Management

Social Distance

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I would be the first one to say that it is difficult to manage a team, especially a large one. In any group, there would always be some tension, confusion and argument since no organization is perfect.

One factor that contributes to conflicts within a group is the diversity of the people in the organization.  There are various differences among team members: background, nationality, and professional work experience, to name a few.  But all these differences must be managed for a group to work well as a team and achieve its goals.

There is one aspect of leadership that I find very important in keeping an exemplary team together—managing the social distance.

What is social distance? In general, it is the difference between our people’s backgrounds and skills set.

To illustrate properly what social distance is, let’s take a look at some examples.

In our Subic solar project, our solar engineering consultant is in India while our CSR person is in Subic. The social distance between these two is indeed a wide one.  One is an engineer and the other a social or political scientist. The Indian engineer looks at numbers from the designs while our CSR person has to empathize with people in the villages. Two totally different perspectives but with one objective and within one team.  Managing the social distance between people with different functions, background and personality is indeed a great task!

Social distance should be the first focus of any manager. It is essential to narrow the possible gap between people in the team due to diversity. Social distance can be narrowed if the organization members are conscious of the group’s structure, the processes, the language each member uses, the identity of the members and the technology being utilized.

The team leader must first recognize that there is a social distance between team members especially if members are of different nationalities or cultural backgrounds.

One must learn the culture of the nationalities with the people he or she will be working with. I usually study a bit of the history, a bit of the music and a lot on the sense of humor of these nationalities. Social gatherings always provide a good platform to socially integrate and celebrate diversity, which, hopefully, will spill over into the workplace.

One must find that equilibrium within the organization where individuals will be comfortable working together. How do we find this equilibrium? First, we must be clear about the organizational structure, as well as the roles of each team member.

For example, the team leader is what he or she is: the leader.  As a leader, the person must coach, cajole, inspire, direct and lead the team to achieve its objective. I often use the term “servant leadership” to denote the need for leaders to be useful to the team. Managers are coaches and as coaches, it is imperative to adopt an open-door policy. This kind of policy removes barriers and minimize cliques or power turfs.

Once the structure is clear to the team, then the team has to agree on the processes or work flow. The team must ask these questions: How do we go about executing our scope of work? How do we monitor and control? How do we procure the things we need?  When and how often do we meet?

Finding the equilibrium also means defining the organization’s outputs or milestones that count and are worthy of recognition and compensation.  The manner by which these milestones are achieved is less important, and, therefore makes the difference in cultures less important, as well.

Communication is key to managing the social distance, too.  Given the technology these days, a group must agree on the technological tools to use to communicate and each team member must have adequate knowledge of these tools.

For an organization with team members from different countries, it is useful to use English as the primary language. Although I would agree that the primary language is only a secondary consideration, as what is more essential is the ability of people to tell a story. In the past, I trained people to use the telephone.  These days, I am thinking of introducing drama classes for better story-telling.

Growing Old When I was Young: Experience in Project Management

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There were several big-ticket power projects that I managed when I was the CEO of National Power Corporation (NAPOCOR). Some of the notable ones are the Leyte-Cebu and Leyte-Luzon Submarine cable projects, San Roque Hydro plant, Masinloc Coal-Fired power plant, Pagbilao, Ilijan and Sual plants and Leyte Geothermal power plant. All these projects were developed and executed simultaneously, generating close to 4,600 megawatts. It’s also worthy to emphasize that these projects were completed at a time when NAPOCOR was already drained of its financial resources.  After all, the projects involved a lot of civil, electrical, and mechanical engineering; we had to do a lot of financial engineering.

Given the magnitude of these projects, I have always admitted that I grew old when I was young. However, with that “ageing” process I also gained wisdom on how to handle these complex projects and motivate project teams to work well together.  I had the luxury of having over 10,000 people working on all these projects plus the day-to-day management of running the power plants.  Plus, I had the good fortune of having a DOE Secretary, Sonny Viray, who provided not only policy directions, but sometimes direct technical advice to our project teams. Finally, I had a direct line to President Fidel Ramos who gave NAPOCOR all the support he could muster to make project execution smoother.

