Fail Fast, Not Over Decades: Kodak CEO Jeff Clarke on The Biggest Turnaround of His Career


If you’re of a certain age, the Kodak name evinces a simpler era — a time when taking a picture was a revelation, and photographs were precious — each exposure was finite, a “roll of film” only offered 24 or 36 shots, and it cost money (and time) to actually see your work developed. Selfies? Who had time for selfies?!

During that era, Kodak was Instagram, Apple, and Sony all rolled into one, a massive, 140,000-person icon of American capitalism. The company’s market cap peaked at $30 billion — huge for its time. But the relentless advances of digital drove Kodak to a humiliating bankruptcy in 2012, one that became emblematic of how large companies can fail to innovate.

Jeff Clarke became CEO of Kodak in 2014, and is charged with one of the most complex turnarounds in corporate history. His first move was to save Kodak’s movie film business, which had been slated for the chopping block. Since then, he’s turned the company’s city-sized manufacturing plant into the world’s largest business accelerator, and even has plans to roll out new consumer products and services, once again putting Kodak at the center of image creation.

The full transcript of our conversation with Clarke, edited for clarity, is below, as is our edited video interview. In it you’ll hear about Kodak’s return to consumer products, its billion-dollar printing business, and why one of the world’s most iconic brands became the landlord for a medical marijuana startup.

John Battelle: I thought we would start with a simple question. You have had a long history as a successful executive. You’ve run very large companies. Why did you decide to become the CEO of Kodak?

Jeff Clarke: Kodak is probably one of the three or four most successful companies in the history of business, and it’s a privilege to be able to carry on a legacy of a brand that is still loved by hundreds of millions of people, even billions of people. It is the classic turnaround. If you want to be a turnaround executive, and I’ve had a few shots at that, this is almost the most perfect case study.

I come from upstate New York, I care about the place, and Kodak does real things — research, science, consumer, commercial. There’s a lot of promise there.

When people think about Kodak, they often think, “Oh, that’s the company at the pinnacle of the analog era.” But now they’re not sure what the Kodak brand means. Did you come in with a vision for what it could mean or was it more, “Let me see what’s here, and I’ll figure it out along the way?”

I was well researched in Kodak before taking the job. First of all, I believe that analog is still important. It is a very small part of our business, but film is still the Kodak heritage, $200 million of revenue a year, and profitable.

I think there’s an analog renaissance happening. There’s some digital fatigue. Things like the vinyl revolution, what’s happening with film and major motion pictures, some new Super 8 products, as well as the Maker movement around the world — I think we’re on the tip of real comeback for these things. It will never be as ubiquitous as it was in the past. That doesn’t mean it can’t be successful.

When you went in, did you say, “OK, I have a grand vision of what Kodak will become,” or was it, “I understand where it is right now, but let’s see where it goes.”

It’s a complex company. It’s still $2 billion in revenues, seven different business lines, including the largest industrial park in the Northeast. We’re making things for the printing industry, for the packaging industry, printing logic on film and micro 3D printing.

The vision is to get thing running properly again, to get the normal capital allocation and investment cycles happening that were not working well when film was such a large part of it.

You came in as the CEO after Kodak had gone through a well-covered, almost famous bankruptcy. Where does the $2 billion of revenue come from besides the film business?

About $1.2 billion of the $2 billion is support around the printing industry. There are 66 trillion pages of newspapers and papers still printed in the world, printing on packaging. Kodak supports 60 trillion of that, in the

There are 66 trillion pages of newspapers and papers still printed in the world, printing on packaging. Kodak supports 60 trillion of that.

traditional offset market, making graphic arts plates, computer plate technologies that image complex newspaper and other images. We do software color management. We print on inkjet and we print on toner.

We’re a major player in the printing industry, from a software to actually making the plates themselves. The theme across that for us is we are taking environmental solutions for printing to the whole next level. We’re the first company to come out with a plate that doesn’t use chemicals, the first company to come out with a packaging process that doesn’t use solvents and uses water instead. We’re greening an industry and that’s part of the science that we bring into the industry.

When people think about printing, they think it’s about the same thing that happened to analog photography. Isn’t the print world on the same decline?

