Luminous Landscape Forum
The Art of Photography => The Coffee Corner => Topic started by: tom b on August 16, 2015, 04:08:40 pm
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In 1975, this Kodak employee invented the digital camera. His bosses made him hide it.
An interesting article (http://www.brw.com.au/p/tech-gadgets/made_this_kodak_employee_invented_QnYp4iCrFXYwagdCRzszeP).
Cheers,
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And they continued in this vein until their world came crashing down around them.
The Kodak story is a pathetic tale of catastrophic stupidity by people running a company loaded with geniuses.
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And they continued in this vein until their world came crashing down around them.
The Kodak story is a pathetic tale of catastrophic stupidity by people running a company loaded with geniuses.
Well said.
Thanks for posting this, Tom.
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And they continued in this vein until their world came crashing down around them.
Not really: Kodak developed a lot of important digital imaging technology, produced the first digital SLRs (based on Nikon and Canon bodies) and was a major force in designing and producing CCDs for digital cameras and at one stage for almost all digital media format backs.. Something eventually went very wrong though!
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Kodak's quandary was "simple:" how to commit suicide and stay alive ;)
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It is certainly received wisdom that Kodak fumbled it.
It's not obvious that it's actually *true*, though. Had Kodak survived and prospered in the digital age, there is no doubt they'd be writing books about the most Epic Pivot ever. And please don't cite Fuji as an example. Fuji's position was quite different in a number of important ways, starting with being #2 and not #1.
Survival was never going to be easy for Kodak, and it's possible that there was no strategy for success. There is no law that says every company has a path to prosperity if only management is clever enough.
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Kodak's quandary was "simple:" how to commit suicide and stay alive ;)
!!!! :D
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I'm gonna cite Fuji. When I was in Korea in 1953 we sometimes couldn't get Kodak color film, but we always could get Fujifilm. Compared with Kodak's stuff it was crap. It got a lot better in later years, and Fuji's management took full advantage of that.
I'll say there was no strategy for success at Kodak. The folks in the front office were convinced they'd be able to coast along on film sales forever. In the meantime, in the back room, they had some brilliant guys designing things like sensor arrays. Management doesn't have to be clever, but they do have to be awake. In Kodak's case, they weren't.
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I think what did Kodak in was its inability, or unwillingness, to accept the degree of scaling back and refocusing it would've had to do to remain viable. IOW…what Slobodan says.
I was briefly part of a company, back in the Aughts, in a somewhat similar position. What needed to be done to stay healthy & alive in the longer term was clear enough. How to overcome inertial forces and vested interests was quite another thing. The company went out of business with senior & mid-level management knowing precisely how & why they were blowing it and yet still incapable of acting.
-Dave-
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So what do you do when you are selling loads of film and earning loads of money, but the future is (probably) in digital? Do you contribute to the technology shift (one where you loose some or all of your natural strengths vs competitors), or do you try to keep the old cash generator alive for as long as possible?
I am sure that manufacturers of horse wagons faced something similar 115 years ago. Along comes "disruptive technology" and big organizations have a hard time adjusting to that.
-h
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Kodak was not the first, and will not be the last, company to fail because it was unable to adapt to massive disruption. This book explains it brilliantly:
http://www.amazon.com/The-Innovators-Dilemma-Revolutionary-Business/dp/0062060244
In my view, the ultimate problem is that there is no known strategy to incent management to take extremely long-term views in companies that are currently at the top of their field, but may face massive disruption to their business model in the medium term. They get rewarded hansomly for improving profits this year and next year, and punished if they make a risky investment which will decrease profits, accelerate the demise of their current business and may not pay off for them.
In fact, the number of companies that have survived such disruptions is small, with IBM being the only large one that I can think of off hand. But there may be others.
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And yet IBM gave up on the microcomputer, which turned out to be the overall winner in the whole field.
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In my view, the ultimate problem is that there is no known strategy to incent management to take extremely long-term views
I think it is a different issue, not one of incentive but one of seeing new possibilities. If a company put money into every new idea on the hope it would succeed they would quickly go bust no matter how enthusiastic the developer was in their 'vision for the future'.
When you have a massive shift in technology it is not always obvious what the impact will be and the company has to take a calculated gamble as to where to put their money. And when you have a 'first in class' product your current business model will impact what you will follow up on. The business world is packed with products that were hailed as the next great thing and did not succeed, and we only see the ones that did.
To take Russ's comments on the IBM the problem was not a lack of willingness to plan long-term but their business model was based on big mainframes (it still is) so the idea of a small independent computer was not really in their mainstream thinking. Which is why when Bill Gates had his vision for a compute in every home a lot of people, IBM (and a lot of 'experts' outside IBM) patted him on the head and agreed to what seems now to be a crazy licensing deal. Rather like the Beatles and the views that guitar based bands were out of favour and would not succeed.
