Thursday, July 30, 2009

Fortune 500 . . . a model for development

(Or why the writer uses them as models)

One of the first efforts Clinton pursued after the family relocated to Washington from Arkansas was to meet a group of Fortune 500 CEOs – to pick their brains. (In an earlier article the writer talked about Clinton’s “marching orders” to his team flowing from his mantra, “It’s the economy, stupid”.)

The writer remembers following developments in Washington on CNN in a hotel room in Ho Chi Minh City. And one of the topics from the Clinton meeting with the Fortune 500 CEOs was his sponsorship of Vietnam’s accession into the WTO. Lo and behold, soon after, flights from the US to Vietnam accelerated in frequency – and not surprising, today, Vietnam has greater foreign direct investment than the Philippines. (The country then hastening its way to progress that directly impacted the writer: in earlier visits not long before, he was billeted in a modest-sized house – where he bumped into a San Miguel manager, keeping an eye on the Vietnam business – that was made into a hotel by an Australian entrepreneur. But by the time Clinton moved to the White House, Ho Chi Minh had built a handful of business-friendly hotels.)

To draw the parallel between the private and the public sector, the writer in earlier articles pointed to the similarity in focus: revenues, margins (or balanced-budget for public admin) and efficiency.

In the efficiency dimension Fortune 500 firms are easier to manage than governments – obviously businesses are governed unlike democracies. Efficiency, which impacts both revenue- and margin-generation, is in reality the outcome of the myriad of human conditions – from instincts to culture to heritage to language to religion, among other things – that come into play when two or more people are organized into a unit. And given the human tendency to take the path of least resistance or seek harmony, it is much easier to traverse the wide and crooked as opposed to the straight and narrow – inefficiency is predictable and expected. (Friends in the New York metro area had requested the writer to suggest for GK to invest in upgrading efficiency in the planning, execution and monitoring of its projects. This is as far as the writer is going – for now or until he gets more details from these friends.)

And precisely given the above challenges, the public sector needs to adopt the private sector’s model of simplicity, clarity and leadership – it needs them in spades: to mitigate human conditions that become barriers, especially where harmony as opposed to efficiency appears the dominant trait.

For example: It is not surprising why, even in the private sector, the Japanese, despite their prowess in electronics . . . “can’t make their smart phones go global . . . Japan’s handset makers must focus more on software and must be more aggressive in hiring foreign talent, and the country’s cellphone carriers must also set their sights overseas – the industry turned increasingly inward . . . and increased the country’s isolation from the global market . . . Japanese cellphone makers need to either look overseas, or exit the business”. See: http://www.nytimes.com/2009/07/20/technology/20cell.html?_r=1&ref=business

Given our state of affairs, that we are the economic basket case of the region (translation: alarming poverty), we can continue down the easy path of the wide and crooked, and wave the flag of deference to our culture, and look inward – or we can adopt what we learned from our faith and traverse the straight and narrow, seek efficiency, e.g., like the Protestant work ethic? And not allow culture – or our comfort zone – to take precedence?

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