Compelling products

Inherited businesses can last beyond 2 generations

In an interconnected world East and West are learning from each other – creativity, dynamism, inquisitiveness, a forward-looking mindset, among others – and the world is the better for it!

Those who were behind the Iron Curtain would concede that their creativity was a function of the scarcity of basic daily needs, and then some – i.e., necessity is the mother of invention! Theirs was no Eden. What would have happened if Adam and Eve were not driven out of Eden? The world would have had billions of Juan Tamads?

Inherited businesses, as conventional wisdom goes in both East and the West, don’t last beyond two generations – because the heirs are not schooled in product development? The products of the inherited business may have been relevant at the time of its founding, but relevance is not perpetual – i.e., the ever changing want of man?

Dried mangoes are representative of our tropical climate, and even our tradition? But products must remain user-friendly, accessible, relevant and becoming – especially food because of our fickle taste buds (or electronic gizmos as Steve Jobs must be preaching his team all the time)? If ice cream requires constant flavor change or mixing and matching of flavors, dried mangoes likewise do? But if mangoes are not as flexible then we need to develop something beyond basic dried mangoes to be relevant. For example: nuts come as basic shelled nuts, as cocktail nuts, or packaged nuts, mixed and matched, etc.; and they have become standard snacks in bars and . . . even mini bars in hotel rooms. In short, we can move up the value chain and elevate dried mangoes from a commodity to a branded product – i.e., a simple product can be driven by innovation if we invest (?) in market and consumer insights, R&D, global distribution and marketing. Innovation is not the monopoly of rocket science!

An economy is driven by the products and services the country produces. What products and services have we developed post WW II that are relevant and compelling? The jeepney, shrimps, garments, ‘bangus’, semi-conductors, call centers . . . etc.? How relevant are they to the 21st century? The services that our OFWs produce are not necessarily generating the requisite incremental goods and services to raise the value and competitiveness of our industry – they are input to foreign industry, and they benefit from the value-creation of these efforts. OFW remittances per se don’t generate as much multiplier effect (on our economic output or GDP) as manufacturing and agri-business, for example – because of the latter’s inherent greater input: talent, machinery & equipment, materials, investment, technology and requisite systems and infrastructure.

Product development is not like prospecting for oil where the well could run dry. Product development is prospecting for the “well of spring water” that is perpetual. And it requires a dynamic, inquisitive and forward-looking outlook! Is that what education is about – or “the training of the mind to think”, as Einstein says?

Our marketers can share with industry – and our economic managers – the mechanics of product architecture modeling. Establishing our strategic industries has been an exercise in macroeconomics . . . that must be drilled down to the core of innovation and product development – i.e., it must be teed up to challenge the creative juices of industry; not be a platform for crony capitalism. The efforts of the foreign chambers to identify 7 key industries are a great first step. Can they get everyone focused on how the $75B incremental investment goal will occur!

Entrepreneurs, given their successes, may view product development as more art and thus miss the discipline (science) bit. And investors must recognize that the true test of competitiveness is winning in the regional if not global market. It is Economics 101: economies of scale generate efficiency and productivity, and raise/create the propensity/condition for innovation – the heart of product development . . . that drives a nation’s economy.