Businesses Fail When Past Successes Blind Them

There's the statement that some honor students didn't do well later in life. I don't blame their being honor students as to why they failed in real life. The late John Gokongwei graduated as an honor student. Just reading this can explain why some honor students are still doing well in real life: 

Mr. John didn’t resume his studies until nearly five decades later. By then, he had already founded JG Summit, built his business empire, and made a name for himself in various industries. Despite his success, he still went back to school and proved that learning truly is a lifelong process. 

Apart from pursuing a master’s degree in business administration from De La Salle University, Mr. John also completed a 14-week Advanced Management Course at Harvard University.  “It took me four years since I was a working student. When I got my diploma, it was one of the proudest moments of my life,” he previously shared during his alma mater’s Grand Reunion for Alumni Champions in 2018.

From then on, he chose to make education his prime advocacy in life.

The story of Gokongwei's success also reminds me of why some businesses fail. It's because they've been blinded by their past successes. The business was probably established and succeeded during an era of lesser competition. They were established when they were still the "hot new thing". It was the time when they established it from their humble beginnings. Did they forget their humble beginnings?

Let's take a look at the evolution of office equipment

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Think of the typical office setting back that boomers used and when boomers grew up in the era of Generation X. I was looking at how old offices looked. Back in the 1990s, one of my memories was that paper-eating monster called the typewriter, the easily fragile floppy disk, dial-up connections, and rotary phones made up the office. Back then, those things were deemed necessary to operate. Those were pretty new back then. A typewriter's introduction would make work easier. If I were born in that era, I would want a typewriter to help me finish my job faster. 

However, I tried using the typewriter until I was 13-14 years old. Yes, there were still typing lessons in the 1990s with that paper-eating monster. Children and teenagers during the 1990s may remember arguing with their parents about getting a PC instead of a typewriter. Instead of embracing change, the parent will say, "You're just lazy! Use a typewriter!" Never mind that a typewriter eats a lot of paper. With a PC, you can edit and edit before you print. Only a lazy person doesn't want to edit properly before printing. As my late English teacher (who died of old age) in high school said, "You already have a PC and you don't even bother to edit? That's real laziness!" 

Back in 2014, I remember arguing with a bank (won't mention the name) and said, "Look, email is better than fax!" The relations officer kept insisting it had to be faxed. I offered to send the document by envelope. I remember one of the things somebody said about the fax machine is, "You can't fax a book. Why can't they just request for standard mail?" Faxing several pages is a very tedious process. Standard mail is the safest method while email is better for follow-ups. I don't mind lining up at the post office to send a confidential sealed document. It's because the post office's technology is up-to-date. However, the fax machine needs better security. Anybody can grab the document and exploit it. 

Unfortunately, some old schoolers are still too stubborn because they succeeded in that era. I was reminded of the scene in Christmas Every Day where a self-absorbed teenager says, "We're stuck in the Flintstones era!  Why can't we get a computer?" Some people will argue that they started business early. However, even if they started getting into business at such a young age, did they make their business something to talk about like SM or Robinson's? Lucio Tan Sr. started Fortune Tobacco at 32 years old. Tan started out as a low-level employee, and graduated with a degree in chemical engineering, all before he started Fortune Tobacco. What's the use of "being into business" at an early age if one refuses to innovate and make space for improvement? 

A lot of stuff today will fail in today's fast-paced world. PCs can now do a better job handling documents than typewriters. I could take the joy of editing and editing my document. Sure, I'll still have to rewrite the printed drafts I submit. However, it's still a lot less paper wastage because I could edit and edit before I print. Today, the use of USBs will allow more storage and better portability. Sure, the floppy disk helped but they're that easily fragile and lack storage. Today, the typewriter and the floppy disk are treated more like milestones than actual usage. It's pretty much like how the Wright Brothers' airplane, the first attenuated vaccine by Louis Pasteur, and many stuff introduced back then were meant to be stepping stones, not something to be the standard forever.

