Saturday, December 22, 2012

Hopefully within our lifetime

A highly respected journalist reacting to the book I recently published (Learning to Reinvent Ourselves: How to Make the Philippines a Winner in the 21st Century) sounded hopeful but not exactly confident that PHL would in fact be able to right itself within our lifetime. How could we have taken such an uncertain path? Is it simply because we are in denial? Is it because of intellectual arrogance – as an educator-friend would opine? Is it because the status quo is so rewarding to the establishment – where we all belong save Juan de la Cruz? Or is it because we are a soft- and leader-dependent culture but our string of leaders haven’t crafted and articulated a vision for Juan de la Cruz? True leadership is credible and crafts and articulates a vision that the population in turn would embrace. When the way forward is crystal clear, people are able to demonstrate unequivocal commitment.

Can we, say, over the last half century, point to visionary leadership that articulated the future such that we in turn demonstrated an unequivocal commitment? Our claim to fame remains our OFW remittances and our rising foreign exchange reserves – and they serve a very narrow slice of the economy. Of course, those in financial services are cheering, but these are the same cheerleaders with eggs in their faces when the credit bubble burst? The axiom: money is not an automatic value-creator unless it is efficiently employed to add value – as in the parable of the talents. Still we are proud of our consumption-driven economy especially when the rest of the world has had a recession. Sadly, we’re far removed from the realities of the 21st century world where economic success or failure is measured by innovation and competitiveness – the true value-creator. China and Germany have been urged to push consumption but we aren’t like them, and don’t share their profiles. China is a low-tier GDP per capita nation but with over a billion people the aggregate economy is humongous. And Germany, while a lot smaller population-wise, has a GDP per capita in the top-tier. PHL has neither characteristic and so we should instead be benchmarking against our neighbors – poor nations once but have successfully elevated their economies. But we remain overly proud to accept the slightest imperfection? Or are we simply unable to step up to the plate – i.e., what we sorely need is investment and technology, full stop!

We may have a robust BPO industry and our handful of billionaires have made it to the Forbes wealthiest. And we may be enamored by our tourism campaign despite the deficiencies in our infrastructure. But the rest of the world has already moved ahead and in pursuit of the spoils they anticipate with the dawning of the Asian century. And we risk being swallowed by the competition if our best response to the 21st century world is our inherent fatalism and/or the oblique way (half-baked or “medya-medya” in the vernacular?) we employ to face our challenges? Incremental thinking – and gains – may be good enough for Juan de la Cruz but that won’t suffice in this day and age.

Thankfully President Aquino’s “daang matuwid” has grabbed the attention of the world community, and that is the good news. The challenge we still face is: what is the vision for PHL and how crystal clear is that to Juan de la Cruz so that he would then demonstrate an unequivocal commitment? We are trumpeting that we are open for business yet our actuations continue to confound foreign investment. Which priority industries are we supporting without equivocation? How do we expect to push over 50 industry road maps, for example? Are we unwittingly setting ourselves up to sub-optimized outcomes and compromises (e.g., with vested interests) if not corruption? Our definition of “inclusive” cannot undo the realities of Pareto’s econometric model. There is a continuing body of knowledge behind the principle, also known as “vital few.” The New York Times magazine (on 11 Nov 2012) featured the Spanish global retailer, Zara, explaining how it grew into the largest fashion retailer. Zara is about driving “fast fashion,” meaning a relatively few contemporary styles that move fast off the shelf.

Of course, beyond Pareto, there are success levers that must be present in the pursuit of critical undertakings: the product or service itself and the other elements of the communication mix, the resource mix and the execution mix (who will do what, when, where and how.) It is not about intellectual arrogance and complexity, but simplicity!

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