Role of business in transformative change and inclusive growth

We are told that for the Philippines—at long last—the wheel has begun to turn: from being in the outer fringes—where a seemingly unending set of man-made and natural forces conspired to consign us to despair and relative darkness—to our finally beginning to emerge into light and hope.

Many of us are still cynical about the prospect of the Philippines moving up to become one of the top 20 economies in the world by 2050.

But this is one sign of springtime for us: it is the first time that a number of analysts are saying that various forces are lining up to put the wind behind our sails.

We should not discourage those who are beginning to view us under a newer, more positive light. It is an advantage to be viewed positively. But it presents us with a clear challenge: we need to assiduously build on our strengths, and decisively chip down our considerable weaknesses that have been posing enormous stumbling blocks to genuine, sustained progress for our economy and society.

For truth to tell: there have always been good things about the Philippines, except that we never took full advantage of them, while we have been spending too much of our time and attention decrying the many stumbling blocks hindering us from moving progressively ahead.

It is time for transformative change! A few others are beginning to look kindly on us and our future prospects. We too must change and direct our focus towards building our economy and our society on the basis of its strengths, even as we address many of the perennial issues that have been with us for far too long. In order to do so, we need a change in mindset. We need a transformation in the way we choose options for moving forward, and for removing the many obstacles that have been holding us back.

Let us never forget: transformative change begins in our minds and hearts.

Need for transformation

If we are to decisively seize the forces that seem to be lining up in our favor, we need to be fully aware of the demands of transformation.

We need to strive—with all our talent and spirit of sacrifice—to get to first base on the run towards eventual transformation. We need to go for systemic change. No single silver bullet exists. No single smart prescription is good enough. No single panacea for sustained development is on offer.

We should know from many years of frustration and disappointment that we need to make a multi-pronged, multi-faceted attack on the entire system of corruption, rent-seeking, a feudal culture of dependence, attraction towards superficial glitter, and stress on passing personalities.

It is no longer a single problem we have to solve, or a single issue we have to face. Rather, it is the entire system of thinking, of doing things, of conducting business that we need to change, improve and modernize.

It is precisely because transformation demands systemic change that we all need to think and act strategic. Indeed, we can no longer conduct business as usual. We have to do so in a clearly strategic manner.

This means we have to be very clear about what we see ourselves becoming in line with our dreams and expectations. What do we dream of our economy becoming in 10, or 20 or in 38 years up to 2050? How do we see our respective corporations transforming themselves into the economic powerhouses we want them to be, within a competitive region and within a world full of conflicts? How do we envision our national government agencies and local government units transforming themselves into the public governance entities well ensconced on the right and straight road (ang daang matuwid) leading them to become models of good public governance in our part of the world still noted for corruption?

Absent this future-defining vision, we would fix our focus only on yesterday, today and tomorrow, without the benefit of a long-term, unifying strategy map that lays out the few strategic priorities we need to give importance to and invest resources in.

We would still be fixated on day-to-day operations and on operational results, without the pressure of having to deliver the strategic outcomes that are the ones that give flesh and substance to the vision we should be committed to realize.

Strategic outcomes bring us to second base on the run towards eventual transformation.

And what would bring us to third base on our run towards eventual transformation?

The answer has to be: sustained and systematic pursuit of the strategic priorities we have in our strategy map. This demands deep commitment to a governance program that gets deeply embedded within an organization. That commitment should be deep enough to transcend leadership changes at the top.

It revolves around the long-term requirements of organizational transformation and around strategic priorities that remain as organizational priorities no matter who is on top of the organization. It also demands continuous improvement of practices that deliver strategic outcomes, and an open readiness to drop practices that simply add to the bureaucratic burden whilst making no strategic difference. What works stays and needs to be improved; and what fails the effectiveness test is dropped and discarded! For it is a set of breakthrough results that transformation asks for, and not numbers that mean little for the transformation of the organization! It is a set of strategic outcomes that can make the substantive difference that transformation requires, and not performance indicators that measure nothing more than keeping the status quo!

Systemic change, strategic outcomes, sustained and systematic pursuit of strategic priorities can bring us to within striking distance of scoring a run—and several successive runs—towards eventual transformation.

For transformation to continue and secure genuine progress for our economy and society, we need to institutionalize a governance culture that embeds the governance discipline of thinking and acting systemic; of focusing on the long term, within which breakthroughs are made and strategic outcomes are delivered; of putting the organization as well as its long-term strength and sustainability above personalities, groups, factions and their more limited, more selfish interests.

Transformation asks for a change of minds and hearts. A governance culture fosters and feeds the fires of that change!

