Wednesday, May 11, 2016

In the wrong business

What business is PH in? “Begin with the End in Mind,” that’s Habit 2 of Stephen R. Covey’s 7 Habits of Highly Effective People which has sold more than 25 million copies worldwide since its first publication in 1989. And that would include countless Filipinos? Aristotle in his infinite wisdom was first to aver that excellence is a habit that is formed. And the converse should be stark.

“The National Economic and Development Authority (Neda), in its ‘AmBisyon Natin 2040’ project, has determined that most Filipinos dream, simply put, ‘to live comfortably.’ From the highlights of the national survey on the aspirations of the Filipino people, Neda observed that the average Filipino envisions him/herself in 2040 ‘to enjoy a stable and comfortable lifestyle, secure in the knowledge that we have enough for our daily needs and unexpected expenses, that we can plan and prepare for our own and our children’s futures. Our families live together in a place of our own, yet we have the freedom to go where we desire, protected and enabled by a clean, efficient and fair government.’“[Paying more than peanuts, Cielito F. HabitoNo Free LunchPhilippine Daily Inquirer, 19th Apr 2016]

Isn’t that what nation-building is all about, a country that is predominantly middle class? Which is the promise of democracy if not the American Dream? Have we finally figured out what the North Star of Juan de la Cruz is? But such a lofty goal can’t be delivered by an insular people – shunning the forces that turned neighbors into economic miracles – that celebrate parochialism and hierarchy and paternalism and political patronage and dynasties and cronyism and oligarchy – the staple of our media that we take as a given? Nor is it about ideology – left or right – and “crab mentality” inherent in our way of life?

Put another way, for an underdeveloped country like the Philippines, to simply keep increasing the number of CCT beneficiaries is not the North Star? Because it is merely acknowledging our failure to reduce poverty like our neighbors did! It’s defeatism.

And lifted from an earlier posting: “Even a small enterprise must have clarity: what its income streams must be; and translated in competitive products and/or services. Otherwise it’s in the wrong business. And David can beat Goliath.”

The evidence? “[T]he five ‘stars’ of Vietnam agriculture. These are the products that earn over US$1 billion annually in exports: rice, natural rubber, cashews, shrimps, and catfish. In contrast, the Philippines has only one: coconut.

“The greatest success over the last ten years was in coffee. In less than a decade, Vietnam has become the largest coffee exporter in the world, surpassing Brazil. One of the major reasons for Vietnam’s high productivity is the support given by the government to research and development. In Daklak, there is the Western Highlands Research Center for Agriculture and Forestry. The center has 50 researchers on coffee alone.

“Not content with its already outstanding accomplishment, Vietnam has released a strategic plan for coffee production up to the year 2020 and a vision to 2030, under which total area for coffee growing will be maintained at 500,000 hectares by 2020 with an output of 2,400 kg per hectare, and 479,000 hectares with an output of 2,500 kg per hectare by 2030.” [Vietnam model, Dr. Bernardo M. Villegas, Manila Bulletin, 5th May 2016]

How does farming win in a highly globalized and competitive 21st-century world? Begin with the end in mind. To wit: “[T]otal area for coffee growing will be maintained at 500,000 hectares by 2020 with an output of 2,400 kg per hectare, and 479,000 hectares with an output of 2,500 kg per hectare by 2030.”

It should not be surprising. They persevered and formed the habit of excelling in their trade. “Over 33 years, Philippine agriculture exports posted the slowest growth at 3.2 percent a year as compared to Malaysia’s 5.9 percent, Thailand’s 7.2 percent, Indonesia’s 8.0 percent, and Vietnam’s 16.3 percent.

“For crops and livestock exports, the Philippines grew 2.5x, Indonesia 12.7x, Malaysia 6.8x, Thailand 9.2x, and Vietnam 102x. Three countries were outstanding in growing their seafood and aqua exports between 1980 and 2013. Vietnam multiplied its exports over 630x to $6.9 billion, Thailand 19.7x to $7.1 billion, and Indonesia 19.1x to $4.0 billion.” [Agri exports: Scorecard of presidents, Rolando T. Dy, MAPping the future,, 2nd May 2016]

And how do we propose to leapfrog our agribusiness efforts? Are we still focused on “activity” instead of “outcome”? It is a distinction between linear thinking and lateral thinking. “[Why] are kids naturally computer-literate? They have the natural tendency to dream, to wonder, to allow their mind to wander and play with thoughts. But in school the stress is on the importance of conformity at the expense of individuality and innovation.” [Terence Jackson, Ph.D., C Suite Advisor/Leadership Development/Thought Leader/Diversity and Inclusion/Organizational Excellence]

And we borrow again from an earlier posting, ‘Unsolicited advice to the Ilocos region and DTI’: There are ways and there are ways to get to a vision. For this exercise, let’s use the region’s contribution of 3.09 percent to the country’s GDP as a starting point. What if the vision is to raise that contribution to 10%? Let’s round it off to 3X current levels so the index can apply across all focused products. Is that doable? In other words, a vision is not a linear progression from the present. It is far out into the future.

