Thursday, June 12, 2014

Start with the end in view III

[Disclosure: This is the third time this blog has used above title. In my development work in Eastern Europe, it has become a mantra and friends say it matter-of-factly.] There was a lively “debate” between two eminent business thinkers in the Sunday Business section of The New York Times about the business model of their likewise eminent school, the Harvard Business School. [Business School, Disrupted, Jerry Useem, The New York Times, 31st May 2014] “If any institution is equipped to handle questions of strategy, it is Harvard Business School, whose professors have coined so much of the strategic lexicon used in classrooms and boardrooms that it’s hard to discuss the topic without recourse to their concepts: Competitive advantage. Disruptive innovation. The value chain . . . The question: Should Harvard Business School enter the business of online education, and, if so, how?”

Porter and Christensen are marquee names and I was drawn to their works as a student of strategy – and more so in the 21st century that brought the Great Recession, which didn’t turn out as bad as the Great Depression but still it laid bare the weaknesses of the US economy, and much of the Western world. But the interest has been there ever since I first exercised supervision; I was a neophyte in the world of management and leadership and wondered how I could be ahead of, not behind the curve. And much later, because of my inclinations, my bosses at my old MNC company sent me to an executive course in strategy (at Columbia University.)

“Harvard Business School faced a choice between different models of online instruction. Prof. Michael Porter favored the development of online courses that would reflect the school’s existing strategy . . . At Harvard Business School, the pros and cons of the argument were personified by two of its most famous faculty members. For Michael Porter, widely considered the father of modern business strategy, the answer is yes — create online courses, but not in a way that undermines the school’s existing strategy. ‘A company must stay the course,’ Professor Porter has written, ‘even in times of upheaval, while constantly improving and extending its distinctive positioning.’”

“For Clayton Christensen, whose 1997 book, ‘The Innovator’s Dilemma,’ propelled him to academic stardom, the only way that market leaders like Harvard Business School survive ‘disruptive innovation’ is by disrupting their existing businesses themselves. This is arguably what rival business schools like Stanford and the Wharton School have been doing by having professors stand in front of cameras and teach MOOCs, or massive open online courses, free of charge to anyone, anywhere in the world.”

Porter and Christensen are big boys and don’t need us to referee their debate. And in the case of PHL, we have been faced with our own challenges. Over the past few decades, the world of business has become increasingly complex and unpredictable. This development is largely the upshot of the transformative effects of the information revolution and the impact of rapid globalization.” [Adapting to complexity,Niceto S. PobladorPhilippine Daily Inquirer, 2nd June 2014]

“Perhaps even more significant is the fact that organizational leaders themselves are becoming increasingly aware that business organizations and their environments are not as stable and as manageable as they were once thought to be, and that the management problems that they face are not as solvable as traditionally assumed.”

“[A] more realistic approach is to address complexity head on, and to search for solutions that are more appropriate for dealing with this phenomenon. But first, we must develop a clear understanding of the workings of complex systems, and a better appreciation of how new patterns continuously emerge from the interaction of the multitudinous components that comprise complex systems.”

“Rethink strategic goals . . . Look at the big picture . . . Aim for maximum flexibility . . . Adapting to complexity requires us to challenge traditional concepts of leadership. Gone are the days of the archetypal ‘great leader’ who knows best what needs to be done, and who has the necessary personal skills to effectively goad, inspire or  intimidate others to play their assigned parts. In today’s knowledge-driven world, the exemplary leader is one who knows where the relevant knowledge can be found, and how these can be brought together in a massive collaborative effort involving individuals within and outside the organization.”

How could we relate that to PHL? For example: “Business groups oppose moves to amend power reform law,” The Philippine Star, 2nd June 2014. “’Amending or making changes in the EPIRA is not the problem, failure to implement it properly is,’ the different business groups said in the position paper . . . The business groups stressed the need to build new power plants, adding that if amendments are introduced, it would create uncertainty and turn off investors . . . ‘Brownouts will be inevitable if we don’t build new power plants. International and local investors and financial institutions won’t invest in an industry where the rules are not known and stable.’”

Another example: “Since a single encompassing competition law is yet to be put in place, the Department of Justice’s Office for Competition (DOJ-OFC)—formed in 2011 under Executive Order (EO) No. 45—has initially focused on three sectors where it was ‘likely to achieve the greatest impact’ in terms of consumer protection, namely energy, telecommunications and transport . . .’” [Competition body probes power, telco firms; Targets possible collusion, anticompetitive services, Ben O. de VeraPhilippine Daily Inquirer, 2nd June 2014]

In the meantime, “Philippine business groups as well as the Joint Foreign Chambers (JFC) supported the immediate enactment of a comprehensive competition law that would create an independent Competition Commission and prevent anticompetitive agreements, abuse of dominant position, and anticompetitive mergers.”

And a more animated article reads: “Those clueless Usecs of DOTC!” [DEMAND AND SUPPLY, Boo Chanco, The Philippine Star, 2nd June 2014] “The bidders were unanimous last year in saying that the terms of reference prepared by the DOTC usecs made no business sense at all . . . Thus, I was laughing out loud when I read the press release of Cosette Canilao of the PPP Center the day after the bidding. The release had this completely hilarious paragraph: Undersecretary Rene Limcaoco explains, ‘It was back to the drawing board for us then. We had to unlearn some of our previous notions on project structuring and procurement. We learned to balance the interests of both the government and the private sector without compromising the project’s viabilities and its public service objectives. We are hopeful we will receive good bids for the LRT Line 1 project.’”

“Hahaha! This is embarrassing, Timmy Limcaoco… apparently, you guys learned nothing from the first experience . . . you guys simply have no idea what makes an attractive business proposal. And to think that Mar Roxas’s bright boys came from the private sector, supposedly hot shot lawyers with Ivy League or hot law firm credentials . . . Well Timmy... I have no doubt you guys are working your butts off on these projects but somehow you guys just don’t get it. There isn’t one major DOTC project you guys had bid out that wasn’t controversial for violating your own rules or ignored by private business for simply being uninteresting.”

To “start with the end in view” is something associated with visionaries. And imagination matters, so said Edison, “To invent, you need a good imagination and a pile of junk;” while to Einstein, “Imagination is more important than knowledge. For knowledge is limited to all we now know and understand, while imagination embraces the entire world, and all there ever will be to know and understand.” [Jim Burke, Reimagining English: The seven personae of the future; English Journal 99.2 (2009), pp 12-15, The National Council of Teachers of English]

Indeed, the world is complex and we wouldn’t want it made more so by our sins of omission and/or commission? That we then have to rationalize our inability to step up to the plate? Or, to settle for the path of least resistance, of “sub-optimizing” and opting for what is convenient – which is another name for ‘crab mentality’? If Ateneo or La Salle wouldn’t settle for second best, how come with PHL, we matter-of-factly accept less than optimized solutions? And we’re surprised we’re not competitive regionally, much less globally? Beyond the metrics or the form of competitiveness is its substance?

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