Managing change if we want PH to move forward

Nation-building “is no longer just economics. We must open our eyes and focus on a bigger canvas, not just economic indicators. Still, most social, political, and other inequality indicators frustrate our efforts to build social cohesion and unite people around certain reforms.” [“PHL urged to focus economic policy on keeping middle class prosperous,” BusinessWorld, 24th Nov 2022]

Let’s hold it right there.

Is it a sigh of resignation that we hear?

It’s a New Year, typically when people would figure out their New Year’s Resolution. If this posting is mine, please be aware that it’s a long and exhaustive Resolution.

In the New Year, the blog turns 14. And I just turned 75, officially retired for 20 years, and have been a volunteer development worker since.

Yet, the blog is not about to cease. A handful in the media with whom I share the postings have been encouraging. But a more significant number chose to block them.

It is not a pleasant read for many, being critical of who we are and what we are. It’s to be, given its genesis. Friends and relatives asked me if I could share my thoughts about righting the ship we call the Philippines, being then the basket case of Asia.

I had disengaged from the Philippines when the family moved to New York. Recall that I spent the first 20 years of my career in the country and saw myself as part of the establishment; I even worked for a Philippine oligarchy for eight years. And while with the Philippine subsidiary of a Fortune 500, I was active in the employers’ group and led efforts to address poverty.

And the church recruited us (my wife and me) to lead a Christian community – and put through the requisite preparations and training. That was when the country went through the hardships that we now attribute to the Marcos dictatorship.

While the community took a significant chunk of time, my primary role didn’t disappear – to make my employer a preferred employer, including making it highly competitive and profitable. We succeeded and tapped for a regional and then a global role.

Recall that the wife rejected my company’s offer to relocate. In our hearts of hearts, we were in the establishment. Translation: Who in the Philippine establishment would find a more desirable lifestyle than ours? Rank has its privileges.

Much of what I share in the postings comes from my background and experience. And having spent more years now outside the Philippines and done business across all continents, my worldview is no longer what it was when I was in the Philippine establishment.

And that is why friends and relatives asked me for my take on the Philippines. And I know it is uncomfortable for us to get unsolicited advice. Said President Cory, “We don’t take unsolicited advice.”

Yet, given what has become of me, I have much to share. Recall how two countries offered me citizenship. [Conversely, the Philippines wouldn’t provide me citizenship if I came from another third-world economy.]

And so, given my inherent leadership, I confirm that the blog is not about to cease. Beyond the “leadership” is “self-government,” fundamental to freedom, democracy, and the free market.

Let’s digress a bit, given my role in Eastern Europe since my retirement. Watching President Zelensky of Ukraine speak to the joint US Congress and preaching Americans what the values of freedom exemplify reminded me why I chose to “represent” democracy in the first place. And I could have ended my role when the USAID program closed.

Yet, self-government and personal responsibility can’t be divorced. 

In other words, I am responsible for sharing my perspective on righting the Philippine ship even when the postings aren’t comfortable to read to some.

Take a developed versus a developing country and how the blog defines the “context” of our efforts in nation-building. We reveal our caste when we pigeonhole Juan de la Cruz as an object of charity. We want to be a first-world economy. It is way beyond providing jobs to address poverty and “inclusion.”

Consider: Dynamism is in the DNA of a developed economy and why I was able to retire at 55 – and be a volunteer development worker.

My old Fortune 500 company embraced a policy called the “rule of 75.” Yet, it is not a binary thought. The company has a well-developed “ecosystem” that makes the “policy” possible.

The rule says that at age 55, with at least 20 years of service, one is a potential retiree – measured against several metrics. Firstly, especially if one is in a leadership position, there is a succession planning program that ensures the pipeline of managers is robust. And it can only be strong if there is a career planning system.

What happened to the vaunted US education system? The company had taken matters into its own hands when Japan Inc. succeeded in undermining America’s manufacturing prowess and competitiveness. And so, we developed an in-house education and training initiative and benchmarked against the Japanese Total Quality Management system while upgrading the company’s Information Technology efforts.

The company must not skip a beat wherever there is a leadership change. Equally, the retiree cannot be left off the street, especially in one’s golden years. And there is a compensation and benefits program to serve the purpose.

The company took deliberate efforts and a long journey to get to such an enviable place. And to date, two decades after my retirement, it has done even more – given the advances in AI, for example – that what we did before would look archaic.

When the blog speaks of the dynamism of this universe, it is a real-world experience I lived through. And “dynamism” – aka “self-government” and “personal responsibility” – is at the heart of freedom, democracy, and the free market.

