The
Situation Facing the Leaders of Today and Tomorrow
By Jun Salipsip
The then candidate and now Philippine President Rodrigo Roa Duterte
said, “Change is coming.” What he did
not say is that there is more to come and the rate it will come will be faster. I think that in his first six months in
office he had already introduced many changes compared to past administrations and
at the rate he is going we can expect more changes to come more rapidly than
before. The man is in a hurry because he
only has six years to make the changes that he promised. And as expected, the
changes he has been introducing, including his personal style, had some leaders
groping for ways to cope with them.
Based on the reaction of some business leaders, you could guess that
they are baffled, perplexed, and/or angry.
They probably have not yet figured out the train of events that will
follow after the reintroduction of death penalty, the change in the
presidential form of government to federalism, the ending of insurgency
especially from the Muslim rebels, the implementation of the family planning
program that had been opposed by the Catholic church, the shift from a
capitalistic to socialistic economic model, the eradication of contractual
work, the revision of the foreign investment law to allow more foreign
investors to come in, the planned eight trillion peso infrastructure
expenditure in the next five years, and the shift away from US relationship to
China and Russia. How will all these planned changes promised by
President Duterte affect the existing social, political and economic order and
how should leaders be preparing for it?
President Duterte also creates more confusion whenever he changes his
mind. First, he did not want to run for
president, and then at the last minute he decided to run and won the election. Second, he wanted to cut ties with the US but
after the election of a new US president he is reconsidering his decision. Third, he invited an opposition leader to
join his cabinet but later asked her not to attend cabinet meetings resulting
into the resignation of that person. Fourth, he promised to be more circumspect
with his language, and then he reverted back to his old ways to express what he
truly feels. These changes created uproar
from the media and were criticized by people who may have not yet accepted the
volatile, uncertain, complex, and ambiguous (VUCA) environment of today. I think there will be more changes in the
president’s plans and previous decisions depending on the prevailing economic,
social, political, and environmental situation.
And, who knows, maybe that is what we need to survive today’s VUCA
environment
Recently, there were some unexpected changes that happened with the
election of a new US president because of his pronouncements and
decisions. The new US president
protectionist and anti-sourcing stance had put expansion plans of the rapidly
growing Business Process Outsourcing (BPOs) in the Philippines on hold. What are its impact on the country’s
employment opportunities and its effect on the building industry that had been
rapidly building to accommodate the requirements of the BPO’s previous planned
expansion? What should be the response
of our national leaders in case the US companies pull out their BOP operations
in the Philippines?
The recent withdrawal of the US from the Trans-Pacific Partnership
(TPP) trade pact that had been vigorously pushed by the previous US
administration could have a “sledgehammer”1 impact in Asia,
including Japan, Australia and Singapore which are all signatories to the TPP. What are its impact on international trade
and who will benefit from it? The
potential responses of other countries, including ours, could have a domino
effect whose results are difficult to predict.
Way back in 1970, Alvin Toffler already noted in his book “Future
Shock” that change is accelerating. The
author said that rapid change creates disorientation and progressive
incompetence in dealing with the new environment. Those who were unable to adapt must have
closed down or had been bought by those who were agile enough to change with
the times. I think that if we check the
top Fortune 500 in 1970 many of them would no longer be in the 2017 list.
To understand better the acceleration of change, let us have a macro
view of the development or evolution of mankind from the beginning of
civilization. Did the succeeding periods
become shorter than the previous ones?
- · The Hunter-Gatherer Age lasted thousands of years2; the Agricultural Age lasted only a few hundred years3; the Age of Discovery (colonization) and the Galleon Trade lasted only a hundred years4; the First Industrial Revolution lasted less than a hundred years5; the Second Industrial/Technological Revolution lasted less than 50 years6 and is now overtaken by the Digital Age which may soon be replaced by the next “who knows what” wave of development.