Many people still are taken by the concept that a picture is a thousand words —but how do you display that picture? Most of us like to take our content visually, as you walk down a store aisle and see packaging on products and printing. But printing is not just analog past, it’s printing in the future, printing on glass, printing batteries, printing solar panels, printing in 3D dimensions that allow a whole new set of industries to start.

Are you working on that? I still haven’t seen the 3D revolution happen, but it does get exciting when you start to think about different forms of printing — extractive printing, printing sheets of very intricate electronic mesh. Is this where you’re focusing a lot of the efforts?

Absolutely. Our first product in micro 3D printing, as we call it…not printing out a tchotchke of yourself or something, but printing something that is truly functional.

Our first entry is touch-screen sensors on copper. Which, again, has an environmental play. This replaces indium tin oxide which is a very difficult environmental by-product. There’s new areas to print. Printing RFID tags rather than manufacturing large pieces of plastic. These are the future.

At present Kodak has about 6,000 employees. At its full height, it literally was a whole city. 140,000 people worked at Kodak. A culture like Kodak has a very proud history, but the people who are still there have seen mostly cuts, decline, and bad news. How do you change a culture like that?

First, you have to embrace the most important parts of that culture. This culture was incredibly successful for a century. Many of the people (have been) there 30, 40 years — and even longer. When they were hired, they were going to the Google or the Apple of that day.

These were the premiere people hired out of universities. Some of the best PhDs in the world still work at the company. I go back even farther. Let’s look at (Kodak founder) George Eastmon: “You push the button. We do the rest.” Embracing simplicity, but with science behind it.

This is a science culture. Most of my career, I’ve worked for technology companies. This is a real science company.

This is a science culture. Most of my career, I’ve worked for technology companies. This is a real science company. A company that pushes the frontiers of science in printing today, around making sure the products have better environmental footprints. This is quite a company culture. To change it, you have to embrace the best parts.

Then, move into some new areas. My background is primarily here in Silicon Valley. Part of what I’m trying to do is bring a little bit of that Silicon Valley to this great science company. What that means is moving faster, change, iterate, fail fast rather than fail over decades. Those are very different concepts, but ones we’re embracing well now.

When I think about a culture that has an average tenure of 20, 25 years, it’s both a strength and a weakness. What would draw a Wharton grad or a newly-minted Material Science Masters or PhD to Kodak now? What are the challenges that you see before the company that are big opportunities?

Kodak has for decades had very successful Engineering Alignment Programs with Stanford, with Purdue University, with Northeastern University, and the Rochester Institute of Technology.

These programs have continued throughout. We still are able to attract very, very skilled, technical people. Part of that is we allow them to push science. We allow them to have longer product cycles. We allow them to do core research. We allow them to build on the seven thousand patents we have.

It’s the work and the alignment with universities that drives that type of employee. The Wharton grad’s a little harder. The Wharton grad is looking for often the best situation. Trading off investment banking versus consulting. We attract people in the design industry. People who are more interested in product development. We certainly have attracted some very strong people in the brand area. Our head of brand now used to work at Apple and Beats. She’s just outstanding. She looked at Kodak as her chance to really imprint herself on a global brand of real importance.

On the day you started, Kodak was looking for a way to get out of the film business. You tell the story that almost on your first day you were presented with a press release announcing that Kodak was exiting the film business.

First of all, it’s such an enormous responsibility to be the company who created film, made it popular, and is now the last maker of a very important medium. Motion picture film is only made in Rochester, New York. It used to be made all over the world.

To restart that factory, once you close it, (would cost) hundreds and hundreds of millions of dollars. If we shut that down, an entire industry — an art form — would go away.

We still would have Polaroid-type products, and some people will even make 35mm film for still photographers, but motion pictures are a much more sophisticated process. That was one consideration.

But, what does it mean to our customers? What does it mean to our brand? Then it comes down to the core economics. From an economic perspective, film is a vertically integrated operation. We make the solvents, we use silver, we have trains that bring in all sorts of raw materials. You really have to look at it in a holistic way. Sure, the business unit that made the film was losing tens of millions of dollars, but Kodak overall would’ve have been in a much more difficult place (without it).

It (also) would’ve been difficult because we own, for better or worse, the largest industrial park in the Northeast, of which the primary product we make is film, and certain byproducts of film — chemicals and so forth.

While it looked like a quick fix to shut it down, when you went and studied it, it wasn’t. Then of course we went to our customers out in Hollywood and our industrial customers. They didn’t want us to stop, and they were willing to work with us on saving film.