Of course, I am applying whatever lessons I gained from years of heading a government institution now that I am in the private sector.  While there are similarities, there are also wide differences.  For one, in NAPOCOR we were bound by very strict bidding rules. This discouraged creativity. As a result, we were faced with congressional censure in government, again dampening enthusiasm to be more effective.  The most important difference is that if we lose in a project, we lose our jobs – there was no Civil Service Commission to protect my job.

I have been asked quite a number of times how I manage to lead or oversee simultaneous power projects in the private sector. My answer is simple: use the proper tools for proper project management. There is no guarantee that the project will not fail, but we work to make that probability low.

But just what does proper project management entail?  Let us look at a typical development of a geothermal power plant project to demonstrate how the proper application of project management tools is crucial to the success of any project, energy-related or otherwise.

Geothermal Power Development Risks

Project development is all about developing a project by taking away risks, often called “de-risking” the project. A project has, as expected, many risks. One has to be astute in identifying these risks and finding creative and economically efficient ways to mitigate these risks.

For a geothermal project, we can categorize the risks involved into four:

  1. Social acceptance,
  2. Market risks
  3. Resource
  4. Operations

The lack of social acceptance of the community of a project is always a factor to consider when developing any power plant project. The local community, of course, often fears displacement when renewable energy developers come into their area. In my experience, one can overcome this risk by starting early and establishing ties and relationships to the community at least two years before starting with the project execution.  Project developers should make their presence felt in the area by living in the community, hiring local personnel, breaking bread with the leaders and the community, and conducting information and educational campaigns down to the purok level.

How does one measure acceptance by the community?  The Environmental Clearance Certificate (ECC) issued by the DENR is an objective way of saying that the community has accepted our project. Aside from the issuance of the ECC, we can also measure social acceptance by looking at the degree of receptivity of local officials to our ideas.

Addressing market risk in the Philippine power sector means either taking a WESM risk or a long-term bilateral power sales agreement (PSA). No one takes a WESM price risk, so generally, a long-term PSA is the route. The challenge for a geothermal project, however, is when one considers exploration or resource risks, the upfront cash is so high. And unless there is a mechanism to mitigate this risk, it will be almost impossible to finance even with private equity.

It is essential that a geothermal development company enters into a power supply agreement (PSA) before starting with the drilling. Otherwise, developers will risk spending tens of millions of dollars without an assurance that we have a market to sell the geothermal power to after finding the resource. Unlike commodities like oil and minerals, geothermal energy is a location-specific resource.

Mitigating Resource and Operations Risks

As soon as a PSA is obtained and approved by the appropriate government authorities like the Energy Regulatory Commission, the project can now proceed with addressing two risks: resource and operational risks.

Resource risk is the single biggest risk in project development. Resource risk, in this case, is the risk that the resource for power generation that the table or surface studies showed as either present or absent or is at a level insufficient for economic operation.  The problem with this risk is that there is no other way to mitigate it except to actually drill.  The cost of drilling is what sets geothermal resource risk apart from all other forms of renewable energy. Keep in mind that exploration can cost 40 to 60 percent of the total project cost.  So, we need to drill first before we can say the resource risk has been managed.

Operations risk for the geothermal project is simply the ability of the company to manage the steam field resource in a sustainable manner.  We need to ensure that the steam field can provide the power we need for the next 25 years.

So, how do we go about in mitigating these two risks?

First, in my experience, I define the guiding principles to follow within the organization in going about our tasks. These principles are:

  1. Well Targeting has to be a real science; we do not continue our drilling based on gut feel
  2. Defined organizational tasks
  3. Hands-on approach by all stakeholders

Ensuring that our well targeting activities are based on science encompasses many things. This means hiring the right people for the job and matching each function according to a person’s skill. Matching function with capabilities in project management is extremely crucial. After all, project management is all about ability to lead, to coach, and to anticipate and manage risks. Thus, the selection of the right people for the job is very important. Personally, I choose consultants who are smart and are able to display their knowledge and skills through a simple explanation of his or scope of work and expertise. Of course, I like being surrounded by people who are fun to work with.

The geothermal project has to have the scientists to plan our resource, a technician to oversee the drilling plan, a manager to oversee the finances and administration of contracts, and a social scientist to handle environmental clearances and the most important person: the community relations person who will handle the Corporate Social Responsibility (CSR) function. In my project structure, I can delegate most functions, but the CSR function is one that is close to my heart. In fact any power project should be a social project first. This sets the priorities straight.

