Typically, empires fall far faster than they ascend.
The same is true in the business sphere. Industry-defining behemoths are inevitable, permanent fixtures in the corporate landscape until they’re suddenly not. When that dominance begins to waver, the very systems, cultures and leadership that drove their rise are likely not what is required to slow the descent, nor lead the recovery. Fundamental changes are required.
Few companies have experienced the extremes of this cycle more viscerally than Eastman Kodak. Founded in 1888, Kodak dominated the 20th-century photographic film market. So ubiquitous was the brand, it even became shorthand for memorable experiences: the “Kodak moment”. By 1996, the company enjoyed over two thirds of global market share, revenues stood at $16bn, and Kodak was worth more than $31bn. Empires didn’t come much bigger.
But the descent came quickly. By 2012 the company had filed for Chapter 11 bankruptcy in the US. A century of dominance had been undone in a little over a decade.
The years that directly followed witnessed a series of restructurings, divestments, pivots and false starts. There was a Kodak smartphone launch, tablets, apps, even a licensed cryptocurrency. Everybody still knew what Kodak was, but few could tell you what it did.
In 2019, the then recently appointed executive chairman Jim Continenza discovered that this equally applied inside the business. “On my first day, I posed the question to over 1,000 of our people gathered in an auditorium: ‘What is Kodak?’” he recalls. “Nobody could give me a straight answer.”
The years since have been committed to delivering one. In Continenza’s first 12 months, Kodak sold its packaging division for $320m and secured a refinancing agreement to the tune of $100m in order to clear debt off the company’s balance sheet – “We had to stop the burn,” the CEO explains. Multiple print divisions were consolidated into a unified organisation – indicative of a renewed focus on print and a central component of Continenza’s “One Kodak” vision.
“One Kodak” was born of a clear idea of what Kodak should be (and what it wasn’t). “We are an industrial manufacturer and we’re in the B2B business,” says Continenza, who acquired the title of CEO in addition to executive chairman in 2020. “Now that’s not very sexy and some people might not want to hear it, but it’s the truth. Our core competency is advanced materials and chemicals. We’re not some dot-com company. We need to take pride in what we are and what we’re good at.”
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And that belief must come from the very top. Continenza is one of Kodak’s largest private shareholders – “I’m putting my money where my mouth is” – and clearly believes in the business’s ability to reclaim and articulate a renewed identity that draws on a storied history. However, getting there has required significant cultural change and engagement across the business – not an easy feat when a large proportion of one’s workforce have been buffeted by a succession of setbacks and false starts.
“Businesses coming out of a bankruptcy typically find themselves being run by legal, finance and HR,” Continenza says. “That was still the case here. For me, companies exist to serve their customers. They need to be run by sales and operations, demonstrating a customer-first mindset. Those other functions I can outsource; I can’t outsource operations and sales. What I need to do is empower them.”
A veteran of approximately 30 turnarounds, Continenza had little interest in protecting the feelings of entrenched leadership or respecting established rules. “You either get onboard or get run over,” he says with a chuckle. “I’m not coming in to learn 130 years of how you do things. Besides, that way wasn’t working.”
As regards those roles Continenza cannot outsource, he clearly places huge value in those working closer to the front-line. “I’m not hierarchical and many loved hierarchy here. We had some divisional leaders who thought they were the most important person in the business. But those aren’t the people that impress me – I can run a business. What I can’t do is make film, printers, inks. I don’t fix or enhance equipment. Those are the people leadership must cherish – and the people I knew I needed to learn from.”
Continenza reveals with some pride that he has spent very little time in his corporate office in Rochester, New York. Instead, he has focused on both visiting customers around the globe and getting out on the factory floor in order to meet with and hear from those individuals and teams who will ultimately dictate Kodak’s success. Various customer boards have also been established, and, internally, Continenza is a great believer in the skip-level meeting, reaching out to colleagues across the business, not standing for respecting the chain of command, and encouraging his workforce to do the same.
“The customers now are part of developing our products,” he says. “They tell us what we should be doing and guide our focus. I don’t want them to tell me how well we’re doing; I need to hear how we can all get better. We only win when our customers win.”
The CEO speaks of an early meeting with the leadership team where, following years of falling revenue, they rejected the possibility of growing the business by even a single dollar – the focus should instead be on managed decline. He still struggles to hide his disdain.
