The Dilemma That Brought Down Kodak

People remember Kodak with a mix of nostalgia and disbelief. Nostalgia for the days when its yellow boxes defined photography for millions, and disbelief that a company so dominant could lose it all. From the first camera for the masses to the invention of the digital camera itself, Kodak helped shape the very future it would later fail to claim. Caught in the grip of the innovator's dilemma, where past success breeds caution and caution kills momentum, Kodak hesitated while others adapted, and the digital revolution left it behind. This is the story of how the company that once defined photography became its most famous casualty.

Key insights

• Innovation means nothing without commitment: Kodak invented digital photography but failed to support it structurally and culturally, choosing to protect film instead of leading the future.

• Survivors design for disruption: Others built systems that allowed them to evolve early, not react late, treating change as a strategy, not as a threat.

• Mindset determines outcome: Kodak saw disruption as a risk to manage. Others saw it as an opportunity to reinvent. That mental shift made all the difference.

• Define by the customer's job, not the product: Kodak judged digital by film-era standards, missing the fact that its real advantage was instant sharing and convenience.

• Capabilities outlast products: Fujifilm proved that the know-how behind a product can be more valuable than the product itself. Defining yourself by capabilities allows you to pivot farther and faster.

• Systems sustain innovation: Constellation Software's model of ring-fencing long-term bets, keeping burn rates low, and assigning dedicated owners, gives disruptive ideas time and space to prove themselves without draining the core business.

The rise and fall

At its peak in the mid-1990s, Kodak had a market cap of $28 billion and employed more than 140,000 people. The company had just a few years earlier controlled an incredible 90% of the U.S. film market and 85% of camera sales. It was an empire built on simplicity, accessibility, and innovation. But fast forward to 2012, and the giant had fallen. Kodak filed for bankruptcy and was reduced to a shadow of its former self.

Kodak's rise and fall through its stock price, 1965–2012.

What happened? How did Kodak go from leading the charge to being left behind by the very digital revolution it helped spark? How could its competitors write such different stories? And what could've saved Kodak from its massive fall?

Let's take it from the start.

A camera for the masses

In the late 19th century, when capturing a simple photo required lugging around equipment heavier than a small elephant and mixing chemicals like a mad scientist, a young bank clerk named George Eastman decided enough was enough. Born in 1854 in Waterville, New York, Eastman was intrigued by the potential of photography but frustrated by its inaccessibility.

It all began in 1877, when Eastman was planning a vacation to Santo Domingo and wanted to document his trip. However, the sheer complexity and bulkiness of photographic equipment at the time (requiring heavy glass plates and chemicals) made him reconsider. Instead of a tropical getaway, Eastman started investing his time and money into making photography less of an extreme sport and more of a leisurely activity.

Eastman was not a trained chemist or engineer. He was a 24-year-old bank clerk at the Rochester Savings Bank, with little formal education and even less free time. He joined the bank in 1874 after dropping out of high school to support his mother and two sisters, following his father's death and the collapse of the family nursery business. The bank job offered stability, but Eastman was restless and intellectually curious, traits that would ultimately steer him far beyond ledgers and deposits. Once the photography bug bit, he became obsessed.

He would spend his evenings in his mother's kitchen, turning it into a makeshift darkroom. He pored over photography journals, experimented with emulsions, and taught himself the painstaking process of preparing photographic plates by hand. What began as curiosity quickly morphed into relentless experimentation. He wasn't trying to become a professional photographer; he simply believed there had to be a better way.

Through countless trials, Eastman eventually developed a dry plate formula that didn't require immediate development, making photography far more practical. But he didn't stop there. By 1880, he had also built a machine to manufacture these plates in bulk, a leap that transformed his invention from a personal solution into a viable business. Recognizing the commercial opportunity, he founded the Eastman Dry Plate Company that same year.

