The end of May has always meant the end of summer to me. It is the month when gentle April showers give way to occasional torrential rains. It is the month when the searing heat of the sun is gentled by afternoon rainstorms. For a long time, May was also the month before classes started. For me, the end of May always marked that time between the ease of summer and the work of the school year.
All that is changing now, of course. The school year in the Philippines is changing and so are weather patterns.
In international news in the last two weeks, flooding in Texas and a heat wave in India compete with news about the continuing aftershocks in Nepal. Mathematicians mourn the death of John Nash and Cher is unveiled as the new face of Marc Jacobs. Apple displaced Google as the number one brand in the world in the 2015 Brand Z rankings of WPP and Millward Brown. Apple, of course, was already number one in Interbrand’s most recent (2014) rankings and in the earlier released 2015 rankings of Brand Finance.
In local news, the Philippine Statistics Authority revised its 2014 Q4 growth downward from 6.9 percent to 6.6 percent, Economic Planning Secretary Balisacan announced that the economy grew 5.2 percent in the first quarter of 2015, lower than the 5.6 percent growth from last year and the lowest growth since the 3.8 percent reported in 2011. Meanwhile, Bill Luz, co-chair of the National Competitiveness Council has been reported as predicting a 30-place (65 from 95) jump in the rankings of the Philippines in the 2016 World Banks Ease of Doing Business index. In the Apec meeting in Boracay, the Philippines affirmed the importance of involvement in global value chains as a means for developing small and medium scale enterprises.
In even more local news, my news feed this week included posts on tempests and purpose.
Purpose is not a difficult word. At its simplest, purpose is simply goal or objective. Google defines purpose as: the reason for which something is created. Google offers many synonyms including: motive, cause, reason, intention, aim, benefit. For those who believe in a divine creator, purpose is God’s will, that for which the individual has been created. This is not to say that purpose is a function of religion. In truth, those who do not believe in a hereafter or divine guidance probably have a stronger reason to seek purpose in this life.
In some ways, purpose is not too different from mission. In business, when “Vision Mission Values” statements are developed, mission is often described as means and vision is described as goals. I always say that that is not necessarily a mistaken definition and certainly provides a handy means of crafting statements. However, I have always preferred the deeper meaning of mission, the French raison d’etre or reason for being.
Even using its simplest meaning, purpose is important. A clear understanding of the reason for doing something keeps implementation on track.
Take, for example, the question of the Ease of Doing Business index. Certainly, it is useful to track our rankings in the index as they point to metrics that are both relevant to businesses as well as comparable with other economies. For example, the Philippines ranks 95 of 189 economies rated in the 2015 DB index. By contrast, Malaysia ranks 18, Thailand ranks 26, Vietnam ranks 78 and the Regional average for East Asia and the Pacific is 92. The country’s highest rankings are in ‘getting electricity’ (16) and resolving insolvency (50). Our worst ratings are in starting a business (161), protecting minority investors (154), and paying taxes (127). Close fourth and fifth are enforcing contracts and dealing with construction permits, for both of which the country ranks 124th.
However, as the report rightly points out, there are many other factors that affect how easy it is to start and run a business in a country. A clear example? Infrastructure is a critical component for businesses and the Doing Business index only covers access to electricity, a factor in which the Philippines actually rates pretty highly. Sadly, one of the reasons the growth in Q1 2015 was so low was the slow rate of public infrastructure spending.
Even more importantly, those who are in charge of Philippine competitiveness need to remember that while the factors in the index provide guideposts, the real goal is to make starting and running a business easier. Another goal, obviously, is not merely to improve our rankings but to actually improve our ratings. The index shows comparative ratings in Philippine scores from 2010 to 2014. Except for dealing with construction permits, there have been only minimal improvements in Philippine factors.
In fact, one of the open secrets about the Philippine economy is that one of the things that keeps it afloat is the grey economy and that the grey economy exists because of the regulatory burden borne by Philippine businesses. That is something well worth thinking about.
In the area of determining brand value, there are three rankings often referred to and the one most referred to is the organization that instituted the first of the global rankings, Interbrand. The three top ranking organizations use different methodologies. Interbrand uses three components: the financial performance of the brand using economic profit (after-tax operating profit minus a charge for capital used), the role of the brand in driving choice, and the brand’s competitive strength. Brand Finance, which turns up the next highest results in google search according to The Economist, defines brand value by multiplying three factors: brand strength index (brand investment, brand equity and brand performance); brand royalty rate, and brand revenues. The Brand Z rankings calculate the value of the corporation that owns the brand and estimates the proportion of that value that can be attributed to the brand.
While it is interesting to peruse these methodologies in order to figure out how to top the rankings, I suspect that no one in Google or Apple stays up late trying to figure out how to top these rankings. Instead, they are busy trying to figure out how to engage the customer, how to develop the next new product or service that people will value enough to pay good money for. Because, that, after all, is the point of enterprise.
For the manager, whether in government or business, the rankings and ratings are useful guides. However, attention needs to be devoted to the real purpose of their organizations.
For individuals, the question of purpose can be trickier. But that is something for another week.
Readers can email Maya at email@example.com. Or visit her site at http://integrations.tumblr.com.