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IBM has realized that mainframes will always be around because they're a good idea. The key is to stay out in front of the naming. This year, for instance, mainframes are called The Cloud.
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Right, Andrew.
I think I already told this story, but I'll tell it again: When IBM wanted to buy DOS, which Microsoft actually had gotten from Tim Paterson, Bill Gates and Paul Allen went to a meeting with Microsoft's top people to negotiate the sale. Both Gates and Allen were wearing ill-fitting suits, and Allen had a habit of rocking from side to side when he was thinking while Gates had a similar habit except he rocked forward and back. The two of them sat there rocking while the well dressed negotiators looked down on them and negotiations went forward. IBM bought DOS and called it PC-DOS, but Gates talked IBM into allowing Microsoft to sell a parallel version called MS-DOS. As a result of that deal, a few years later Microsoft could have bought IBM with a leveraged buyout.
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MS-DOS (along with PC-DOS) was mostly a clone of the earlier CP/M operating system. The Microsoft/IBM variant used a different file system…internally meaningful but not externally to end users. The first computer my friend Dale & I built, in 1979, used CP/M as its OS.
Earlier, in mid/late 1978, another friend & I met Paul Allen & Bill Gates at a homebrew computer trade show. Probably one of the first large-scale shows of its kind. They were selling copies of Microsoft Basic, for CP/M, on floppy discs in ziplock bags. We chatted briefly with them and moved on. I had my Leica M2 and 35mm Summicron with me, but didn't take any pics of the Microsoft booth as (I thought) they had nothing worth documenting. :D :o
-Dave-
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But but but......
the KH-11 was the first American spy satellite to use electro-optical digital imaging, and create a real-time optical observation capability.
which was launched in 1976, a year after Kodak invented the digital camera and then did nothing with it. So who got there first, Kodak or the US military?
I know which my money is on.
https://en.wikipedia.org/wiki/KH-11_Kennan
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And they continued in this vein until their world came crashing down around them.
The Kodak story is a pathetic tale of catastrophic stupidity by people running a company loaded with geniuses.
I don't think they were stupid. Kodak behaved practically in a very rational way to maximize it near monopolistic present profit at the time when digital camera came to the scene. In retrospect, its perfect instrumental rationality eventually caused its demise.
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I guess your definition of "stupid" differs from mine. To me, the inability of management to deal with obvious future trends is stupid.
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I guess your definition of "stupid" differs from mine. To me, the inability of management to deal with obvious future trends is stupid.
One of my favorite quotes is "The Future is Stupid." Marcuse famously argued more than half a century ago that the enlightenment project aka modernity's instrumental rationality results in systemic irrationality and catastrophe for entire humanity.
(http://41.media.tumblr.com/75467b2106ea8342b39c8a572c1ba177/tumblr_mtkrjkMsNS1qzt824o1_500.jpg)
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Notice, though, that Marcuse is dead.
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Notice, though, that Marcuse is dead.
that's cute. and it essentially confirms what George Orwell predicted, "Orthodoxy means not thinking--not needing to think. Orthodoxy is unconsciousness."
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I don't think they were stupid. Kodak behaved practically in a very rational way to maximize it near monopolistic present profit at the time when digital camera came to the scene. In retrospect, its perfect instrumental rationality eventually caused its demise.
I'd agree, Kodak were a corporation with a sound business model that was working well for them, it is only hindsight that allows us to see so clearly that they were heading for the Niagara falls. However.........
I have already alluded to the fact that the US military were probably well ahead in digital imaging by the time Kodak cobbled together their device, the KH-11 spy satellite/rocket was to be launched the following year based around a digital camera(s) and that sort of development programme is not a five minute affair, so it's reasonable to assume that they had a device up and running long before the launch date.
Kodak, it seems, had mirrored the work of a top secret (at the time) US spy programme, this would hardly impress the authorities who may have 'suggested' to Kodak that they shelve the idea for a while. Why should the company comply? The answer to that may lie in the fact that Kodak were already contractors to the spy satellite programme and it's probably fair to say that it was a reasonably rewarding relationship, why upset the applecart for a box of tricks that didn't have any immediate value?
The Corona satellites used special 70 millimeter film with a 24-inch (610 mm) focal length camera.[5] Manufactured by Eastman Kodak, the film was initially 0.0003 inches (7.6 µm) thick, with a resolution of 170 lines per 0.04 inches (1.0 mm) of film.[6][7] The contrast was 2-to-1
https://en.wikipedia.org/wiki/Corona_%28satellite%29
We must also bear in mind that the success of digital cameras over film is due in great part to the whole digital revolution, if it wasn't for the internet and 'devices' analogue may have stuck around for a lot longer. It wasn't just the fact that we didn't need film anymore and they have to be seen in that context.
Kodak were a victim of circumstances, their luck ran out.
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Kodak were a victim of circumstances, their luck ran out.
