KODAK‘S BLACK-AND-WHITE DIVISION
Eastman Kodak, a classic reengineering example portrayed by Hammer
and Champy (1993), began with a push from the top but put much
greater emphasis on customers and on empowering employees at mul-
tiple levels. Kodak traces its rich historic roots back to the late 1880s,
when George Eastman began to manufacture wooden boxes capable of
capturing one hundred personal images on film.
A century later, Kodak was a giant in trouble. Its name and film
were known around the world, but the company had been rocked by
intense competition, high costs, declining customer satisfaction, threats
of a hostile takeover, and low employee morale. At a top management
1989, Kodak's normally gentle, soft-spoken CEO, Colby
structure and Restructuring 9394
Chandler, wielded a machete to hack a wooden lectern to pieces. The
message was clear and dramatic: Kodak needed fundamental change,
and its functional, “stovepipe” structure had to give way to an orga-
nization based on process—a seamless flow from raw materials to fin-
ished products (Hammer and Champy, 1993).
Kodak chose to reorganize into six flows, one of which was black-and-
White film, Implementation was to begin immediately, and any laggard
operations would be shut down. In the black-and-white division, a group
of executives focused on creating three streams: graphics, health sciences,
and solvent coatings. All other areas (financial services, human resources,
and engineering support) would be “dedicated” to supporting these flows.
One of the first tasks was to create performance measures and stan-
dards for the flows (productivity, inventory, waste, quality, conformance
to specifications). With the operating flow as the center of attention,
managers and supervisors became coaches and cheerleaders. Frequent
informal meetings were an opportunity to air concerns and identify
problems. Employees were encouraged to develop local visions and
determine priorities and improvement plans for everything from reduc-
ing inventory and cutting waste to establishing relationships with sup-
pliers and speeding delivery time (Frangos, 1996).
The overall flow focused on satisfying external customers; each step
in the process emphasized satisfying internal customers and build-
ing cooperation among employees. Cross-functional teams began to
achieve breakthroughs in quality and cost reduction. Two years after
the restructuring was launched, performance standards were being sur-
passed. The division was not only one of the company's shining stars in
‘terms of profitability but also was widely heralded as one of the compa-
ny’s best places to work.
Reframing OrganizationsReferences
Bolman, L. G., and Deal, T. E. Reframing Organizations: Artistry, Choice, and Leadership
San Francisco: Jossey-Bass, 2008.
Frangos, S. Team Zebra. New York: Wiley, 1996.
Hammer, M., and Champy, J. Reengineering the Corporation. New York: HarperCollins, 1993.