Saturday, July 28, 2012

Culture, morality and transformation

Are we taking transformation for granted because of our culture and our faith? Given our faith has defined our morality are we then at home in our certitude? Take land reform and our wage index – compared to the global norm – i.e., we value skilled work less because we want a living wage for the unskilled?

And these two examples have impacted our productivity, our competitiveness, our economy – and, unfortunately, have to live with elevated poverty. Disclosure: the writer has negotiated and/or directed numerous labor contracts beyond the Philippines. And as a consultant in Eastern Europe, given his MNC experience, has sought that businesses be competitive – and that does not mean suppressing compensation but ensuring that it is in fact competitive, i.e., talent and talent development is a pillar of competitiveness. As Jack Welch proudly proclaimed while he was GE CEO, "we made loads of millionaires within the company."

And the writer remembers how the jaws of his Eastern European friends dropped when he first saw their facility, and declared that they had to mechanize their packing lines. Their jaws would drop more times: from being asked to relocate offices from the middle of nowhere to the central business district to putting up R&D labs next to marketing to developing 3-year product development plans to establishing margin goals of 50% to erecting state-of-the-art manufacturing facilities to posting financial measures in the intranet on a daily basis to spending periodic time in the classroom to never ending product, budget and business reviews to developing markets to celebrating success incessantly, etc. Ten years later the writer and the wife's greatest joy is visiting their Eastern European friends in their Western-like homes and joining them for holidays overseas. The wife had to fight back tears when she first saw their communist-era apartments and wondered how people tolerated them for decades.

We are a long ways away from raising ourselves from economic laggards – and we won't if our certitude keeps us tied down to our assumptions, derived from our culture and morality? Land reform ought to be a platform for a competitive agribusiness. Wage determination ought to be “a productivity and competitive weapon” for greater economic output – i.e., generous and competitive wages come from a competitive economic activity.

"Arangkada Philippines" has agribusiness as one of the strategic industries meant to attract foreign investment, spawn intermediate businesses and activity, and generate appreciably incremental GDP and greater employment. And we now have an agribusiness road map, but it needs dogged efforts to translate it to reality. We cannot turn our back to the challenge of competitiveness. As we now know our run-of-the-mill agricultural produce could easily lose out to foreign produce – given the 21st century interconnected world – and so it demands a competitive mindset if we are to transform our agriculture orientation to a globally competitive agribusiness.

For example, Eastern Europeans have partnered with a German MNC to put up a milk processing plant – with feedstock coming from local farms – that then paved the way for other downstream products, e.g., the writer's friends established a cheese business, their 4th business unit. And it is consistent with their core competency of consumer packaged goods marketing: from putting up an R&D lab next to marketing to developing a 3-year product development plan to establishing margin goals of 50% to erecting a state-of-the-art manufacturing facility to posting financial measures in the intranet on a daily basis to spending periodic time in the classroom to never ending product, budget and business reviews to developing the local and overseas markets to celebrating success incessantly, etc. They wear a competitive mindset – inquisitive, dogged, spirit-driven – not certitude!

But is that too simple for our complex culture? Or is it improbable because of our “bida” (hero or heroine) culture, thus our certitude? Memo: Even the Vatican is subject to “trust and verify” when it comes to money laundering and the demands for transparency. Change is the only thing constant. Even the Vatican has to change. But Juan de la Cruz is stuck with his culture?

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