Back to basics

“Many bought into the idea that America could go from a technology-based, export-oriented powerhouse to a services-led, consumption-based economy — and somehow still expect to prosper,” Mr. Immelt (GE CEO) said. “That idea was flat wrong.” [The New York Times, Dec 4^th] Did we follow the same US model – and so for decades had emphasized a services-led and consumption-based economy? Then we should be able to say, ‘That idea was flat wrong’? (Is integrity – or being honest to one’s self – undermined by deference to hierarchy or the lack of transparency, and thus breeds corruption or abuse, whether in the private or public sector or even the church?)

Among the first words the writer heard from his boss upon moving to corporate headquarters was, ‘I blew it!’ Translation: we go by the hierarchy of ideas – not rank – and constantly raising the performance bar! Now retired and sits on the board of global enterprises, including charity efforts – and introduced the writer to volunteerism; for many years profiled among the most influential businesspersons globally, but would walk 30 blocks to get home in the evening and in the morning like a typical Manhattan resident would commute, by bus. (Mayor Bloomberg, for instance, is driven from Gracie Mansion to a subway station and takes the subway to City Hall.)

In 1992 after GE had unveiled their plans to go global – they were a US-centric business – they invited a handful of global companies (a demonstration of maturity by a firm larger than most of their peers) to speak to their top managers, and the writer represented his company. He doesn’t have the presentation anymore but recalls discussing their own experience: focusing on the basics of ‘making things and selling things’ within a strategically defined set of core businesses – the same model that has put his Eastern European friends in good stead and competitive beyond their borders despite the global recession and slow down of trade. (Or why it’s not surprising that PAL is between a rock and a hard place – their problem is beyond a PR campaign, they need to: (a) get back to the basics and (b) come down to the fundamentals of competitiveness: investment, technology, talent, innovation, product, market!)

“[And] so G.E. has revamped its strategy in the wake of the financial crisis. Its heritage of industrial innovation reaches back to Thomas Edison and the incandescent light bulb, and with that legacy in mind, G.E. is going back to basics. The company, Mr. Immelt insists, must rely more on making physical products and less on financial engineering — a path that, he insists, is also necessary for the American economy as a whole . . . The underlying DNA of G.E., going back a century, has been to invest for growth in its technology base . . . So by increasing R.&D. spending and with investments in manufacturing, Jeff Immelt is going ‘back to the future’ at G.E. . . . About 1,000 miles from corporate headquarters, inside a gleaming new plant that is the result of a $100 million, three-year investment, G.E.’s back-to-basics strategy is on display.

“Production is organized around the concept of “high-performance work teams,” typically six to 12 workers . . . It’s a bottom-up approach that shuns hierarchy, and places most of the responsibility for continuous improvement on the teams. An egalitarian ethos is reflected in the job titles. The boss, Jeanne Edwards, is the “plant leader.” Line workers are called “production associates.” There are no supervisors here, only “leaders” and “coaches.” [ibid]

There’s so much we could learn – given our standing (embarrassing or pathetic?) in economic and human development – but does ‘Filipino orgullo’ or ‘yabang’ (misplaced pride) get in the way? Simplicity, as da Vinci says, is the ultimate sophistication. What about making things and selling things, investing in R&D, in innovation, in manufacturing, in continuous improvement and shunting hierarchy – and driving prosperity not just for the few but for the many? We won’t get there overnight – and we need a big heart to think and win big?

The US is looking at doubling exports to $2 trillion; while the EDC (Export Development Council) is looking at doubling ours to $100 billion. Our goals are much more modest and it appears the EDC has a game plan to get us there. The reality is we have no choice: our GDP per capita (PPP) of $3,300 – barely a 6^th of Singapore’s – can’t generate and sustain the levels of economic growth that will reverse the decline of the last 40-50 years. Competitiveness is the key – not worn-out short-term palliatives that lower instead of raise the performance bar?