Reinventing ourselves

The blog is now a dozen years.

Here’s its genesis: “I started writing to engage columnists and newspaper editors at the end of a trip to the Philippines over Holy Week in 2008 – to echo the frustrations expressed by friends and relations that were much louder and more intense than previous trips.

“My first thought was: with so many talents and skills, how could the country be the basket case of Asia? Are we too nice as a people?

“Since then, I have kept abreast with local news and opinions.”

The title itself would make Juan de la Cruz squirm because it connotes criticism, and people don’t like them.

Sadly, the status quo bias is devoid of Darwin; we can’t but be in sync with this dynamic universe.

Should we pause and ponder our “reality” — with a little help from George, Fr. George Gorospe?

Given people’s frustrations and how the Philippines has become the laughingstock of the region, if not the world, I chose to share the postings with about 50 columnists and journalists.

And what happened? The following blocked my emails: (a) two economists; (b) a professional organization; (c) an avowed Christian; and (d) a marketing professor. There may have been more. But those were the ones where I got the prompts.

On the other hand, some were encouraging – sending words to the effect – and would quote from the postings.

And where is the Philippines twelve years later? Recall in the “Genesis of the Blog,” I compared the Philippines against Malaysia, Thailand, and Vietnam. We were still ahead of Vietnam then, and today even Vietnam has overtaken us.

And with the pandemic courtesy of Covid-19, we find ourselves lagging further behind. For example, we allocated the least to combat the economic downturn. Why? We want to be prudent and preserve our fiscal standing.

We can argue with our economic managers, but if we get down to the core of our problem, that posture is a consequence of our financial backwardness compared to our neighbors.

Indeed, there is a fire, and we must deal with it – within our capacity. Is it from the trauma of the Binondo Central Bank that our economic managers want to be prudent?

What would happen if we overextended ourselves financially? Would we lose our credit ratings? So, what if we again pay higher interests? Did the Philippines go under when we were paying those high interests?

What is our frame of reference? That is why it boils down to our financial backwardness.

Let’s hold it right there.

Yet, and it’s a Big YET, we are not doing the heavy lifting demanded by this backwardness. 

We are still looking at the future with an economy driven by OFW remittances and the BPOs.

Of course, there is CREATE and a host of other fiscal policies before the legislature. But then again, have we benchmarked against Vietnam, for instance?

With due respect to our economic managers and legislators, these proposed policies are indeed in the right direction. They are logical and will generate incremental outcomes. But how much out-of-the-box are they to develop a quantum leap?

Why a quantum leap? A 6%-7% GDP growth is too meager for the Philippines to overcome poverty in Vietnam’s timeframe.

That is why the blog continually plays Juan de la Cruz’s instincts: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

Let’s hold it right there and recap the other continuing themes of the blog: (1) Our caste system – the permanence of hierarchy and societal order; (2) Paternalism – submission to authority, assumed to be benevolent; (3) Human (cognitive) development – from dualism to relativism; (4) System 1 and System 2 Thinking – automatic vs. conscious; (5) Linear (logical) and incremental thinking vs. Lateral and creative thinking; (6) Context: the creation story and the dynamism of this universe; (7) Christianity and democracy being mirror images.

The above would sound too pedantic, and that’s why I keep stressing I am not an academic but a practitioner. And in the real world, where we encounter Darwin all the time, one has to do his or her homework.

And that goes back to when I decided “what I wanted to be” – and stop being a lazy student.  And to make up for a lost time, I had to get credits from three universities, following the curriculum I put together myself. And instead of religiously attending classes, I would use the syllabus to guide my self-study in the library. I only attended classes where the professors would insist on my attendance.

The experience got me interested in neuroscience, and I realized the power of the subconscious mind. Even a lazy student would recall the fundamentals of a course or subject, including those from grade school.

For example, we are not a multi-trillion-dollar economy that the US should be our model and mirror their fiscal and monetary policies. But our economic managers and the administration can educate Juan de la Cruz to buy-in to the exercise we call economic development.

