Will Covid be our “teachable moment”?

A teachable moment is when the abstract comes with clarity to relate to the real world.

Those that read the blog may recall that I picked that up from the top educators and consultants that my old MNC-company tapped – to develop an in-house education and training curriculum.

With the emergence of Japan Inc. in the early 80s, Fortune 500 companies had a teachable moment – grabbed the bull by the horns – to act, to do something to overcome the shortcomings of US higher education.

Can we grab the bull by the horns, do something, overcome our instincts – now that we know that the economic scarring courtesy of Covid has undermined our fragile economy, i.e., dependent on OFW remittances and call centers?

Consider: We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity.

“To expand FDIs and good jobs at home,” Gerardo P. Sicat, CROSSROADS TOWARD PHILIPPINE ECONOMIC AND SOCIAL PROGRESS, The Philippine Star, 22nd Dec 2021.

“Reversing our mentality. It means reversing our mentality about FDIs. It means putting action where political rhetoric was once cheap. Can we now, finally, walk the talk?

“Our neighbors pull ahead with high-value FDIs. The recent high-valued FDIs in the electronics industry that have flowed into our neighboring partners among ASEAN countries is a sign of how they have pulled ahead in achieving their industrial potentials.

“Compared to them, we have languished in attracting FDIs and in catching the structural economic changes in the whole East Asia region as a result of trade wars and economic realignments of industries and capital flows.

“The actions undertaken recently have been significant to correct these deficiencies, but more needs to be done. The marketplace is shifting in competition. Countries are working on the same objectives to raise the level of FDI investments.”

Consider: The unfamiliar is always taboo that it is human nature to take the path of least resistance. It is the unwitting response demanded by self-preservation – why rock the boat?

But as the world at large kept moving at warp speed, especially in the 21st century, social scientists wanted to get ahead of the curve. For example, they postulated the distinctions between a “growth mindset” versus a “fixed mindset.”

And Microsoft, for example, because of Bill Gates, embraced the imperative of the “growth mindset.” And today, it stands only behind Apple in market value – the only two worth over two trillion dollars.

Those who read the blog may recall that the postings often speak to Steve Jobs and Apple – the benchmark that I introduced to my Eastern European friends.

While they were an MSME, a losing proposition going eight years, they didn’t cower when measured against a behemoth.

And that’s the kind of challenge we Pinoys won’t take because we pigeonholed Juan de la Cruz as a fragile enterprise? And it comes from our value of hierarchy and paternalism?

Was I surprised when the EU Competition Commission recognized my friends as a model enterprise in the EU or that they killed the brand of the most prominent Western competition in Europe with their first focused brand?

Today they have ten other core brands with three attaining state-of-the-art that scare Western competition all the more. Indeed, the entire portfolio will be a formidable competition – as the brands keep moving up the value chain.

Unsurprisingly, these friends were again recognized recently – in the markets where they actively compete – as the industry’s most successful and innovative company.

But then please recall what the wife said when we first arrived in Eastern Europe: What are we doing in this godforsaken place?

What a reversal of fortune?

Can we Filipinos reverse our mentality? It will not be a cakewalk, given our caste system.

Can we pause – and ponder?

If Covid is to be our teachable moment, “it will take a village” for us to have a prayer of upending our instincts.

In other words, if People Power failed to instill a sense of purpose in us Filipinos, can Covid succeed? 

Leadership is a critical element, and the next presidential election will be our chance.

For example, America was inward-looking, a divided nation, especially after WWI. Still, they had the fortune of exemplary leadership in FDR. And Pearl Harbor woke them up.

And so, we have an uphill climb. But then again, democracy is an exercise in self-government.

Can we step up to the plate and embrace the imperative of personal responsibility and pursue the “common good”?

There are two barriers we must recognize (1) the need to overcome our instincts and (2) embrace that sense of purpose — “To traverse poverty to prosperity rapidly.”

And the instincts we must overcome? We are parochial and insular. We value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity. 

And it takes a village to face these formidable challenges.

Here’s a quote from a prior posting: “We can create a de facto group to brainstorm and craft how to traverse poverty to prosperity rapidly.

“Design thinking” – an iterative approach to problem-solving that intentionally seeks out people with different perspectives, knowledge, skills, and experience and has them work together to create a practical solution for a real-world problem.

“And that group can include, among others: economists, “think tanks,” “economic managers,” legislators, the likes of George Gorospe, SJ, whose treatise about “reality” mirrors the character of this universe, i.e., dynamism and interdependence, Mr. Canto of McKinsey, IRRI, Arangkada, AmBisyon.

“We must welcome [too] the winningest coach in college or pro basketball. The winningest coach can edify us on the culture of winning. Indeed, if losing is a culture, winning is too.

"We need a representative to address the next generation BPO industry because we can’t just talk and talk about moving up the value chain.

“Then think of the Theory of Change about defining a desired “outcome” and “outputs” and tracing or mapping backward the critical elements that will constitute the portfolio’s ecosystem.

“And to test that we don’t miss a beat, the mental model must be the photosynthesis phenomenon. 

“For example, if an undertaking is ever to succeed, there are three dynamics to manage: (1) the marketing mix, (2) the resource mix, (3) the execution mix.