We had to buy an outside technology that paved the way for our flagship brand to become a dominant market leader globally. Consider that we had a technology center with over a thousand scientists; and a global marketing organization with scores of expert resources. That is more headcount than the entire Philippine legislature where we create laws.

And the experts in the company are multi-degreed with vast experiences in their respective careers. Yet, complacency can always set in when a structure becomes too comfortable with itself, especially when it becomes too inward-looking, given countless successes.

And being at the global headquarters, I knew the sense. For example, when I hadn’t traveled for a month, I turned “parochial if not red-neck-like.” We called it New York-centric. Yet, the world nor the business is not New York.

And that’s where the concept of “context” comes in. What is the big picture? Recall the elements of cognitive development. Beyond “binary thinking,” there is multiplicity and relativism – or the imperative of context.

And that was not the first experience I had with “context.” When I first joined a restructuring team while still in the Philippines, the marching order – which was Finance-driven – was to cut costs by 10%. And I lived through the limitations of binary thinking. A business may not be competitive for many reasons, not just costs.

And I brought that experience when I became a regional manager and changed the planning and budgeting model. And when the president saw how effective it was while visiting two countries, he and the CEO agreed that I had to upgrade the entire company’s model. It proved handy as we made aggressive investments in China, Vietnam, and India, among others.

The company embarked on several years of restructuring after it became a takeover target that fell through. And that was because the potential acquirer liked its important business and brands but was spread too thin across numerous industries. 

They wanted the company to focus its efforts where it gets the biggest bang for the buck. [In other words, a significant investor saw us remiss in our fiduciary responsibility. But now we know Western investors, given instincts of transparency, won’t take the PLDT hiccup meekly. Meekness must be in “context” if it is a virtue we want to embrace. Sadly, we Filipinos, given our autocratic bent, take transparency for granted, if not submit to tyranny, e.g., EJKs.]

That imperative to focus on the “vital few” – and “toss the trivial many” – gave me the framework for a new planning and budgeting model and leading other restructuring efforts, including in the developed markets in the West.

Please think of the ecosystem we know as photosynthesis. Humankind thrives not just because of the sun, which gives us energy. And so I learned about its parallel in human undertakings, say, a business enterprise. And there are the three dynamics of the (a) marketing mix, from the human need the product addresses and beyond, (b) resource mix, from the people that are behind the efforts and beyond, (c) execution mix, from the questions who will do what, when, where, and how.

Moreover, a change effort faces other forces as it takes on its journey. And that is where the force field theory comes in. There are driving forces that will propel the effort forward, yet there are restraining ones that will undermine it.

The bottom line: If it was not crystal clear to the technology center and the marketing folks that we needed an outside technology, the challenge we faced made it abundantly clear – for our flagship brand to become a dominant market leader globally. And recall what I said to the pharma unit’s CEO, who nervously asked if we should buy the outside technology. “What are we waiting for,” was my response. He explained that both the technology center and marketing community were non-committal.

Let’s get back to the Philippines.

Nation-building “is no longer just economics. We must open our eyes and focus on a bigger canvas, not just economic indicators. Still, most social, political, and other inequality indicators frustrate our efforts to build social cohesion and unite people around certain reforms.” [“PHL urged to focus economic policy on keeping middle class prosperous,” BusinessWorld, 24th Nov 2022]

Consider our instincts, reflected in the Philippine caste system: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

Manage change if we want PH to move forward.

It’s worth repeating; a change effort faces forces as it takes on its journey. There are driving forces that will propel the journey forward, yet there are restraining ones that will undermine it. And our culture of impunity is a significant barrier. 

And that is where the force field theory comes in. That means (a) exploiting the driving forces while (b) righting the restraining ones.

Wrote Ciel Habito, “It was during my watch at the National Economic and Development Authority (Neda) that heads the National Land Use Committee (NLUC), when we first proposed the NLUA bill in 1994, at the ninth Congress. 

“We’ve had ten congresses since, but the closest NLUA ever got, after passage by the House, was a second reading in the Senate, in the 15th Congress in 2013.

“In the 16th and 17th Congresses, the bill also passed the House but again stalled in the Senate despite successive strong pushes by Presidents Ramos, Arroyo, Aquino, and Duterte.

“Proponents see Sen. Cynthia Villar as the measure’s nemesis, having used her chairmanship of the committee on environment, natural resources, and climate change to keep the bill from reaching the plenary in both the 17th and 18th Congresses. That she continues to chair that same committee in the current 19th Congress dampens the hope of NLUA proponents.

