The Future” Column in the INQUIRER
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Volume 7 Issue No. 09 map.org.ph March 2, 2021 “MAPping the Future” Column in the INQUIRER The SGV - MAP NextGen CEO Transformative Leadership Program March 1, 2021 Mr. AURELIO “Gigi” R. MONTINOLA III On behalf of the Management Association of the Philippines (MAP), I would like to thank SGV (SyCip Gorres Velayo & Company) for being our Knowledge Partner for the very first MAP NextGen Conference last November 20, 2020 and our forthcoming second MAP NextGen Conference on November 12, 2021. As the Knowledge Partner, SGV has agreed to conduct the “SGV - MAP NextGen CEO Transformative Leadership Program.” In this regard, we are all virtually gathered together for an opening Kick-Off ceremony for a pioneering 12-month interactive leadership program. Fifteen (15) MAP NextGen members have been carefully selected to join this program to improve their leadership skills and help them reframe the future of their companies. Allow me a few words to welcome our 15 Participants and our Knowledge Partner SGV. Dear NextGen Participants and Future Thought Leaders of the Country: I returned at age 29 to Manila in 1980 after 5 years of international Graduate School and overseas work experience with an international bank to start a career in the Philippines. Little did I know that the Philippines would be going rapidly economically downhill during the next 5 years of Martial Law, that I would join a local bank (BPI), that Ninoy Aquino would be assassinated, and that I would have my first taste of a severe economic crisis where the country would plead for an international debt moratorium, inflation and Interest rates would hit 50-60% per annum, and foreign exchange of even $10,000 had to be rationed out. 1 And yet, I survived and actually later thrived, as I knew less than most, stayed focused on my job, and was not in a position to over-worry about things beyond my and the country’s control. Why am I telling you this? Each generation has a “once in a lifetime” life-changing event. For my parents, it was World War 2. For my generation, it was Martial Law. For you NextGen leaders, it will be the COVID-19 pandemic. Each event lasted longer than anyone thought, and was, at minimum, life-threatening to many. And yet, each major crisis brought major opportunity - the Philippines gained independence and rebuilt its economy with a new generation of entrepreneurs after World War 2. Post-EDSA 1986 started slow with political change focus on the first 15 years, and then steadily upward economic progress the next 18 years to the point where NEDA Secretary Karl Kendrick Chua recently said, we were on the cusp of becoming an upper middle-income country by end-2019 before the COVID-19 pandemic cruelly struck in 2020. Due to my age, I have also been through four major economic crises - effectively one per decade for a few years. In the 1980s, it was the Philippine debt moratorium from 1983-1985. In the 1990s, it was the Asian Financial Crisis in 1996-1997. In the 2000s, we had the Global Financial Institutions crisis in 2008-2009. In the 2010s, we thought that had miraculously escaped, but then COVID-19 hit us like a sledgehammer in the decade’s last year, or 2020. From being considered among the best in Asia, the Philippines suddenly and unfortunately is being forecasted to be one of the slowest countries to recover to pre-COVID growth days. Some Current Opinions A New York Times article by David Brooks on February 18, 2021 is entitled “Get ready for greater technology”. Some Relevant Quotations “ … Discoveries in information technology have been massive - the internet and the smartphone… But life altering breakthroughs, while still significant, are fewer than they once were. If you were born in 1900 and died in 1970, you lived from the age of the horse drawn carriage to the man on the moon. You saw the widespread use of electricity, air conditioning, aviation, the automobile, penicillin, and so much else. But if you were born in 1960 and lived until today, the driving and the flying experience would essentially be safer, but otherwise the same, and your kitchen, aside from the microwave, is basically unchanged…. But this technological lull may be ending … the first and most obvious is vaccines…One could go on: artificial intelligence, space exploration…, anti-aging technologies, … even lab grown meat…. what if we create a world with cheap clean energy, driverless cars, and more productive years in our lives?