Where’s the leadership?

A Bangko Sentral official said something last Friday that summarizes our problem as a nation. In a crisis, Deputy BSP Governor Diwa Guinigundo said, the country’s best option rests not in exports or consumption activities but in good governance.

Over dinner I had last Wednesday with a group of economists, they expressed their concern that our worsening fiscal situation could have an adverse impact on our country’s credit rating just as the world is recovering from the economic slump. That could shut us off from the benefits of an economic recovery… investors may bypass us yet again. If Ate Glue is not careful, they agreed, she is about to lose the only good thing we give her credit for.

Indeed, Friday morning delivered the headline about Moody’s Investor Service, the ratings agency, warning it may remove the positive outlook on the Philippines sovereign rating because of a worse-than-expected drop in GDP growth and tax revenue. Moody’s also pointed out that the government’s dependence on foreign borrowing made it vulnerable to a weakening in the peso.

Moody’s Senior vice-president Thomas Byrne told a briefing the country may not be able to maintain its fiscal discipline amid a sharp drop in government revenue. That was exactly what the economists I had dinner with were worried about.

So why should anyone believe the blue skies optimism of Ralph Recto, the politician on top of the country’s economic planning agency, in the face of the contrary opinion of trained economists, local and international? I would love to believe Ralph’s view if only because I am as anxious as any Filipino to see our country’s economy not just stabilize but take off.

This brings me to Tuesday last week, a day I spent listening to John Maxwell, an evangelical preacher turned management guru talk about leadership in crisis. Mr. Maxwell didn’t say anything really new to me but he certainly reinforced many concepts I believe in on the subject of crisis leadership.

I didn’t take notes but his concepts are so basic anyone who considers himself a leader should know them by heart. One has to do with leadership by example. Mr. Maxwell made the point that leaders attract the same kind of people around him. I guess if you are a crook, you can only attract crooks to work with you. A crook cannot attract people of good moral character.

Then there is this thing about dreaming. Leaders should have the capacity to dream… imagination is essential or where will he lead his people to? This is also called vision. And it must be communicated well so people can share it and work with the leader to attain it. Ate Glue has been our leader for almost 10 years now and I have no idea what she has in mind for this country. Honestly.

Even if we give her the benefit of the doubt, that maybe she has a vision to leave Malacañang with the country better off than when she took over, that has simply not happened. Poverty is the same or worse. Infrastructure? NAIA 3 is still not functioning as an international air terminal. In the countryside, infrastructure is still lacking. Corruption seems to have become worse.

It all figures. An article at the Asian Wall Street Journal last Friday observed that because of the president’s efforts to cling to power, “in the meantime, policy efforts to address the country’s myriad problems are at a standstill.”

That’s also what former President Ramos said last week. The President herself should not become so inutile as a controversial and unfocused leader, FVR said, to the extent of being seen as the core of our problems… “But if not much change is happening now – because President Arroyo has failed to harness the opportunities afforded to her in the past eight years of her presidency – then, our people must persist in their pursuit of a better future…”

There is this thing about getting a grip on reality. Mr. Maxwell said that is very important because a leader needs to know where he is now and from there, determine where he wants to be. Yet, Ate Glue and her economic managers are prone to long periods of being in denial of reality. In the face of evidence to the contrary, they have been insisting our economy is doing better than it really is.

I am hoping that in spite of all that public posturing, Ate Glue knows the real score and is doing something about it. Why deny to your people the real state of the economy? Telling them the problems we face should make them realize that we are all in this pickle together and we all ought to work together or suffer together.

BSP’s Gunigundo is right about the importance of good governance. By good governance he meant such basic things as the quick processing of investment permits, for instance, so that investors, whether domestic or foreign, could go into business as quickly as possible with the least possible delays. “So the challenge is really to improve our competitiveness. In other words, good governance,” Guinigundo said.

Because Mr. Maxwell will not have the chance to have a long talk with Ate Glue on what it takes to be a good leader, I checked out his website and picked up some of the principles he took up in his Leadership Summit last week, just in case Ate Glue still reads me. Here is how Mr. Maxwell thinks a leader should lead in a crisis:

First, acknowledge the challenge. The situation is awkward. You know it; everyone knows it. Don’t be afraid to state the obvious. (In our case, if we are in a recession or about to be, say so. Why quibble that we are still less than a percentage point away from it? By acknowledging the challenge, you create common ground.)

Second, develop a clear strategy. A press release is not a strategy. Be clear about the goals. Then strategize on how you will work to achieve the goals. Creating a strategy helps everyone be confident of what they need to prioritize and what they can expect others to deliver.

Third, make courageous decisions. What must be done?

Crises usually require leaders to narrow their focus. That requires courage when others have a lot invested in what will be eliminated. A leader has to be willing to stand up to all competing agendas and do what must be done.

Fourth, prioritize decisions. What must be done first?

The Italian economist Vilfredo Pareto once said, “If you’re Noah, and your ark is about to sink, look for the elephants first, because you can throw over a bunch of cats and dogs and squirrels and everything else that is just a small animal – and your ark will keep sinking. But if you can find one elephant to get overboard, you’re in much better shape.” If you’re a leader, get rid of your elephants… unless you are married to one.

Fifth, change decisions. What must be done differently? Even ideas that would have worked well a month earlier may be useless in an emergency. Leaders know when it’s time to make a change. When the horse is dead, DISMOUNT. Even FVR said it was not too late for Ms. Arroyo to “transform, transcend and transfigure.”

Mr. Maxwell emphasized that “leaders are not MADE in a crisis. Leaders are REVEALED in a crisis. It’s easy to steer a ship in calm waters. Only the turbulence of a storm shows a captain’s true skill.”

Almost 10 years after she assumed national leadership, we have yet to be convinced we actually have one. –Boo Chanco, Philippine Star