But Eastman wasn't content with only improving existing methods. He envisioned making photography "as convenient as the pencil." In a similar manner to how people could just pick up a pencil and draw something, they should be able to take photos without needing a chemistry degree. Following this vision, he shifted his focus to developing a more portable and user-friendly camera. Then, on September 4, 1888, Eastman introduced the world to the first Kodak camera. Priced at $25 (a small fortune back then, but cheaper than hiring a personal artist), the camera came pre-loaded with a 100-exposure roll of film.

How Kodak made photography snap

The genius of the Kodak camera lay in its simplicity. The company's slogan, "You press the button, we do the rest," wasn't just catchy. After taking 100 photos, likely of stern-faced relatives who hadn't yet mastered the art of saying "cheese," customers would send the entire camera back to the Kodak factory. There, the film was developed, prints were made, the camera was reloaded, and everything was sent back to the customer.

For the first time, photography was within reach of the average person, not just professionals or hobbyists with deep pockets. The Kodak camera was lightweight, easy to use, and required no technical knowledge of photography. People could now capture everyday moments, a child's first steps, a family picnic, or Uncle Joe accidentally falling into the lake.

The name "Kodak" itself was a stroke of marketing brilliance. Eastman liked the letter "K," thinking it was strong and incisive. He wanted a word that was short, unique, and easy to pronounce in any language. And so, "Kodak" was born, a name that, according to Eastman himself, "snaps like a camera shutter in your face," and soon would become synonymous with photography all over the world.

Building on this success, Kodak introduced the Brownie camera in 1900, priced at just one dollar. It was marketed to children and the mass market, proving that even kids could handle photography without accidentally setting anything on fire. The Brownie was a runaway success, selling millions of units and turning photography into a widespread hobby.

The Kodak ecosystem

Kodak went on to create an entire ecosystem around the cameras. This ecosystem-driven strategy boosted profitability by creating a closed-loop system that maximized customer lifetime value. By controlling every step of the photographic process, they not only generated recurring revenues but also locked customers into their ecosystem.

Here's how it worked:

1. Recurring revenue streams: The company didn't just sell cameras; they ensured that using those cameras required Kodak film. Once the photos were taken, users also needed Kodak-branded development and printing services. This created a steady stream of income well beyond the initial camera sale.

2. Brand loyalty and market dominance: Kodak became synonymous with photography by building a vertically integrated ecosystem that locked in customers. Their widespread marketing, easy-to-use products, and omnipresence in retail ensured that Kodak was the default choice for generations, making competitors almost invisible to the average consumer.

3. Consistent quality and user experience: By controlling the production of cameras, film, and printing materials, Kodak ensured consistency in the final output. This reassured customers that using Kodak products at every step would result in high-quality photos, reinforcing their trust in the brand.

4. Cross-selling opportunities: Kodak leveraged its ecosystem to introduce additional products and services. For example, they provided guides and tips for improving photography, enticing users to experiment more, and by extension, buy more film and prints.

In essence, Kodak's vertically integrated business model turned a one-time camera purchase into a long-term relationship, with multiple touchpoints for revenue generation. Their ability to bundle products and services also allowed them to maintain higher margins while ensuring customers rarely, if ever, left the Kodak ecosystem. A post on Before It Happened, a podcast and storytelling series exploring pivotal innovations, describes it well:

Innovation and cultural impact

Throughout the early 20th century, Kodak continued to innovate and expand. The company introduced new products at a steady clip, each one lowering the barrier between everyday people and the power of photography.

One of Kodak's most significant breakthroughs came in 1935 with the release of Kodachrome, one of the first successful consumer-grade color films. It allowed families to capture the world not just in shades of gray but in vivid reds, blues, and greens. Sunsets, summer dresses, autumn leaves, and birthday balloons suddenly had texture and warmth, and color photography was no longer a professional luxury. It became personal.

But Kodak didn't just build the tools. It built the narrative.

Through savvy marketing, the company made photography feel essential to modern life. Their ads weren't focused on specs or film speed, but on the moments its cameras could capture. The phrase "Kodak Moment" slipped into everyday speech, shorthand for something fleeting and beautiful, something you'd regret not capturing. Your kid's first step. A pose on a mountain summit. Your cat doing something other than ignoring you.

