Have you ever heard of a river that changed its path after a bridge was built on it? You must be wondering how could a bridge that leads to nowhere be a point of discussion. For that let’s understand the story behind the Choluteca bridge and why it is so famous
Honduras is a small country in Central America known for its adverse weather conditions and fiery hurricanes. To make the Honduras region more accessible, the government decided to construct a 400m long bridge over the famous Choluteca river.
Bearing in mind the unfavorable weather condition of Honduras, the bridge had to be built to withstand nature's vehemence. The construction of the bridge began in 1996 and was completed in 1998 using the latest Japanese technology.
Soon after it was built, a category 5 storm, hurricane Mitch, hit Honduras. The harsh storm destroyed everything that crossed its path and more than 7,000 people lost their lives. But there was one thing that remained intact and unaffected - the Choluteca bridge.
However, the country was in for another surprise, while the bridge withstood the storm, the surroundings did not. The roads used to approach the bridge disappeared and the river flowing under the bridge changed its course. River Choluteca now flows right beside the bridge. Overnight, the bridge lost all its value and became a bridge to nowhere.
As you say in a fairy tale, the moral of the story is CHANGE. The Choluteca bridge is a powerful symbol of how circumstances can change in an instant and shows despite extensive planning, things may not work in one’s favor.
The world we live in is constantly evolving and in such circumstances, the bridge teaches us a very important concept of diversification and the necessity to adapt to the changes in your environment. This need for diversification is not limited to a single sphere of life and can be observed in different realms of our lives.
For example, the business dynamics are constantly evolving and it is remarkable to see new developments in the IT culture in the past 10 years, especially with the advent of social media and the internet. But despite these advancements, some companies failed to exploit this opportunity and tumbled down.
Let us understand it better with the help of a few case studies.
For almost the whole of the 20th century, Kodak was the leading photographic film company in the world. The company was synonymous with success and achieved numerous milestones throughout its journey. You will be surprised to know that Kodak was the pioneer of the digital age and invented the first digital camera in 1975. So, what went wrong?
Despite having hands set on the latest technology, Kodak held back due to fear over hurting its lucrative film business. In the early 2000s, the film market began to shrink slowly and by 2010, the demand for the photographic film fell to less than 10%. With the advent of digital cameras and the internet, the core business of Kodak, that is the film and post-processing disappeared and they lost a large amount of market share.
In contrast, another film company, Fujifilm, involved in a similar business faced the same stumbling block. However, they took this crisis as an opportunity to thrive. Fujifilm acted swiftly and changed its business through innovation and revolutionized its business strategy.
They predicted the boom of LCD screens and heavily invested in that market. Fujifilm managed to increase its sales by over 60% while Kodak’s revenue fell by over 57%. Kodak was so blinded by their success that they failed to recognize the changes that were taking place in the business environment due to digitalization. Their myopic business strategy did now allow them to either adapt or evolve. Kodak had tremendous market power, but what they lacked was innovation, which ultimately led them to become like the Choluteca bridge. And as they say, “Kodak will never be Kodak again.”
Nokia shares a very similar story. It was a well-established company, known for its camera phones during the early 2000s. They were competent enough to acquire a significant market share and created a good brand name. In October 1998, Nokia became the best selling mobile phone brand in the world and its profit went from $1 billion to $4 billion by1999.
With the release of the Apple iPhone in 2007, the quality of Nokia’s high-end phones continued to decline and in just 6 years the market value of Nokia declined by 90%. The reasons for Nokia’s downfall were multifold. Lack of vision and the inability to innovate by the top-level executives accompanied by the tough competition by the Apple iPhone exacerbated Nokia’s downfall.
Mismanagement played a huge role in Nokia’s unsettling defeat. Top managers often lacked technical competence and accused the middle-level management of not being ambitious enough. Instead of allocating resources in long term investments, Nokia focused on meeting short-term demands. The human factor was added to economic and structural factors and together they have generated a state of “temporal myopia” that hindered Nokia’s ability to innovate.
Similarly, COVID 19 has altered our lives in inconceivable ways. These challenging times have significantly revolutionized consumer behavior and business strategies. From a sudden loss of consumers and clients to under-utilized assets and infrastructure - businesses need to rethink, adapt, and recover. How we entertain ourselves to how we shop, consumer behavior has undergone rapid shits.
Safety and security is now the primary concern of people. As social distancing has become the norm of today, virtual gathering, online shopping, remote learning, and work from home has become our daily lifestyle and technology is what is enabling a sense of normalcy in these strange times. In order to survive in these challenging times, businesses will be forced to come out of their comfort zone and think and act in unique and innovative ways.
Change is the only constant and the ability to embrace and thrive this transition and uncertainty is what defines an entrepreneur. Entrepreneurs must be prepared to be driven even in unforeseen and challenging circumstances and defy all odds.
Mr. Prakash Iyer, best-selling author and leadership coach rightly says, “The challenge for us is that we get focused on creating the best solution to a given problem. We forget that the problem itself might change. ‘Built to Last’ might have been a popular mantra, but ‘Built to Adapt’ could be the way to go.”
It is important for us to realize the importance of diversification and strategic change and not become like the Choluteca bridge that even though is strong, is meaningless.