Sunday, September 30, 2012

The Lincoln model

Today’s Republican Party may be able to perform useful tasks with its current hyper-individualistic mentality. But its commercial soul is too narrow. It won’t be a worthy governing party until it treads the course Lincoln trod: starting with individual ambition but ascending to a larger vision and creating a national environment that arouses ambition and nurtures success,” David Brooks, The Party of Strivers, NY Times, 31st Aug 2012. He is a professed Republican supporter yet strives to be objective. But the writer took issue with him when he tried in vain to justify that George Bush was the right person for the right job. “The guy was born in third base yet thought he hit a triple.” And so the swagger: “Mission Accomplished”! And today many Americans still blame him for the extended economic slump in the US – and why Obama appears to be in the running despite over 8% unemployment, in the past a guaranteed loss for the incumbent (and in part helped by Romney's inability to connect with the voters . . . and with a little help from the liberal media.)

In the Philippines – as in many parts of the world especially Europe – we could easily find fault in America. Yet most everywhere people would define success in a very narrow sense – or as David Brooks says of the GOP, “its commercial soul is too narrow.” If the US has countless monuments of this narrow definition of success, Europe has its own share. And the writer, a part-time Europe resident, has witnessed people’s reactions while gawking at its many palaces oozing wealth if not royalty. And thus it was easy to comprehend, for instance, why the tsars had to go. And beyond the palaces, the Kremlin diamond museum would give New York’s diamond district a run for their money.

Since the Philippines is relatively young, we could be going through our own “Gilded Age” except that it’s already the 21st century. And we have to find our own Lincoln who would demonstrate that “starting with individual ambition” is fine “but ascending to a larger vision and creating a national environment that arouses ambition and nurtures success” ought to be the “nirvana.” This blog is about reinventing ourselves – to become more competitive – and the writer defines competitiveness in pretty broad terms to flesh up what economists call the ‘multiplier effect of investment.’ Competitiveness is about investment that is directed to: technology and innovation as well as education or talent, product and market development. It is when investments fuel these building blocks that a broad-based economy is created – and why, for example, Apple has become the largest business enterprise and appreciably impacting the global economy. And to underscore the distinction, the writer speaks to our ‘cacique system’ where capital rules; and which is reinforced as we view the market as confined to the Philippines and/or when we trumpet our ‘consumption economy.’ Unfortunately, they are a reflection of our parochial bias that perpetuates a closed and hierarchical system – and an underdeveloped economy?

Is whatever we are, the good and the bad, unalterable? Juan de la Cruz ought to take offense when Pinoys are viewed as undeserving; for example, border controls could subject Filipino women to indignation. And it doesn’t matter if they look dignified, even bejeweled. The writer remembers the embarrassment of a Pinay trying to get into London; and it was not the first time he has witnessed such a scene. The bottom line: while individual Filipinos may be respected Juan de la Cruz in more ways than one isn’t.

We are a relatively young nation and are still learning the ropes . . . except that many younger ones are leaving us in the dust. Shouldn’t we take offense?

Wednesday, September 26, 2012

“I’m sure you want to be No. 1 . . .”

. . . You have to figure out a way to be competitive . . . Restrictions in the Constitution and business conditions in general do not make American investors as excited to invest in the Philippines as they are elsewhere in the region,” says US ambassador to the Philippines Harry K. Thomas Jr. [Business Mirror, 29th Aug 2012.] “American businessmen talk about transparency in government, speed in decision making, the court system and predictability.” [Manila Bulletin, 29th Aug 2012.] “He noted that there have been $150 billion worth of American investments in the ASEAN region of which $100 billion were invested in Singapore and only the remaining $50 billion in the rest of southeast Asian countries.” What was left unsaid is: what are you waiting for?

Why speed? Four fundamental drivers are converging to force transformational change of businesses & industries fast: Technology, Customers & Markets, Globalization and Partnerships.” That’s from “The Working Group, Report of Findings, The Conference Board, October 4-5, 1999.That was many years ago but the writer, who was part of the working group (of Fortune 500 companies), still remembers “why speed”! And in his blogs the writer would simply summarize it in one word: competitiveness. And which he defines as: investing in technology and innovation as well as in education or talent, product and market development.