Unfortunately, some people still believe their success is a reason to stay in the Stone Age (read here). There have been some businesses that eventually closed down. They could've started using better methods of record keeping but refused to do so. As the demand for something increases, better record-keeping is needed. They forget that their success back then was based on the principle of fitting in with the times. The use of the typewriter back in their day was because it made work faster. If they didn't use the typewriter back then, they would fail. Today, if you refuse to use a PC for your paperwork, you can expect to be overwhelmed by the greater demand. Both the typewriter and the PC were created to improve the quality of paperwork. Eventually, old PCs and the typewriter are to be simply recorded as historical milestones--not something to be used forever. The typewriter will break, old PCs will break, and that's why new technology is always needed. 

Eventually, one can think about two types of old businesses. I couldn't imagine going to SM, Ayala, or Robinson's and seeing these businesses not evolve. I went to the old Robinson's of my childhood and saw it's not the same place anymore. I'd often enter a toy store to feed my inner child and see the shelf is full of toys based on the current generation of children. Imagine if Toys R Us, Toy Kingdom, SM Toystore, etc. refused to evolve? Imagine if the malls were still using the equipment back in my childhood. These businesses would fail. Some old business establishments would survive because they continue to evolve. Meanwhile, some old businesses eventually collapsed because they refused to upgrade their office equipment, which led to inefficiency and ineffectiveness. 

Remembering some stuff I used to use back then as pieces of evidence of why relying on past successes prevents future success

As a 1990s child, I could remember my Nokia phone. However, I hardly know anyone who uses a Nokia phone. Back then, Kodak was the thing and Filipino Visayans like myself would say, "magpa-Kodak" which the word Kodak is associated with photography. I remember my old Nokia phone. However, as time passed, touchscreen phones have become more and more used The use of Android OS and Apple iOS became the thing. Why would I want a Nokia phone with limited functions when I could use an Android phone or an iPhone with better features? I could use these smartphones to read something, listen to music, etc. while waiting for the person to arrive during the appointment. Sure, I still buy paperback books but I keep in mind that these paperback books' methods of production, have evolved.

Now, for the story of Kodak's fall. From the Photo PXL website, an article called "The Story Of Kodak’s Fall By AI" by Kevin Raber tells a huge tale. The once mighty company and when Filipino Visayans once used "magpa-Kodak" as a word for photography, failed to meet up with the times. This is a very interesting take:

A key factor behind the failure of Kodak was its seeming inability to innovate in the era of digital photography. While Kodak was a pioneer in photography in the 20th century, the company struggled to adapt to the changing market in the digital age. The rise of digital photography in the 1990s made Kodak’s film camera business obsolete. The company found itself competing with digital cameras, smartphones, and other devices that made photography accessible to more people than ever before.

What’s interesting is that Kodak actually had a head start in digital photography. In the 1970s and ‘80s, Kodak scientists had developed the first digital camera and introduced the world’s first-megapixel sensor in 1986. However, the company failed to capitalize on these early successes, believing that digital photography would never catch on. Even as digital photography began to grow in popularity in the early 2000s, Kodak was still focusing on its traditional film camera business.

Another factor that contributed to Kodak’s decline was a lack of strategic planning and leadership. For decades, Kodak had been a dominant player in the photography industry. However, as the market began to shift, the company failed to create a new strategy, instead relying on its past successes. Kodak became focused on trying to maintain its market share in traditional film and chemicals while competitors were investing in digital photography. Kodak’s leadership also failed to recognize the severity of the problem until it was too late. By then, the company was already behind in the digital game and playing catch-up.

The company’s corporate culture also played a role in the company’s decline. Kodak was a proud and traditional company, but this pride and tradition also led to a certain degree of complacency. The company culture was steeped in the idea that Kodak knew what was best for the consumer, based on its long history in the film camera business. This arrogance led to a failure to listen to customer needs and preferences. Kodak failed to recognize that consumers were shifting away from film cameras towards more portable, lighter digital cameras. Instead, Kodak continued to produce heavy and expensive film cameras, even as the market was moving in a different direction.