“We want to tap a marketing practitioner and an experienced project manager with an enviable execution track record to better handle the above dynamics.”

Let’s hold it right there.

We are not used to brainstorming, especially at the national level. But then, we don’t have a track record either of successfully pursuing ambitious efforts like Arangkada or AmBisyon.

But Arangkada and AmBisyon are good beginnings that we can build on. And so is the prototype offered by Andrew Masigan.

Here’s an avenue to pursue:

Change efforts can be driven simultaneously from the top and below. For example, Andrew can do the latter, and NEDA can do it from the top and tap the referenced resources. The overlaps will be good, especially when the parties build on each other’s efforts.

In the meantime, I read up on Jon Canto of McKinsey and Tim Cone, the winningest coach in the PBA with 23 championships. “Cone knows a thing or two about winning a title.” [NBA.com Philippines]

If people can’t imagine winning 23 championships, Tim Cone has been there and done that. He can reverse our mentality that Juan de la Cruz is a fragile enterprise – and why the focus on poverty.

We now know that all our efforts to address poverty have failed, from the comprehensive agrarian reform program to borrowing tons of money for the 4 Ps, and then some. 

Do we know what Einstein said about such stubbornness?

The excellent news is that Canto and Cone have Philippine roots and know our “culture.”

“McKinsey and Co. Philippines Acting Managing Partner Jonathan Canto said the Philippines should explore a potential niche as a manufacturing hub with 80% of US companies and 67% of European companies from China to elsewhere in Asia. And Vietnam, Thailand, and Malaysia are currently gearing up to take over China.

“Mr. Canto recommended that the Philippines reassess its FDI strategy and priority sectors, build unique deal-focused value propositions, focus on investment promotion, and ensure end-to-end support for investors.” [“Foreign chambers tout FDI as key to economic recovery, poverty relief,” Bianca Angelica D. Añago, BusinessWorld, 1st Dec 2021]

But let’s get back to the object of the exercise:

“The blog advanced a forward view for Juan de la Cruz, which we can label as “outcome,” to differentiate it from “output.” And that is, “To traverse poverty to prosperity rapidly.”

“For example, instead of the 6% GDP growth metric we are familiar with, the blog introduced an incremental GDP of $200 billion as “output.”

“But let’s drill down to the next level:

“The legs of the PH economy are services (60%), industry (31%), and agriculture (10%). And Vietnam: services (51.3), industry (33.3), (agriculture (15.3).

“The narrow gap in the industry is illuminating, i.e., that was how Vietnam was able to arrest poverty.”

“But we struggle to figure out the ‘vital few’ areas that propelled Vietnam to leave us in the dust – as did the Asian Tigers and China before them.”

“What about agriculture? Two of our neighbors are rice exporters, Thailand and Vietnam.

“But then again, beyond eliminating the restrictions on farm sizes and raising the budget of the DA, we must benchmark against Thailand and Vietnam – because there are other factors and nuances that we must know and learn by heart if we are to match their competitiveness.

“And we can add IRRI as a resource – because IRRI is a “knowledge bank” that is too precious to ignore.

“What about coconut. It is a significant export for PH. Have we fully exploited this opportunity? Or has political patronage and oligarchy gotten in the way? Should we do our homework — and tap the right resources — to figure out the way forward for the industry?

“Recall the Pareto principle, the “vital few” versus the “trivial many.” 

"What produce and products must make up the portfolio of the Philippine agribusiness industry? If rice and coconut, and coconut-based products have sizable markets and generate ideal revenues and margins, what else must we consider? Consider crop rotations, for example,"

To recap, the de facto group will be looking at the three legs of the Philippine economy: (1) services – to focus on the next generation BPO; (2) agriculture – to define the “vital few” produce and products that will form the portfolio of the Philippine agribusiness industry and to develop the ecosystem that will ensure we match the competitiveness of Thailand and Vietnam; (3) industry – to focus on the quick hits and big wins amongst the FDIs in China that can move to the Philippines.

In other words, while we’ve identified the big industry winners under Arangkada, we must replicate the coup pulled by Vietnam on Samsung smartphones.

The bottom line: The “desired outcome” is for the Philippines to traverse poverty to prosperity rapidly – i.e., the next Asian Tiger.

Because we did not win despite attaining the 6%-7% GDP growth metric over a decade, we are setting a winner’s goal of an incremental GDP of $200 billion.

We may not deliver the total $200 billion in ten years. Still, we must benchmark against Vietnam and have something substantial in ten years, e.g., bring poverty down to low single-digits – and geared to sooner than later attain the goal. Recall that Vietnam took a mere ten years to overtake us.

And that means the three legs of the economy – services, agriculture, industry – will perform better than historical norms.

Note the focus on the “vital few” versus the “trivial many.”

We want the biggest bang for the buck. Not perpetuate the crab mentality.

That is how we can put the requisite focus on the few that will deliver the output – $200 billion incremental GDP – and outcome we desire – to traverse poverty to prosperity rapidly.

Winning 23 championships is a reality – but way beyond our fixed mindset.

Will Covid be our teachable moment? And overcome our instincts and embrace a sense of purpose?

Gising bayan! 

A healthy and prosperous New Year to one and all!