And thus it’s not surprising that Singapore is up there in competitiveness, which has created for the Singaporeans a virtuous cycle and hence their ability to corner a big chunk of US investments, among others. And so the ambassador “also advised the Philippines to look at other countries like Vietnam, Singapore and Cambodia on their strengths in attracting foreign direct investments.” [ibid]

The good news is President Aquino has been persistent in his fight against corruption and thus has attracted foreign direct investments. But as the ambassador says, and confirmed by the study of the Conference Board, we must learn to move with speed. We have yet to realize and recognize that instinctively we’ve been giving ourselves too much slack when the 21st century world is vigorously competitive. No pain, no gain! For example, no one is saying that fixing our power situation and flood control is easy. Nor is it easy to get our road maps in agribusiness or manufacturing, among others, done and executed.

The question to ask ourselves is: how could the Singaporeans – and now the Vietnamese and Cambodians – be doing a better job of attracting foreign investments? Do we have a problem with self-esteem? [“Only in New York,” as the saying goes, is psychiatry good business – because people recognize that they could have a problem with self-esteem. The problem, of course, is when they go to the opposite extreme.] If it is not self-esteem, is it our parochial bias that makes us unwittingly restrict our worldview and thus struggle to embrace a wider playing field, including foreign investments? “Foreign and domestic investors express concern over the propensity of Philippine courts and regulators to stray beyond matters of legal interpretation into policy-making and about the lack of transparency in these processes. There also are reports of courts being influenced by bribery and improperly issuing temporary restraining orders to impede legitimate commerce . . .” [Business Mirror, 29th Aug 2012] And for whose benefit?

In short, we must heed President Aquino’s call for the “straight and narrow” or his “daang matuwid.” Put another way, we have to internalize the power of simplicity. Absent simplicity speed is elusive which then engenders a culture of compromise (e.g., influence peddling) thus undermining the common good while preserving the power of the few. And as we lag in progress and development we would find ourselves in a bigger and deeper hole making the pursuit of transparency, speed and predictability even more daunting?

Thursday, September 20, 2012

To be unshackled is to soar

The human spirit is meant to soar but first it must be set free. Indeed the mission taken on by President Aquino to rid us of corruption seems to be moving forward with the appointment of Chief Justice Maria Lourdes Sereno. Her relative youth, on top of her expertise and demonstrated skills, is equated to dynamism that is critical to realize the goal of reforming the judiciary, and for the Philippines to be synonymous to the rule of law. Of course, her unblemished record of integrity must be at the core of why she was the president's choice. But as in any mission, barriers are bound to sprout and thus the demand for dynamism.

Ex-CJ Panganiban, who knows the job first hand, summarized for us why CJ Sereno was a great choice. And the writer, coming from the private sector, has understood the imperative of hiring the right person for the right job. For example, in their efforts to benchmark best global practices, progressive enterprises would take note that the British civil service hiring system is respected the world over.

And the way CJ Sereno describes her new job gives us comfort that she would not let barriers stand in the way of reform. And she speaks to transparency while setting the highest standards for the judiciary. We cannot afford to set low standards and the British hiring system is a good model to think about. What to us may be a high-enough standard must always be tested against global yardsticks if we are to raise ourselves up as a nation. We are not simply the 'little brown brother' – we must find our place in the sun.

We cannot keep to our comfort zone and long-standing yardsticks. Or to be satisfied with simply being hopeful. For example, we need greater dynamism to fix basic problems like power and flood control. Likewise, we need dynamism to get the road maps of agribusiness and manufacturing executed – i.e., plans are meaningless until they are executed and that they in fact deliver the desired outcomes.

We have to keep fighting the urge of "pwede na yan" or "mababaw ang kaligayahan.” In other words, good enough is never good enough! We may have a standard of living that is to die for but then again, it simply confirms that ours is a two sub-set economy. And for a proud people that ought to be a shame, not a source of pride – especially given our Christian heritage.

Supposedly pro-poor advocates see the new CJ as pro the wealthy (i.e., the Cojuangcos) because of her opinion (re the basis of its valuation) on the Luisita Supreme Court decision. We keep forgetting what we learned from our forbears about "puno't dulo" – which in modern lingo translates to "connecting the dots" and "starting with the end in view." Without going into the merits of the case, Philippine land reform is a failure precisely because we took the hurdle of "sustainable economic undertaking" for granted. An undertaking may sound charitable but it does not serve the purpose if it is not sustainable. Populist instincts may gain political points and, unfortunately, explain why our politics remains patronizing – thus guaranteeing the cycle of poverty.