The empire at its peak

Kodak's influence wasn't limited to birthday parties and family picnics. The company's film stock became the gold standard in another storytelling medium: motion pictures. For decades, Kodak supplied film to Hollywood studios and independent filmmakers alike. Its emulsions helped create the warm glow of Casablanca, the otherworldly palette of The Wizard of Oz, and the epic landscapes of Lawrence of Arabia. Kodak, quite literally, gave Hollywood its look.

They were just as essential behind hospital doors. Kodak developed X-ray films and medical imaging solutions that supported diagnostics and treatment across the globe. In labs and research institutions, their high-resolution films helped document experiments, capture microscopic structures, and advance science. The reach of Kodak's innovation extended into aerospace, forensic science, industrial inspection, and everything in between.

If there was an image to be captured, static or moving, Kodak was likely somewhere in the chain.

By the 1950s, Kodak was an institution. It commanded over 85% of the U.S. photography market at its peak. Its Instamatic camera, launched in 1963, was wildly popular and sold more than 50 million units. Its research labs were among the best-funded and most ambitious in the private sector, and the firm routinely filed more patents than entire industries.

The Instamatic: making photography easy enough to wrap and give.

Kodak's success transformed its hometown of Rochester, New York, into a bustling company town. The city boasted excellent schools, arts institutions, and public amenities, all boosted by Kodak money. At its height, the company employed over 140,000 people worldwide, and for generations of Rochester families, a job at Kodak meant security, pride, and upward mobility.

In boardrooms, on billboards, and in family albums, Kodak's presence was constant. It had become, quite literally, the name of the moment. It seemed nothing could dim their flashbulb.

The innovator's dilemma and Kodak's hesitation on digital

As the 20th century wore on and technology accelerated at an unprecedented pace, Kodak, once the gold standard of photographic innovation, approached a crossroads. What followed would become one of the most widely cited stories of decline in business history. It is a textbook case of the innovator's dilemma, a concept introduced by Harvard professors Clayton M. Christensen and Joseph L. Bower in their 1995 HBR article, "Disruptive Technologies: Catching the Wave." Their theory explains how even the most successful companies can fail by doing everything "right." By focusing on perfecting existing products and protecting current profit centers, they often ignore the seemingly small innovations that eventually reshape entire industries.

George Eastman himself had warned against such complacency decades earlier:

Ironically, the company he built on bold bets and accessible technology would later fall victim to the very system it once disrupted.

The threat emerged in 1975, not from a competitor, but from within Kodak's own walls. A young electrical engineer named Steve Sasson built a working prototype of the world's first digital camera, a toaster-sized device that captured black-and-white images at 0.01 megapixels and stored them on a cassette tape. It was crude by today's standards, but revolutionary for the time. Sasson presented it to Kodak's management, expecting excitement. Instead, he was met with a lukewarm response, bordering on skepticism, as this excerpt from a Petapixel (2022) article recounts:

Kodak's leaders didn't dispute the innovation, they just didn't want it. Why promote a technology that would cannibalize their billion-dollar film business? Why replace prints with pixels, negatives with code? To them, the digital camera was a fascinating side project, but commercially dangerous. After all, who would want to look at photos on a screen?

But this is precisely how disruption works. New technologies often look like toys at first, limited, low-quality, and impractical. That's why incumbents ignore them, and that's how they get overtaken. While Kodak hesitated, Sony, Canon, Fujifilm, Nikon, and others leaned in. They pushed digital imaging forward, embraced the future Kodak had helped invent, and claimed the next generation of photography.

Kodak, meanwhile, doubled down on what it knew best. It launched half-hearted digital initiatives, but never gave them the internal support to thrive. The digital transition didn't just undermine Kodak's products but completely obliterated its business model. Consumers no longer needed film, development labs, or printing services. The entire analog supply chain, once Kodak's fortress, became irrelevant.

By the early 2000s, Kodak's dominance had unraveled. In 1996, the company was worth over $28 billion and employed more than 140,000 people. Roughly 15 years later, it was filing for Chapter 11 bankruptcy protection (2012), brought down by its failure to adapt to the very future it had glimpsed first.