He knows that while economists celebrate a 6%-7% GDP growth, he still sees himself as abjectly poor. Recall the blog presents a different economic goal for the Philippines, to raise GDP by $200 billion – instead of a 6%-7% growth – and beat the hell out of our neighbors, including Malaysia. 

Yet, it comes from grade five math. But by turning the challenge on its head, we open our eyes to a more significant playing field that will nudge the imagination.

For example, by setting a tangible and meaningful goal, we will most likely ask how?

That will impel us to forward-think: We need – and must get – our GDP up to our neighbors’ levels. Why? 

We must become a wealthy economy by traversing poverty to prosperity. 

The war on poverty does not address the challenge of being prosperous. It is not materialistic. It is what nation-building is. The development comes with treasure – so we can address Juan de la Cruz’s wellbeing instead of merely keeping body and soul together. 

But we don’t get that because we assume the system — capitalism — doesn’t work. That socialism is the answer. We have had “socialism” since we introduced LGUs. And we want to do more despite undermining the laws of physics? It is a glaring demonstration of the crab mentality. 

That is why the blog keeps asking, will we ever learn how to benchmark? 

We knew the word in our laboratory class in high school. That first experiment is still fresh to this septuagenarian: air has weight and occupies space. I cannot credit it to supervising the pharma unit of my old MNC-company and developing a breakthrough product.

Consider: Our neighbors are beyond poverty and have the luxury of doing more forward-thinking. That will ensure they keep us in the rearview mirror. 

Benchmark. Benchmark. Benchmark.

Many years later, I would break into a grin working with advertising agencies on Madison Avenue, that their guiding principle is to communicate to a grade five pupil. If she doesn’t get it, forget it.

The blog also speaks to big data and analytics. Again, it is not an academic exercise. Every working day, I do the “exercise” to demonstrate to my Eastern European friends how to figure out the “vital few” so they know where to focus efforts, resources, and investment — to (a) get the biggest bang for the buck and (b) overcome competition. 

They sell in as many as 70 countries and have 18 active brands, each with their respective variants. They know what big data is, not just the theory, but the reality. 

Let’s pause once more because growing an undertaking or an enterprise or an economy demands respecting physics as in the economies of scale. It requires setting priorities as in the vital few or Pareto. Conversely, the Pinoy crab mentality is a self-defeating exercise.

And because I have been doing big data and analytics for decades, despite the lockdown, we could do business and budget reviews while I was WFH. During my time at the MNC-company, I had to travel the region, if not the world, to do the activity.

Recall I also changed the planning and budget system of a 200-year-old MNC — to articulate the exercise parameters, numbers must mean or represent something.

To fight a takeover attempt by a dissatisfied investor, we went through a restructuring program and cut revenues by half to focus on our most significant businesses. And so, the planning and budget process must define and aggressively drive (1) revenues – to regain prior total company sales, (2) margins, and (3) efficiency.

I know we Filipinos are proud we created SGV. But this MNC hires from the best schools, including the Ivies, and the most prominent audit firms in the US. In short, these people know their planning and budgeting. However, they are also experienced in global competition and know that competition can come from anywhere in the world. America does not have all the answers.

That’s what I told my Eastern European friends when I first met them. “Can we even compete against these Western behemoths?” That was the question. And that is why “Don’t expect answers from me. I will teach you the principles, but you have to practice and practice and practice to learn the tricks of the trade.”

Did they make mistakes in the process? Of course, and I would tell them after the fact that I knew based on my own specific experience that they would. For example, there were years when they could have done even better. But the real world and authentic learning don’t come with paved roads. And the value of the experience is much greater than the cost of the error.

And we know that as part of growing up. We survived adolescence despite our youthful indiscretions. 

There are always exceptions. I will disagree if they put themselves into a disaster waiting to happen. For example, when we developed the first premium product, I did not even look at the mediocre supplier’s equipment offer. “This is lesson number one on the execution of this project. The mindset will shift from mediocre to premium, period.”

