Open Space Ventures Advisor and Manila Times Columnist Stephen CuUnjieng speaks at the Management Association of the Philippines International CEO Conference in Taguig City on Tuesday, September 13, 2022. PHOTO BY J. GERARD SEGUIA
THANK YOU to the Management Association of the Philippines (MAP) and conference chair Alma Jimenez for inviting me to speak on September 13th on “Business Strategies: Viewing the Changed Landscape with a New Lens”. I guess it was well received, so I will discuss some of the points I raised here. As economic historian Adam Tooze has pointed out, Covid-19 was the first time since World War II that the economy was not the primary driver of politics. This was the first induced recession since then. It was intentional but not pleasant as public safety was paramount. What lessons have governments and businesses learned from this?
Governments and businesses that thrived and improved their standing and position during the pandemic had strong strategies in place. They adapted, modified or accelerated them during this period and their position and reputation increased. Most governments survived, but some that mismanaged it were defeated or replaced like Trump and Boris Johnson. Firms had less room for error, especially smaller ones, and many failed, even in countries where aid was given. Governments and corporations that lacked a coherent strategy or simply reacted to circumstances clearly fared worse and their populations suffered more. I don’t regret how unprecedented and new it was for all of us. There was a lot of experimentation, missteps, and discoveries needed to find a plan that was workable, and then change or adapt as circumstances and what was possible and available changed and evolved. I understand what they had to deal with at the initial stage.
Strategies in place
What was clear was that the most successful had a strategy, implemented it well, and tweaked and tweaked it as needed. There was a plan and an execution. No agitated frustration or mere reactions. Governments and businesses have failed to strategize amid the pandemic. Those who did best already had a strategy and plan that worked, then adapted and implemented it. They didn’t mention one, or like in a bad drama, a deus ex machina solution appeared and saved the day.
For businesses, my example is Microsoft. It was rolling on Windows and Office during Ballmer’s time as CEO, with the stock trading between $30 and $40 for much of that time, despite having over $300 billion in cash (if memory serves). exact) and no debt. Satya Nadella, who replaced Ballmer, was in charge of cloud computing and budding cloud-related initiatives. Microsoft was getting quite competitive there. It is mainly for this reason that Nadella was appointed President and CEO. As customers migrated to the cloud rather than simply relying on on-premises data storage and management, the cloud services leader was AWS (Amazon Web Services). Nadella enhanced Microsoft’s suite of services and encouraged its more than 40,000 partners to work with them, but most importantly, played on AWS’s vulnerability and Microsoft’s strength: enterprise customers. In addition to ensuring that they have complementary and ancillary products for their cloud computing product, they emphasized to enterprise customers that Microsoft is and always will be just a software company. So if you were Walmart, for example, who would you be most comfortable with managing your data and cloud services? AWS or Microsoft?
Microsoft was better with enterprises, AWS with small businesses and individuals, and both handle government entities well. With Covid, as Nadella said in 2020 – “The Covid-19 pandemic accelerated the digitization process by at least a decade, and it has now become an essential part of how we function.”
What I mean is that Microsoft already had the right cloud strategy and was executing it when the pandemic hit. He then expertly calibrated its modification and execution to thrive. Just like AWS. Microsoft’s stock price fell from around $100 in 2018 to $349 earlier this year. Even with the major pullback in stock prices, especially for tech, it’s trading around $250 per share. This happened because they had a solid strategy, planned and executed it well, and adapted and modified it as circumstances dictated. They did not react to the success or formulate a plan on the sly.
Governments and Covid
What about governments and Covid? Similar results. Let’s look at what the Trump administration wasted, what likely cost Trump the presidency (a fortunately positive outcome, hopefully not reversed in 2024), and contrast with Biden, as well as Singapore and Thailand. It is customary for the staff of US presidents to maintain and update a pandemic response book. The Obama administration’s effective handling of Ebola was added to their update when they passed the answer book to the Trump administration. Given their disdain for anything related to his popular predecessor, Trump officials ignored him. Their unfortunate and chaotic response to the virus (remember the claims that it will be gone by Easter 2020 as well as the ruminations on bleach and other ridiculous talk while politicizing a health issue) was the result of a kakistocracy. When they were fortunately replaced by the Biden administration returning to the book and updating it as best they could, the response improved dramatically. Even vaccines, which Biden graciously credited Trump for continuing and funding with advance orders, were a mess under Trump. When they were introduced in December 2020, the funds and the program to deploy them were lacking. Trump and his ill-fated administration saw it as a vaccination program. The vaccine was there, we did our part, that was their thinking. The Biden administration viewed it as a vaccine program. The goal was to have vaccines and get them to people in droves and quickly. Sports arenas, convention centers, community centers, schools and similar venues have been used as vaccination centers. This was not limited to doctors’ offices, pharmacies, clinics and hospitals. The latter two have been de-emphasized so that vaccination does not interfere with Covid treatment. National and local websites showing where to get vaccinated and appointment times have been put in place. Finally, medical students, nurses, retirees and army medical personnel were also used to deploy mass vaccination. It was considered a logistical triumph and the proof was that no Republicans criticized it as they had nothing to complain about that would remain.
Singapore and Thailand
For all governments, what was phase 1 for Covid? Survival, which meant stopping the spread where possible. I understand and even forgive some of the clumsy and misguided steps taken when we were all reacting to something new and there were many mistakes and reversals for every government. What I understand less is sticking to things that don’t work because it was already there or the authorities got used to it.
The second phase was how to recover and bring the situation to where we have done what works best for our specific needs. This is where, without criticizing what various governments like ours have done, I can best illustrate it by showing how those who did the important things right made decisions and implemented them. First, they analyzed what they wanted to achieve and made plans and developed a strategy to achieve it, then seriously executed it. What they didn’t do was be an imitator by just looking at what others did and just being a follower.
Singapore, a trading city-state, realized that it would be a competitive advantage to get out ahead of the rest and a potential disaster to lag behind. While others haggled over mRNA vaccines, price and timing, they paid the premium to get it as soon as it was available after commitments to the US and EU that have preloaded the program by paying in advance. They understood that whatever the bounty for the vaccines was, it would be more than offset by a faster opening. Then with a sufficient percentage of completely vaccinated, they were the first in Asia to treat it as endemic. They were right and took advantage of it and the contrast with Hong Kong on this is in favor of Singapore.
Thailand understood that it had to be seen as safe and vibrant so as not to lose the tourist trade when it returned. They welcomed more than 40 million tourists in 2019 (compared to 8 million for us). Not all of them will return this year but their target of 11 million for the whole of 2022 was already reached last month. They knew they had to be both safe and friendly, not having the first call to those who want to travel and to others when they decide to. Thailand knew it could not vaccinate all 70 million people as quickly as a state with a small population like Singapore. What did they do in 2021? At first, they vaccinated everyone in Phuket, so they could open up the place for quarantine-free travel ahead of others. It was the “Phuket Sandbox”. The program was a modest success, but that was not the only goal. This was to successfully signal that tourists were welcome, and that it was both safe and easy to return to Thailand. I have been there twice this year. You would think it was 2019 with the number of people in malls and hotels and the variety of tourists – Asians, Americans and Europeans.
The contrast is sharp. These changes do not happen by accident or luck. As Louis Pasteur said, “Chance favors the prepared man”.