What Kodak could have learned from Christensen

Kodak's failure was part ignorance and part structure. It had the foresight (at least partly), the technology, and the talent to lead the digital photography revolution. What it lacked was the willingness and the organizational design to truly pursue it.

In hindsight, it's the perfect example of the innovator's dilemma, Clayton Christensen's theory that transformed how we think about corporate failure. First introduced with Joseph L. Bower in 1995, and later developed in Christensen's 1997 book "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail," the idea explains why dominant companies often fall, not because they're poorly run, but because they're too optimized for the present. Their very success makes it difficult to back something new that looks small, low-margin, or misaligned with existing customers.

While Kodak's story unfolded years before Christensen formalized the theory, it would later become a textbook case of exactly the problem he described. His framework was clear, structural, and actionable, offering the kind of guidance Kodak might have benefited from, had it existed at the time.

Separate to survive

One of Christensen's core insights was that a disruptive business must be allowed to grow outside the gravitational pull of the core. That means creating a structure where the new venture isn't forced to meet the same targets, serve the same customers, or justify itself through the same economic logic. It's not enough to acknowledge disruption – you have to build an environment where it can breathe.

Kodak didn't do that. When Steve Sasson invented the first digital camera in 1975, management didn't dismiss it outright, but they also didn't know what to do with it. The technology challenged their most profitable product, and their internal systems had no way to nurture something so different. Digital didn't fit. It didn't sell film. It didn't drive prints. It didn't feed their labs or channels. So instead of spinning it out or giving it space, Kodak buried it.

Contrast that with what IBM did when it launched its PC business. Rather than building it inside the existing mainframe structure, the company set up an autonomous team in Boca Raton, Florida, physically and culturally removed from HQ. They gave it freedom to choose its own suppliers, set its own costs, and move fast. IBM wasn't trying to optimize the PC for its old business. It was building something new, and it knew that required distance. Kodak, by contrast, kept digital close and smothered it.

Right-sizing the risk

Another barrier Kodak ran into was size. By the 1980s and '90s, Kodak was a behemoth, and it needed billion-dollar ideas to move the needle. Digital photography, in its infancy, didn't look like that. It was slow, low-res, and had no clear path to mass-market profitability. From the perspective of Kodak's leadership, it simply wasn't big enough to matter.

Christensen called this the problem of scale mismatch. Large companies overlook small opportunities not because they can't see them, but because they can't justify them. Their units are too big, their expectations too high. That's why Christensen recommended carving out small, focused teams with right-sized goals; that is, ventures built to learn, not just earn. Philips did this with Hue, its smart lighting division, which started as a 30-person skunkworks project. Adobe applied the same model to its mobile tools. Kodak, by contrast, never gave digital the space to grow.

Rethinking the job to be done

Just as crucial, Christensen urged companies to shift how they understand customers. Most incumbents focus on product categories and feature gaps. Disruptors, by contrast, focus on what he called the "job to be done." That is, what goal is the customer trying to accomplish, and under what conditions do they "hire" a product to do it?

Kodak saw digital as a worse version of film: lower resolution, fewer prints, and no physical output. But digital wasn't trying to compete on those terms. It was trying to solve a different job, with instant sharing, convenience, and portability. The ability to see and send a photo without ever printing it was a new kind of progress, one Kodak didn't recognize because it didn't resemble their existing value proposition.

Strategy that emerges, not predicts

Perhaps most importantly, Christensen advocated for emergent strategy. Big companies like Kodak tend to rely on long-term forecasts, TAM analyses, and five-year ROI models. But disruptive technologies don't play by those rules. They emerge slowly, often looking like toys or side projects. The answer, Christensen believed, was running low-cost experiments, tracking early usage metrics, and scaling based on real behavior, instead of modeled projections.

