The name Kodak is synonymous with photographic film and for many decades it held a dominant market position. But the advent of digital technology revolutionised the sector and Kodak needed to go in a significantly different direction to survive.

The upheaval to achieve this was seismic and involved a period of Chapter 11 bankruptcy from which it has now emerged as a leaner more focused business. As Interim HR Director, Gary Fisher worked with the CEO and EMT to take the company through the changes and put the company into a strong position for the future.

 

“Gary’s experience and judgement was instrumental in effecting key decisions which have played a major role in migrating the culture of the old Eastman Kodak business towards a single, unified team working with Kodak Alaris’s core values, vision and mission.”

CEO Ralf Gerbershagen, Kodak Alaris

In 1888, George Eastman revolutionised photography when he sold his first simple camera.  In doing so, he took a previously complicated and cumbersome process and put it squarely in the hands of the consumer; suddenly, photography was accessible to everyone.  Operating under the name Eastman Kodak Corporation (EKC) and headquarted in Rochester, New York state, this culture of innovation and invention continued to serve the company well and over the following years, Eastman Kodak released a continual stream of new products and improved processes that fortified their market-leading position.

 Through its early history, EKC (commonly referred to as “Kodak”) became synonymous with photographic film.  Indeed, throughout most of the 20th century, the company held an utterly dominant market position in the photographic film sector, rising as high as 89% market share in the US in the late 1970s.  Such was its dominance, that the term “Kodak moment” entered common usage as shorthand for a personal event that ought to be recorded for posterity.

Come the late 1990s, the major technological event on the horizon was the rise of digital photography and, having invented the core technology that is still used in digital cameras today, Kodak should have been extremely well-placed to capitalise on this shift in the marketplace.  Partnerships with a wide range of companies followed, from Apple to Microsoft, all in an effort to establish a presence in this new product sector and push forward Kodak’s digital strategy.  In reality however, the company was deeply conflicted as senior management seemed unwilling or unable to contemplate a world without photographic film and the digital strategy was never fully implemented.  A subsequent push into the digital space, under a new CEO, put a range of Kodak-branded digital cameras at its core.  The cameras were well-received and with a number of innovative features that directly addressed customer needs, they quickly gained market share and revenues consequently grew.  However, new competitors surged into this growth sector and Kodak was soon undercut by competitors with lower production costs; profit margins on digital cameras shrunk dramatically.  Kodak soon began to lose market share in the digital camera sector, whilst, in tandem, revenues from photographic film continued to decline.

A new CEO was appointed in 2005 and quickly began to work towards a new strategy.  Film factories were shut down and much manufacturing was outsourced as he strived to take the company back to its core – a technology-led business.  He spearheaded the development of new services and invested heavily in digital technologies in order to generate more high-margin lines of business that could plug the hole left by continually-falling film sales.  Whilst this turnaround delivered new revenue streams, it also severely depleted the company’s cash reserves.  In January 2012, EKC filed for Chapter 11 bankruptcy protection and in February 2012, it announced it would stop making digital cameras, pocket video cameras and digital picture frames and focus on the corporate digital imaging market.  The company was given just over a year to come up with a restructuring plan and soon began to court buyers for a number of its business units.

It was at this stage that Gary was engaged by the Kodak Pension Plan (KPP) as interim HR Director in July 2013 and his initial task was to help EKC out of Chapter 11, securing all terms and conditions and benefits out of EKC into Kodak Alaris in 36 jurisdictions worldwide. Gary led the modelling process for the new Company and OD at the highest level, recruiting initially the new, external CEO.

Together they built the Board from internal and external candidates, comprising five non-executive directors including the Chairman. Whilst this was being actioned, Gary also developed and led an HR team of 45 people worldwide and introduced an HR leadership team of five to build the HR strategy and processes needed to help enable the new company to meet its five year plan which included considerable restructuring. Gary reported to the CEO, was an active member of the Executive Committee and liaised regularly with the sole shareholder, the KPP. He travelled extensively and regularly to the US, China and Brazil.

“Gary worked well with the Kodak team and professional advisors (Grant Thornton & Hogan Lovells) straight away, gaining respect from senior management and staff alike, even though what he was to deliver was not going to be easy and would potentially be painful for some employees”, recalls Steven Ross of Ross Trustees and Chairman of the Kodak Pension Plan Trustee Board.

Eastman Kodak Corporation (EKC) emerged from Chapter 11 bankruptcy protection on Tuesday 3rd September 2013. A commercial imaging business remained as part of EKC but a key part of the process was the ‘spinning off’ of the firm’s Document Imaging and Personalized Imaging businesses to the Kodak Pension Plan (KPP) – Kodak’s United Kingdom pension fund – for ‘cash and non-cash consideration of $650M’.  This agreement also settled approximately $2.8 billion of claims by KPP against EKC and certain of its affiliates. The KPP is the only shareholder and now controls the new business, which is called Kodak Alaris Limited.  Kodak Alaris (KA) has 36 jurisdictions worldwide with a turnover of circa $1.3B and 3,500 employees.

“Gary delivered all that was required within the agreed time frames and tight budgetary constraints,” continued Steve Ross. “He has played a significant part in helping EKC out of Chapter 11, establishing Kodak Alaris, and providing a more secure future for the members of the KPP.”

Kodak Alaris now comprises two divisions, Document Imaging (DI) and Personalised Imaging (PI).

Commenting on Gary’s contribution to the formation and development of Kodak Alaris, CEO Ralf Gerbershagen said “Gary helped recruit me in to a fantastically exciting opportunity and quickly became a respected member of the EMT under my leadership. He worked closely with me as an experienced sounding board for my thoughts and ideas and performed a similar role with other EMT members, adding value to them and their contributions to the development of the business. In bringing together the non-executive board members, Gary has also helped create a powerful senior management team that will take Kodak Alaris forward in very challenging markets.”

He added: “Gary also worked closely with and led an extensive, worldwide HR team ensuring that re-structuring plans were delivered on schedule, and has helped develop them into a more strategic and higher level performance team, progressing them into true business partners for the Company.

“Overall,” commented Ralf, “Gary’s experience and judgement was instrumental in effecting key decisions which have played a major role migrating the culture of the old Eastman Kodak business towards a single, unified team working with Kodak Alaris’s core values, vision and mission.”