Without operational excellence, capital is squandered

The grand-daddy of our culture-as-root-cause thesis, the late great Teddy Benigno, in his classic 2002 Star article Why investors avoid us: The trust factor highlighted what, at the time, was a very conservative forecast regarding China’s fortunes made in a Nomura Research Institute (NRI) study that foresaw a China that could “burgeon into the world’s economic superpower this century.” Today, it seems that this forecast would become a reality this decade. But the real insight of note lay in an assessment that was included in the NRI study of the renowned Filipino Condition that has for so long thwarted our efforts at becoming a similar magnet for “foreign investment” .

Benigno laid out the key points from that study in his article:

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(1) “Filipinos in conflict tend to cluster based on their place of origin.”

This is detrimental to nation-oriented economic progress. Look at the Chinese, the Japanese, the Jews. They bond and function as one. Bickering and feuding like fishwives in a public market (look at our Senate) are alien to their culture.

(2) “Language barrier which has hindered the smooth transfer of technology.”

English is the language of technology. And technology they have to absorb fast. With increasing productivity, national progress eventually rides a roller coaster. And if we surrender our once commanding lead in English to others, we will be a dead duck very soon in Asia.

(3) “Workers intolerance to criticism.”

Once business establishments here pay higher wages and have to deal with recalcitrant, fire-breathing unions and workers, we lose to China, South Korea, Taiwan, Singapore, Malaysia which pay lower wages and salaries. Foreign investors find it easier to deal with them. As a result, their workplaces and factories hum with a productivity that beggars that of the Philippines.

(4) “Workers’ apparent lack of initiative, as dictated by the attitude to do ‘no more than what they are told to do.”

It cuts deep to what is wrong with Filipino culture, the absence of a work ethic. And this absence will eventually sever our jugular. Because it means there is no sense of nationhood driving and motivating our economy, our leadership. Many Asian nations are driven today to excel. And to excel, their peoples do not mind sacrifice, hard relentless work (at times 16 hours a day) if that will rescue the nation from poverty.

(5) “An attitude of “family first before country or company.”

If the Filipino can trust only his family, or close extensions of his family, then he collapses on the hard, arduous road of economic progress. To effectively compete, he must learn to trust his neighbors, his community. Social trust is the indispensable cultural factor for progress. If the Filipino can only trust ten percent of Filipinos, and mistrust 90 percent, then he is not going anywhere.

(6) “Workers’ tendency to give up easily.”

We Filipinos relish pleasure, abhor pain. We prefer lawyering or showbiz to other careers, for a diploma in law or a top movie or media billing are the best catapult to politics. In politics, power, instant riches, instant gratification are there for the taking. We Filipinos are not creators or builders. We are not even successful entrepreneurs for that will take time, planning, structuring and hard endeavor.

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These key cultural aspects of ours point to a vast barren wasteland of mere first impressions where seeds of capital investment may germinate halfway before shriveling up in the hot equatorial sun once monsoon wetness gives way to the pounding dryness of our cultural bankruptcy. This is punctuated by the last line I highlight in bold above which I re-iterate below:

“Filipinos are not creators or builders. We are not even successful entrepreneurs.”

Capital infusion is only one half of the equation. The other half is operational excellence. Without the latter, the earlier simply gets squandered and its originators put off for good in many cases. The above six items spell out a simple singular reality about our capability to step up if (a big if, that one is) the money comes pouring in:

Filipinos suck at operations.

We suck at it because we are culturally-predisposed failures at operating efficiently at large scales, and we fail to operate efficiently at large scales because we lack an ability to come together at large scales in a structured manner. Sure we go out by the millions to oust presidents, venerate the Black Nazarene, hang out at Hong Kong parks, and open Facebook accounts. But those are movements in quantity that consistently lack quality.

Where are the big achievements that proportionately reflect our vast numbers?

Excellent operations are necessarily efficient. Yet the national language, Tagalog, lacks a single word for efficiency. Go figure. Investments go where there is opportunity to havest more bang for every buck. A society with a clear indicator that it is one that lacks a fundamental meme — a word — for the key driver of operational excellence (and therefore a lack of an internalised appreciation for it) has a long way to go before it can expect much sustainable results from the money it presumes to expect to attract into its shores.