Indeed, Juan de la Cruz must learn more and be committed to dynamism. The 21st century is about technology and innovation, for instance. And it presupposes overcoming the bias for and to be unquestioning about the status quo. How the new CJ gets the judiciary team on board will be her first test – especially given our assumptions of tradition and hierarchy? And if we add our instinct to personalize, the challenge for CJ Sereno gets magnified!

Hiring the right person for the right job simply means that – but to Juan de la Cruz that's a curve ball? Until we learn to operate outside the box, we shall be held hostage by the status quo. It's time we set the human spirit free . . . and let it soar.

Saturday, September 15, 2012

From the head to the heart to the gut

In the private sector they recognize that knowledge must be translated into the requisite attitude, skills and habit – thus the acronym KASH that training and development professionals adhere to. While pundits, in the US, are called “talking heads” – i.e., they talk a good game but what about play a good game?

A friend, educated abroad with multiple degrees, explains why UP ranks relatively lower against the rest of the world: “They meet the required population of PhDs but in this country we have yet to develop a symbiotic relationship between the academe and industry.” It reminded the writer of a US consultancy (of mostly PhDs); and on a trip to Asia they asked him if he’d mind spending a session with them. “We have updated our research and are inviting practitioners to critique it and given our US orientation, we need more insights into the world.” And a professor, known in business schools including the Philippines, was about to publish the book that made him world renowned. And the writer had wanted some folks from Asia to be the first to be exposed to it; his schedule was tight but the professor agreed to meet on a Saturday and in his study at his home and offered to meet the group at the airport.

Driving from the airport and upon seeing a pizza restaurant he commented: “I had just met with the people from that pizza company, and told them that I was meeting up with you folks from half way around the world.” He was the consultant of a global pizza brand headquartered in the same city as his university, and they were proud of what to them started as a local pizzeria. “You come from that part of the world that we know very little about, and I am sorry that we have to do it on a Saturday. But please feel at home. I’d be very honest; I wanted foreigners to be the first to critique my research.” And this professor has also lectured at the GE development center and given its global orientation, he was not exactly ignorant of the world.

We don’t have the environment of a US and so our academic community has very little access, like these examples, to the world. For instance, the equivalent of a GE would be the handful of entities of our industrialist-billionaires. But they are locally focused and thus the challenge of our education institutions goes deeper than what it appears. How do we teach about global citizenship? It starts with Philippine citizenship? It’s about the common good and in our faith it’s the Great Commandment or in secular parlance, the Golden Rule? In other words, how do we teach the young how to move beyond family and beyond our parochial orientation? How do we teach compassion so that it is not about giving fish but teaching how to fish? How do we teach them about the future – e.g., interdependence is beyond family and beyond country? How do we teach them character – so that they don’t feel inferior against the powerful and those who don’t play by the rules? If sheltering the young was meant to teach character, how come we demonstrate very little of it – i.e., we’ve recognized, if not accepted, being called among the most corrupt?

Hierarchy may be the law of nature, but given man’s superiority, he learned to be egalitarian – because quite easily the human condition could undo his superior capacity. And it has again come to the fore with the LIBOR scandal (which, as the press reported, bank regulators in the West first noted was a brewing problem before the 2008 collapse of the global financial system.) How do we teach the young that the days of lords and masters are about the past – and the past is to learn from not to live in? How do we demonstrate Einstein’s “the value of education is not the learning of many facts but the training of the mind to think”? How do we teach the young how to be inquisitive? How do we teach them to look to the future with the confidence to nurture great expectations? We’ve started with K+12 and the use of the vernacular, but what is our vision for education? It can’t be an ivory tower? To attain economic prosperity we need – beyond investments – technology and innovation as well as talent, product and market development. They can be taught but the real challenge is to bring them down from the head to heart and to the gut!  

