Reinventing leadership

In the Philippines, we like the word “reform.” What about “transform” or “reinvent”? The blog is going on 13, and it’s apt to revisit its header, “Philippine Economy: Reinventing Ourselves.”

And what a coincidence; I just pulled out the January-February issue of the Harvard Business Review from the mails pile, and its cover screams: “Build a Leadership Team for Transformation: Your organization’s future depends on it.”

“As companies strive to build competitive advantage in a world obsessed with digitizing (which is often a must but rarely differentiating), they find that what they need from their leaders is changing.

[The operative word is “differentiating.” It is something we Pinoys take for granted, i.e., it is several rungs above “benchmarking,” which we are yet to internalize. We have our work cut out for us.]

“Their top people must be able to reimagine the company’s place in the world and transform the organization to live up to a more ambitious purpose. That will mean fundamental change not only in the executives themselves but also in how they collectively manage and lead the firm.”

[Indeed, it takes a village to transform an entity – a nation, economy, and even the world.]

“The skills that leaders need for success have evolved.

“A recent survey highlighted the importance of balancing specific characteristics that, on the surface, look paradoxical.

“Companies now need their top people to be great visionaries and great operators. They must be tech-savvy humanists, high-integrity politicians, humble heroes, globally-minded localists, and traditioned innovators.

“It is clear that if companies are to thrive in the years ahead, they must build new forms of advantage rather than digitize what they are doing today.

“Accomplishing that means being ready to shed past belief systems and define new, bolder value propositions.

“Leaders must be willing to challenge every aspect of their company: its purpose, its business model, its operating model, its people, and themselves.

“And conventional ideas about managing have to be inverted.

“Executives must move away from focusing on their areas of responsibility and responding to needs bubbling up from below; instead, they must work together as a team to shape the organization’s future and steer a path toward it.

“There are four key components to the approach: (1) Identifying the leadership roles needed for the future; (2) Assembling the right people; (3) Focusing your leadership team on driving the company’s transformation; (4) Taking ownership of your leadership team’s behavior.”

Let’s hold it right there.

Those that read the blog may recall that postings often raise the characteristics of the “real world” – that may not square with the academic world.

But that isn’t surprising. This universe is dynamic and demands interdependence. Fortunately, the hierarchy of human needs is inherent to respond to these demands. Recall that humankind had to migrate out of Africa because of climate phenomena. Moreover, they had to figure out a better abode than caves.

Pleasingly, both worlds pull bodies of knowledge together, albeit “reality” would still outpace the efforts. And hence the recognition that this universe is moving at warp speed.

And social scientists are continually challenged to solve how people can get ahead of the curve, e.g., distinguishing the “growth mindset” from the “fixed mindset.”

As the blog has argued, to assume “consumerism” as the culprit – or the be-all and end-all – is misplaced. And why it submits that undertakings are subsets of more significant sets. Sadly, Padre Damaso thought otherwise.

But Einstein and Jobs come to mind; both had the “universe” in their consciousness. Even Bill Gates saw the genius of Steve Jobs. He would visit the latter at his home and proceed straightway to the kitchen/dining room chairs. [Jobs did not furnish the living room for some time. He didn’t find the ones that he fancied – unsurprising, given his “father” was an artisan that turned woodworking into an art – and the wife put up with his idiosyncrasies.]

Gates did not see the wisdom of Jobs going into the iPod, for example. The former saw the corporate world as the market for software – and they don’t buy iPods. But Jobs mocked him for not recognizing the average Joe. Jobs had a powerful human sense. It explains why he sought an Indian guru in his younger days. Think of John Lennon too.

Look at how Jobs’ ideas traversed from a hobby-kit (a crude “computer”) to the Apple Watch – that will soon be integral to the healthcare system.

“I want to make a dent in the universe” was how he expressed his sense of purpose. How? Creating products that will stimulate one’s creativity – e.g., there are 2 million apps for Apple products today and counting.

Jobs saw a world bigger than himself, i.e., the universe.

Recall what the wife said when we first arrived in Eastern Europe: What are we doing in this godforsaken place?

I had just retired from my old MNC-company. And at the instance of USAID, accepted a volunteer assignment in Eastern Europe – having had a brief visit before.

The wife had organized a tour of Greece, Bulgaria, and Romania after the collapse of the Soviet empire. 

“Let’s get another look – this time for a month – and take it as an exotic holiday.” Still, the horror on her face said it all.