It's the same approach Amazon used with AWS, which started with a single product (S3) before expanding based on developer demand. Netflix took a similar path, greenlighting streaming in 2007 when less than five percent of its DVD library was available online. They weren't aiming for immediate returns. Instead, they paid close attention to how people used the product and adapted quickly.

Kodak never embraced this approach, electing to wait for digital to become obvious and immediately profitable. By the time it did, the field was crowded with competitors who had spent a decade building capabilities, market share, and brand trust. Kodak tried to catch up, but it was too late.

Innovation requires structural humility

Christensen's thesis isn't that disruption is inevitable. It's that survival depends on your ability to act before the numbers make sense, before the new curve overtakes the old one. Kodak had all the raw materials to lead the digital era. What it lacked was the humility to treat digital not as a threat to be managed, but as a future to be discovered.

When theory meets reality

If Kodak is the story of decline, Constellation Software (CSI) may be its quiet counterpoint. Without ever invoking Christensen's name, CSI has built a long-term operating model that instinctively sidesteps the innovator's dilemma.

Founded in 1995 by Mark Leonard, CSI has grown into one of the most successful serial acquirers in history, acquiring hundreds of vertical market software businesses and compounding capital at extraordinary rates. But what often goes unnoticed beneath the surface of CSI's decentralized empire is how methodically Leonard and his team have approached the challenge of sustaining innovation without sacrificing discipline.

At the heart of that strategy is a deceptively simple distinction: separating R&D and Sales & Marketing spend (RDSM) into two categories: initiatives and everything else.

There's a lot for us to learn here. This internal framework has essentially given CSI a structural tool to think differently about long-term bets. It helps the company distinguish between the resources used to maintain and optimize existing businesses (everything else). And those invested in riskier, longer-horizon efforts, the kind of projects that usually get killed too early by companies focused on quarterly earnings (initiatives).

Playing the long game

Leonard understood that truly disruptive innovation in software often takes five to ten years to bear fruit, a timeline most public companies aren't built to tolerate. By ring-fencing these long-term initiatives within a separate budget, CSI has created space for experimentation and innovation without threatening the financial health of the broader business.

This patient, measured view allows CSI to pursue innovation without chasing it blindly, and without demanding instant results.

Feedback loops and course correction

Initiatives at CSI aren't left to drift. Leonard has emphasized the importance of tight feedback loops, with clear measurement against assumptions and a willingness to triage early when things aren't working. If a project shows no signs of traction, it's shut down or redirected, not defended endlessly out of pride or sunk-cost fallacy.

This mirrors Christensen's advice: treat disruptive bets like options, not guarantees. You place them thoughtfully, monitor their progress, and act decisively when reality proves or contradicts the plan.

Controlling the burn

CSI also recognized a trap many companies fall into: allowing early-stage projects to quietly bleed capital for years without ever proving themselves. Leonard and his team tackled this by enforcing strict burn-rate discipline. Initiatives are expected to stay lean, sometimes even funded in part by early customers, until reaching proof of concept or market validation.

This approach doesn't just preserve cash, but also filters out ideas lacking urgency, traction, or customer pull. As Leonard put it in his 2012 President's Letter:

Ownership, not diffusion

Another powerful lever is dedicated leadership. CSI introduced the role of "Initiative Champions," individuals fully accountable for the progress and outcome of a given effort. No more split responsibility or part-time oversight. This ensures each project has clear direction and a single point of accountability.

This level of ownership helps prevent one of the most common killers of innovation in large companies: diffusion of responsibility.

Shifting mental models

Perhaps most importantly, Leonard understood that structures alone aren't enough. If the mental models inside the organization aren't evolving, the same short-term biases will eventually reassert themselves.

So rather than issuing top-down mandates, CSI lets the system speak for itself. They measured, adapted, and shared results. Over time, a new culture took root, where long-term thinking became part of how the organization operates.

Innovation with discipline

What CSI has achieved isn't flashy; there are no high-profile moonshots or viral product launches. But beneath its steady track record lies a system built to balance innovation with restraint, curiosity with accountability, and long-term vision with near-term discipline.