But if you're managing a company like Kodak you're not supposed to rely on luck.
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But if you're managing a company like Kodak you're not supposed to rely on luck.
Quite so, you are not meant to rely on it but sh!t happens.
Daniel Kahneman in his book 'Thinking Fast and Slow' emphatically points to the role of luck in everything in life, be it the fortunes of big corporations or the chances of getting a job. I'd expand more upon the subject but I've lost a little too much time on here of late, maybe when I've caught up.
the book highlights several decades of academic research to suggest that people place too much confidence in human judgment
https://en.wikipedia.org/wiki/Thinking,_Fast_and_Slow
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Of course there's luck in everything, but in this case Kodak, evidently reluctantly, was producing things like top-of-the-line sensors for digital cameras put out by their rivals. Management decided they had it made, didn't push their digital development, and felt could rely forever on film sales even though a quick talk with their R&D folks probably could have put that idea to rest.
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Of course there's luck in everything, but in this case Kodak, evidently reluctantly, was producing things like top-of-the-line sensors for digital cameras put out by their rivals. Management decided they had it made, didn't push their digital development, and felt could rely forever on film sales even though a quick talk with their R&D folks probably could have put that idea to rest.
Perhaps they were just unlucky in having the wrong people at the top.
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That's probably pretty close to the truth.
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Perhaps they were just unlucky in having the wrong people at the top.
Of course... the moment I left, the downfall started ;)
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That's gotta be it.
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Of course... the moment I left, the downfall started ;)
Are we talking countries or companies? ;D
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Are we talking countries or companies? ;D
Touché! Both.
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George Fisher, the CEO of Kodak between 1993 and 2000, sincerely believed in the digital revolution, saw the writings on the wall, and tried his best to change the corporate culture, its analog mentality and business model at the time.
Too bad Kodak was too deeply embedded in an era that couldn't envision a future of humanity first interacting with one another via screens, then becoming screens themselves. And this was/is the gigantic sea change that future historians will study, which is on par with the changes happened twice before in similar magnitude: 3500 years ago when the Greeks converted oral culture to alphabet-based culture by adopting the Phoenician invention, and about 600 years ago when Gutenberg invented printing press purely out of his love of God, who couldn't have foreseen Martin Luther' Reformation splitting the Church using his invention.
There's nothing gained without a loss.
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George Fisher, the CEO of Kodak between 1993 and 2000, sincerely believed in the digital revolution...
No wonder, he was an outsider (came form Motorola), providing for a fresh pair or eyes and perspective. Then Kodak committed a fatal mistake, replacing him with Daniel Carp, a Kodak old-timer, a quality that was at the time touted as positive. What an old-timer did was to be expected, things Kodak had always done, entrenched in the old, glorious days or film. I've seen that fossilized, old-timer, bureaucratic structure first hand and wasn't surprised it ended as it did.
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As much as I may regret Kodak's demise, they're a good example of what happens. Humans are terrible at grasping probability and responding rationally to its implications while simultaneously overconfident in their ability to do both. (Read Kahneman's book, mentioned above by Justinr…it's a good one.) In the context of businesses this inevitably—at some point—leads to failure. Non-rational behavior combined with skilled rationalizing of same…y adiós, amigos!
-Dave-
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No wonder, he was an outsider (came form Motorola), providing for a fresh pair or eyes and perspective. Then Kodak committed a fatal mistake, replacing him with Daniel Carp, a Kodak old-timer, the quality that was at the time touted as positive. What an old-timer did was to be expected, things Kodak had always done, entrenched in the old, glorious days or film. I've seen that fossilized, old-timer, bureaucratic structure first hand and wasn't surprised it ended as it did.
(http://www.businessweek.com/1997/42/art42/42covd.jpg)
Fisher's approach required short term sacrifices (due to larger spendings on R&D and selling some analog business segments while price was still great) for long-term gain.
Traditionally the US Government has paid the bills for the most expensive and hardest R&D projects from defense, pharmaceutical, computing to shipping technology. But Fischer was the CEO at the time when the Cold War just ended. As a result, Uncle Sam had for the first time dramatically reduced its footprint in scientific R&D.
At the same time, Kodak's shareholders, particularly institution investors, were only interested in getting short term stock price gains and increasing dividends. They had no interest in what the future might hold for the company. This was the beginning of an era that Neoliberalism had successfully convinced management that the sole purpose of its existence is to increase shareholders' value via stock price performance, which is essentially a very short term mentality.
That's why I disagree with those who refuse to investigate by simply saying they were stupid. I believe that Kodak behaved in a very rational econimic (instrumental) rationality that eventually brought its own demise. Humans today act very rationally out of the same instrumental rationality to destroy their own habitat: the remaining rain forests, coral reefs, and on and on to guarantee their own disappearance.
Jenny Holzer famously wrote more than thirty years ago, "Future is Stupid."