Latest / The CEO Diary with Fexingo: Leadership Lessons, Executive Decisions, and Corner Office Stories / How Fujifilm Reinvented Itself Beyond the Camera
Transcript
- Lucas: So, Luna, quick question for you. What do you think a company that makes photographic film should do when the world goes digital and film basically stops selling? Luna: I'd say either pivot to something completely different or just go bankrupt like Kodak did. Lucas: Right, and most people know the Kodak story. But there's another company, Fujifilm, that faced the exact same cliff and chose a different path. They're still around, and they're doing quite well. Today I want to look at how they pulled that off. Luna: I'm in. I've heard the Fujifilm skincare story before, but I've never really understood how that makes sense for a camera company. Lucas: That's exactly the puzzle. And the key is in the chemistry. For decades, Fujifilm was basically a chemistry company. Film is a coating of light-sensitive chemicals on a plastic base, and to make it good, they had to become world-class in organic chemistry and colloid science. So when film vanished, they realized they had a massive library of chemical knowledge that could apply to other areas. Luna: Like skincare? Because collagen is a protein, and they knew about proteins from making film? That's the story I've heard. Lucas: Precisely. But it wasn't just a happy accident. The leader at the time, Shigetaka Komori, who took over as CEO in 2003, made a deliberate decision to create a second pillar for the company. He called the plan VISION 75, aiming to generate about 75 percent of sales from non-film businesses by the fiscal year ending March 2026. Luna: Wow, that's a long-term plan. And it actually worked? Lucas: Well, the plan was set before digital fully crushed film, but the thinking was there. Komori saw the decline coming. In the mid-2000s, film sales were still profitable, but he knew the digital transition was inevitable. So he committed billions to R&D in healthcare, pharmaceuticals, and cosmetics, even while the film business was still making money. Luna: So he was essentially funding the future while the present was still okay. That's the kind of foresight most companies fail to have. Lucas: Exactly. And the beauty of the story is that the pivot wasn't a leap into the unknown. They were repurposing existing expertise. For example, the same oxidation-reduction chemistry used in film development turned out to be relevant for anti-aging skincare. Their lead skincare brand, Astalift, uses ingredients originally developed to prevent photo-degradation in film, which actually translates to protecting your skin from light damage. Luna: That's a pretty elegant connection. So they weren't just a camera company; they were a chemistry company that happened to sell cameras. Lucas: Right. And that reframing was crucial. Komori famously said that to survive, they had to become a different kind of company. He even used a phrase — 'beyond the camera' — to push the organization to think beyond its core identity. Luna: It's one thing to say that, but how do you actually get thousands of employees to buy into a vision that feels so far from the original mission? Lucas: That's the leadership challenge, and it's a big one. Komori didn't just announce the plan and hope for the best. He set concrete targets, like reducing dependence on film revenue to 50 percent by a certain date, and he backed it with real investment. He also made sure to communicate the urgency repeatedly, not as a threat, but as an opportunity to leverage what they were already good at. Luna: So he gave people a sense of purpose, not just fear. That's a lesson a lot of leaders could use. Lucas: And there's a nice parallel here to what we talked about with Jorgen Vig Knudstorp at LEGO, where he had to convince the family owners to let him break the brick. But Fujifilm's case is even more extreme because the entire core product was dying. Luna: Yeah, LEGO was still selling bricks; Fujifilm's film was becoming obsolete. So they had to reinvent from a position of strength, not weakness, which is actually harder because there's less urgency. Lucas: Exactly. In fact, that's one of the biggest lessons from Fujifilm: they made the pivot while the film business was still profitable. They had the cash flow to invest heavily in the new areas without having to make desperate cuts. If they had waited until film was almost gone, it would have been too late. Luna: So the timing was everything. They used their core business as a cash cow to fund the transformation. Lucas: Right. And they diversified across three fronts: healthcare, cosmetics, and optical materials. In healthcare, they developed medical imaging systems, pharmaceuticals, and even a drug for COVID-19 that was approved in Japan. In cosmetics, they had Astalift and other brands. And in optical materials, they make components for smartphones, OLED displays, and semiconductor manufacturing. Luna: I remember reading that Fujifilm is actually a major supplier of photolithography