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Links of the Day:

– Why is Kodak floundering while Fujifilm flourishes? The Economist tackles this question and finds while both firms saw change coming, Kodak was slower to adapt and misjudged emerging markets. The magazine also quotes someone who blames Rochester, as a WSJ columnist did:

Another reason why Kodak was slow to change was that its executives “suffered from a mentality of perfect products, rather than the high-tech mindset of make it, launch it, fix it,” says Rosabeth Moss Kanter of Harvard Business School, who has advised the firm. Working in a one-company town did not help, either. Kodak’s bosses in Rochester seldom heard much criticism of the firm, she says. Even when Kodak decided to diversify, it took years to make its first acquisition. It created a widely admired venture-capital arm, but never made big enough bets to create breakthroughs, says Ms Kanter.

I find it hard to believe the culture of Rochester somehow contributed to Kodak’s downfall. This has been a place of tremendous innovation throughout its history, although lately getting those innovations to market isn’t easy. There are so many examples of thriving companies, this logic fails to resonate.

– A 1998 editorial in the D&C warns Kodak to change.

– Kathleen Parker wrote a great column about mean-spirited attacks on Michelle Obama.

– Single-cup coffee makers are concerned about their impact on the environment.

12 Responses to Blame Rochester?

  1. January 14, 2012 at 12:53 pm Gary Craig responds:

    Calling Rochester a one-company town is clearly off-base. However, there may be something to the argument that the Kodak culture became so insular – and so integrated as part of the Rochester culture – that there never seemed to be an urgency until it was too late. Rochester, of course, had the Curt Gerling nickname of Smugtown, partly stemming from some sense that it was of a different stratum economically, culturally, etc. than many other of its urban brethren. And there was some truth to that. But the same mindset can also make it difficult to change directions – or attitudes – when buffeted by very different economic winds. (Or other winds. This was the city touting its race relations in the months before the 1964 riots.) This is coming, of course, from an outsider who only moved here in 1990, but I do think that the argument can be made that the culture of Kodak did infiltrate the very culture of the community.

    • We Rochesterians, generally speaking, have had a difficult time embracing change. There has always been a sense that what exists here does not exist anywhere else, at least when compared to other regions of comparable size.
      It has been our general overall sense of entitlement that has repeatedly gotten us into considerable socioeconomic trouble over the years.
      To have any knowledge of how Kodak has handled its business allows one to better understand why this area is, and has been, in its seemingly static state.

      • Andy. You da man!

        Maybe R’s blog with get this town out of its denial and start it on a road to modern enlightenment.

        Maybe it had something to do with Rochester sinusitis (known as Genesee fever in olden times.)

  2. “Seldom heard much criticism”? Really? Because my entire life I have watched, listened to and read the media second guessing Kodak, and with good cause.
    Maybe their idea of “not criticizing” comes from Kodak’s earlier years when the company invested in the community (shock and horror in today’s vulture capitalism to be sure) which had zero to do with Kodak’s downfall and a lot to do with Rochester being able to weather such a massive abandonment by its largest employer better than other cities.

  3. Actually, I think there is something to the idea that local culture played a role — but not a culture in some way autochthonous to the city itself, but a culture that came about from Rochester being a company town where so many seemed set for life and so much of the community’s life was so tied up with a few big companies.

    It would be hard to say anything “bad” about Kodak folks, when like so many Rochester natives I grew up surrounded by them (and my own mother worked there before she started a family). They were the backbone of the community, at almost every level. In college, I was a finalist for a highly sought Kodak scholarship.

    And as an adult, between consulting work and community projects, I had the chance to get a closer look at some of the folks who staffed and ran some of Rochester’s larger companies — and in the broadest sense I did discern a mindset that I came to recognize but still have trouble characterizing. Somewhat closed, bureaucratic. Hard to cite specifics, but one thing I was surprised to find in common across the larger companies was overhearing their employees literally hang up the phone on those they had disagreements with — sometimes even preceding it with “I will not continue this conversation” or “I’m going to hang up on you.”

    Although the mindset I observed perhaps lines up imperfectly with what Curt Gerling characterized as the “Smugtown” mindset, it’s always what comes to mind whenever I hear that moniker for my hometown. I can also say that I observed what the Harvard Business School advisor did — the “perfect product” mindset. As a consultant, I once had to interface between a large Rochester company and their smaller, more nimble midwest supplier. The Rochester company wanted endless meetings & signoffs + weeks of testing and training with approved, versioned documentation with every change. The supplier was used to making changes very quickly, then communicating specifics in more nimble, interactive ways. They would laugh about the mindset of their Rochester customers.

    Similarly, IBM required a similar culture change, something I got to see firsthand. Very early out of college I had the chance to meet some old-time IBM mainframe folks, and found them to be as set in their ways as the midwest supplier I mentioned found their Rochester clients. Yet IBM was able to change culture, not without difficulty, and reinvent itself.

