January 08, 2004

It's hard to reinvent an iceburg in frozen waters.

On the seeming inability to bring Eastman Kodak Company into the future, Tuesday's article called Photo Finished on Slate hits several nails on the head. I wish it hadn't.

Among other things, the article says that Kodak never achieved leadership in the digital film era because It would also have required some imagination, which seems to be in short supply in Rochester.

Ouch. Sometimes the truth doesn't just hurt, it stings for a good long time.

As a former Rochesterian who spent nearly four years at Kodak, I can say this:

You had to be there.

It's difficult to describe the cultural phenomenon in that town that gave birth to and/or nurtured giants like Kodak, Xerox, and Baush and Lomb, and then failed to sustain those powerhouses into a connected world, a connected economy. It's tough to explain to outsiders. It really is. The reason for the resistance to progress isn't so simple. There are many layers, including the culture of Western New York, which bosts a population of hard working, resiliant citizens who still save for rainy days, of which there are approximately 362 each year.

Slate isn't new at Kodak bashing, and they're good at it. But they lack that thing I mentioned--an understanding of what made industry tick in Rochester for a very long time, and an understanding of the dynamics beyond statistics and strategies that have made them flounder.

For one, they never spent six months dragging themselves to work in six feet of snow and 20-degree weather. But that's not what I want to talk about in this post.

I will tell you one secret that Slate won't: The Kodak spinoff mentality of the mid-1980s was really ahead of its time.

Creating the venture capital arm called Eastman Technologies in the mid-80s meant that Kodak generously funded some innovative startup companies, like the one I worked for, Edicon Systems Division. The entrepreneurial design teams for the (dozen? I think--can't remember) venture companies were made up of thinkers, hard workers, scientists, patent-holders, and really brilliant, mostly passionate people. The brainpower and spirit of innovation at Edicon and the other Ventures in the late 80s and early 90s was real. I saw it. I felt it. There was, in truth, a dot-com spirit pre-dot-com, in those days. Ventures were staffed by the brightest and best from in and (more importantly) outside of the company in the beginning. Out-of-the-box (pun intended) thinkers who thought they could make a difference in the world, or at least in the world of technology and digital imaging.

If Kodak had launched Eastman Technologies ten years later, something would have popped for the old red and yellow box. I am 97-percent sure of that.

As it was, not a single one of those original venture companies lasted beyond the mid-90s. During my years at Edicon we had the distinguished honor of being the sole remaining Venture company. And when George Fisher took over--I remember meeting in the big conference room on State Street for his company-wide address when he joined--things got much worse. I remember when he came to Rochester from Motorola, he had to buy a house in Rochester.

Although none of the CEO-recruits wanted to live in Rochester, it was a requirement. Fisher sold his house in Chicago to move to Rochester only to find he couldn't find a house that cost enough initially to save him from capital gains. It's hard to find a house in Rochester that you can dump a couple of million on. That's not how we live up there. It's not practical.

With his citified ways, Fisher was a Rochester oddity who brought some fiscal discipline to the company at the expense of any remaining imagination, innovation, and spirit. It was innovation he was hired to bring, but he began with layoffs. So much for the "we can do it" attitude.

For me it was heartbreaking.

The layoffs in 1993-94 saw too many of my colleages--my friends, my collaborators, my co-conspirators--let go. Renegade GM Dave Rusin left, and in his place came Gary Clarke, a long-time Kodak insider with no good ideas I could discern.

And so, I took a job in Atlanta. In a sense, Kodak's inability to sustain or embrace change, to nurture the imagination of the talented, committed team at Edicon (where we still did care) is the reason I'm in Atlanta today.

It was clear by the late 90s that George Fisher hadn't turned out to be the panacea Kodak had hoped for.

I noticed that Kodak was giving the spinoff idea another shot in 2002 with Appairnet. I have no idea how that company is doing. But with a name like Appairnet, I have to wonder if Kodak is just now catching up with passe dot-com strategies of good ideas past. Or at least the branding.

I want Kodak to succeed. I really do.

But it's a tough culture there.

To move an inch takes, it seems, a decade.

Maybe by 2014?