With such complex relationships between functions and team members, teamwork will be hard to achieve. And here lies the importance of proper collaboration including open and constant communication within the organization.

Just how crucial is proper organization in mitigating resource and operation risk?

In drilling a well, we need to ensure the perfect execution: we need to find the perfect spot and drill at the perfect speed. Perfect execution is critical since a less perfect one will cost us tons of money. This is the reason why we need to have open and timely communication. Decisions are made every single day like whether to continue drilling at the spot or not.

This is why we have meetings and arm ourselves with communication tools.

At the beginning of the project,  we hold a major meeting, a kick-off meeting that will include all parties– internal and external–to simulate the execution of the project.

I require that we have our face-to-face meetings weekly and monthly. This is our “townhall meeting” to introduce new staff or just to socialize and discuss project concerns.

Technology plays a big role in any organization. I prefer that our group make use of technology-based in our communication and collaboration.  My team and I  use collaborative apps like Podio, GroupMe and online conference tools like GotoMeeting and Skype.  All managers have internet access on their smartphones.

Our organization relies heavily on Apple Ecosystem. Photo c/o http://livingenterprise.net/

Our organization relies heavily on Apple Ecosystem.
Photo c/o http://livingenterprise.net/

Personally, I try to use tools that are intuitive and almost idiot-proof.  That is why our companies are Mac-centric.  In other words, we have an Apple ecosystem.  Apps in the Mac OS tend to be intuitive and integrative.  Our people no longer have to be tethered to an LCD projector system, for example, as we use “AirPlay”. We also leverage on the Merlin Project Management Software- the equivalent of Microsoft Project in the Mac OS system, “Moneyworks” for financial management and Daylite 5.0 to ensure collaboration is further strengthened.

I welcome disagreements in the organization.  In fact, the danger of having teams that are not properly managed is “group thinking.”  This happens when true dissenters do not speak up just so “harmony” within the group can be achieved.  This is bad. We should always encourage disagreements without being disagreeable. Obviously, I give a lot of weight to experts’ opinions, but at the same time encourage consensus building among the experts.  Once a consensus is reached, then that’s the decision.  Otherwise, I toss coins.

The Politics of Having a Professional Career

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When we start in our professional careers, we begin by focusing on being “professional” more than having a “career.”  This means doing our best in carrying out the tasks given to us without regard to our personal preferences or views. After all, that is what being “professional” is about. Yet, as one gets older, many of us realize that the concept of being “professional” becomes blurred and hazy in order to move up the corporate ladder of our chosen career. Terms like being a “badass,” or having to “kiss ass” pop-up like a jack-in-the-box in our careers, forcing many of us to sacrifice the “professional” part, in order to advance the “career” part.

Being a “professional” is indeed how I started out my days as an analyst at the Private Development Corporation of the Philippines (PDCP) up to my days as Managing Director of the Northern Mindanao Development Bank (NMDB). After a while though, one gets to be introduced to the politics of the corporate jungle and the nasty complexities that go with it. I always say I grew old when I was young — I learned the bitter truth that things are not always what they seem to be very early on.  Such a realization can lead to discouragement, of course. For me, however, I took them as lessons upon which, I could build a strategy for my own professional and more importantly, my personal development.

As a PDCP analyst, I would work on the 16-column yellow pads for days and endure sleepless nights just to complete my financial projections on time. This was the time we had to prepare everything on our own, and the most difficult part was doing the financial projections “spreadsheet.”

At that time, a “spreadsheet” meant the 16-inch yellow columnar pad where we used a Mongol pencil to do the multi-year projections. For us, financial analysts, doing the spreadsheet meant doing the calculations manually– using the calculator to calculate the numbers one would place in every cell; adding the column numbers and proceeding to the next column.  And this was just for the profit-and-loss (P&L) projections.  We then had to simultaneously do the cash flow and balance sheet projections. Nothing was more frustrating than finding out at the end of the calculations that the total assets would not square with the total liabilities and equity.