Wednesday, September 12, 2012

"Hope takes work"

That is lifted from the column of Fr. Rolando V. de la Rosa, O.P., 11th August 2012, Manila Bulletin. "The Olympics: Hope takes work. Let's face it, the physical and mental preparation of our athletes are hardly commensurate with the hopes they cherish."

A priest was sharing the hope he felt despite the state of the church today – but which he clarified as not synonymous to optimism. "We must pray for the church that it is being led by the spirit. We appear to be moving away from Vatican II; in many places they have no priest to say mass – when the Eucharist is what our faith is about; people are so busy they have no time for Sunday mass, we are losing a generation of Christians; and in politics where the leadership of the country comes from, there is not much to expect. We, the members of the church, must move beyond being inward; we have to make use of the nourishment we've received and be outward."

And the sad state of affairs is confirmed by the daughter: "This country is on a downward trend." She teaches in a New York charter school for kids rescued from their wayward ways and, despite all efforts to motivate them, many have refused the regimen of education. Some would even prefer to have kids in order to exempt them from school while entitled to social services. [And not surprisingly, Romney picked Ryan as his running mate given his 'small government' mantra.]

'Hope takes work' is universal. To paraphrase Fr. de la Rosa, the walk must match the talk. President Aquino is providing the leadership to right the nation and its economic ship by personally leading the fight against corruption. More to the point, it is pure lip service every time we talk about 'inclusive growth’ when Juan de la Cruz is unwittingly perpetuating an economy that is skewed to serve the few – while expecting to be patronized? And because of the status quo that we are preserving, it is not only in the economy and in athletics where we are deficient. The chaos and environmental degradation of Metro Manila and beyond, our backward infrastructure, our underdeveloped agriculture and our uncompetitive industry are black marks on a proud Juan de la Cruz.

We can dream . . . we can hope . . . but until we take to heart that hope takes work, we simply are in la-la land. We can't just cherry pick – a swallow doesn't make a summer – which we proudly attribute to our being incurable optimists? Unfortunately, we mistake faith for fatalism? We know full well that despite the interests from foreign investors, for instance, we are still miles away compared to our neighbors. And given our black marks, we need to take the extra mile if we are to attain economic prosperity. It takes more than optimism and hope – it takes work.

How do we demonstrate it – not when we’ve allowed ourselves in a no-win situation? “Mega investors protest electricity bill” [Manila Bulletin, 21st Aug 2012]; we can't get power-related projects to attract bidders [paraphrasing Boo Chanco, 20th Aug 2012, The Philippine Star] and we are now told that foreign consultants (of Meralco) believe that given the free-market system we've created no foreign entity would dare enter our power industry – because their investment could be at risk? On the other hand, the NEDA chief says we need to create decent paying jobs. Between the challenge posed by endemic corruption and our power situation, where is the NEDA chief coming from? We have a structural problem and we need more than rhetoric. It is not plans that we need – because we've had them for decades – it is political will that we sorely lack!

It brings to mind the Bush-Cheney team that subscribed to outsourcing military services to the likes of Cheney's former company, Halliburton. Where is our economic team? Where is the leadership? How could we talk of pursuing 13 strategic industries – or more than the 7 proposed by the Joint Foreign Chambers (JFC) – when something as fundamental as power (and flood control) seems nakedly leaderless and spinning out of control?

Saturday, September 8, 2012

Of doctors and our future

"Twenty-five percent from our batch left the country. Those that you would label as altruistic and stayed are increasingly growing frustrated and there are those who decided to stay closer to home in the provinces." The writer was chatting with a couple, both of them doctors, over a fiesta-like baptismal gathering of Pinoys that was capped, to everyone's delight given Metro New York's 95-degree blazing summer heat, by the authentic Filipino "halo-halo." The only foreign twist about it was the white-American young man who made sure there was shaved ice for everyone.

"In fairness, there were professors who kept abreast of developments and updated their materials but it was not uncommon to stick with outdated ones, and the students were expected to keep still – because of the unwritten rule of hierarchy. And mentoring especially if that meant putting a professor's practice at risk was foreign – they would ensure that their patients don't get to look at other doctors. So the option is to be employed in a hospital but the salaries won't give even for a couple like us the means to raise a family.

