Resistance to change

“People change, forms of organization change. The stories of Philippine businesses that have lost their prominence show the resistance to change, some more evident than others. That inability to move forward is called inertia. To break away from inertia, one must innovate. There are of course risks to innovation, risks that conservative owners are afraid to take. Yet without taking those risks, an organization certainly dies. Studying the reasons family businesses have failed, and understanding the motivations to revive once-active family businesses provides valuable insight on the role families have in the life, death and possibly rebirths of their businesses.” [Philippine businesses of yesteryears, Dr. Andrea Santiago, Green Light, Manila Standard Today, 4th Aug 2014]

That’s the micro view. And now for the macro view: “Infrastructure in the Philippines — transport, energy and communication — is in a difficult state to say the least,” said Thierry Geiger, an economist with the World Economic Forum. “Year after year, when we ask business executives based in the country about the state of infrastructure, they say that it is improving. Yet it remains a major bottleneck.” [Strained Infrastructure in Philippines Erodes the Nation’s Growth Prospects, Floyd Whaley, The New York Times, 3rd Aug 2014]

“But the infrastructure problems now threaten to hold the Philippines back from reaching the next level, economically speaking, and improving its manufacturing base. Infrastructure problems have surpassed corruption as the leading economic obstacle, according to the most recent World Economic Forum competitiveness report, which is based on responses from people doing business in the country. Manila is plagued by power failures, chronic water shortages, an antiquated telecommunications system, deteriorating roads and bridges and a subpar airport.”

That last line must be speaking to crony capitalism in the Philippines and its oligarchic economy – being at the center of these infrastructure projects? And these are “the infrastructure problems [that] now threaten to hold the Philippines back from reaching the next level . . . [and] have surpassed corruption as the leading economic obstacle.” But when foreign investors pick up a local Philippine paper, what do they read? That we Pinoys have elevated oligarchy and exalted them as savior of the nation? And we wonder why we're the least able to attract foreign investment? But unlike the church, through the bishops, that has finally acknowledged that it's a sick institution, political patrons and their cronies have yet to accept that they represent sick institutions as well?

Resistance to change? We simply can’t move beyond being an island unto ourselves – and like the days of old – are ruled by a cacique system and structure and thus our soft yet tyrannical culture? And has it turned us into a weakling in this day and age of global competition? And what about family which we like to talk about with pride, is it another dimension that underpins our chronic underdevelopment, i.e., nepotism and political dynasties? Where is the source of Filipino pride when we are suspect all the way down to the bones?

“Last week while listening to the President in his State of the Nation Address, he sounded very patriotic and commended all his Cabinet members. I’m pretty sure he needed to also boost the spirits of his team but he also failed to recognize their weaknesses. Every wrong move seemed to be rationalized. With such an attitude we will never move forward. This reminds me of a quote from Inazo Nitobe (a Japanese author), “Poor is the patriot who finds no fault in his own country: for a self-righteous nation can never improve.” [We never move forward, always backward, Sara Soliven De Guzman, As a matter of fact, The Philippine Star, 4th Aug 2014] “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle. – Sun Tzu, The Art of War”

“There is strong evidence that the cognitive skills of the population—rather than simply school attainment—are robustly related to workers’ earnings, distribution of income and economic growth. Spending on R&D covers current and capital expenditures (both public and private) on creative work undertaken systematically to increase knowledge—including of humanity, culture and society—and the use of knowledge for new applications. Philippine R&D spending stuck at around 0.15 percent for years is woefully inadequate for its 21st century requirements. Sadly, this reflects the importance the government and society in general give to investment in suprastructure relative to its Asean contemporaries’ R&D spending which hews closer to the Unesco norm of 1 percent of GDP.” [Investing in ‘suprastructure’, Ernesto M. Pernia, Gisela P. Padilla-Concepcion, Ramon L. Clarete, Philippine Daily Inquirer, 3rd Aug 2014]

That’s a mouthful but the following line needs to be highlighted: “There is strong evidence that the cognitive skills of the population—rather than simply school attainment—are robustly related to workers’ earnings, distribution of income and economic growth.” And it brings to mind people like Bill Gates and Steve Jobs, both college dropouts. And I’m also reminded of Joi Ito, head of the MIT Media Lab, on TED Talk: “Education is what others do to you; learning is what you do to yourself.”

From my MNC background and today as consultant – which my Eastern European friends would define to outsiders as teacher, coach, trainer, and friend – the relevance of cognitive skills in human endeavors has been unmistakable. As Steve Jobs would define creativity, it simply is connecting the dots.

And in an MNC-headquarters environment where graduate degrees like vice-presidents are a dime a dozen, one would wonder why bad decisions and faulty executions could still occur. And having worked with consultants (in education and training, leadership and strategy, among others), I had then the good fortune of being involved in addressing these challenges both from an education and training standpoint, by developing an extensive training curriculum for our people, and as importantly, in the real world, by fixing problem businesses. And where would such organizational lapses come from? From the mindset of people and the biases that they bring – wittingly or unwittingly – that become barriers even when they believe they are employing the right approaches in their problem-solving efforts.

Illustration: “I went home constipated by information overload, arrived home wet from walking in the rain and wondering just how would I translate a 25-year saga that began in the time of Cory Aquino. I hope this explanation does not “shock” you . . . During Marcos’ time FM wanted self-reliance in Energy including nuclear power but the deals were all marked by controversy and corruption. So when the Cory regime came in, they obliterated all Marcos related plans for energy sufficiency and self-reliance. Alongside came a petroleum company executive who convinced Cory and her advisers to totally junk plans for energy self-reliance because there would always be enough fuel to run the power plants.” [Gentlemen: Start your generators (!), Cito Beltran, CTALK, The Philippine Star, 4th Aug 2014]

Having lived through the above experience, Jobs’ definition of creativity indeed comes in handy in my current role in Eastern Europe. Connecting the dots compresses lots and lots of information into a simple model that lends itself to successful execution. Or why in PHL we've fallen behind in people, infrastructure, industry and economic development? The “success chain” then comes down to: (a) a universal vision that forms (b) the mindset and the biases of a people; that are then thrown into the hopper of (c) the cognitive skills; and produces (d) the model that sets up (c) successful execution.

How do we form our mindset and our biases? Please see above illustration. What could have been the mindset of the decision-makers – and what about their biases? Did they miss the forest for the trees? Was there visionary leadership – or was populism a given? And did a classic “groupthink” ensue for which Juan de la Cruz has dearly paid the price – in PHL being regional laggards with no clear way forward given deficits in the fundamental building blocks of an economy: infrastructure and an industrial base? Wikipedia: “Groupthink is the practice of thinking or making decisions as a group in a way that discourages creativity or individual responsibility . . . There's always a danger of groupthink when two leaders are so alike.”

Do we form our mindset and biases through the influence of the church or our cacique system and structure or our educational system or our politics and crony capitalism or our oligarchic economy? “Education is what others do to you; learning is what you do to yourself,” Joi Ito. [“The New York Times reported that Joi Ito was named to be the director of the MIT Media Lab. His appointment was called an ‘unusual choice’ since Ito studied at two colleges, but did not finish his degrees.” Wikipedia]