“spreadsheet”. A 16-column yellow pad that kept me awake for most nights back then.
Photo taken from Amazon

That kept me busy most evenings, which almost ruined my social life as I was always up in the evenings working when my contemporaries would be spending their time in folk houses (the trend in Davao City then.) Added to this task, was the travel to Dadiangas (now “Gen. Santos City”), Kidapawan, Mati, and other Mindanao towns and municipalities for project evaluations and mortgage evaluations and registration. These travels were made at the height of the MNLF and NPA activities in Mindanao. Finally, after all, these, we had to write a “Project Evaluation Report” (PER) and present to the “Staff Investment Committee” (SIC) in Manila.

What I have just said cannot be more “professional” in the strictest sense of the word. In spite of the dangers, I went to municipalities to evaluate projects and many times to foreclose on a mortgage in the middle of Sultan Kudarat.  I went through NPA checkpoints, MNLF checkpoints, and other police “cashpoints” so called because they did not accept checks, but only cash. Without any regard for my personal safety, I did my job for the company.  I was, in my opinion, a professional. And I was good in my job — very high collection rates on my loan accounts, successful foreclosures, and expanding the portfolio.

But that early, in retrospect, I was aware that to succeed, I needed to do more than just “a good professional job.” Among the difficult things, I had to do then was to foreclose on mortgages of clients in the rural areas. My heart was always heavy when I had to bring a sheriff to auction off chattel and real assets. This was the livelihood of clients that I was auctioning off, and not just a car or some hardware.

It’s not enough to have the documents in order to do a foreclosure successfully– you also need the sheriff on your side. And to have the sheriff “on your side,” you had to be on his good side, as well.  You had to know his likes and dislikes and you had to essentially “lick his ass.” This part, certainly goes beyond being a “professional” in the books of many people.

And the argument is simple: why do I need to cozy up to the sheriff?  He is a government employee and he is paid to do his job.  As such, he should perform his job as professionally as I do with mine!

If you hold on to this argument, then truly you are a professional in my book. You, of course, will be an ineffective professional, but you will not be alone. Many “professionals” will take this view.

I, of course, am of the opposite view. To be able to do my job professionally well, I needed to have the sheriff on my side. I needed him to walk the extra mile for me, and to be able to do that, I had to call on my ability to have EMPATHY. I put that in capital letters because I realized very early on in life, that many of us do not have this ability.  According to Wikipedia: Empathy is the capacity to understand what another person is experiencing from within the other person’s frame of reference; like the capacity to place oneself in another’s shoes.

Drawing from empathy, I could see why the sheriff will hesitate to walk an extra mile for anyone.  Given his salary, he will have to face angry people who may resort to violence in the process of a foreclosure. The sheriff may have to take a bullet in enforcing a judicial order, as I had personally experienced in more than one occasion.  From this perspective, therefore, it will not be easy for a “professional” banker to impose on the sheriff to do his job.

How then do we manage our professional career in this situation? How do we draw on our sacred moral code and professional ethical standards in this situation? This is an example where one has to look into the politics of having a professional career.

GOSSIP – A GREAT MANAGEMENT TOOL

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We all grew up with it.  Gossip is a favorite Filipino past time.  Of course, we are told by our elders that this is a bad habit, and should be avoided at all cost.  Carried to an extreme, gossiping may lead to calumny (misinterpretation of information that can be harmful to one’s reputation), which is a serious breach in many faiths and religions.

So it is no surprise that in many professional organizations, gossiping is sometimes listed as a serious offense: “unprofessional behavior.”

Companies go to great lengths to look for ways to prevent gossiping such as the promotion of “transparency” and “open door policy”. Other organizations also provide training and educational materials (i.e electronic newsletters) on how to avoid office gossip. And others firms even enforce strict rules about office gossiping in employees’ personal social media accounts and blogs.

No matter how much we try, it seems that gossiping is in the Filipino DNA. It’s like dinuguan and lechon.  Take gossiping away and you will see a brown zombie walking about aimlessly.  While it is generally seen as a scourge, it should be tapped as a management tool. After all, gossip can be positive, too. Plus, I think to go against what is natural to us will be fruitless and very expensive.  Besides as Pope Francis said:  engage it rather than succumb to an aspect of office politics, which gossiping is.