I met two budding entrepreneurs, and they had different worldviews. One wanted to sell the business to a Western company and wanted my help – he thought he saw better prospects in another line of business.

The other wanted to be the best in the business out of Eastern Europe. “We’ve had eight years experience and learned a lot but are yet to make money. The trade and the consumer buy our products but not enough to put us above water. And we realized we need to learn more."

The company was less than a third the size of the first entrepreneur. But what an irony; years later, the first would offer his business which turned out to be a mere fraction of the second one – the undertaking that I supported since.

Now a close family friend, the entrepreneur saw a world bigger than himself. Why? I sensed a “growth mindset” – to be the best in the business out of Eastern Europe, but realized they needed to learn more.

But let’s get back to the Philippines – and put PH against this backdrop:

“It is clear that if [enterprises/economies/nations] are to thrive in the years ahead, they must build new forms of advantage rather than digitize what they are doing today.

“Accomplishing that means being ready to shed past belief systems and define new, bolder value propositions.

“Leaders must be willing to challenge every aspect of their enterprise: its purpose, its [economic] model, its operating model, its people, and themselves.

“And conventional ideas about managing have to be inverted.”

Consider the worldviews of two prominent Philippine economists:

“Let's be clear-headed: the issues facing Western economies are different from the issues facing us. They have a demand problem, which is very much harder to solve. Instead, we face supply and capacity problems within our powers to solve. We need to do supply-side economics.

“Lack of capacity and supply remains our problem, and it would be well for us to focus on supply-side economics. Our growing trade deficit (we increasingly rely on imports to solve our domestic supply problem), our inability to export, and our low investment to GDP ratio show that capacity and supply remain our problem.” [“Supply-side economics,” Calixto V. Chikiamco, Introspective, BusinessWorld, 26th Dec 2021]

Here’s the other one: “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.”

In fairness, we are seeing a call to action from respected economists – Villegas, Sicat, and Chikiamco – as well as Masigan and Salceda.

Unfortunately, “change” is never a given. There is no free lunch.

We must paddle our own canoe. But how?

Are we prepared to shed past belief systems and define new, bolder value propositions? And is our leadership and the leaders we choose ready to challenge every aspect of the PH enterprise – its purpose, its [economic] model, its operating model, its people, and themselves?

How many of us in the Philippine elite and chattering classes laugh off the argument that our instincts stand in the way of shedding our belief systems? And that we can’t define new, bolder value propositions?

How come we didn’t lift a finger going decades when the Asian Tigers and then China and Vietnam demonstrated to the world what economic miracles are?

And our instincts are best captured by our caste system.

How else to explain our parochialism and insularity? Or why do we value hierarchy and paternalism and rely on political patronage and oligarchy that ours is a culture of impunity?

We can sweep it under the carpet, but the world sees us as a pariah, illustrated most vividly by Maria Ressa and Harry Roque — two sides of the same coin. And soon, despite blatant impunity, we will install another Marcos to the presidency?

But we can’t escape responsibility. 

Consider: We celebrated growing the economy 6%-7% over a decade. Yet, it was on the backs of over 10 million OFWs, and 23 million Filipinos pay a steeper price — they can’t put body and soul together.

There is no free lunch in a democracy. That’s why “personal responsibility” is inherent in self-government.

We must do our homework. Our paradigm is not in sync with the demands of the century. As the above HBR article points out, leadership today presupposes “cognitive development” – i.e., binary thinking will not cut it.

History repeats itself if we recall how Christ explained the Great Commandments — or the focus on the “common good,” aka “love thy neighbor.” It describes our struggle to prioritize, which we find paradoxical given our crab mentality – that hides in “inclusive.” But that is not surprising. Even America fell into the trap of polarization.

And with our lack of development experience, all the more, we must learn to look outward and benchmark because we don’t have the skills in our quiver.

The excellent news is that a body of knowledge reinforces the power of “brainstorming.” And its latest version, “design thinking,” is a tool that Silicone Valley employs to be at the forefront of “innovation.”

And it is worth repeating the following – over again – that “We can create a de facto group to brainstorm and craft how to traverse poverty to prosperity rapidly.”

And the group will be as varied as can be – from the winningest basketball coach, Tim Cone, to Jon Canto of McKinsey, who proposes a radical, targeted design to attract FDIs from China to PH. Also, from IRRI to Arangkada to AmBisyon to someone like the late George Gorospe, SJ, whose treatise on “reality” reinforces the dynamism of this universe, among others. 

