Wednesday, August 27, 2014

Misunderstanding our faith – not preserving feudalism?

“To serve his higher calling as a pope of the people, Francis knows, he must continue to keep one eye on the bottom line.”[This pope means business, Shawn Tully, Fortune Magazine, 14th Aug 2014] Francis declared that sound financial management was a pillar of his greatest mission: aiding the poor and underprivileged. That mission was endangered by volatile, unpredictable budgets that careened from modest surpluses to steep deficits. The Vatican’s inept practices had inhibited giving, he explained, and had to stop. ‘When the administration is fat, it’s unhealthy,’ he said. Francis wanted a leaner, more efficient Vatican administration that would be solidly self-sustaining . . . he despises waste and inefficiency, and he thinks the Vatican can run better with fewer employees.”

That is Wall Street lingo which in one word spells “restructuring”. In PHL, we’ve had a history of labor strife because we assumed compassion means being “pro-poor” – ergo, “restructuring” is evil? If we can't streamline private-sector enterprises for efficiency and productivity, for example, what more of government bureaucracy? And so where are we today? Why can’t we move forward as an economy and nation? We have yet to internalize the imperative of creating a sustainable income stream – and being focused on accelerating economic development and moving from underdeveloped to developed economy?

When a nation has insufficient income stream, there is no wealth to spread around. The point needs to be made: the ex-socialists I write often about have understood and are learning to internalize – though it won't happen overnight – that fundamental principle, but which to us in PHL remains fuzzy? Their thinking process has started to shift from being rule-based to principle-driven. For decades bombarded by ideology and Communist rules, they would realize their limitations and impact on their cognitive process. 

Cognitive science has also established certain parameters: “how the mind works must be based on more than ‘common sense’ and introspection, since these can give a misleading picture of mental operations, many of which are not consciously accessible.” [] Help? Enter Steve Jobs, who defined problem-solving as principle-driven, and creativity as connecting the dots. [And here’s a simple exercise: imagine if we have in fact connected the dots, say, from arrival (of a visitor) at NAIA and disembarking to the terminal building to a hotel.  And imagine Pope Francis: he despises waste and inefficiency.”]

To paraphrase President Ramos, the pie is too small! Yet we believe “our GDP in dollar terms is huge” – as an absolute number or in isolation? Indeed it is huge for those bent on raiding government coffers! And economists have figured the context, and that is, our national income per person puts us in the same bucket as other poor countries. And government revenues from taxes are not the spring that generates the nation's income stream. It is the country's total output of goods and services (GDP, for short) that is the spring and from where government revenues are derived.

“It’s the economy stupid,” so said Clinton, during whose time America saw one of the longest periods of economic expansion post-WWII. In PHL we’ve had this disconnect or problem (of cognition) for the longest time because our model has been Padre Damaso – and a hierarchical church that preached compassion and for Juan de la Cruz to be “pro-poor”? Padre Damaso is long gone but Rizal saw through it even then: “Why independence, if the servants of today will be the tyrants of tomorrow?” And thank God Francis has taken it upon himself to expose this dark secret to the world. But is he simply mirroring the activist and the model radical, Jesus H. Christ?

Because we’ve accepted a cacique system and structure as a given, wittingly or unwittingly, we have tied our hands oblivious to the global nature of the 21st century world that is going to get more competitive not less. It’s a closed system compared to the open and diverse characteristics of the egalitarian model (the operative words being open and diverse and that a body of knowledge has established would explain the advancement of the West in human development) and thus we shouldn’t be surprised why we’re not regionally much less globally competitive. Net, we are able to play only in the “little league” that we in the elite class rules. It is the world we've created, a nation that serves the purposes of our cacique masters. If that remains hidden from us because of the blinders that is our culture, it will get worse before it gets better for Juan de la Cruz – and why tyrants of the world have been punished by the community of nations.

“The wildly popular Francis is more than a pontiff of the people. He’s an elite manager who’s reforming the Vatican’s troubled finances. The new pope wanted to talk about money. That was the message that went out to a group of seven prominent financiers—major Catholics all—from around the world in the summer of 2013. Barely five months after the shocking resignation of Pope Benedict XVI, Pope Francis had summoned them to assemble at the seat of holy power, the Vatican. They knew their general assignment: to create a plan to restructure the Vatican’s scandal-plagued finances.” [ibid.]

“With little preamble, he began outlining his strategic vision, in an approach described by one participant as ‘highly managerial’ . . .  [T]he pope explained to the group that for his spiritual message to be credible, the Vatican’s finances must be credible as well. After centuries of secrecy and intrigue, it was time to open the books to the faithful. Strict rules and protocols must be adopted to end the cycle of scandals that had plagued the Vatican in recent years . . . ‘Now I want solutions to these problems, and I want them as soon as possible.’ With that, Francis left the group to figure out the details.”

“What’s far less appreciated is his intense engagement—and astounding success—in overhauling the Vatican’s finances and pushing the adoption of modern practices it had resisted for decades. The changes are massive,’ says René Brülhart, chief of the AIF, the Vatican equivalent of the Securities and Exchange Commission. Now a clear game plan has been put in place, and we’re really part of the international community.”

“What has been less appreciated by outsiders until now is the pope’s elite managerial skill set. Like a great CEO, he has the ability to set a strategic vision, then choose and motivate the right people to make it work. His rapid overhaul of the Vatican’s finances is both one of the most unusual case studies in the annals of business and one of the more instructive.”

“Indeed, Francis has brought in some of the biggest brand names in the world of business. KPMG is implementing uniform, internationally accepted accounting standards to replace the Vatican’s previous crazy quilt of bookkeeping. EY (the former Ernst & Young) is scrutinizing management of the Vatican’s stores, utilities, and other municipal services. Deloitte & Touche now audits the accounts at the Vatican bank. And Spencer Stuart has recruited top management talent from around the globe. Heading the effort to restructure media operations, assisted by McKinsey & Co., is Lord Christopher Patten, a former head of the BBC and the last British governor of Hong Kong.”

What can we in PHL learn from Pope Francis? Do we have a strategic vision for PHL such that we matter-of-factly channel fiscal and monetary policies to rapidly erecting the fundamentals of an ecosystem – as in basic infrastructure and an industrial base – in order to establish a solid economic platform that will not only attract FDIs, but fuel an economy that is like a well-oiled machine? Have we ever considered bringing some of the biggest brand names in the world of business to challenge us, to rethink and restructure our enterprise and become that well-oiled machine? But because we like to look backward and inward and not forward and outward, will we ever come close to approximating the managerial skill set of Pope Francis?

“The pontiff does not talk about balance sheets and cash flow. He leaves the numbers to the experts. His forte is leadership. Like any good chief executive, he knows that the culture of an organization is established at the top . . . It’s impossible to hoodwink him. By getting the views of many participants—both Vatican officials and lay advisers—in all of his reform initiatives, the pope quickly determines if his instructions are being implemented or blocked by the old guard. If he sees resistance from old-school directors, he’ll quickly make changes, as when he replaced the entire board of the AIF, the financial regulator.” [ibid.]

Why are we poor? Because we have been in denial (e.g., that we are rich pretending to be poor?) for the longest time and haven’t had the leadership that will put PHL on the right path? And do we want to preserve our cacique system and structure and confine us to the dark ages?

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