And now it’s profitable?

It is. We’ve been profitable four quarters in a row in the film business after significant losses. But I can’t take the credit for that, the customers saved the film business. I was a responsible steward of this incredibly important factory for this art medium. When we went to our customers, we realized that they were willing to make investments going forward with us, in terms of forward purchases, in terms of using film in ways they had used it before and supporting film as medium.

It’s difficult to put it into words, but there’s a feeling, a sensibility, an art to the expression of directorial talent and acting talent through the medium of film as opposed to digital. You mentioned digital fatigue. Can you say a bit more about that?

I can talk about it, but it’s much better for the artist to talk about it. The fact is that there are a series of film artists, big names like Spielberg, Tarantino, Nolan, Abrams — who only want to shoot film. Several of them would not continue making movies if film isn’t available.

There’s certain actors who have said they prefer to be shot in film: Daniel Craig, Tom Cruise, Tina Fey. They do not want to be shot on digital or on video, because they see the difference in the medium — it’s warmer, the medium is analog like we are as human beings.

Digital and video has democratized the ability to tell stories. It’s very easy for me to grab my iPhone and take a picture of my child playing with a rabbit. It’d be harder to get the old Super 8 out there. But some people want the Super 8.

That’s one of the first new products that’s come out of Kodak with a consumer-facing approach. As you pointed out, almost all of Kodak’s current revenues are really business-to-business. But earlier this year at CES, you introduced a new Super 8 camera, and it seemed to unleash a torrent of consumer goodwill towards the company.

We were very pleased with it. Just put it in perspective, we were at a major print conference in Düsseldorf last week and announced 20 new (business to business) products — all significant investments.

The Super 8 is an opportunity for us to recapture the consumer market and recapture the dream of film, and to allow film to be back in schools and for amateurs. Super 8 is an accessible product that many of us grew up with. To let that fade away wasn’t consistent with our decision to save film. We found a lot more demand than we originally thought.

It’s coming out in the fall?

We announced that the first version will be out just around Christmas time, by the next CES, which is mid-January. We expect to have a large amount available of the higher-end initial camera, and then in about another six to eight months we should be able to go in volume.

If you’re successful, will the Kodak brand mean largely the same thing it used to mean, or do you have a vision for what it might mean in a post-digital era?

I think Kodak in the future will be known for the science that we do, that creates products that help the environment.

You’ve mentioned the environment several times. Is it because the impact of printing was so significant prior, and there’s an opportunity to be branded around being environmentally conscious?

It’s not really a branding issue for us. It certainly helps the environment. There is nothing wrong with that for the brand. Many companies try and make that an adjacent or a very central part of their brand. For us it’s where the science is taking us.

We have hundreds of researchers, and when we look at what we can do to change a very large industry, the printing industry, we feel that we can always do faster speeds and feeds, and we’re pretty good at that.

What really is going to make the difference is lower cost to our customers, and the largest increasing part of cost for a printer is the environmental side effects.

There’s a business opportunity of solving an environmental problem?

Absolutely. It’s good for the industry. It’s good for the company and it’s good for our customers. Of course, Kodak’s history around imaging and around film will still be a core part of the company and will still be what most people think of even 5 or 10 years from now.

We will invest in that and we’ll have more consumer products. The core of our businesses is around printing, and the technology and science underneath it.

There is an almost mythical story about Kodak. It missed the digital transition. I’m sure you rankle about that story …

I wasn’t there, John. [laughs]

True! But there is the story of how Kodak made the first digital camera, had the patents for it, created Apple’s QuickTake, but decided not to put the brand on the camera. The digital photography revolution occurred, but it largely bypassed Kodak.

Apple’s first digital camera, the QuickTake, made by Kodak

I think that is the story that has gotten into the business cases per se. There is a lot of truth to it. The fact is, the charge-coupled device was an important element of research that led to the digital camera.

The first digital camera produced was by a Kodak researcher, a wonderful guy who still works very closely with Kodak today. Kodak took that technology in many ways. It allowed for a lot of the exploration of space because of that digital technology.

We’re very proud of our heritage around this, and we were able to monetize it to the tunes of billions of dollars. It wasn’t a complete swing and miss. However, we didn’t become Sony, we didn’t become Apple, and those are high bars.