“While she argues that the measure undermines the autonomy granted by law to local governments, they accuse her of conflict of interest given how the NLUA could restrict her family’s real estate business, which has made her husband the country’s richest man.

“Why is the NLUA critical for the country? The land distribution in the country remains highly skewed and politicized.

“The NLUA would institutionalize a holistic, rational, and comprehensive land use and physical planning mechanism, which will appropriately identify land use and allocation patterns in all parts of the country. It would also provide an environment that would better foster food security.

“Moreover, the NLUA would also harmonize present land-use policies to address competing land usage and balance the country’s needs for food, settlements, biodiversity, climate resilience, and industry.

“On the argument that the NLUA violates the autonomy that the 1991 Local Government Code grants local government units (LGUs), proponents point out that LGU powers need not be impaired, but must be guided and limited by national policy and standards.” [“More critical than Maharlika,” Cielito F. Habito, NO FREE LUNCH, Philippine Daily Inquirer, 20th Dec 2022]

Beyond the culture of impunity, our crab mentality always gets in the way. And that is why we can’t fathom the distinctions between the “vital few” and the “trivial many” – or the Pareto principle.

And why we can’t prioritize. Consider: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy; ours is a culture of impunity.

That is far worse than being remiss in our fiduciary responsibility. By being the perpetual regional laggard, we are flirting with being a failed nation if we’re not there yet. See above; the challenge my old Fortune 500 company faced, i.e., the imperative to focus, while in our oligarchic economy, we value and idolize conglomerates. No expertise is required to shower Juan de la Cruz with paternalism.

What to do? 

Why does the blog keep beating “self-government” and “personal responsibility” black and blue? They are overwhelming for Juan de la Cruz because of the caste system that values hierarchy and paternalism. And that blinds us; the dots connect roundly from parochialism to a culture of impunity.

In short, can we be both Juan Tamad and Bondying rolled into one? Rizal expressed it more elegantly, “He who submits to tyranny loves it.”

Moreover, recall that the blog spoke a few times about “horizontal leadership.” And in the case of nation-building, our economic managers must learn horizontal leadership. Without formal authority, they must be able to edify and dialogue with the public and private sectors and rally them behind our journey from poverty to prosperity.

And that presupposes that economic managers can demonstrate the distinctions, on one hand, of logical yet linear and incremental thinking and, on the other, forward, lateral, and creative thinking.

One more time with feeling: We want to be a first-world economy; that is way beyond providing jobs to address poverty and “inclusion.”

As we now know, AmBisyon, Arangkada, and the scores of industry road maps don’t serve the purpose.

As the blog often raises, we cannot rally an entire country or even an organization against a set of dissertations.

That is why we need to learn “Change Management.”

While we need a rigorous document like a dissertation as a reference, the key to selling a significant undertaking is simplicity. It must be so simple that it is actionable. 

“Do you want to win the knot-tying competition or not?” I remember when I was 11, going 12 and leading a group of six boys scouts. We never lost, not once – and won countless times.

Unbeknownst to me, I was embarking on a non-conventional career path learning about leadership and winning even as my senior year class in high school voted me least likely to succeed, being indolent when it came to classroom work. That frustrated my teacher-trained mother, but she also made sure I joined the Boys Scouts to learn leadership.

Did leadership come to me as child play? Recall that I also introduced the neighborhood kids to softball when I was less than ten. 

Neuroscience can now explain the phenomenon.

“Childhood is a phase in human development. And we can watch consciousness come online in real time. And also, language, culture, and social rules are being absorbed, learned, and changed — significantly, changed.

“Experiments and research show that there is a way in which children are a lot smarter than adults. Their strangest and seemingly silliest behaviors are, in fact, remarkable.

“Children are tuned to learn. And when you “tune a mind” to learn, it works differently than a mind that already knows a lot. That’s why we adults take so much for granted. And why we have much trouble taking the world on its terms to try to derive how it works.

“We’ve lost the ability to unlearn what we know and sometimes fail to question things correctly.

“These different minds are two different creatures. One is to explore, learn, to change. The other is to exploit — to go out, find resources, make plans, and make things happen.

“These two different developmental and evolutionary agendas come with different kinds of cognition. Adults can have the capacity, to some extent go back and forth between the states – to think out of the box. But children are in that explore state all the time.” [Opinion | Why Adults Lose the ‘Beginner’s Mind’ - The New York Times (nytimes.com)]

Recall what I said to the CEO of the pharma unit of my old Fortune 500 company. “What are we waiting for?”