Moreover, the company also failed to realize that the photography industry was not just about selling cameras and film. It was also about creating a user experience and providing services that consumers found valuable. Kodak didn’t understand the importance of creating an ecosystem that went beyond just selling cameras and film, something that many of its competitors, like Apple or Google, do exceptionally well.

Another reason why Kodak failed was the company’s inability to adapt to changes in the market. By the time Kodak began to embrace digital photography, it was already too late. In the interim period, competitors like Canon and Nikon had already gained significant market share, leading to further erosion of Kodak’s sales. Kodak’s digital cameras were inferior to those made by its competitors, and the company was seen as playing catch-up rather than innovating.

Even when Kodak did embrace digital photography, the company still made critical missteps. One of these was focusing on the printing business, producing expensive and proprietary inkjet printers. At the time, Kodak believed that the printing business would be highly profitable, but it didn’t have the capacity to scale it up quickly. Instead, the company struggled to compete with competitors who were already entrenched in the market.

Additionally, the company’s reliance on chemical-based photography, which had been Kodak’s bread and butter for much of the 20th century, proved to be a significant disadvantage. Chemical-based photography had a high cost of production and was highly reliant on the company’s internal supply chain. By the time Kodak began to embrace digital photography, it lacked the resources and expertise to take advantage of the digital market.

This reminds me of an incident I lost my cool back in the 2000s. I was told I was wrong to shout but the same person who reprimanded me said, "But I understand why you lost your cool." I soon said, "If these people are too afraid the photos were tampered with, why not take photos themselves?" When I was renewing my driver's license in the 2000s, 2010s, and then I'll soon be renewing it by 2027--the photos were taken by digital camera. The result was that photos were soon printed faster into the license than having to scan the photos. Right now, I still want a digital camera but my smartphone seems to be doing a fine job. 

I'm also reminded of why some old-school artists are still doing well. Can you imagine if singers like Paun Anka and Neil Sedaka refused to have their songs on platforms like Spotify? If they were resistant then nobody today will appreciate the very old songs. I wouldn't be able to sing a redefined version of "Diana" and "Oh Carol". Sure, these old-school artists are now on the backstage. It's their acceptance of change that kept many of their old songs going and still heard. Those who didn't accept the change would just fail. Some people would never be able to listen to old music that may be way better than some of the new songs today. 

The same can be said about the failure to see why the Philippine Constitution needs updating in its economic provisions

I may discuss all I want about the need to go for a parliamentary government. However, I'd like to focus on the economic side. Some people still are wary of the badly needed economic charter change. Some tend to associate it with just former president Atty. Rodrigo Roa Duterte, a Marcos propaganda, etc. Never mind that a supporter of Atty. Maria Leonor S. Gerona-Robredo, namely Andrew James Masigan, actually supports economic charter change. I think the problem with people opposing constitutional amendments because of the success of EDSA 1986 Revolution is pretty much getting blinded by past successes.

I'm not going to deny that a peaceful revolution is something to brag about. Sure, I can have a violent temper but I tend to admire two dead people. One is Mahatma Gandhi and the other is Benigno Simeon "Ninoy" A. Aquino Jr. It's said that Ninoy actually got inspired by Gandhi's philosophy. That's why I still question the claim that Ninoy was actually involved with Plaza Miranda. People danced in the streets when the late Ferdinand E. Marcos Sr. was ousted. However, the problem was that people got so intoxicated by their success, never mind that the 1987 Constitution was written in a hurry because of the need for a new constitution. A new constitution was needed to replace the defective 1973 Constitution. It's like saying goodbye to an operating system that only destroyed your work for a better one.

However, operating systems do need to be upgraded every now and then. It's already 2024 and would you use Windows 95 or even lower? Would you still want to use a typewriter in your office to type a long report? Some people still use the success of the late Benigno Simeon "Noynoy" C. Aquino III to justify not amending the Constitution. Never mind that laws to ease certain sectors of foreign investments were submitted from the time of Rep. Gloria Macapagal-Arroyo up to Duterte. Later, Mrs. Robredo even admits she's open to amending the current Philippine Constitution for the sake of FDIs. 

