From “know it all” to “learn it all.”

This posting will highlight a podcast by McKinsey & Company, “Author Talks: Bill George sets a course for “true north,” 15th Sep 2022, about his new book, True North: Leading Authentically in Today’s Workplace. George is a Harvard professor and former Medtronic CEO. [Here’s the link to the podcast: [https://www.mckinsey.com/featured-insights/mckinsey-on-books/author-talks-bill-george-sets-a-course-for-true-north?cid=app]]

“In the Edelman Trust Barometer today, business is the most trusted element in society. The reason is that people have given up on politicians who seem to be out for themselves and gridlocked. Most top-ranking politicians are in their 70s and 80s and unfamiliar with what people need. I think people are looking to businesses to help solve problems like climate change, healthcare, income inequality, food shortages, and supply chain.

“Government is not set up to deal with those things. They can pass laws but can’t address them, so everyone’s looking to business. That’s the challenge for today’s leaders: if they don’t address today’s problems, they won’t be good leaders, I can tell you.

“In my book, I feature whom I consider role models of the new way of leading, many of whom are baby boomers. They are the ones that emerging leaders seek.

“Let’s take Satya Nadella at Microsoft: he transformed that company. Mary Barra brought General Motors out of bankruptcy and is making it into a new company. Hubert Joly was very committed to “purpose” at Best Buy, and now his successor, Corie Barry, is doing a great job. These are the forerunner leaders. Those kinds of leaders influence the younger leaders who are coming along, which I also feature in the book. We need role models. We need quality role models. We don’t need people who are just out for themselves.”

Here’s a soundbite that stuck with me; how Nadella transformed Microsoft, “From know it all to learn it all.”

“Hunger” is an embarrassing subject. Whereas the Government now has monthly surveys on unemployment and underemployment and has promised to update its poverty figures every two years instead of every three, it has hardly any numbers on hunger.

“Econometric modeling of hunger at the UP School of Statistics (UPSS). Using the SWS quarterly data, [UPSS] researchers Dennis S. Mapa, Fatima C. Han, and Kristina Claire O. Estrada showed that an increase in food prices in one quarter would raise hunger for five subsequent quarters. In contrast, an increase in underemployment would raise it for two quarters (Hunger incidence in the Philippines: facts, determinants, and challenges,” paper for a forum of the National Academy of Science and Technology, 2/10/2010).

“I think the [UPSS] econometricians examined the gross domestic product and other potential determinants and found little correlation. I hope they will update their analysis with data after 2010, including the pandemic time. (Mapa has been head of the Philippine Statistics Authority since 2019, by the way).

“The lengthy hump in hunger was generally unnoticed by development analysts, perhaps because it did not affect the financial sector. It remains a perennial problem.” [“The perennial problem of hunger,” Mahar Mangahas, SOCIAL CLIMATE, Philippine Daily Inquirer, 21st Jan 2023.]

Then consider: “The 50-year ‘disease’ in Philippine agriculture,” Ramon L. Clarete, Introspective, BusinessWorld, 15th Jan 2023. “High food prices may be a fluke, as the farming sector goes through the ravages of extreme weather, losing productivity in the process. But this unfavorable situation has been with us through the years. Agriculture growth has gradually tanked in the past half a century, so much so that its record has become an insignificant statistic in the country’s gross domestic product accounting.”

Unsurprisingly, Juan de la Cruz went from the basket case of Asia to the perennial regional laggard.

“If there is one factor hindering the Philippines from catching up with its dynamic neighbors in the ASEAN, the outdated mindset has remained with us from the last century. ‘Customer orientation’ has long been the crux in business operations, and clearly understood that failure to internalize this culture will result in a loss to competition and eventually the replacement of the boss.” [The 21st-century mindset, Cesar B. Bautista, Mapping the future, Philippine Daily Inquirer, 10th May 2015]

It’s worth repeating that the [UPSS] econometricians examined the gross domestic product and other potential [hunger] determinants and found little correlation with them.

Let’s hold it right there.

Here’s a quote from an earlier posting: “Over the last fourteen years, the blog has raised several bodies of knowledge to challenge our worldview. And they are not from an academic but a practitioner. 

“We need to develop a hardy mindset.

“We can’t be both Juan Tamad and Bondying rolled into one. What is a hardy mindset? It embraces (1) the challenge one faces and (2) the commitment to overcome it while (3) recognizing that one has no control over others but themselves. In other words, the onus to change is on Juan de la Cruz.

“We must distinguish (a) logical yet linear and incremental thinking and (b) forward, lateral, and creative thinking.

“The blog has been critical of our economic managers, legislators, and think tanks. Like Laos, we delivered the global metric of a 6%-7% GDP growth rate for over a decade. Yet, both countries remained underdeveloped.