It was a breakthrough technology that would pave the way for our flagship brand to be a dominant market leader globally.

Ramon Ang’s Bulacan initiative, beyond the Bulacan airport, must mirror the Pearl River Delta Economic Zone ecosystem and generate “incremental” exports of $200 billion. That will pave the way for the Philippines to match the export revenues of our neighbors. And which is how Vietnam eliminated poverty.

As the blog has raised, the BOI must be in the crosshairs to take up this challenge and toss our historical models in crafting investment incentives. 

And recall, the blog challenged the Philippine president to invite the most prominent investors, especially in technology like TMCC, Samsung and Apple, personally and pick their brains on how the Philippines can match if not outdo the neighbors’ efforts. Mahathir did this by creating a tech advisory group that included Bill Gates.

And last November, Zelensky of Ukraine signed an investment partnership with the CEO of BlackRock CEO Larry Fink. BlackRock is the world’s largest asset manager.

To those in the media, I realize not everyone has the expertise to craft the day’s headline. Young brand managers similarly struggle to spell out crisply the vision of their brand and its reason for being. We need practice on how to define a “context.”

Of course, I have had much practice since I was eleven.

Recall what I said to my Eastern European friends. Despite eight years of losses and revenues of less than $10 million, “You must be a $100 million enterprise to match the competitiveness of the median Fortune 500 subsidy.”

And just before they put the plans and budgets for next year together, I asked them to confirm the big picture: “We will be a billion-dollar company.”

We have had some practice with AmBisyon, Arangkada, and the scores of industry road maps. 

We must shift gears and rack our brains to get the rest of the nation behind the Ramon Ang Bulacan initiative.

To repeat an earlier disclosure, I don’t know or have met Mr. Ang. I am going by what the media has reported – because it is an excellent example of a driving force to exploit and move the Philippines forward and attain industrialized status.

Sadly, we can’t wrap our heads around the imperative of industrialization, yet we want to talk about digital transformation. Neuroscience explains why we can’t fathom the distinctions between (a) logical yet linear and incremental thinking and (b) forward, lateral, and creative thinking. A digital transformation is merely a tool for an enterprise.

Recall that the blog highlighted Axelum Resources as a best practice model in agri (coconut) and industrialization. While their $125 million revenues are modest given the Ang Bulacan initiative of $200 billion, we can replicate Axelum under the latter’s umbrella. That means we can double coconut-based competitive product exports to $250 million.

Axelum sources coconuts within a 200 km radius of their plant in Mindanao. Given that Calabarzon, a significant coconut producer, is less than 200 km from Bulacan, with better road infrastructure, we have an ideal setup to replicate a best-practice model.

Axelum can’t be where they are if they aren’t digitized, but the forward, lateral, and creative thinking gave them a leg up. For example, they don’t cater to the “bottom of the pyramid.” Yet, they employ over 5,000 in Misamis Oriental and support coconut farmers and their communities via social initiatives, including paying produce above market prices and providing sustainable farming technology.

They designed their enterprise to meet the challenge of this century, i.e., innovation and global competitiveness and creating a product portfolio that navigates the value chain. They recognize the continuum of human needs, from desiccated coconut to coconut water to coconut milk to sweetened coconut to coconut cream.

They export the bulk of their products, e.g., 75% goes to the US. Only 8% is sold locally in the Philippines.

What is the moral of the story? Axelum had their eyes opened and focused on a larger canvas. They understood the “context” as beyond creating jobs to address poverty and “inclusion” and to step up to the 21st-century challenge of innovation and global competitiveness.

Conversely, the creation of a Competitiveness Commission is merely a tool. It has no teeth in an oligarchic economy. In other words, the Philippine Competitiveness Commission is not the context. The Philippines must leapfrog industrialization and join the ranks of first-world economies.

The bottom line: We can’t recognize we’ve been going through a vicious cycle because of the blinders we wear, aka the Philippine caste system. When what we need is the virtuous cycle of an “ecosystem.”

Manage change if we want PH to move forward.

Nation-building “is no longer just economics. We must open our eyes and focus on a bigger canvas, not just economic indicators. Still, most social, political, and other inequality indicators frustrate our efforts to build social cohesion and unite people around certain reforms.” [“PHL urged to focus economic policy on keeping middle class prosperous,” BusinessWorld, 24th Nov 2022]

Gising bayan!

[The family joins me in wishing one and all a Healthy and Happy New Year!]