- · Fast, unpredictable changes without clear patterns or trends are difficult to deal with. It has a way of disrupting the way people live and work. Being creatures of habits people tend to resist change but they are forced to change and adapt to new living conditions or perish.
Each change also brings with it more complexity because of the
introduction of better tools replacing old ones, development of extensive new knowledge
uprooting old mindsets on many areas, and the application of intricate
processes that are more efficient and effective. Each period brings with it new challenges
that must be learned within a shorter period of time.
- · When the ice age ended it brought forth a temperate climate to some regions that favored the growth of edible plants. It is not hard to imagine that the hunter-gatherers had to begin figuring out whether it was more convenient to do a search over a wide area to obtain food and chase wild animals for food or tend to the plants in one area and domesticate some animals for their sustenance. Some of the hunters and gatherers opted to settle down thus giving birth to the Agricultural Age. With improved agricultural harvest, the economy grew and encouraged trade and commerce. The growth of commerce gave impetus to voyages of trade and discovery thus ushering the Age of Discovery and Colonization. With dominance in world trade and with Western Europe’s tremendous population growth, increased demand led to increased production of goods leading outright into the Industrial Revolution.
- · In the hunter-gatherer age, they foraged and hunted for food and carried them home to share with the others. They facilitated and coordinated their activities through language and probably only had stone tools to defend themselves or help them in their work and day to day activities. They were nomadic and had to travel light to follow the sources of food. The work was probably limited to a few hours every day and work may have simply been divided between those who forage and those who hunt. Life was probably more leisurely because nothing much was changing.
- · But as they began to farm, the hunter-gatherer had to learn to weed or water the plants and gather seeds for replanting. They have to learn how to herd or domesticate animals, feed them and harness them for work. They have to invent private property and ownership to encourage land development. They needed to invent new tools for tilling the land, wheels to transport their harvest, and storage facilities that is protected from marauders. They have to create laws to regulate relationships and transactions. And to implement the laws they have to establish a group that can enforce them. They have to invent writing to codify their rules and regulations. Together with writing they have to invent numbers to count their harvest and inventory of goods. Their activities were also probably driven by the seasons thereby introducing a certain kind of cadence to their lives. The level of complexity had gone up a notch higher and work must be done within certain periods or else they will miss certain windows of opportunities. And because of the growing complexity work must have been divided among many specialists.
- · With the invention of the sailing ships and the compass and sextant, the Age of Discovery/Colonization and Trading began in earnest. This age opened up the world to new ideas. They also learned how to use the gun powder and fitted their ships with canons to subdue and colonize other countries and force some people into slavery. With increasing trade, they handled the new complexity by chartering corporations, inventing the double entry accounting to record transactions, and introduced foreign exchange and banking to facilitate foreign trade.
- · Then, the three stages of industrial revolution created more knowledge through science and introduced more complexity because of new inventions and technology that allowed more technology to be produced. It was during the first industrial revolution that professional management was introduced as a function separate from the other functions of business. New approaches to management that is still in use today were also introduced. There was a shift to “a system of factory-based manufacturing that included complex machinery, continual technological growth, new energy sources, and developments in transportation”7.
- · Later, in the second industrial revolution, the internal combustion engine was developed that led to the development of automobile and the airplane. The development of electricity8 improved industrial processes and the invention of the telephone improved communication tremendously. With the airplane, travel to faraway place became faster bringing people together more easily but increasing the clash between cultures more readily.
- · Today, with the Internet, we generate and share information digitally across the globe. New e-businesses are cropping up all over the world and many businesses are able to locate anywhere in the world that can offer the most advantageous location and conditions. Renewable energy is being developed to replace fossil fuel and new electric cars are being invented that may soon replace the internal combustion engine. Artificial intelligence may also replace the traditional work we know of today forcing us to learn quickly new skills for new jobs that may soon be replaced by future jobs within a shorter period of time.