CSI didn't let fear of disruption blind it to the need for renewal. And unlike many impulsive startups, it didn't let the pursuit of growth override the principles of capital efficiency. It simply built a system that could hold both.

But CSI's story is rare. Most companies don't build those systems. They don't adjust their mental models, ring-fence their innovation budgets, or separate long-term bets from short-term pressures. They try to manage disruption from within the core, and often end up paralyzed by it.

Which brings us back to Kodak.

While CSI quietly built mechanisms to support disciplined innovation, Kodak stood on the edge of a digital wave with all the right tools, and none of the structure or conviction to use them.

Digital overtakes film

While Kodak hesitated, its competitors surged ahead. Companies like Sony, Canon, and Nikon had no legacy film empire to protect, and that gave them a strategic advantage. They weren't burdened by decades of institutional momentum or dependent on a business model tied to chemicals, paper, and processing labs. Instead, they could look at digital technology with fresh eyes.

These firms invested aggressively in research and development, improving image resolution, storage, battery life, and usability at a remarkable pace. They understood that while digital cameras may have thinner margins at first, the market potential was enormous. Photography was shifting from a finite, expensive process, limited by rolls of film and per-print costs, to an infinite, immediate experience. Digital wasn't just another format; it was a new medium entirely.

By the early 2000s, the message was loud and clear: convenience was king. Consumers no longer wanted to buy film or wait days for prints. With digital, they could shoot hundreds of photos at no extra cost, delete the bad ones, and instantly share the good ones. It became a way to communicate, curate, and connect in real time.

The rise of digital cameras and the decline of film, 1995–2010.

Kodak, ironically, had all the ingredients to lead this wave. It held some of the earliest and most valuable patents in digital imaging, and its engineers were among the best in the world. Steve Sasson's 1975 prototype had proven the technical feasibility of digital photography nearly a decade before competitors brought viable products to market.

But it stands clear that innovation isn't just about invention, it's about belief and follow-through. Kodak's leadership never fully committed. Digital remained a side project, tucked into corners of the organization, always subordinate to film. The company launched digital cameras, yes, but half-heartedly, often pricing them to protect film sales or limiting their distribution. They behaved like incumbents trying not to lose, while others were playing to win.

The cultural divide between engineering and management at Kodak widened. Engineers understood where the technology was going, but their insights rarely translated into decisive business action. As photographer Sam Abell later recalled:

Diversification can work

While Kodak struggled to reconcile its past with the future, across the Pacific, Fujifilm was navigating the same storm and charting a completely different course. The early 2000s brought an existential crisis to every company rooted in film photography. Between 2000 and 2006, global demand for color photographic film plummeted by 60%. By 2010, the market had all but collapsed, reduced to less than a tenth of its former size.

Fujifilm's CEO at the time, Shigetaka Komori, described it as an "earth-shattering event." For a company that had long depended on film for its profits and identity, the bottom was falling out, and fast. But while Kodak froze, Fujifilm moved.

Fujifilm recognized early that the digital revolution wasn't a passing fad like floppy disks or frosted tips. It was the future, and they treated it as such.

Unlike Kodak, which treated digital as a side hustle, Fujifilm embraced the shift head-on. They invested in digital imaging, built a competitive line of digital cameras, and leaned into their expertise in optics and sensors. By doing so, they preserved a meaningful position in consumer photography as film rapidly faded from relevance.

But Fujifilm didn't stop at adaptation. They reimagined their core identity.

From film grain to skin care

Rather than asking what products they had to protect, Fujifilm asked what capabilities they had to repurpose. That mindset became the foundation of one of the most successful corporate reinventions of the modern era.

Film manufacturing had made them experts in chemical engineering, collagen science, and antioxidant preservation, all critical in keeping film stable and long-lasting. And they realized those same capabilities had applications far beyond photography.

The result? A bold leap into cosmetics and pharmaceuticals.