“And we know that we are standing on the shoulders of Juan de la Cruz – to the tune of over $50 billion. Our economy is driven by what they bring in via OFW remittances and call centers.

Said differently, BSP has “excess funds” because of said remittances. It does not come from the economy per se. Our trade balance is underwater because our meager export receipts can’t cover our imports.

How much will Maharlika add to GDP growth because it will fund infrastructure and social programs? A fraction of a percent? 

“Why are our economic managers, legislators, and think tanks not figuring out what else we must develop income stream-wise?”

Because of hubris, we have been reinventing the wheel because we are “economically savvy,” and our neighbors aren’t. See below; Vietnam’s export machinery dwarfs our over 400 export zones.

Should we learn how Nadella transformed Microsoft, “From know it all to learn it all”?

Here’s something from Davos: “Marcos gets pledges but investment analysts unimpressed,” BusinessWorld, 20th Jan 2023.

“Terry L. Ridon, a public investment analyst, said the commitment from Morgan Stanley to build a Manila office does not constitute a commitment to undertake foreign direct investment (FDI) in the Philippines. The investment bank’s primary business involves not FDIs but portfolio investments.

“The president does not need to go to Davos if only to convince DP World to expand its operations in the country, i.e., judge the president’s trip on the total cost of funding the delegation against existing investment pledges originating from the WEF itself.

“Mr. Marcos’ office should have been more forthright in presenting the trip as nothing more than a speaking tour to manage public expectations. The public can see news out of Davos that the trip has essentially been a speaking engagement for the president to promote the country to the world.

“Foreign investment commitments should have already been perfected by government negotiators before the Philippine leader’s foreign trips, adding that the trips should only serve as a venue for the formal signing of diplomatic or economic agreements.

“The Philippines faces growth risks from elevated inflation, rising borrowing costs, and a global recession. The World Bank expects the economy to slow to 5.4% this year from an estimated 7.2% last year.”

If our economic managers are listening, whose heads must now roll? We can fool Juan de la Cruz, but the global community isn’t naïve!

What about political patronage and oligarchy blocking efforts to make us a competitive market for FDIs? It’s not the over 400 export zones under PEZA. They confirm our crab mentality and expand the opportunity for smugglers. 

But our economic managers, who must know better, better exercise horizontal leadership and demonstrate the pursuit of the common good.

The challenge to our economic managers, legislators, and think tanks is to move from “know it all” to “learn it all.”

To match the dynamism of our neighbors, we in the Philippine elite and chattering classes must “learn it all” too, from psychology to philosophy to physics, economics to theology. It’s called cross-discipline thinking, the key to unlocking forward, lateral, and creative thinking demanded by the 21st century.

Look at all the initiatives we proudly pursued to create jobs and address poverty and inclusion. Yet, none would correlate and directly generate substantial income streams. 

Logical yet linear and incremental thinking makes us proud that we grew GDP by 6%-7% over a decade while we remained underdeveloped – and the laughingstock of the region.

Recall how the blog would distinguish “analysis” from “analytics.” Here’s what “analysis” would look like: “The [UPSS] econometricians examined the gross domestic product and other potential determinants and found little correlation with them.

Recall how we celebrated green shoots and the manufacturing uptick in 2015. In other words, aren’t we doing what they call an “after-action review” in the military?

How many of these shortsighted analyses have we promoted through the media that were proven to be such shortsighted? We are in the “real world,” not the classroom.

The Maharlika Investment Fund is the latest fiasco. [See above; how much will Maharlika add to GDP growth?] Worse, this insanity has gone overboard if not “criminal.” Consider the hypothesis that OFW remittances would make up for the absence of industrialization. 

And Maharlika is the added insult to injury. In other words, hubris is beyond the pale.

We are still pushing fiscal and monetary interventions that brought about millions of hungry and poor Filipinos.

Messrs. Diokno and Balisacan would be out the door if they committed such blunders in the private sector.

Enter “analytics.” Think of the concept of sets and subsets. We cannot correlate “analysis” being a subset to its more substantial set, “analytics,” if we can’t do forward, lateral, and creative thinking.

See above; investment analysts weren’t impressed by the Maharlika Investment Fund.

In other words, our economic managers can’t delve beyond fiscal interventions because we have no experience outside classical economics. “Beg for Western money and technology” was the mantra of the Asian Tigers because they saw that leapfrogging industrialization would accelerate their journey from poverty to prosperity. Unsurprisingly, they became the most significant exporters, to the amazement of the West and the rest of the world.

Let’s drill that down. 

Vietnam is the latest example. But before we replay the Vietnam example, let’s pause and ponder.

Question: How do we leapfrog industrialization? We have Arangkada, AmBisyon, and the scores of industry road maps. But why can’t we move forward?

Recall the force field theory: Exploit the driving forces and right the restraining ones.