I was conscious of this trait all my professional life.  I never looked at gossiping as something I should take down.  Instead, I was always intrigued on how best I could use the “radyokawayan” channel to promote the goals and objectives of the organization.  I found it most intriguing when I became the CEO of NAPOCOR.

As the head of 12,000 employees that is in the middle of a crisis and  planning for privatizing NPC, I knew gossiping will be unavoidable. White papers were par for the course in government agencies, and NPC was no exception.  With billions of dollars involved in our transactions, gossips on bribery and corruption were daily fare.  The challenge was how to deal with it, or more importantly, how to use the same channel to promote the NPC.

This was how the weekly Wednesday breakfast with the President was born.

Every Wednesday, I had my office randomly invite 5-7 Head Office (HO) personnel for breakfast with me. We did not have any particular agenda except to just talk or “make kuwento” about almost anything. We would discuss their problems, concerns, their joys, and even their personal lives. Over a course of four years, I must have had breakfast with a third of the 2,500 HO employees.

It was in these breakfasts that I would share my views on where NPC was going, or address specific issues personal or otherwise.  Invariably, I would always end the breakfast with what I would call “positive” pieces of gossip like an impending bonus payout.  Or I would address, on the spot, specific professional issues e.g. delayed promotion or personal issues e.g. missing the family because of prolonged assignments in the field.

My hope was that after the breakfast my colleagues and employees would walk away feeling good about themselves, feeling proud of what they were doing, and inspired to work even better.

And it was my hope they would spread gossips about these positive feelings…

Take a bullet for your company?

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Take a bullet for your company?

This question does not usually crop up during an average person’s professional career.  Of course, our brothers and sisters in the police and military all answer: “It is our job to take a bullet for our country.” For the rest of us, though, this question may be a rhetorical one leading to issues of politics in the office, or mixing “professional” work with politics. If you went up to your boss and tell him or her, “I will take a bullet for you boss,” your boss will either kick you out for being too much of an ass-licker, or your boss will kick you out for being stupid.  Either way, politics and professional management will come into play one way or the other.

That question was for real for me when I was working for the Private Development Corporation of the Philippines (PDCP) in Davao City in the late 70s.

Davao’s Agdao district was called then “Nicaragdao”, depicting a similarity to the war torn situation in Nicaragua back then. Most people carried guns — licensed or unlicensed — and definitely the VIPs had bevies of bodyguards. The Korokan Bar (it no longer exists) was the scene of many gunfights and bomb explosions.  Vigilante groups summarily executed criminals and the NPAs and the MNLF were also very active in the city.

People from Davao are still asking for an end to summary executions. Photo courtesy of Rappler.com

People from Davao are still asking for an end to summary executions. Photo courtesy of Rappler.com

Our location back then–the corner of Anda and Bonifacio streets in Davao City– was the scene of a couple of gun battles and even grenade explosions.  It was so dangerous that my company, PDCP,decided to change the glass windows to a stronger concrete wall. Our secretary during that time, Luz Cedeño, just barely missed the shrapnel.  She had retreated to the toilet when a grenade exploded and she felt hot metal shrapnel on her body just as she dropped for cover on the floor.

It was no wonder back then that there were very few volunteers from PDCP’s Head Office to work for the branch in Davao City. I joined PDCP in 1979 and was immediately sent to Davao City.  I had several immediate bosses like the late Tom Alcantara, among others.  The expansion of PDCP was so fast at that time that my bosses like FerminChio only stayed briefly in Davao and were assigned to more progressive branches like Cebu. The Davao branch was composed of only 3 people: the branch manager, the analyst (that was me) and Luz Cedeño, the secretary.

One day a gunfight erupted right in front of the office and we all saw a man in the throes of death. A few days later, a phone call came in after we sent a telex to our branches head, Exequiel “Jun” P. Villacorta, Jr. to report the incident. “Guido, are you willing to be acting head of the Davao branch with no increase in pay?”was what EPV (what we called Jun Villacorta) asked. Apparently, no one from Head Office wanted the assignment in the Davao branch. And as I was just a fresh graduate with no performance track record, I could not be promoted to any senior permanent management position.  And even if I accepted the job, my salary was just a third of what Luz then was making.

