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A Kodak moment to forget

Don't knock Kodak for its dire digital and financial straits, because when it comes to screwing up, it's got lots of company.

Digital Equipment founder Ken Olsen was one of the smartest people ever to grace the tech landscape. Yet seemingly every recollection of his legacy makes sure to cite his dumbest quote.

1928 photo of George Eastman and Thomas Edison at a garden party to present an early Kodacolor motion picture film. Kodak

"There is no reason for any individual to have a computer in his home," Olsen told a meeting of the World Future Society in Boston in 1977.

Though Olsen would later claim that the quote was misinterpreted, it's since acquired the status of punch line, an eternal shorthand summation for corporate cluelessness.

What a shame. Long after it became clear to everyone that the PC was thoroughly revolutionizing business, I interviewed Olsen. He was a charming and gracious man who was kind enough not to take off my head when I second-guessed him.

Harvard Business Review: What went wrong at Eastman-Kodak

How was it that he had missed a tech transition that now was so obvious? I recall that he just smiled at the question and said something to the effect that, well, there's no shortage of 20-20 wisdom in the rear view mirror.

I was reminded of Olsen's answer as the news hit early Thursday morning that Kodak was getting rid of its camera business. There's no shortage of commentary out there today about how Kodak screwed up and how the empty suits at the top of the company were dumber than a sack of potatoes to muff a business that they helped pioneer--for Pete's sake, they actually invented the digital camera. Yet here they were, shutting the lights at the company's digital camera and pocket video camera businesses. Yes, this surely was a Kodak moment to remember.

But before going off so smug and smart, let's also acknowledge that these technology transitions, always clear in retrospect, are far less so in the beginning. Starting in 1900 with the introduction of the inexpensive Brownie camera, Kodak built a formidable business. At one point in the mid-1970s, the company owned 90 percent of the high-margin film photography market in the U.S.

That's not just dominance; it's Babe Ruth, New York Yankees kind of dominance. It also factored into the complacency that set in as Kodak failed to meet aggressive challenges from Fuji and then poorly navigated the transition to the information age before getting entirely annihilated as its customers began turning to smartphones to take pictures.

But it wasn't as if Kodak was entirely out to lunch. In 1975, its engineers came out with a working prototype for a digital camera. But like the management at Xerox, which failed to recognize the revolutionary work being done by the boffins at its PARC subsidiary, Kodak didn't--or didn't want to--recognize what was theirs for the taking.

Steve Sasson, the Kodak engineer who led the project, recalled that management reacted to the prototype saying, "That's cute--but don't tell anyone about it." Management was still too in love with the old business model, a fixation that the authors of a Harvard Business study of Kodak (PDF) noted was a guarantee of corporate suicide in the post-digital age.

Even then, Kodak did invest billions of dollars into digital imaging. It even bought an Internet photo-sharing site called Ofoto in 2001. But none of this eased the way toward a successful transformation with Kodak still stuck primarily on playing up photography. Unfortunately for the company, by then it was too little, too late.

The world had moved on.