Sunday, January 12, 2014

“A whole hierarchy of people [needing] to agree . . .”

“. . . that a new idea is good . . . is [why] big companies [that] have plenty of great ideas do not innovate.” [Ben Horowitz (Co-Founder and Partner, Andreessen Horowitz), Can-Do vs. Can’t-Do Culture,, 1st Jan 2014] “As a venture capitalist, people often ask me why big companies have trouble innovating while small companies seem to be able to do it so easily. My answer is generally unexpected. Big companies have plenty of great ideas, but they do not innovate because they need a whole hierarchy of people to agree that a new idea is good in order to pursue it. If one smart person figures out something wrong with an idea — often to show off or to consolidate power — that’s usually enough to kill it. This leads to a Can’t-Do Culture. The trouble with innovation is that truly innovative ideas often look like bad ideas at the time. That’s why they are innovative — until now, nobody ever figured out that they were good ideas. Creative big companies like Amazon and Google tend to be run by their innovators. Larry Page will unilaterally fund a good idea that looks like a bad idea and dismiss the reasons why it can’t be done. In this way, he creates a Can-Do Culture.”

And from the Harvard Business Review, Dec 2012, Reclaim your creative confidence, Tom Kelley and David Kelley: “Most people are born creative. As children, we revel in imaginary play, ask outlandish questions, draw blobs and call them dinosaurs. But over time, because of socialization and formal education, a lot of us start to stifle those impulses. We learn to be warier of judgment, more cautious, more analytical. The world seems to divide into “creatives” and “noncreatives,” and too many people consciously or unconsciously resign themselves to the latter category . . . Students often come to Stanford University’s “” (which was founded by one of us—David Kelley—and is formally known as the Hasso Plattner Institute of Design) to develop their creativity. Clients work with IDEO, our design and innovation consultancy, for the same reason. But along the way, we’ve learned that our job isn’t to teach them creativity. It’s to help them rediscover their creative confidence—the natural ability to come up with new ideas and the courage to try them out. We do this by giving them strategies to get past four fears that hold most of us back: fear of the messy unknown, fear of being judged, fear of the first step, and fear of losing control.”

Why is PHL industry uncompetitive? It is not surprising given what Rizal saw over a hundred years ago, i.e., we’re backward and anti-progress? And we can substitute economy or nation for industry and the picture doesn’t change? And I've shared before how my Eastern European friends struggled yet wanting to pursue free enterprise – after decades under Soviet rule – learned to embrace a Can-Do Culture.

It is not easy for an entire nation to take such a leap, but if PHL industry wants to move up to the next level, especially with ASEAN integration, it must. Because if our local enterprises aren't regionally competitive, they could be takeover targets by regional behemoths. And so while for decades we were able to raise barriers against foreign interests, ASEAN would bring those barriers down. In other words, we are no longer an island unto ourselves. And to thrive in the 21st century, we have to learn and embrace innovation and creativity. And it isn't about Pinoy creativity as we know it – because in more ways than one, Pinoy creativity or abilidad is more about making-do as opposed to value-adding innovation.

And it's no different from what I saw in Eastern Europe. Poverty informs a people's mindset. And so while they once proudly showed off that they could “copy” products from the West and priced them lower, they had to learn that a sustainable economic activity was what they had to aim for – i.e., a virtuous circle. (It also explains why we Pinoys couldn't imagine being able to develop innovative and high valued-added products?) Thus eleven years after I first arrived, they have truly embraced the mantra, and their confidence to do business globally gets stronger each passing day. They have overcome all the fears discussed in the HBR article.

Likewise, they have become “anti-hierarchy” and have espoused the 21st century's demands for rapid, self-organizing teams that are cross-functional and multi-level and even cross-national. We Pinoys can opt to be parochial, inward-looking and wedded to the past. So long as we recognize that water seeks its own level. If Russian billionaires could buy the most expensive New York apartments, Malaysians if not Indians, for example, could buy uncompetitive local Philippine companies. 

Of course, to the Filipino investor or investors, that may be a windfall – but that could be a short-term benefit if the proceeds aren’t invested in an enterprise that would be sustainable beyond the local market. Because it means we won't be able to take advantage of the bigger regional market, and thus the returns to PHL and impact or contributions to the economy would be limited . . . And until we recognize how self-defeating parochialism is, it would get worse before it gets better for Juan de la Cruz! 

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