We had to borrow a ton of money from a Western bank, and the rest is history. Three of the brands, benchmarked against the world’s best brands, are giving Western giants a run for their money. Moreover, they know this once tiny enterprise from the poorest country in Eastern Europe is coming down the pike — with several more, like fifteen more. Think of Pareto and how they will prioritize to raise their firepower and go head-to-head against the West.

Recall how the Philippines’ most prominent companies bought into the mantra of catering to the “bottom of the pyramid.” Do we wonder why innovation is not our cup of tea and why we can’t match our neighbors export-wise?

It gets back to dualism versus relativism. 

The bedrock of innovation and product development is Maslow’s hierarchy of human needs. Call it inclusive if you will. The challenge for enterprises is to cater to these needs. It is not about consumerism but raising humankind’s wellbeing.

But we don’t get it because it goes against our instincts — to perpetuate our caste system and value hierarchy and paternalism.

What about capitalism versus socialism? I’ve lived in the heart of capitalism and the bowels of socialism. And “experience is the best teacher” — and paves the journey from dualism to relativism.

The acid test is: How does our effort play out in the real world? For example, we Filipinos cannot brush aside the reality that we are the regional laggard. We may be the Philippine elite class, but our “reality” is for the world to see. Translation: We did a disservice to capitalism and free enterprise. See above; Christianity and democracy are mirror images.

Consider: What case studies do we assign to our graduate business students? Western? That works in the West because they can be interns in these companies. But we have our eight top companies? That explains why we perpetuate monopoly power, political patronage, and oligarchy. They are not exposed to Samsung Vietnam or AirPods Vietnam, for example, to understand how one enterprise can outdo our top companies combined.

Recall our top exports, over 64%, are in the same product categories. But benchmarking is alien to us. And so is Pareto. Why? It’s the Pinoy crab mentality. And that brings us back to our instincts — from parochialism to a culture of impunity.

The blog is a story of my real-world experiences with one caveat: While people acknowledge my expertise, I continue to preach principles, not hard-and-fast rules. Why?

(1) American higher education failed the nation; it did not hold the keys to the future, i.e., clueless about Japan, Inc., and (2) the most outstanding product idea one can think of will be passe sooner if not later. Why? This universe is dynamic. 

Today, even capitalism is under siege. But then again, it is only a subset of a more significant set. Yet, people seek refuge in a playing field that keeps shrinking. Recall the paper and pencil puzzle to test one’s ability to think outside-the-box and connect the dots.

Recall that beyond the local and even the global markets, the Creator’s genius is for everyone to see. Humankind has this universe to be a co-creator in the creation story. I’ve shared the “photosynthesis” phenomenon — that we learned in grade school because nature demonstrates how to create and sustain a product or an undertaking  — with countless, and perhaps because of proximity, the daughter echoed it in a conversation with the wife.

Not a surprise; she’s a philosophy product of Brown. I don’t have her IQ and won’t qualify for an Ivy – except in an executive education program. And this was confirmed when I could not proceed beyond page one of a book she was reading. It was Greek to me. 

That’s why I bask in the glory of experience being the best teacher. That bodies of work confirm the story of my real-world experiences.

How are we then going to thrive in this universe, given our instincts?

We don’t appreciate how our caste system nailed us down, unable to progress. It is not a debate about conservatism or progressivism. Even the Vatican, a Roman empire product, through Pope Francis has eschewed hierarchy. It is too archaic to even be a reality in the 21st century.

That is why the world supported Prince Harry for opting to leave royalty. But we Filipinos can’t shed our rank and privilege.

What about paternalism? It is an insult to human dignity. In other words, we like to argue that Western-style democracy is not for us. Indeed, it is not for us because we can’t forego paternalism. The evidence? The 91 percent approval rating we gave Duterte despite the war on drugs condemned by the free world.

