Thursday, November 13, 2014

“Feudal at their core”

“Most organizations are still feudal at their core . . .” [The Core Incompetencies of the Corporation, Gary Hamel, Harvard Business Review, 31st Oct 2014] “The performance of any social system (be it a government, a religious denomination or a corporation), is ultimately limited by the paradigmatic beliefs of its members; by the core tenets that have been encapsulated in creeds and reified in structures.”

“Reflect for a moment on the development of constitutional democracy. Ancient and medieval societies were predicated on the ‘divine right of kings.’ The sovereign was answerable only to God and royal edicts could not be countermanded. Society was ordered in descending ranks of royal privilege and everyone from dukes to peasants ‘knew their place.’ To most of those who lived in this pre-democratic world, the idea of self-government would have been ludicrous, if it could have been imagined at all. Thankfully, a few brave souls like William Penn, Thomas Paine, and Patrick Henry not only imagined self-government, but devoted their lives to making it a reality. Today it’s the imperial alternative that’s unthinkable.”

“Until we challenge our foundational beliefs, we won’t be able to build organizations that are substantially more capable than the ones we have today. We will fail to build organizations that are as nimble as change itself. We will fail to make innovation an instinctual and intrinsic capability. We will fail to inspire extraordinary contributions from our colleagues and employees.”

“Most organizations are still feudal at their core, with a raft of institutionalized distinctions between thinkers and doers—between the executive class and everyone else. And most leaders still over-value alignment and conformance and under-value heterodoxy and heresy. Until this changes, our organizations will be substantially less capable than they might be.”

If most organizations in the private sector can be feudal at their core, what more of nations? “The protests against [President Blaise Compaoré] were provoked by his attempt to change the Constitution so he could run again in elections next year. At one point, he seemed on the brink of succeeding in securing support from lawmakers, but protesters surged into the Parliament building on Thursday and set it ablaze, forestalling a vote.” [Military Backs an Interim President, but Burkina Faso Remains Unsettled, Herve Taoko and Alan Cowell, The New York Times, 1st Nov 2014]

Sound familiar? Did we not entertain the possibility of President Aquino running for another term? Having done business in Africa, it felt like yesterday when I was in the Ivory Coast and met business leaders from Burkina Faso and understood very quickly how government and industry there were intertwined. And I was glad it was the first and the last time.

We’re supposed to be better than Burkina Faso? [But will the Binays rule Makati longer than Compaoré did?] And does it bother us to read something like this? “Almost in chorus, players in the energy sector are emphasizing that ‘entering a competitive sphere with ASEAN neighbors’ may have been desirable – ‘but that is only if we know how to address our own problems first before we go out in the field to compete.’ Sure, there are feasible laws and policies governing various segments of the industry, but various stakeholders averred “we are terribly failing in enforcements.” [PH energy sector: Will it be left out in the AEC (?), Myrna Velasco, Manila Bulletin, 2nd Nov 2014]

“In many instances, investors in the Philippines were shocked with drastic changes or flip-flopping in policies that are being triggered either by ‘political pressures’ and even judicial interventions.” Does that come close to being feudal if not exactly? But the following line makes the point as it relates to PHL? “Society was ordered in descending ranks of royal privilege and everyone from dukes to peasants ‘knew their place.’ ”

Not surprisingly, “The Philippines appears to have stalled in its quest to improve its business environment. After being hailed as the most-improved economy in the 2014 World Bank survey on the ease of doing business, the country’s ranking slipped in 2015 (under a new methodology). The findings, reported in the World Bank’s flagship publication ‘Doing Business 2015: Going Beyond Efficiency,’ indicate how hard it is still for businesses to operate in the Philippines compared with more developed countries.” [Stalled, Editorial, Philippine Daily Inquirer, 4th Nov 2014]

And there’s more: “Why do people run for public office nowadays? Do you really believe they still have the compassion to lead and serve? Sad to say, only a few are sincere. Majority are there for the money. In short, many public officials are fueled by kickbacks. They thrive on government funds.” [Kickbacks are what they live for, Sara Soliven DE Guzman, AS A MATTER OF FACT, The Philippine Star, 3rd Nov 2014]

That is some brave journalist given, “In an extended discussion on the ‘Terrors of a Free Press,’ [Dean and currently a co-faculty member in the UP College of Mass Communication Luis V. Teodoro] pointed to scary statistics on journalists killed in various parts of the country, while many more of them are threatened with being jailed or oppressed. “Living dangerously” has come to describe the journalistic profession, and Dean Teodoro underscores the need for government for a tough policy to protect journalists.” [Know the higher calling of journalists, Dante M. Velasco, Philippine Daily Inquirer, 2nd Nov 2014]

Are we frozen and unable to fix what’s wrong with PHL? For example, why can’t we fix power supply? We defer to plutocracy? We worry about the poor? They will forever be poor if we don’t fix PHL because PHL is one humongous problem – as in we lag the region in investment, infrastructure and competitiveness!

Can we learn something from the church? “There were gasps and tears at Holy Rosary Church in East Harlem. At Sacred Heart in Mount Vernon, congregants shared mournful embraces. And at Our Lady of Peace on the East Side, parishioners pledged a fight. Across the Roman Catholic Archdiocese of New York, a day of reckoning arrived on Sunday, as Cardinal Timothy M. Dolan announced how scores of parishes would be affected by the largest reorganization in the history of the archdiocese.”

“I can well understand the frustration, the anger, the confusion of our people, and I apologize for it, because I am the agent of it . . . But this is about the future, this is about strength and renewal, and we will get through this.” [Heartache for New York’s Catholics as Church Closings Are Announced, Sharon Otterman, The New York Times, 2nd Nov 2014]

Disclosure: At my old MNC company I was involved in restructuring. Restructuring, as part of a strategic initiative to attain sustainable profitable growth, will yield the common good. Even with my Eastern European friends where as a first initiative we automated the packing lines in the factory; yet as we pursued sustainable profitable growth we increased the employee population five-fold. And as we went west attracted highly qualified talents from Western MNCs, i.e., they realized meritocracy isn’t confined to the West, but where we've tapped Western science and technology. Our manufacturing facilities today are state-of-the-art, and we’ve been training people constantly not only in the original location – where we’re among the major employers – but in different parts of the world.

There is no feudalism. Nor political patronage and crony capitalism. It’s free enterprise as it's meant to be, competitive and progressive. It’s a commitment to drive and sustain a high-commitment team – not a hierarchical structure weighed down by bureaucracy – no matter the size. For example, we’re at the height of this year’s budget review and my Bulgarian friend is not even in the meetings. And I would just drop in every now and then. The people own the budget process and plans so they are committed to deliver them – and, of course, they know what’s in it for them.

In PHL we remain feudal at the core – to be egalitarian being too foreign? To be egalitarian is what human development is about. While the science of the mind says poverty reduction efforts make us feel good even when we’re perpetuating our hierarchical cacique system and structure. If we haven’t noticed yet, both as an economy and in human development we’re laggards? And who will fix our sorry state?

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