- · Multiple and intertwined technological, social, political, and environmental factors create a lot of complexity that is difficult to immediately comprehend
Today, the impact of the digital age is represented by the “white water
metaphor”9. It is seen as
symbolic of today’s digital environment that describes a situation where an
organization is seen as shooting the rapids in a smaller boat manned only by
crews working together to successfully steer the boat without waiting to be
told to do so. The organization is seen
as navigating through the many dangerous and unpredictable twists and turns of
the channel in raging current and foaming water with the crew trying hard to
avoid sharp boulders littering their path.
The twists and turns represent the frequent disruptive changes where
the last twist and turn is not a very good predictor of the next one. The crew
working together represents the required multiple and combined knowledge needed
to address complex situations. It also
represent the exercise of multiple leadership, making multiple decisions as
against a single all-knowing leader, making a single decision. Anything
that does not contribute to the success of the navigation is considered
unnecessary baggage that is thrown overboard.
This metaphor represents how organizations have flattened out and
outsourced anything that is not related to their core business.
I think the biggest contributor to the complexity in today’s world is
the increasing availability of information to anyone who needs it, the speed
with which information is made available and the expansion of networks around
the world. The activities and
interactions of different individuals, groups, businesses, countries and races together
with their mutual relations or the dependence of each of these elements with
one another create a more complex system that is difficult to comprehend in its
totality10. The world is now interconnected with many interacting
elements creating a complex system highly sensitive to even a slight change in
another part of the world resulting into what is called the “butterfly effect.”
The butterfly effect is the concept that small causes can have large or
unpredictable effects in a complex system.
The phrase “Does the flap of a butterfly’s wings in Brazil set off a
tornado in Texas?” is
attributed to Philip Merilees when he concocted a title to the presentation of Edward
Lorenz11 who failed to provide a title to his talk that was to be
presented at the 139th meeting of the American Association for the Advancement
of Science in 1972.
The poetic “butterfly effect” does not really mean that the fluttering
wings of a butterfly in Brazil will really set off a tornado in Texas but it
represents the idea that there are many unknown factors or conditions
interacting with each other that can influence the future results of an
activity. It represents the idea of
uncertainty in today’s environment
And since today’s situation is in a continuous flux, the information we
have may be vague, obscure or could be interpreted in many ways. Identifying problems is difficult because
they could have many causes and may need multi-solution that we have not
thought of because of the inconclusive information that we possess.
Under the above situations, plans would not be precise and the
company’s objectives must be adjusted continually. Leaders must develop a sense of the reality
of evolving situation and learn to adapt rapidly. Decisions would be based on the responses of
others or on the anticipation of what those responses will be.12
The world has become more complex and will become more complex in the
future making our knowledge of it more imperfect. Our ability to process the growing number of
information is limited and most information that we possess is incomplete. Because leaders could not possible analyze
all information on all alternatives, they should have the ability to formulate
a hypothesis and the courage to continue experimenting until they achieve the
results they are looking for and learn to “accept solutions that are good
enough”13
The leaders of tomorrow would need to gather as much information as he
could get and reconcile competing views of different people with different
perspective. It is difficult today to
foresee what the future holds but a leader must be ready to keep matching the
abilities of his organization to the changing business conditions.
Are our leaders of today up to the challenge of a VUCA world? We sincerely hope so but it remains to be
seen.
###
References:
1. Babe G. Romualdez, Spy
Bits,”So Far So Good for Duterte”, Thursday, January 26, 2017
6. https://en.wikipedia.org/wiki/Second_Industrial_Revolution
8.
https://en.wikipedia.org/wiki/Electrification
9. https://www.google.com.ph/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=the%20white-water%20rapids%20metaphor%20sees%20change%20as
11. Edward Norton Lorenz was an American
mathematician, meteorologist, and a pioneer of chaos theory, along with Mary
Cartwright. He introduced the strange attractor notion and coined the term
butterfly effect.
12.
John Kay, Obliquity, page 172
13.
Robins and Coulter, Management, page 78
No comments:
Post a Comment