Friday, May 29, 2015

Outstanding achievement versus wasted potential

“I have always been deeply moved by outstanding achievement and saddened by wasted potential.” [Carol Dweck, PhD; one of the world’s leading researchers in the field of motivation; the Lewis and Virginia Eaton Professor of Psychology at Stanford University]. “Her research has focused on why people succeed and how to foster success.” That’s from her website:

Dr. Dweck came to mind after coming across these news reports re APEC: “PH proposes ‘Boracay Action Plan’ for APEC,” Chino Leyco, Manila Bulletin, 24th May 2015; “Making ASEAN economic integration a reality,” Manila Bulletin, 23rd May 2015; and “APEC backs ‘Boracay Agenda’ to globalize small enterprises,” Business World, 24th May 2015.

I happened to be covering North America at my old MNC company when NAFTA came into being. And was invited to Bulgaria 12 years ago when Bulgaria and Romania were working on their accessions into the EU. The Canada of today appears to me more confident [and I am doing business there again through my Bulgarian client] while the Canada I knew then was more like the poorer of the two cousins, the other being the US. And Puerto Rico today is reported to be akin to Greece. While Bulgaria and Romania in a relatively short period have experienced the ups and downs of their economies.

This blog has discussed the power of the mindset before. And given my respect for academic rigor, I make it a point to compare notes with academe even when my perspective comes from the real world. For instance, my old MNC company, once a takeover target, is today the number one brand in the category globally. And is the only brand – out of 11,000 brands – that has penetrated more than 50% of global households (in the sector at 63.4%, with the next brand doing 44%.)

But perhaps more relevant to PHL’s MSMEs would be my Bulgarian client – and they were the ones that inspired me to start this blog 6 years ago. “We’re poor Bulgarians, we cannot sell products at more than 50 euro cents. The world has left us behind – 500 years under Ottoman rule and 50 years under Soviet rule. We take things as they come. A bright future is beyond our perspective.” But then my now Bulgarian friend had another idea. “I want to move up to the next level. I’ve been in the business for 8 years and I know what I know but there are things I don’t know. How do we move up to the next level? We’re not profitable and must become one sooner than later.”

Those are examples of what Dr. Dweck calls a fixed mindset on the one hand and a growth mindset on the other. What do they mean? Those with a fixed mindset look outside self with very little sense if their situation could be any different. While those with a growth mindset challenge self to grow and develop.

“Internationalizing small firms,” Cielito F. Habito, The Philippine Inquirer, 19th May 2015. “Across the Apec region, small firms consistently account for more than 97 percent of all enterprises; for the bulk of the region, including the Philippines, the share is in fact 99 percent or more. But there is a wide divergence of their contribution to the economy. Contribution to gross domestic product varies from a low of 21 percent in Russia to a high of 59 percent in China and Indonesia; the Philippines is lower than average, at 36 percent. Contribution to total employment ranges from a low of 25 percent in Russia to a high of 92 percent in Indonesia (with Canada a close second at 90 percent); we are again below the average (67 percent) at 61 percent.”

“As for exports, the small firms’ contribution ranges from below 15 percent (Australia, Chile and Peru) to nearly 70 percent (China). Unfortunately, we lack reliable data to be able to determine exactly where the Philippines lies in this range, but indications point to our MSMEs’ export contribution being near the bottom end. What we know from sample survey data is that the bulk of Filipino enterprises do not export at all.”

How do we develop a growth mindset? We must first recognize that many of our neighbors, even before and without APEC, became Asian Tigers. Because they didn’t point at others to sugarcoat their weaknesses. And instead would draw upon their inner strengths. In short, they wanted to grow – and succeed!

There is no denying that the platform and mechanisms made available by the formation of economic blocs like NAFTA, EU or even APEC would be helpful. But at the end of the day, the game is all about competitiveness. For example, both the US and Singapore have taken the mindset that they are falling behind in competitiveness. On the other hand, we Pinoys like to harp on what we’re good at or the positives in our culture. Those are examples of the two mindsets that Dr. Dweck talks about.

Where would they come from? Critical thinking which means we must question our assumptions. And emotional intelligence which means we must manage our disappointments and be results-driven. To be focused on outcomes while influencing the rest of us – with fixed mindsets – to attain collaboration. It is the exercise of leadership such that change is embraced by the people. 

Similarly, it is not enough to know the techniques of how things must be pursued, say, via a well-thought out strategy and be under the umbrella of an APEC. In fact successful change comes from autonomy, self-mastery and a sense of purpose. In other words, we have to paddle our own canoe and develop mastery in competitiveness and demonstrate that as a people we share a common purpose.

For example, we should have had a collective agreement as a people re power generation and vital infrastructure like yesterday if we wanted to move forward as an economy? What about the FOI and the competition law and peace in Mindanao? Or has our hierarchical-parochial bias made us gloss over these imperatives? In other words, APEC cannot keep our house in order for us; we have to do that ourselves!

We’ve always assumed – over decades – that we weren’t prepared to face the world? And thus embraced import substitution, shunted foreign investors, and vacillated in putting up new power generation given its impact on electricity prices? They were juvenile tendencies when compared to what the Asian Tigers embraced? Both Lee Kuan Yew and Mahathir Mohamad advised Deng Xiaoping to seek Western money and technology!

Admittedly, for a people to develop and embrace a sense of purpose is not a cakewalk. And autonomy and self-mastery are not a given either. Yet the reality is performance cannot be dictated and compelled from above. Team members must develop the impulse to perform at peak performance.

And between the West and my Eastern European friends, if there is a common denominator that makes them able to demonstrate competitiveness, it is that bosses and subordinates can be “in your face.” Still, bosses know they can’t pull rank whether brainstorming new product ideas or marketing or sales initiatives, while subordinates don’t pull their punches.

Very recently my Bulgarian friend who owns his company came over to explain an idea that didn’t fly with a subordinate. He was not lobbying for me to get on his side but to explain where he was coming from. And as the discussion went on, he realized that he was off-base and came around to support the subordinate. And this happens all the time! And it is all about the imperative of competitiveness. Simply put, rank does not bestow competitiveness. It is earned collectively by a group or an organization committed to attain peak performance.

Given today’s highly competitive world, what is our option? “You can’t stop the machine,” Fareed Zakaria, Washington Post Writers Group, The Manila Times, 23rd May 2015. “The two most powerful forces that have transformed the world in recent decades have been the expansion of globalization and the information revolution. These two great engines have been chugging away, integrating Asia into the global system and ushering in a digital age that is now invading every corner of life . . . You can’t stop China from growing. You can’t prevent Africa from deepening its integration into the global system. These forces, now deeply entrenched, will continue to gain steam.”

Fareed Zakaria may be a pundit. But what about the real world? My Eastern European friends just developed a couple of new products while tapping and leveraging technologies in the US and Italy and designers in New York and Rhode Island. “It’s a small world,” indeed, Mr. Walt Disney!

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