And we take it as a virtue and why we borrow hundreds of millions (dollars) to keep the 4Ps going. Yet, we play blind that our neighbors took a different path to overcome poverty. 

Will we ever learn to benchmark?

Should we again pause to ponder the question?

Those of us in higher education must be familiar with William G. Perry, Jr. “He was a well-known educational psychologist who studied the cognitive development of students during their college years. He was a professor of education at the Harvard Graduate School of Education and founder and longtime director of the Bureau of Study Counsel. While at Harvard, he developed his college-age students’ intellectual and cognitive development theory through a 15-year study during the 1950s and 1960s. His work was very influential in the field of student development.

“Fundamental to the Perry scheme is the nine stages of student development – from dualist to relativist.

“The nine positions of the Perry scheme has three broader categories, which Perry identified as 1) dualism modified (or dualism + “multiplicity”), 2) relativism discovered, and 3) commitments in relativism developed.

“The Perry scheme addresses issues distinct from those commonly discussed under the rubric of ‘critical thinking.’

“Critical thinking can be understood as the ability to weigh evidence, examine arguments, and construct rational bases for beliefs. Or how do we arrive at our reasoning? Is it relevant and adequate?

“However, Perry’s scheme speaks to epistemic issues underlying critical thinking: students’ assumptions concerning the nature and acquisition of knowledge (or truth.) [Wikipedia]

In other words, critical thinking is elusive if we’re stuck at the level of dualism.

What about System 1 and System 2 Thinking – i.e., automatic vs. conscious – from behavioral economics? We are yet to get ourselves into this branch of economics.

The two systems also explain why populism appeals to people. People react automatically to something they see as responding to their needs. In the Philippines, we know this as retail politics.

It also explains why Trump beat Hillary. He appealed to the basic fear of the average Joe. Trump tried it again — with MAGA — for his reelection yet failed. 

More people than his base have moved from System 1 to 2 thinking, i.e., more conscious of what he was all about. A fraud or a Russian agent? Only Putin is enjoying the spectacle without investing more for his KGB colleagues.

Then think of why populism didn’t soar like a rocket? Because the Emperor had no clothes?

Put another way, it is easier to communicate at the dualistic level and why it is not easy to move up to relativism. Or why Christ had to die on the cross.

Or it is easy to be Fox News than the New York Times.

And in our case, as Filipinos, “innovation” is way beyond Juan de la Cruz’s basic needs — that we are yet to recognize the challenge of “innovation.”

Innovation will not go away and continue to raise the bar for us. Yes, also for the average Joe, i.e., the next Trump is not the answer to the developed world’s post-industrialization era.

Why? To thrive in this dynamic universe, human need can’t be but dynamic. See above; the bedrock of innovation is Maslow’s hierarchy of human needs.

The good news is the 21st century is not about technology, per se, because everything comes from the mind. Technology is beyond 5G that we like to talk about — or STEM. 

Recall in my old MNC-company, it was not the central tech center where we had a thousand scientists that discovered the breakthrough product, but a small private R&D lab ran by two Ivy professor-scientists part of the network of the pharma unit. It is classic out-of-the-box.

As a first step, we Filipinos must learn how to think across disciplines to leverage Filipino brainpower. For example, nation-building is beyond economics.

And because religion is at the very heart of our psyche, we must learn from the Harvard Business Review’s article – “Innovator’s DNA” – to appreciate George or Fr. George Gorospe’s treatise on “reality.”

We must be able to practice “associating –  the ability to successfully connect seemingly unrelated questions, problems, or ideas from different fields, being central to the innovator’s DNA.”

It’s a New Year, again. It will not be easy to move the Philippines forward if we don’t step up to the plate.

Consider our leader-dependency. It blocks us from recognizing that democracy demands personal responsibility to pursue the common good like Christianity. It is self-government, not leader-dependency.

That is why we created a Marcos and then a Duterte. And we want another one?

Or do we want to reinvent ourselves?

Gising bayan!

[Happy New Year!]