I'm reminded of what Atty. Teodoro A. Casiño wrote on Rappler last 2018. I almost feel like Casiño just wants to stick to the same old narrative. Just because a dictator was overthrown doesn't mean that everything's going to be magically better. Do you think that Germany would've already been better if it didn't create new rules after the fall of Nazi Germany and later the Berlin Wall? The Philippines should've not just focused on the success of the EDSA Revolution of 1986. It should've also focused on fixing the damage that was left behind by the one ousted from power. In fact, one of the worst things during the first Marcos Administration was rampant economic protectionism as cited by the UP School of Economics. The 1987 Constitution of the Philippines could've addressed that immediately than sticking to the Filipino First Policy by the late Carlos P. Garcia. I'd say that unless Garcia's remains be unearthed from the Libingan Ng Mga Bayani (Heroes' Graveyard) then the remains of Marcos Sr. should remain there. The two are rightfully buried next to each other as heroes of the Filipino First Policy. In fact, I might say Marcos Sr. should be posthumously named as the champion of Filipino First Policy. 

The Philippine Constitution may not be a literal car but the illustration can make sense. Sure, I prefer to say that the Constitution is a school of thought. People can argue with me if the car is new and the driver messes it, whose fault is it? It's the fault of the driver. We need to think that if all the cars are in good condition--there will be less accidents. It would be easier to expose the bad driver if the cars were in good condition. However, if all the cars were in bad condition, it doesn't matter how many drivers you fire, accidents will still happen because the car is bad. In my case, I prefer to compare the Philippine Constitution to a school of thought and an educational institution. You can have the best teachers and still produce bad results. I had several good teachers but they were forced to use faulty tools. It's because teachers are following a system which is the textbooks they're using and the syllabus. They follow what's in the syllabus and have to follow it. Unless the way things are carried out changes--teachers are simply forced to follow it.

It would be stupid to keep relying on the peaceful revolution. It was a big victory but it also defeated Filipinos by blinding them. It's not that they were blinded from the truth about the first Marcos Administration. It's that they were blinded from focusing on succeeding in the future. Instead, some people still believe the spurious myth of the Marcos Years being a parliamentary system, never mind that even records show Marcos Sr. was a president with powers and Cesar Virata was nothing more than an executive assistant. The book From Third World to First had the late Lee Kuan Yew unimpressed with Virata whom he called a non-starter and no leader, not the type to lead the Philippines. One can say Virata was probably even less qualified than the late Maria Corazon S. Cojuangco-Aquino. I still prefer to see Mrs. Aquino as someone who should've remained a ceremonial figure since she served as a national symbol of unity during EDSA. That's why I think calling Mrs. Robredo another Mrs. Aquino is ridiculous. Mrs. Robredo has political experience and she's still more qualified to lead than President Ferdinand R. Marcos Jr., even if I didn't vote for her. 

As a result, the Philippine business environment is partly a failure. One can brag about Jollibee or some Filipinos doing business abroad. However, we can't deny that public services in the Philippines sucks. Jollibee branches in other countries may enjoy better public utilities than in its own home country. Businesses that have been pampered by protectionism refuse to grow. The reason why some Filipino businesses have evolved is because of competition. Tony Tancaktiong faced competition head-on and saw it as an opportunity to grow. The oligarchs of the Philippines are oligarchs because oligarchy means powers in the hands of a few. However, let big businesses from other countries compete and the Philippine oligarchs will be forced to innovate. Why jobs are still scarce in the Philippines because of Garcia's stupid desire that Filipinos should be the majority of shareholders in business. 

Instead, EDSA should be treated as a stepping stone, not a replacement for daily learning. Just remember that EDSA didn't come together because Filipinos were satisfied with the status quo of the first Marcos Administration. It was the desire for change that caused EDSA 1986 to happen. The mistake wasn't EDSA 1986. The mistake was that they got so drunk with success after the event, that they refused to evolve and improve the status quo.