“Let's go back to the focused products: cacao, coffee, mango, and processed meat and fish. And take cacao. Where do we export this product? What are the different segments representing the levels of value-added? The basic segment being the produce from our farms. [And the Malaysians, sensing how uncompetitive we are, assumed we will confine ourselves to farming. Not surprising given our crab mentality and how we define nirvana – to parcel out miniscule lands to our farmers being the Christian thing to do? Sadly immortalizing their bonds to poverty? And it comes from our hierarchical and paternalistic system and structure where we embrace destiny – not social mobility? What happened to Juan de la Cruz is made in the image and likeness of his creator?]

“And so we must ask: How high up the value chain do we go and compete? The higher we go the greater the probability of generating healthier margins – the critical element in the effort to attain a sustainable economic undertaking. For example, do we have premium chocolates like Belgian chocolates that are branded?

“In other words, what is the current portfolio of products of our cacao industry? What is the size of the global market for each of the segments as well as in each of the countries where we export or can export them? We need to establish a base line: where are we? And where is the global market and how does it break down by country? And where is the total global market of cacao products including those in the highest or premium segment?

“That is how we can see far out into the future and expand our outlook – beyond the industry’s current contribution to the country’s GDP. The key is for us to have a brand new perspective – if indeed we want to get agribusiness growing robustly instead of declining. And that is why we ask the question, what if the vision is to get to a 10% contribution? And we can run different “what-if” scenarios until the numbers approximate the demands of a sustainable enterprise.

“Forget about whether we currently have the capacity or the wherewithal to go to that 3X vision. The thought process is meant to begin and develop strategic thinking – and down the road visionary leadership. They are not accomplished via linear thinking or a linear exercise. Which is man’s default thinking process – and why visionary leadership is few and far between.

“Then we must ask: what resources do we need to pull together in order to raise output to the 3X contribution level? How much land do we need to produce that volume? And given economies of scale, the buildup of resources must likewise reinforce the desired efficiency, effectiveness and productivity levels because we want to exploit not undermine the benefits inherent in scale – which, unfortunately, is how we crafted land reform. See above re our definition of nirvana. Recall Edison: Begin with the end in mind. And not to put the cart before the horse.”

Our economy is skewed to services accounting for 58.8% while agriculture stands at a meager 10.3%. While industry delivers 30.9% what it masks is the reality that we’re not an industrialized economy and aren’t globally competitive. We don’t even have basic vital infrastructure to get business and people moving. Sadly, we don’t focus on outcome and are mired in activity. Because we didn’t develop the habit.

And we’re paying a very high price for the inability to be forward- and outward-looking. The evidence? We’re stuck to a reactive as opposed to a proactive mode, enlarging CCT consistent with our paternalistic character while continuing to lag in economic development and nation-building.

Here’s the full list of the 7 Habits of Highly Effective People: Be Proactive; Begin with the End in Mind; Put First Things First; Think Win/Win; Seek First to Understand, Then be Understood; Synergize; Continuous Improvement.

Sadly, if we test Juan de la Cruz against these habits, we could only shake our heads because we won’t get our act together – perched on our high horse? It’s the idiocy of a cacique hierarchical system and structure where the ruling class dictates the norm – and why we’re a banana republic. The evidence? “Business titans secretly fund Philippine presidential bets,” inquirer.netAgence France-Presse, 8th May 2016 . . . There goes the FOI and the opening of PHL to FDIs? Should we wonder why we are where we are?

“Why independence, if the slaves of today will be the tyrants of tomorrow? And that they will be such is not to be doubted, for he who submits to tyranny loves it.” [We are ruled by Rizal’s ‘tyrants of tomorrow,’ Editorial, The Manila Times, 29th Dec 2015]

“As a major component for the education and reorientation of our people, mainstream media – their reporters, writers, photographers, columnists and editors – have an obligation to this country . . .” [Era of documented irrelevance: Mainstream media, critics and protesters, Homobono A. Adaza, The Manila Times, 25th Nov 2015]

“Development [is informed by a people’s] worldview, cognitive capacity, values, moral development, self-identity, spirituality, and leadership . . .” [Frederic Laloux, Reinventing organizations, Nelson Parker, 2014]

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