The halo effect . . . of success

“On paper at least, P&G . . . has one of the strongest boards in the world with CEOs from six other companies among its 12 members . . .” [P&G all-star board's oversight questioned as CEO departs, Reuters, 29th May 2013] “P&G . . . last year described the board as "highly qualified and each Director brings a diversity of skills and experiences . . . The sudden exit of Procter & Gamble Co's Bob McDonald as chief executive and the return of former CEO A.G. Lafley in his place has raised questions about the vigilance of one of America's highest-profile corporate boards.”

Call it the celebrity halo effect or the halo effect of hierarchy in a hierarchical system. It reinforces the imperative of an egalitarian ethos to make ‘check-and-balance’ work towards approximating ‘the greater good.’ The best example: Pope Francis. “Pope Francis has revealed . . . the reasons for his decision to shun the official papal apartments and instead live in a much more modest Vatican 'hotel'. [The Telegraph, 30th May 2013] The Pope broke with Vatican tradition when he decided . . . not to live in the apostolic apartments. "I didn't want to go and live in the apostolic palace. I go over there just to work and for audiences. I've remained living in the Casa Santa Marta . . . which accommodates bishops, priests and lay people." There he feels "part of a family" he wrote . . . "I'm visible to people and I lead a normal life . . . All this is good for me and prevents me from being isolated."

In PHL, between oligarchy and the elite class, we have a very exclusive group that has called the shots for Juan de la Cruz and, not surprisingly, PHL has remained underdeveloped and uncompetitive and stuck with widespread poverty? [Protectionist clauses in the Philippine Constitution restrict the flow of foreign direct investment, The Philippine Star, 3rd Jun 2013] Or in the words of Francis, "The wealthy and the powerful are leading the world down the wrong path." What are the manifestations? We keep pointing at the faults of others especially our neighbors while deflecting, defending and denying our shortcomings? This exclusive group is the voice of the media, too? And as my Bulgarian friends would explain, "under Communist rule we had no media only propaganda – and thus had no voice – and why we had to resort to self-immolation. And it has become part of our culture and not surprisingly we demonstrated it recently."

When I first came to Eastern Europe ten years ago, people in the industry revered P&G. It wasn’t surprising. They had to live with mediocre personal care products – if they were even meant for human consumption – under Communist rule. “Even life’s simple pleasures were denied us, and to this day happiness is not us – when we say we’re Balkans it says it all. We rank poorly in the happiness index.” And here was a company that taught the Western World how these products ought to be made. P&G represented liberation. Two of my then new friends even bought a share each of P&G stock so that they could display the certificates in their offices. They wanted the affinity with "the best in class." P&G was a ‘rock star.’ Is that far from how we in PHL celebrate oligarchy and the elite class?

“The litany of challenges . . . remains almost unchanged. Growth will most certainly hit the wall, if more robust energy and infrastructure investments are not forthcoming. And the benefits of any growth that does occur will still remain concentrated in the hands of a few if deep structural reforms are not pursued.” [Why PH improves in competitiveness ranking, Ronald U. Mendoza, Asian Institute of Management Policy Center, 30th May 2013]

“Ultimately what the economy may need now is a “big push” to spur investments, promote stronger competition, and trigger massive job creation . . . [I]n spite of the 9.8% growth in net FDI inflows in 2012 and the 42.7% increase in 2011, the Philippines slipped in the international investment sub-factor from 54th to 55th, as other competitor countries raked in significantly more FDI inflows . . . In 2012, the Philippines posted US$2.0 billion in net FDI inflows, much lower than Malaysia’s $9.4 billion, Indonesia’s $ 19.5 billion, and Thailand’s US$ 8.6 billion. The disparity in FDI achievement between the Philippines and its neighbors is better illustrated by figures on FDI stock. The country is not only lagging behind – the gap with its neighbors is also increasing . . .”

And how do we respond – point at the neighbors’ faults instead of owning up? Sadly, for Juan de la Cruz, for us to own up is self-defeating while defending and protecting the status quo is self-preserving?