Consider: BOI reported adopting the Pareto principle to focus on “big ticket” items. That was after Mr. Ramon Ang shared his Bulacan initiative, which would generate $200 billion in export revenues beyond the Bulacan airport. And as the blog raised, we can include agribusiness under the Bulacan umbrella.

Those are multifaceted challenges. And recall the elements of cognitive development. Beyond binary thinking, there is multiplicity and relativism — the imperative of context.

The bottom line: How do we pull them all together? Beyond the restrictive economic provisions of the Constitution, we have countless sets and subsets to align and harmonize. And it goes back to overcoming binary thinking.

And it takes a village, and the Philippine elite and chattering classes could be the nucleus to lead this multifaceted challenge.

But then, can the economic managers, legislators, and think tanks update their respective portfolios and show the way?

We can return to the Vietnam example to make the exercise more tangible.

“2017 was a year of great significance for both the Vietnamese economy and Samsung Vietnam. Vietnam’s export turnover for the first time in history reached more than 214 billion USD, and Samsung Vietnam’s export turnover also achieved a breakthrough with more than 54 billion USD for the first time.

“Samsung Vietnam contributes more than 25% to the total export turnover of Vietnam. This miraculous figure is 150 times higher than Samsung Vietnam’s total export turnover in 2009 ($350 million) when SEV began production.

“As of June 2018, Samsung has reached the milestone of 1 billion high-tech innovative products manufactured in Vietnam. The 1 billion products include smartphones, tablets, smartwatches, and other essential mobile phone products.

“The Samsung Bac Ninh factory produced more than 625 million products, and Samsung Thai Nguyen made more than 431 million. Vietnam is currently the second largest smartphone export in the world after China, and Samsung plays a significant role in this achievement. 

“In terms of infrastructure, Samsung has built four manufacturing centers in Vietnam and a newly developed R&D center. These manufacturing centers contain housing, schools, medical centers, and gyms to serve their employees. Other entities under the Samsung group have also invested heavily in their manufacturing facilities in the country.

“Samsung has also invested in infrastructure such as roads, electricity, and water networks in the areas near their manufacturing centers. These infrastructures not only serve Samsung’s facilities but they have a positive impact on the host city and its citizens as well.

“The operation of large electronics corporations like Samsung entails a huge ecosystem to support its production and business activities.” [The effect Samsung has on the economy of Vietnam (viettonkinconsulting.com)]

Recall how often the blog raised the Pearl River Delta Economic Zone ecosystem (in Guangdong, China) as the best practice model to attract foreign money and technology. And all that Vietnam did was replicate the China experience and find a partner in Samsung.

Let’s hold it right there.

Why does the blog keep distinguishing “analysis” and “analytics”? See above; the 50-year ‘disease’ in Philippine agriculture. Yet, from rice tariffication, we are doing the rest of the agri products to address shortages. That is how “analysis” looks. On the other hand, the Vietnamese learned “analytics” from the Asian Tigers, which they translated to “ecosystem.” See above; the operations of Samsung entail a vast ecosystem. And not to forget that Vietnam is a top rice exporter like Thailand. The agri ecosystem of both countries is something we want to learn. It is beyond liberalizing the agriculture sector.

The story’s moral: The Vietnamese embraced “learn it all” and not “know it all.”

And they are doing it in the field of education too. “Grounded on Lewin’s three-stage change model (1951) and an appreciation of the benefits of leadership theories and organizational change, this mixed-method case study sought to present stages in change implementation in an academic division of a Vietnamese university.” [“Implementing Lewin’s Change Theory for Institutional Improvements: A Vietnamese Case Study,” Tuyet Thi Tran and Franco Gandolfi, Journal of Management Research, Vol. 20, No. 4, October - December 2020, pp. 01-12]

What about Philippine education?

As with the economy, Philippine education is down the cellar. Yet, why the hubris?

When are we moving from “know it all” to “learn it all”?

“I think people are looking to business to help solve problems like climate change, healthcare, income inequality, food shortages, and supply chain.

“Government is not set up to deal with those things. They can pass laws but can’t address them, which is why everyone’s looking to business. That’s the challenge for today’s leaders: if they don’t address today’s problems, they won’t be good leaders, I can tell you.” [George, op. cit.]

In other words, should our economic managers merely bend to our politicians even when our “Government isn’t up to deal with our decades-old challenges, including hunger and poverty? They can pass laws but can’t address them, which is why everyone’s looking to business.

It’s called horizontal leadership.

And we in the Philippine elite and chattering classes better step up to the plate – or we won’t be good leaders too.

But first, we must shift from “know it all” to “learn it all.”

Sadly, it’s a tall order given our 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.

Over the last fourteen years, the blog has raised several bodies of knowledge to challenge our worldview. And they are not from an academic but a practitioner. 

Gising bayan!