We were able to monetize the tech behind digital cameras to the tunes of billions of dollars. It wasn’t a complete swing and miss. However, we didn’t become Sony. We didn’t become Apple.

The fact is that Kodak had a huge business in film, and it is true, that it did not go as aggressively as (it could have). If you don’t dis-intermediate yourself, someone else will.

It may be painful for those who lived through it but the fact is, it is part of our legacy and we won’t make that mistake again.

There is a whole generation of people growing up today who may not even know what Kodak means. But there’s a new service that you released — for now only in Singapore. Kodakit?

Yes. It’s a service that brings photographers and events together. Say I’m getting married and I need a photographer. You’ve got the Kodak brand enabling image creation that matters to me.

Are those the kinds of consumer services that you could see a lot more happening over time?

Absolutely. It’s hard to live in San Francisco where Uber was born, and not to think about how the Internet and ubiquitous GPS can change markets that frustrate you. We were all frustrated living in the city with the taxi market.

Uber was a refreshing change. You didn’t have to pull out your wallet or credit card each time. You didn’t have to tell the driver where you were going. You could get in and get to your point A to point B much easier. There were business model changes that happened.

We think the same thing needs to happen in the commercial and amateur photography market. Today, if you want to have your son or daughter’s birthday party done, it’s painful. You go on Craigslist or you search. You do an independent contractor. The guy shows up. You don’t really know how good they are. Has there been a lot of user ratings on them? And then they own the pictures. You pay for them to come and then they own the picture. You pay again for the picture. That doesn’t make any sense.

Does Kodakit change that model?

Our model at Kodakit is very simple. We will connect photographers to events. You press the button. It shows what (the photographers are) really good at or what they like to do, whether its weddings or food events. Standard contract, you pay upfront, you don’t have to negotiate, the photographer doesn’t have to go through all billing processes and marketing, and most importantly, you own your pictures at the end.

Getting back to the scale of Kodak as a physical plant — the size of that Eastman plant, it’s literally miles of space. You took an interesting approach with that plant, turning it into the world’s largest business accelerator.

To give you a scale of it — we have 17 miles of train tracks, two power plants. We’re completely off the grid. We handle our own water, our own electricity, our own forced steam air for industrial processes.

We have 17 miles of train tracks, two power plants. We’re completely off the grid. We handle our own water, our own electricity, our own forced steam air for industrial processes.

It’s a completely secure site for from both military and other operational capabilities. The scale needs to be put in perspective. The Empire State building is a little over 2 million square feet. We have 16 million square feet of industrial space.

That’s eight times of Empire State Building!

To your point on acceleration, this infrastructure — with its own labs, its own analytics capabilities, not to mention great synthetic chemical capabilities and recycling and chilled water — plus the power that we generate there.

We’ve offered the opportunity for companies to operate at about $4 per square foot there, in a very sophisticated environment. We’re creating everything there from solvents to very sophisticated synthetic chemicals, to silver-based products, to growing medical marijuana.

There’s an industry that George Eastman probably could never have imagined.

Come on now, Kodak Brownie.

The Kodak Brownie. That’s giving a new meaning! You’ve got this big infrastructure and you said, “OK well, let’s figure out how to lever it?” It’s all through partnering?

It is. We run a giant industrial park really as a landlord. We provide value-added services, run analytical testing around research, partnerships. We’re looking for companies that are primarily pushing science.

In the case of medical marijuana, since we went down that road, they happened to be the medical marijuana company that has a relationship with Sloan (Kettering) around research. They’re doing very specific things to test and build out the best therapeutic uses of that product.

In other areas around are more traditional synthetic chemicals or material science, printing, making inks and toners and products like that, having that capability there is a wonderful acceleration opportunity.

You’ve had a long career, you’ve been CEO of a very large travel business. How has this job been different from all the others? Do you see yourself doing this for quite a long time or are you the guy who comes in to fix it and then you move on to the next role?

I typically like to stay a long time in a company. My first company Digital Equipment Corporation was bought by Compaq, which was bought by HP, and I stayed 19 years across the whole company. When I find something I like, I like to stay.

In the case of Travelport and Orbitz, I stayed a little over five years, mainly because we were able to take Orbitz public — very good outcomes for that business. For Kodak, I think I’m just scratching the surface.

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