“That told me everything I needed to hear about many of my leaders,” he exclaims. “There was this victim mentality, people going through the motions. I needed warriors, but that’s not possible when it’s not coming from leadership. They’re the ones who create victims, who stop people reaching their full potential. Getting them out of the way so as to empower our people to be better was a major step that had to be taken.”
A number of the leaders brought in to replace them had extensive experience working with the CEO on other turnaround projects, meaning they both knew how he worked and provided much-needed new perspectives on the changes required. Kodak had become excessively inward-facing, overly dependent upon those with little grounding outside the business.
An injection of fresh blood and current leaders who shared the same vision at the top of the organisation helped engender a wider cultural shift. Things needed to be functional, accountable, measurable and trackable. This did not mean a complete changing of the guard, however. Continenza points to Terry Taber, his CTO and head of advanced materials and chemicals, as a prime example. Taber, who has been with the company for over four decades, was on the verge of retirement, only to reverse his decision on the back of the changes he could see were under way.
“The ones that are still here like Terry, they get it – and we can’t win without them. Many have been wanting to win for a long time, but nobody would listen to them. That’s why it was so important to strip away the hierarchy. This isn’t about getting rid of the old guard – are you kidding me? All that knowledge is invaluable. Now we’re finding the right mix of new and old.”
In order to protect that knowledge base, the CEO has removed mandatory retirement at 65. At the same time, female representation in leadership positions has grown significantly and there has been significant investment in training and succession planning.
“If I was 35, I’d come here tomorrow,” claims Continenza. “Great technology, history, brand name, knowledge base, core competencies. A pension fund that’s over-funded – good luck finding that elsewhere. And you can see career progression. If that 35-year-old goes to a new tech company, all my managers are the same age as I am. Here, a large number are in their 50s and 60s – we’ll either retire or die! There is huge opportunity and we need to build the pathways, creating jobs for the next generation.”
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And Kodak has been hiring. While Continenza acknowledges that “several hundred” people have left the business under his watch, he insists that headcount remains the same – albeit not with all heads necessarily found in the same roles as before. “We have looked to automate those functional jobs that don’t create profitable revenue and put more people into manufacturing, sustainability, sales and R&D,” he explains.
“When businesses are in trouble, they tend to fire the very people who will generate revenue – how will you ever recover? That wasn’t a mistake we were going to make.”
An ever-greater emphasis on operations is also underpinned by a desire to install more of a start-up mentality when it comes to taking risks, with individuals showing a willingness to challenge established norms.
“Doing your job has to be driven by more than simply keeping it,” insists Continenza. “We get paid for the intangibles, to make the decisions that paper and computers can’t. I want to see a gung-ho, ‘let’s go do it’ spirit. Have an idea? Bring it to me. No single mistake is going to sink the company. If it doesn’t work we can put the brakes on it, but I don’t ever get upset because we got halfway. There was a real fear of failure before, and that meant a fear of risk-taking and a lack of accountability. I always say I reserve the right to get smarter every day.”
This willingness to take risks and experiment has been reflected by moves into fields as diverse as EV battery coating, light-blocking technology, transparent antennas and pharmaceutical manufacturing. All are rooted, however, in those “core competencies” the CEO returns to time and again.
“That’s how everything is judged. Do we have the core competency, the skillset and knowledge base. That’s why I’m out there talking to our people in the factories, jumping on skip-level meetings. We know how to print, we know how to layer, and we know how to coat. Making film and coating substrate for batteries is almost identical. One uses a slurry. One uses a solution. One’s done in the dark. Other than that, there’s no difference. We’ve been doing it for 130 years, we do it better than anyone else. For me it’s a no-brainer.”
No-brainer or not, this shift in leadership, culture and strategy appears to be working. In 2022, Kodak grew revenue in consecutive years for the first time in decades. Having embarked upon a major restructuring project in the middle of a global pandemic, and with a series of macro political and economic events continuing to disrupt supply chains and impact operations, it hasn’t always been straightforward. But the CEO has clearly lost none of his appetite for the challenge at hand – or for winning. Credit for any success, however, will never come down to one man.
“This is not and cannot ever be the Jim Show,” Continenza insists. “I’ve created an environment for people to succeed – that’s all it is. They need to take it over the line. If you have the courage to do so, you’ll love it here. What we do have now is a leadership culture that believes in empowering our people in order to not make the same mistakes of the past, to prevent Kodak from going down the same path again.”
New Statesman Media Group, in partnership with Kodak, has authored An Environment for Success, a report investigating the role print might play in helping businesses unlock new environmental standards.