"These barriers are erected at practically every turn. Dengue is something we want to address but we would rather have Thailand do the drug development instead of partnering with foreign drug companies. The funny part is Thailand will have to do the testing in the Philippines. There is a score of next-generation HIV drugs but we're still limited to a handful of first-generation ones because we want to stick with the cheaper drugs. [Another attempt at social engineering that is shortsighted and counterproductive?] Even foreign aids face barriers and so we can’t take advantage of them. For example, beyond the taxes we impose on modern equipment that we sorely need is the bureaucracy that we seemingly accept, and so we've become our worst enemy!

"Science has brought about an explosion of challenges and opportunities in the field of medicine. Between these man-made barriers and our lack of resources, we are being left behind – putting us on a downward spiral. A truly dedicated leadership, say, in a university hospital must be committed and single-minded to fight the status quo."

The writer could not help but be reminded of President Aquino's personal fight against corruption. But as the writer shared his thought a friend who just returned from Manila overheard him and quipped: "Who are we talking about as the next president, another corrupt politician"! And so the writer shared the belief he had growing up that Filipinos are smart; he looked up to the bright students during his school days as well as those in the business world and Philippine society in general. "When we get to speak to those in our batch, their frustrations have grown so much that they've become part of the status quo," chimed the doctor-couple. "We can also talk about what's wrong with the American culture, but the bottom line for us is we would like our children to have a better environment than what we had to go through."

The writer could almost hear his Eastern European friends who’d been sharing their desire for a better world for their children. And so he explained to the young couple that the one thing he learned in the West is how progressive enterprises have made mentoring inherent. When he was with his MNC employer, he experienced working with three CEOs who came from different parts of the world. And it is not surprising because mentoring which starts from the time college students are tapped as interns goes on through their careers – where training and development and succession planning are valued, not paid lip service. [And to the writer's delight, his Eastern European friends have embraced the practice. Because they would be the better for it and it already shows in their ability to compete head-to-head with Western behemoths.]

And so in this blog, meant to challenge Juan de la Cruz to reinvent himself if we are to attain economic prosperity, the themes revolve around the imperatives of investment, technology and innovation as well as education or talent, product and market development. Not surprisingly, Fr. Rolando V. de la Rosa, O.P., writes: “. . . Hope takes work.” [Manila Bulletin, 11th Aug 2012]

Tuesday, September 4, 2012

Having our cake and eating it too

An Australian swim coach has tough love for his compatriots in the Olympics this year: "We're getting too soft. Our work ethic has dropped down," CNN, 9th Aug 2012. “Ken Wood, the swim coach who helped train China's double gold winner Ye Shiwen, one of the Olympic surprises this year, said the Australians “cannot afford to be soft" to compete with Chinese swimmers.”

Deadly floods that have swamped nearly all of the Philippine capital are less a natural disaster and more the result of poor planning, lax enforcement and political self-interest, experts say,”, 9th Aug 2012. “Damaged watersheds, massive squatter colonies living in danger zones and the neglect of drainage systems are some of the factors that have made the chaotic city of 15 million people much more vulnerable to enormous floods . . . Urban planner Nathaniel Einseidel said the Philippines had enough technical know-how and could find the necessary financing to solve the problem, but there was no vision or political will . . . “It’s a lack of appreciation for the benefits of long-term plans. It’s a vicious cycle when the planning, the policies and enforcement are not very well synchronized,” said Einseidel, who was Manila’s planning chief in1979-89 . . . “I haven’t heard of a local government, a town or city that has a comprehensive drainage master plan.”

We can’t have our cake and eat it too? We reap what we sow? Do we even care? Is it our passive nature? Is it our fatalism? Is it our weather? Is it because we’re an archipelago – and we think like islands unto ourselves? Or are we compliant because we defer to hierarchy?

We have seen Metro Manila descend into the abyss of chaos and environmental degradation – right before our very eyes? During the recent flood the poor were pitiful, but a Metro Manila that is not organized, developed and geared for such density is bound to affect everyone, not just the poor? We can’t be like a sinking ship?

And the wife would interpret “work ethic,” thus: “We’re so used to our assistant – and so we don’t lift a finger when our assistant would have her own assistant”? And that is where inefficiency – and our being oblivious to productivity and competitiveness – starts? And it gets worse as we've valued monopoly power given our insularity – i.e., local enterprises  are not pushed to the edge to satisfy regional if not global yardsticks of excellence? And not being pushed to the edge is why we proudly believe that we’re the happiest people on earth?