    But not Kodak. Xerox, on the other hand, has been able to do a lot of reinventing and is doing well — all things considered. Unlike Kodak, it has benefited from dynamic leadership. It also happens to be headquartered elsewhere — in a place where the top executives are surrounded by a much more dynamic, entrepreneurial, capital-savvy population.

    Although there are lots of very intelligent and inventive people in the Rochester area, I think by and large the community did indeed become hidebound — allowing other communities to shoot past and leave Rochester in the dust. And that in a community that was once a national leader in areas such as education reform, health-care cooperation, high-tech manufacturing, progressive government (CGR, Morin-Ryan), downtown development (Midtown Plaza).

    A lot of Ph. D’s will be minted, in a lot of disciplines, writing dissertations on just what happened. Just don’t let such navel-gazing become a community pasttime, as it is here in Buffalo.

  4. January 14, 2012 at 2:15 pm Gary Craig responds:

    RaChaCha – a relative of mine had a very similar experience with Kodak as that you describe. He was asked to visit the company because of its interest in a photographic piece of equipment he’d patented. He spent the day bounced between managers who could give little insight or answers or sign-offs and he found the whole event so frustrating he didn’t continue to pursue it. I thought Doug Emblidge’s recent interview with former Kodak spokesman Paul Allen was insightful, in which he acknowledged the company needed belt-tightening but it went way too far. It was as if Kodak needed sutures for a wound but lopped off a whole appendage.
    Unfortunately, the corporate America approach now – and one the media is too aware of – is to first decimate staff then try to innovate. It is not a logical equation, but it seems to now be a part of our country’s corporate culture.

  5. Criticism wasn’t allowed …… I was a digital guy in an analog world …. I was pretty much told to “shut up and sit down” for the 10 years i was there.Even in the digital group I worked ….. Kodak was always right and management was GOD

    • George,

      Remember when they banned Fuji workers from classes at U of R’s Simon School because they were worried about them stealing Big Yellow secrets?

      Judas priest, Fuji was prolly in there trying to see if Big Yellow had figured out film was kaput, yet.

      So parochial; so neanderthal.

  6. folks, it’s called incest. sooner or later the gene pool gets corrupted.

    Well, at least they put an Italian American as COO in this latest re-org. We were always good at sweeping-up around the office.

  7. Interesting to hear the mention of the Simon School, which in many ways at one time was Kodak’s management training school. I took some classes there on a non-matriculated basis, where I learned about something they called the “Kodak Factor.” I wondered why, if this was a business school affiliated with a university and with a national ranking, I was sailing through the courses with A’s without needing a lot of study or output — in one class, without even doing the homework, and just showing up for the final. The “Kodak Factor,” I was told. The school’s bread and butter was tuition reimbursements from big companies like Kodak and Xerox, which required the students to get a B or better (I think) to get reimbursed. Yet the companies essentially allowed anyone and everyone to take classes, so the school had to adjust the difficulty accordingly (trying not to say “dumbed down”). So under this understanding, the school got its money, the employees got their degrees — and the companies, apparently, got complacent with having all this supposed highly trained brainpower around that they paid so much to school.
    Although I don’t have anything other than gut feel to back this up, I suspect that resulted in a rescinding of the “Peter Principle” at those companies. The Peter Principle says that in a hierarchy, every employee will rise to their level of incompetence. But with all those plodders who secured overvalued Simon School MBAs on the company’s dime rattling around Rochester HQs, I suspect a lot of people were promoted WAY beyond their levels of incompetence.
    Who is going to most perceive change, risk, new ideas, new technologies as a threat? And who is going to give the snappiest salutes when the person up the chain gives an order? That’s right: the person who knows they’re out of their league, and have gone beyond their level of incompetence — but is desperate to hang on until they can put their kids through college and retire with a pension at their pay grade. Actually, that sounds like a lot of our electeds and bureaucrats, as well. Hmmm.

  8. I think the main point that Kanter makes in the WSJ article is true but not articulated correctly. From over 30 years of experience, I can tell you that former Kodak employees often complained that their Kodak-learned skill set and experience with the company was not transferable to jobs at other companies due to Kodak’s very unique business practicies, policies and ways they did business. I have heard this from several headhunter execs in the area that have had a great deal of difficulty in placing ex-Kodakers in new positions (especially in engineering and technical jobs). Kodak often did not encourage a true world view of the competitive landscape that led to an insular viewpoint. Job candidates that had worked at HP, Apple, Fuji and other firms were not allowed to interview for positions within Kodak due to an institutional paranoia about intellectual property leakage.

    • My dad wrked there through 1986, and his last project was the disc camera. Digital technolgy was there, but Kodak chose to try something different amd failed. They did it again with the Advantix camera, which had some added feature including zoom and panoramic shots. Photo’s were clearer, not as grainy. Still they ignored digital technology. Can’t blame Rochester because they chose to ignore technology and the future. Dad would be so ashamed to see Kodak now.

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