Il caso Kodak : quando l'innovazione diventa il nemico da combattere

In the cases we have analysed so far Boeing, Deepwater Horizon, etc — the risk was operational, regulatory, environmental, always reactive: something went wrong and the organisation had failed to prevent it.

The Kodak case introduces a new and more subtle dimension: strategic risk. A company that does not collapse because of an accident or a fraud — but because of a deliberate decision to ignore the future in order to protect the present. A company that had invented the future of photography. And had chosen to bury it.

A century-old monopoly facing a revolutionary invention

Founded in 1888 by George Eastman, Kodak had built over a century one of the most solid monopolies in American industrial history. In the 1970s, it controlled more than 90% of the American photographic film market and 85% of cameras.

Film was a money-printing machine. Every roll sold generated extraordinary margins. The business model seemed unassailable.

In December 1975, a young 24-year-old electrical engineer named Steve Sasson assembled a prototype in Kodak’s applied research laboratory in Rochester, New York. The device was the size of a toaster, weighed 3.6 kilos, used a lens borrowed from a Super-8 movie camera, 16 nickel-cadmium batteries and a Fairchild Semiconductor CCD chip. It captured black-and-white images at 0.01 megapixels and stored them on a cassette. It took 23 seconds to write an image. It was the world’s first digital camera. (Source: National Inventors Hall of Fame, May 2019)

The meeting that changed history

In early 1976, Sasson presented his invention to Kodak’s executives. He brought the prototype, took photos of the people in the room, removed the tape and inserted it into the playback unit. An image appeared on the television screen.

<p>The reaction I got from Kodak management was one of curiosity and scepticism as it did not feel like a major invention. There was not a real feeling that we had invented something. The feeling was that this was a very scary look at what could be possible in the future.</p>

<p>The official response was what would become one of the most quoted phrases in modern management history: “That’s cute — but don’t tell anyone about it.” (Source: Forbes, January 2012)</p>

<p>Kodak patented the technology in 1978. And put it in a drawer.</p>

The ignored signals: four moments when Kodak could have changed course

Signal #1 — 1975: the buried invention: the technology was not ready for the mass market in 1975 — that is true. But the decision not to develop it, not to create a separate unit to explore it, not to invest in its evolution, was not technical. It was strategic. Kodak had a profitable monopoly on film. Digital would have cannibalised its own business. Better to bury it. (Source: Stratrix, March 2026)

Signal #2 — 1981: Sony launches the first commercial electronic camera: Sony launches the Mavica — the first commercial electronic camera. Kodak sees the threat coming. Commissions a market study that concludes: digital is the future, but it will take 10 years before image quality matches that of film. Kodak’s response: protect film for another 10 years. A wasted decade. (Source: Forbes, January 2012)

Signal #3 — 1989: the first digital DSLR — never commercialised: Sasson and his colleague Robert Hills create the first standalone digital DSLR. Kodak decides not to commercialise it. Film still generates margins too high to risk cannibalising it. (Source: National Inventors Hall of Fame, May 2019)

Signal #4 — The 1990s: digital explodes, Kodak hesitates: in the 1990s, Kodak still controlled more than 80% of the global film market. But digital was growing at exponential rates. Sony, Canon, Nikon, Fujifilm were building the future that Kodak had invented. Kodak launched some digital products — late, timidly, without ever really wanting to cannibalise film. One step forward and two steps back. (Source: AInvest, August 2025)

The cost of strategic inertia

The financial cost: in 1997, Kodak had a market capitalisation of $31 billion. It was one of the most powerful companies in the world. In January 2012, Eastman Kodak filed for bankruptcy with $5.1 billion in assets and $6.8 billion in debt. Shares had fallen 80% in 2011 alone, hitting an all-time low of $0.54 per share — down from a high of over $80 in the 1990s. (Source: Newsletter Pro, February 2026)

<p><strong>The market cost:</strong> Kodak had controlled 90% of the American film market. That market no longer exists. The company that invented digital photography was destroyed by digital photography. (Source: AInvest, August 2025)

The human capital cost: Kodak had tens of thousands of employees. The city of Rochester, New York, was built around Kodak. Thousands of families, suppliers and entire communities suffered the consequences of a decision taken in the upper floors in the 1970s and 1980s.

The only silver lining: over the decades, Kodak had accumulated more than 11,000 patents valued at around $1 billion. In 2013, it sold its digital imaging patents for $525 million to a consortium including Apple, Google, Facebook, Microsoft and Samsung — the very companies that had built the future Kodak had chosen not to build. (Source: IEEE Spectrum)
The Kodak lesson for risk professionals

The risk that destroyed Kodak was not in the processes, not in the regulations, not in the safety systems. It was in the strategy. And more precisely: in the conscious decision not to see what was already visible.

This changes everything. Because an organisation can have a perfect risk management system procedures, audits, KPIs, control committees — and still collapse, if nobody has the courage to raise their hand and say: “We are building the wrong future.”

Three reflections that the Kodak case leaves to those who work in risk management.

Strategic risk does not wait. It does not explode in a single day. It accumulates in silence, year after year, decision after decision. When it becomes visible, it is already too late to act without enormous costs. The window to intervene closes slowly — but it closes.

Internal conflict of interest is the most difficult risk to manage. At Kodak, everyone knew. The engineers knew. The executives knew. The problem was not the information — it was the incentive. Those who earned from film had no interest in killing it. Those who had the power to decide were the same ones who had the most to lose from change. In risk management, this is called a structural conflict of interest. And it is exactly the type of risk that no checklist manages to intercept.

The question that reveals everything. When Sasson presented his invention, Kodak’s executives did not ask him how it worked. They asked: “Why would anyone want to look at their photos on a television screen?” That was not a technical question. It was a cultural question. It revealed an organisation incapable of imagining a future different from the present. And an organisation that cannot imagine the future — cannot manage the risks that future brings with it.

Conclusion

The Kodak case is not the story of a company that failed to innovate. It is the story of a company that had already innovated — and had chosen to bury its own innovation.

In operational risk management, there is a principle that applies as much to workplace safety as to corporate strategy: unmanaged risks do not disappear. They accumulate until the cost of ignoring them exceeds the cost of facing them.

For Kodak, that moment came on 19 January 2012.

Sources: Steve Sasson — National Inventors Hall of Fame (May 2019) — Stratrix, Kodak Shelves Its Digital Camera (March 2026) — Forbes, How Kodak Failed (January 2012) — Petapixel, How Steve Sasson Invented the Digital Camera (2022) — AInvest, The Decline of Kodak (August 2025) — CDO Times, Case Study: Kodak’s Downfall (September 2023) — Newsletter Pro, Kodak: A Business Failure Case Study (February 2026) — IEEE Spectrum, Kodak’s Digital Imaging Patents Sold for $525 Million — Cambridge University Press, Business History Review (August 2025).