“ Locally, Francis Kong , in a Philippine Star article on February 21, 2021 has five notable observations in a “Pandemic Developments” opinion column - “... the Acceleration of Innovation, Resistance around Change Weakens, Leaders Learned 2 and Showed Empathy and Generosity, the Pandemic has Ushered in Healthier Habits, and There is Higher Appreciation of the Simple Things in Life.” Excellent food for thought as you start your 12-month program. Some Practical Advice I close with some practical advice: 1. Stay Cool - My major learning after four economic crises is that by simply surviving, you will be ahead of 80 percent of others. Control what you can, observe what you cannot, and Stay Cool. You will be able to think more clearly, and be a step ahead of negative social media on “Why are things Going Wrong” mindsets. 2. Stay Focused - Be aware of what you can and cannot do during this pandemic, but also think through who is your Client and Major Customer, and what product you are trying to offer. Lack of Mobility, difficulty in logistics, and social distancing requirements are the big negatives, but digitalization, work from home, and rapid culture change are the big positives. The vaccine will help, but don’t bet your Business Plan on it, as we will all be learning to live with this Next Normal for a few years, if not semi permanently. As an aside, in all three previous economic crises, I would advise against debt, but in today’s environment, I might be tempted as interest rates are so low; however, your key metric should be Cash Flow through either Operating Margin and/or EBITDA. 3. Stay Positive - You are young, and you would not have been picked for this Next Generation 12-month interactive management leadership course if you were not Good. Think Opportunity rather than Risk, and anyway, you have less blinders than others precisely because you are the Next Generation and currently fearless. Learn to live and operate in a Philippine setting, and bet the Philippines - after all, it is your country, and you have the skills and the track record to make a difference. Above all, Trust yourself and your business instincts, but remember that each time you learn something new from others, you make yourself a better manager and leader. Finally, in my MAP 2021 Inaugural Address, I pointed to 5 Crises - Health, Economic, Environmental, Education, and Social Justice . Let the older generation experts solve the Health and Economic crises, while you Next Generation Leaders focus on resolving the fundamental present and future three - the Environment’s Critical Decade to reverse Climate Change, Education’s War against the Philippines’ Learning Crisis, and Social Justice’s fight for Jobs, Food, and Values Formation. In short, please help us achieve MAP 2021’s Theme of “The GREAT RESET: LEADING for the COMMON GOOD”! Good luck in your Learning Journey over the Next 12 Months! 3 (This article was lifted from the Welcome Remarks delivered by the author, as the MAP President, at the February 22, 2021 Kick-off ceremony for the “SGV-MAP NextGen CEO Transformative Leadership Program”. The author is Chair of Far Eastern University (FEU). Feedback at <[email protected]> and < [email protected]>. For previous articles, please visit <map.org.ph>). “MAP Insights” Column in BUSINESSWORLD ON THE MORAL RESPONSIBILITY OF BUSINESS: An Alternative View March 2, 2021 Dr. NICETO “Nick” S. POBLADOR In November last year, the largest business and professional associations in the Philippines – collectively called the Philippine Business Group (PBG which includes the Management Association of the Philippines, sponsor of this column) signed a “Covenant for Shared Prosperity” by which it pledged to address the universal issues of economic and social inequality and non-inclusivity by ensuring “…ethical wealth creation and the sharing of prosperity with all their stakeholders.” This Covenant echoes the “Statement of Purpose of the Corporation” which was formally adopted by the Washington, DC – based Business Roundtable (BRT) over a year earlier. At its annual meeting in January 2020, the World Economic Forum (WEF) launched its new “Davos Manifesto” in support of Stakeholder Capitalism. With these proclamations, the PBG, the BRT and the WEF abandoned their long- standing advocacy of Shareholder Wealth Maximization and committed themselves and the rest of the corporate world to creating value for ALL stakeholders. In public forums and in social media, corporate leaders everywhere assert their commitment to pursue the economic interests of all their stakeholders. By all indications, Stakeholder Capitalism is now the new mantra in the corporate world. These corporate commitments to Stakeholder Capitalism and responsibility to society carry the implication that businesses have a moral obligation to serve the interest of others. There is widespread belief that businesses are morally bound to serve the needs of society. This view is consistent with current thinking on Corporate Social Responsibility (CSR) which is generally understood to require the voluntary sharing of business profits with the community and the other stakeholders in the firm. These acts of magnanimity are generally seen as means of giving back of what is owed to others.