Of course, since PHL is an economy of two subsets, we are able to put our best foot forward confident that we’re world-class – where it matters, e.g., our individual successes? But it simply perpetuates our lopsided economy and thus our hierarchical structure. President Aquino has taught us about the “common good” by personally leading the fight against corruption. But beyond that, we now need to define “the vital few” initiatives that could get our economy going. We are way behind development-wise that there is the urge to bite more than we can chew. But that’s precisely why we were like spinning wheels for decades; for example, how come we failed to prioritize power and basic infrastructure?

The Joint Foreign Chambers (JFC) is showing us how to back-off and prioritize – via the 7 strategic industries that they put together working with both the public and the private sectors. But to come together to define our common good and our vital few is not our normal? And the chaos that characterizes Metro Manila and hence its environmental degradation is the price we are paying today?

We can’t have our cake and eat it too?

Saturday, September 1, 2012

The fewer the better

The piece of Cayetano W. Paderanga, Jr., former director general of NEDA, entitled “Why PPP” (5th August 2012, Business World) reinforces the axiom that especially in major undertakings, “the fewer the better.” “PPP is more than just the financing. It also exploits the efficiencies, the speedy and timely decision making, the single-mindedness and nimbleness of private initiative. It offers the opportunity to pinpoint and implement the strategic and critical projects that support and are interconnected with national infrastructure networks and clusters.”

PPP demands just as or even more stringent requirements from the public sector as ODA and direct government implementation. The institutional infrastructure includes, among others, well-structured rules that are clear and transparent for everyone’s guidance. Transparency, fairness and a level playing field are critical to bringing in the right private sector players and heading off unwanted legal hassles later . . . At the same time, it is important for the government to have an effective planning and programming process to identify and prepare public projects amenable to this mode of implementation . . . With the complexity and size of public projects nowadays and the complicated, interrelated (a "noodle dish") government laws and regulations, one cannot anticipate all of the potential issues in project design, development and contracting . . . For complete and effective implementation, we need to take care of the details "from A to Z."

It is for this reason that we need to develop the bias for the vital few – and not take our “mantra of inclusive” as a given. Our failure to develop over the last half a century is arguably because of spreading resources thinly thus underfunding initiatives and sub-optimizing outcomes in our desire (a.k.a. "crab mentality"?) to please competing ideas, which in reality perpetuates compromise – not necessarily for good but more often than not, for ill – and magnifies our passive culture against a globalized world that, by definition, is competitive.

For instance, to successfully pursue the 7 strategic industries teed up by Arangkada Philippines (c/o the Joint Foreign Chambers) is, by themselves, a big challenge. What more of the 13 industries which the government seems committed to pursue? And even with the seven championed by the JFC, we must still prioritize the industries with the utmost urgency: infrastructure, agribusiness and manufacturing, for example. Because within each of them, there will still be loads of intermediate projects that must again be prioritized until the exercise gets down to their operational nuts and bolts. [And as the Budget or DBM Secretary explained to Congress, while we want to step up agribusiness efforts, we must get their requisite infrastructure done first otherwise we are only throwing good money after bad.] And to truly train a laser-like focus on these top priority strategic industries, the president ought to be the one to cajole execution, and monitor and report their progress.

The private sector’s ability to be more efficient goes beyond the profit motive. It is more because of its ability to focus on the vital few. And as Procter & Gamble has learned, proudly pushing over a dozen billion-dollar brands, for example, in fact resulted in a loss of focus. Put another way, if a global enterprise with a market capitalization approximating that of the GDP of the Philippines, despite being arguably among the best in the business and with their well-developed management and ICT systems, still must focus on the vital few or their core businesses, what more of a nation which, by definition, has a less developed management system?

Unfortunately, being an underdeveloped economy where dominance is celebrated (owing to crony capitalism and monopoly power) we have yet to internalize the power of the vital few – or in our Christian heritage, the Great Commandment. Our challenge boils down to: can we do a paradigm shift? Share-and-share alike is what socialism is about and it has failed miserably. What is called for – if we are to overturn half a century of economic underdevelopment – is political maturity.