed. Not every company should be "customer-centric."

André: That’s really insightful. And how can companies institutionalize foresight and become more adaptive?

Philippe: Again, it starts with culture. Know what your company is naturally good at seeing. Know where your blind spots are. Use tools to fill those gaps. But don’t pretend all companies should work the same way. They need to build foresight that fits their DNA.

André: Thanks again, Philippe. Have a great day.

Philippe: You too. Bye!