By Dean Waye & Alan Gonsenhauser
When corporate giants collapse, the story usually gets simplified into a tech morality tale: disrupt or die. Kodak was killed by digital cameras. Blockbuster was steamrolled by Netflix. These stories are neat, satisfying, but dead wrong.
Neither company was destroyed by technology. They were destroyed by a failure of imagination.
They didn’t miss the future. They saw it, built parts of it, held it in their hands and turned away. Not because they didn’t understand the tech, but because they couldn’t abandon the logic of their past success.
The Crime Scene: They Had the Tools
Start with Kodak. In 1975, a Kodak engineer named Steve Sasson built the first digital camera. By the early 2000s, Kodak owned over a thousand digital imaging patents. They didn’t miss the wave, they helped create it.
Blockbuster? In 2000, Netflix offered to sell for $50 million. Blockbuster passed. Called it a niche. They had the future in their inbox and deleted it.
This wasn’t a failure to see what was coming. It was a refusal to imagine themselves without their existing business model.
The Real Cause of Death
Both companies suffered from the same three fatal pathologies:
- Addiction to Legacy Revenue
Kodak’s cash came from selling film not cameras. Digital cameras threatened the recurring revenue stream that had defined their margins for decades.
Blockbuster made nearly a billion dollars a year from late fees. Netflix’s subscription model wasn’t just different, it was the enemy.
These revenue addictions made change feel like self-harm. Which meant leadership couldn’t pursue the future without cannibalizing the present.
- Convergent Strategy Thinking
Both companies asked the wrong question:
“How do we use this new technology to protect what we already have?”
What they should have asked was:
“What if our core business is dying? How do we replace it before it kills us?”
Kodak didn’t lack innovation. It lacked permission to threaten the business model. Steve Sasson wasn’t ignored because his idea didn’t work. He was ignored because it worked too well.
Blockbuster was the same. Netflix wasn’t rejected because it was irrelevant. It was rejected because it would have forced an identity crisis.
- A Culture That Silenced Its Visionaries
The final wound was cultural. These companies had smart people with bold ideas but the system filtered them out.
They optimized for efficiency, not originality. Consensus, not contradiction. Execution, not exploration.
They crushed the individuals who could’ve saved them.
What They Could Have Done
Both companies had alternatives:
• Kodak could have embraced digital and pivoted to become a storytelling platform. A creative enabler. The “Adobe for moments.”
With AI, they could have become the ultimate photo assistant, enhancing, organizing, and shaping narratives from people’s memories.
• Blockbuster could have built the first large-scale subscription entertainment platform. With its physical footprint and brand recognition, it had every advantage Netflix lacked. It just couldn’t imagine itself giving up control.
Both companies tried to protect the castle instead of inventing a new one. That’s not a technology problem. That’s a failure of imagination.
The Economic Case for Imagination
The companies that win don’t optimize the existing game, they change it.
• Tesla didn’t just build an electric car. It rebuilt the entire automotive value chain: no dealers, its own charging network, direct software updates.
• IKEA didn’t just sell furniture. It made customers part of the manufacturing process. It created emotional equity, not just lower prices.
Differentiation creates economic value. Optimization just defends it for a while.
The Strategic Fix: Building Divergent Thinking into the Org
Avoiding this fate doesn’t require better tech. It requires better imagination.
That means:
• Hiring for friction: You need cognitive diversity — especially neurodivergent thinkers — who don’t instinctively protect the current model.
• Running “assumption audits”: Challenge your sacred cows. Force inversion. Ask, “What if the opposite were true?”
• Using divergent frameworks: Future-back strategy, cross-industry analogies, first-principles rethinking.
This isn’t abstract. It’s survival. Because the next time the future knocks, it won’t beg.
Final Cut
The essential question for every executive is this:
“If our current success vanished tomorrow, what would we build instead?”
If you don’t know, you’re not leading, you’re inheriting.
And you’re on the same path as Blockbuster and Kodak: holding the future in your hands, but too afraid to drop the past.