In 2007, Fujifilm launched ASTALIFT, a skincare line that used its proprietary knowledge of nanotechnology and collagen chemistry to fight signs of aging. The idea might've sounded outlandish at first. Why would a camera company make beauty products? But the science was sound, and the market responded. ASTALIFT grew steadily, hitting around $180 million in sales by 2011, and helped establish Fujifilm as a serious player in the high-end skincare space.

Reinventing around imaging – again

Fujifilm also doubled down on digital imaging, not just in cameras but in medical diagnostics and healthcare equipment. Their capabilities in image processing, optics, and sensor technology translated naturally into digital X-ray systems, endoscopes, and ultrasound imaging.

In 2008, they acquired Toyama Chemical for approximately $1.5 billion, securing a foothold in pharmaceutical R&D. They also began investing in regenerative medicine, biotech, and healthcare IT. These moves were tightly aligned with Fujifilm's strengths, just applied to new, future-proof categories.

The results speak for themselves. By FY2024, Fujifilm's healthcare segment accounted for 32.0% of total revenues and 21.0% of EBIT, while its imaging segment contributed 17.0% of revenues and a striking 37.8% of EBIT, driven largely by high-margin digital photography and diagnostics. In other words, a company once known for capturing memories is now helping to preserve lives.

The second foundation strategy

All of this transformation was guided by what Komori called "The Second Foundation," a complete corporate overhaul designed to future-proof Fujifilm for the digital age. It was as much about mindset as it was about business models.

The company aggressively cut costs, closed underperforming factories, and reduced headcount where necessary. About 5,000 jobs were cut between 2004 and 2010, mainly in photo imaging. These were painful but necessary moves to become leaner and more agile.

At the same time, Fujifilm kept investing in R&D, optimizing supply chains, and pursuing growth in promising new sectors. They didn't abandon imaging, but they evolved it, building a portfolio that stretched from enthusiast cameras like the Fujifilm X-series to diagnostic imaging systems found in hospitals around the world.

And all of it came down to one crucial difference: Fujifilm chose to let go of its past before the market forced its hand.

Revenue paths diverged as Fujifilm adapted and Kodak faltered.

Kodak's present struggles

More than a decade after its 2012 bankruptcy, Kodak again finds itself at a crossroads. Since reemerging in 2013, the company has tried to reinvent itself, shifting from film into commercial printing, specialty chemicals, and pharmaceuticals, aided by a high-profile $765 million U.S. loan in 2020. Yet in August 2025, the 131-year-old firm warned investors there is "substantial doubt" about its ability to continue operating. With nearly half a billion dollars in debt coming due within 12 months and only $155 million in cash on hand, the situation looks precarious.

Kodak is attempting to ease the crisis by tapping into a surplus from its pension fund, potentially redirecting around $300 million toward debt repayment. Executives insist this will leave the company nearly debt-free by year-end, but accounting rules forced Kodak to issue the disclosure that rattled markets.

The situation underscores a telling pattern. Kodak once failed because it couldn't let go of its film legacy, and now it is fighting to remain relevant in industries far removed from the "Kodak Moment." Whether its pivot succeeds, or whether history will repeat itself, remains to be seen.

Closing thoughts

Disruption doesn't announce itself with a press release. It arrives as a prototype, a fringe behavior, a change in customer expectation that's easy to ignore, until it isn't. Kodak had the vision. It had the technology. But it lacked the structure and conviction to break from its own gravity. By the time it took digital seriously, it was no longer the leader.

Fujifilm faced the same cliff, and built a bridge. By asking what are we really good at, not just what do we sell, it reimagined its future from the inside out. Today, it's not just surviving, it's thriving in sectors Kodak never entered.

Constellation Software took yet another path, quietly embedding Christensen's principles into its operating model. It didn't need a single product to change the world. It needed a system that could absorb change, test ideas, and protect them from premature death.

The lesson across all three is simple to say, hard to practice: innovation requires more than invention. It demands humility, discipline, and a willingness to let go of what once worked.

If Kodak's story reminds us of what happens when we cling too tightly to the past, Fujifilm and CSI show what's possible when companies prepare, deliberately and structurally, for the future. That's not just strategy. It's the quiet difference between decline and progress.