Inclusive growth

A governance culture entails inclusive growth and development. Such a culture is necessarily inclusive. It demands that the dreams and vision are shared.

It asks that all units within the organization—and all individuals who work there—are empowered so they freely take initiatives by which they contribute to the realization of the organization’s dream and vision.

It counts upon all those units and individuals to commit to levels of performance, which would redound to breakthrough results that eventually bring about transformation. Two words must become reality within a governance culture: cascading of the vision, the strategic priorities and the strategy map of the organization down to all units and individuals; and alignment of those units’ and individuals’ efforts and initiatives in support of that vision, those strategic priorities, and the strategy map.

Instead of each one pitching for and going towards different directions, all units and individuals work for a common cause and go towards a common destination.

This is inclusion at work—not just of benefits and welfare, but also of contributions and effort.

A governance culture, being essentially inclusive, should work for the eventual transformation of any organization. What happens if it is spread to cover all banks and financial institutions; all publicly listed corporations and all public corporations; many small and medium enterprises and cooperatives? Then business—yes, Philippine business—would eventually be transformed. And what happens if it is spread to all national government agencies, all local government units including their component barangays and all GOCCs and GFIs? Then government—yes, the Philippine government itself—would eventually be transformed.

We may start with a few banks and a few publicly listed corporations. But these few, moved by the governance culture they imbibe, should reach out to create a wider socio-economic impact.

They reach out to their peers in business and government for the eventual, and more rapid, transformation of the Philippines as an economy and as a polity.

Again, this outreach is inclusion at work—not limited to only a few, but extending to as many entities and units we have in business and in government.

A governance culture extends to civil society as well. Think of well-governed families: they would be stronger, more united, happier and more effective seedbeds from which will shoot forth many responsible citizens and genuine assets of the community. Think of well-governed schools, colleges, and universities: they too become flourishing seedbeds of responsible citizenship and of a governance culture as a foundation of a great, more intelligent and much better equipped society. Think of well-governed civil society organizations and non-governmental organizations: they become more effective, selfless and self-sacrificing instruments for the common good of the entire country.

Can anything be more completely transformative than the inclusion of civil society in the dissemination, adoption and observance of a governance culture? Their involvement and participation are inclusion at work—not limited to the two big sectors of the economy and polity, i.e., business and government, but extending to the third sector, civil society, which completes the frame for Philippine society as a whole.

Conclusion

What then must we do? What should be our action agenda arising out of this 10th MAP International CEO Conference? Shouldn’t it be the crafting and formulation of a transformation program in as many units and organizations within business, government and civil society?

Once a transformation program has been crafted and formulated—with a shared vision and a set of clear strategic priorities laid out in a systemic strategy map—shouldn’t a multi-sector coalition be set up to secure external support and cooperation in the sustained, systematic pursuit of the strategic priorities in the strategy map? Wouldn’t government benefit from such a multi-sector coalition, which substantiates and institutionalizes in an operational manner the public-private partnership already put forth as the fundamental approach to governance?

Shouldn’t the governance discipline of transparency and accountability be observed by arranging for regular reports on actual performance using scorecards that track the delivery of strategic outcomes?

Instead of only operational indicators, shouldn’t the multi-sector coalition focus on assessing strategic outcomes, whose delivery by certain deadlines had been committed?

Finally, with performance scorecards and their use by an objective multi-sector coalition in assessing the delivery of strategic outcomes, shouldn’t our recognition and rewards system—including performance bonuses—be clearly tied up with real progress on the strategy road towards substantive, real transformation as set forth by the organization’s vision?

All these—transformation programs, multi-sector coalitions, scorecards on strategic outcomes, performance bonuses—are already in the air. One hears about them. One reads about them. We have yet to put them all together in actual fact: in every corporation in business; in every NGA, LGU, GOCC/GFI in government; in every unit within civil society. The faster we succeed in doing so, the faster we bring about the transformative change we want for the Philippine economy, polity and society, and the sooner we can secure our top ranking in the world by 2050 or even much before then.

The playing field for transformative change for the Philippines is all clear. We now need many units in business, in government, and in civil society to actually play in it, and to score many winning runs. Those runs—with transformative outcomes behind them—can catapult us to among the top 20 economies of the world, sooner rather than later (or worse, never).

(This was lifted from the author’s opening keynote speech at the 10th MAP International CEO Conference. The author is “MAP Management of the Year 2009” awardee and chairman of the Institute of Corporate Directors and the Institute for Solidarity in Asia. Feedback at [email protected]. For previous articles, visit map.org.ph.)