Let’s pause right there.

But why should we create a de facto group to brainstorm and craft how to traverse poverty to prosperity rapidly? Why not leave it to the experts? But experts on what?

Can we agree that nation-building takes a village? Do we buy the idea that democracy is self-government? And that “personal responsibility” is inherent?

Then think of the “4 Cs to 21-century skills” – communication, collaboration, critical thinking, creative thinking.

Then see above; the “conventional ideas about managing have to be inverted” – if [enterprises] are to thrive in the years ahead.

For example, we cannot keep talking to ourselves in the Philippine elite and chattering classes. We are among the fastest-growing economies, and over a decade, we attained the global yardstick of a 6%-7% GDP growth rate.

Consider: We celebrated the uptick in manufacturing and that agriculture employs 10 million farmers.

That is economist-speak. And Juan de la Cruz humors us by demanding, for example: give me my acre or two of farms, give me my fertilizer subsidy, give me my irrigation, give me farms to market roads. And by the way, give my province more share from the national tax revenues to take care of local needs. Also, could you give us a representation in Congress?

And did we not do all of that?

In the end, why is Juan de la Cruz still an object of charity? Because what we brag about the economy comes from the sacrifices of over 10 million OFWs and their families. And Juan de la Cruz himself suffers from abject poverty.

The “conventional ideas about managing have to be inverted.”

For example, will Juan de la Cruz want to be told, “We will traverse poverty to prosperity rapidly”?

He won’t buy the 6%-7% growth metric anymore. He won’t accept that manufacturing is an uptick or that agriculture employs 10 million farmers.

But we can tell him that Vietnam – in 10 years, 2009-2019 – overtook us in income per person because, in 2009, their FDIs were almost twice ours.

And they did not reinvent the wheel. Vietnam merely replicated the Asian Tigers and China.

But how do we traverse poverty to prosperity rapidly? We are setting not a growth target of 6%-7% but an incremental GDP of $200 billion to leapfrog the output of our neighbors, including Malaysia.

And that will come from the three legs of the economy: services, industry, agriculture.

We are doing very well with services delivering 60% of national income courtesy of OFW remittances and call centers. 

But we must exploit the BPO opportunity and move up the value chain to the state-of-the-art. That will be a significant piece of the brainstorming efforts.

Our industry delivers 30% of national income, and this is where our neighbors poured their efforts to put Asia on the world map as the world’s manufacturing center. And it’s gone for decades – from Japan to South Korea to Thailand to Malaysia to China to Vietnam.

Moreover, the industry is the reason why these neighbors arrested poverty. Sadly, our aggressive poverty programs didn’t work the magic.

As the world’s population keeps rising and countries move from poor to a middle class, there will always be markets for innovative and competitive products. Enter: FDIs.

But China has overplayed its cards by acting as the new bully in town. And so, the great majority of Western FDIs want to move out. And our neighbors, again, are luring them.

In other words, Vietnam, Thailand, and Malaysia will again corner these FDIs.

That is why FDIs – and luring them – are a big piece of the brainstorming efforts. We can’t stick to models like CREATE and SIPP. We must turn our thinking upside down.

In agriculture, we must do better. But then again, we must benchmark against Thailand and Vietnam. They must be our model. Agriculture is beyond food security. That is a buzzword. What agriculture is to Thailand and Vietnam is innovation and global competitiveness – that they can export a staple like rice. See above; the operative word is “differentiating.”

We want “produce” and manufactured products that generate scale – revenue and margin-wise. And that presupposes we do our homework: define the portfolio of the Philippine agribusiness industry. See below: the three dynamics to manage for a successful undertaking.

Sadly, Thailand and Vietnam relied on IRRI too. And IRRI is in our backyard.

But back to the de facto group. We need “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” – aka Design Thinking.

We cannot embark on a radical approach without doing our homework.

Here’s a quote from prior postings: “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.”

In the Philippines, we like the word “reform.” What about “transform” or “reinvent”? The blog is going on 13, and it’s apt to revisit its header, “Philippine Economy: Reinventing Ourselves.”

“Reform” is too convenient. Consider: The demand imposed on PH being the regional laggard is to “reinvent.”

Gising bayan!

A healthy and prosperous New Year to one and all!