materials for chipmaking. Who would have thought that a film company would end up in semiconductors? Lucas: It's a great example of repurposing chemical expertise. The same polymer chemistry used in film emulsions is relevant for the resists used in semiconductor lithography. So they found a way to stay relevant in a completely different high-tech industry. Luna: That's impressive. But let's be honest, not every company can pull off that kind of pivot. What made Fujifilm different from, say, Kodak, which had similar chemistry knowledge but still failed? Lucas: That's the million-dollar question. And one key factor is that Kodak was heavily invested in the razor-blade model: sell cheap cameras, make money on film. So they had a huge incentive to protect the film business. Fujifilm, on the other hand, was more diversified geographically and had already been making digital cameras and minilabs, so they had less to lose. Also, Komori was an outsider to the founding family, which gave him more freedom to make radical changes. Luna: So sometimes being a bit less attached to the core product is an advantage. Lucas: Exactly. And there's another subtle factor: the culture of continuous improvement. Fujifilm had a history of squeezing more performance out of film by tweaking chemical formulations. That mindset of constant iteration carried over to their new businesses. They weren't afraid to experiment and learn. Luna: That's a good reminder that corporate culture can either be the biggest obstacle or the biggest enabler of change. Lucas: Before we go further, I want to pause for a second. If today's episode is giving you a new way to think about corporate reinvention, the reason this show stays ad-free is listener support. If you find value in these conversations, you can help keep them going by buying us a coffee at buy me a coffee dot com slash fexingo. It's a low-key way to say that this matters to you. Luna: Yeah, and it really does make a difference. We put a lot of research into each episode, and knowing that there are people out there who appreciate it is what keeps us going. Lucas: So, back to Fujifilm. One of the most striking things about their transformation is how they managed the emotional side of the shift. Imagine being a film engineer who spent thirty years perfecting a product that's becoming obsolete. How do you keep that person motivated? Luna: I'd guess it's not easy. They must have felt like their skills were worthless. Lucas: Komori addressed that head-on. He told employees that their expertise in chemistry and materials was not obsolete—it was a strategic asset. He literally redefined the company's identity in a document that said 'we are not a film company, we are a technology company'. That gave people a new narrative to anchor to. Luna: That's a powerful reframing. It's like turning a threat into an opportunity. Lucas: And it paid off financially. By 2026, Fujifilm's healthcare and materials divisions make up a large share of revenue, and the company is solidly profitable. They even continue to make film, though it's a niche, retro product now. But they're not known primarily as a camera company anymore. Luna: So what's the takeaway for a typical CEO listening to this? I can't imagine everyone can just pivot into cosmetics and semiconductors. Lucas: The takeaway isn't to copy Fujifilm's specific moves. It's to recognize that your company likely has skills and assets that are valuable beyond your current product. The question is whether you're willing to look for them and invest in them before you're forced to. Luna: That's a good point. Look for the hidden asset. I guess every company has some kind of core competency that could be applied elsewhere. Lucas: And the other lesson is about leadership courage. Komori had to make huge bets, including a 400 billion yen investment in healthcare over five years. That's about four billion dollars. He gave up the comfort of a shrinking but profitable film business to chase something uncertain. That takes vision and nerve. Luna: It's easy to say you'd do that in hindsight, but in the moment, with shareholders and analysts questioning you, it must have been tough. Lucas: It was. When they announced the healthcare push, the stock barely moved. Analysts didn't see the connection. But Komori held the course, and eventually the market recognized that Fujifilm was no longer a legacy company. Luna: So it's a story about patience as well. Not every transformation shows results quickly. Lucas: Absolutely. VISION 75 had a ten-year horizon. That's a long time to keep a board and employees aligned. But it worked because the plan was concrete, and they communicated it relentlessly. Luna: I think that's a great note to end on. If there's one thing I'll remember, it's that you can't wait until the film is dead to start thinking about what else you can do. Lucas: And that's the paradox of successful reinvention: you have to change while you're still succeeding. Fujifilm shows that it's possible, but it takes guts. I'm Lucas, and that's Luna. Thanks for listening.