Because I thought — and I still do — of myself as a professional, I felt I had no option but to say “yes.” Having graduated the Advance ROTC course and a member of the UP Vanguard, I was trained to follow my commander. And this situation was no different. I knew the branch was in trouble and I knew no one wanted to come and solve the problems. And more importantly, I felt that I could solve a number of our problems. So, as a “professional”, I had to say yes. In a way, it was like saying, “yes, I will take a bullet for the company.”

Yes, I was young and reckless.

Looking back with more jaded eyes as I have today, I could have been a bit more “political” then by negotiating a few “goodies” from EPV. For example, a higher salary would have come in handy as I was sharing in the household expenses of my parents.  Or maybe a higher housing allowance as I was staying in a room with three other young professionals who were all like me–at the bottom of the corporate totem pole. Or, if I had been married with children, I would have hesitated and imposed a condition that a transfer be made after a year.

But no, I did not do any of that.  One could say it was naiveté, but in my book, it was not something that a good “professional” would do.  I was taught to follow orders, period. This was my pure, unadulterated and personal view of what a professional should be.  To me then, to be a professional is to do your job to the best of your ability; have faith that your superiors will appreciate your work and in their wisdom will ultimately reward you with a pay increase or eventually a promotion.

And at the risk of still sounding naïve or having my friends fall from their chairs with tears in their eyeswhile laughing, I still believe that today. That view, however, is now tempered with prudence and pragmatism.  In his book “Lead with Humility,” a book on Pope Francis’ leadership, Jeffrey A. Krames describes the Pope as humble, but pragmatic enough to be a “political animal.” In short, we have no choice but to engage in office politics; but to get involved in office politics does not mean to succumb to it, according to Krames.

I agree with that view.

Krames points out that Poe Francis actually “urges people to engage in office politics.” He warns that those who would rather stay out of politics will realize that they will be left behind in their organization. Instead of avoiding office politics, Pope Francis encourages us to use the “dramas” that come out of office politics as opportunities for us to use our leadership skills in getting the protagonists and antagonists together to build a more effective team. I believe we can use all the tools used in office politics also for the good. You hear people say that politics is not bad at all– it is the politicians who make politics look bad!

LEAD WITH HUMILITY: A book on Pope Francis' leadership. Photo taken from NYPost.com

LEAD WITH HUMILITY: A book on Pope Francis’ leadership. Photo taken from NYPost.com

I was still in high school when I read a book entitled “Surviving in the Corporate Jungle”. I do not see that in print anymore (at least not in Amazon although there is a similar book with the same title and slant). I used that book for a book review assignment in my fourth year high school English class. That book gave me an insight on what to expect in the world of business working with “professional” men and women. Remember I was reading this book in the early 1970s!

To use office politics in a professional company by a professional person almost seems like heresy. I guess in religion, it is like a Christian saying Jesus was not God! I am sure I will have many detractors here.  However, if Pope Francis believes in having to be a “political animal,” there must be some logic in it. The Bible tells us in Matthew 10:16:  “Behold, I send you out as sheep in the midst of wolves; so be shrewd as serpents and innocent as doves.”

Matthew must have been talking about the apostles and disciples going out to the world and preaching the Word of God.  But these men and women did a wonderful job. Although almost all of them came from the poor and were most likely illiterate, they, more than anyone else in the history of the world, managed to bring, eventually, billions into the Christian faith. This was clearly a marketing success!  Although I must admit, there may have been supernatural grace that nudged them every now and then, clearly the logic of being shrewd as a serpent worked.

And certainly, a good number of them took more than just a bullet defending Christianity!

From the time I was an “acting temporary Officer-in-Charge” of the Davao branch and until today, I have had , essentially  only one, direct boss, EPV. The rest of my career was as a head of an organization where I reported to a Board of Directors. So my professional life was spent mostly as a CEO. It is from this vantage point that I want to share my views about politics and professional management, two concepts that do not seem to mix.

As the CEO of the largest development bank outside of Luzon then, and eventually as the CEO of one the largest companies in the country, I have learned many things. As the CEO of my own companies now, I am thankful for having “grown old” when I was young. Even as a CEO you realize that to get things done, you need to get the interests of all your shareholders, members of the Board, and the other stakeholders all in “synced.” In today’s ever growing and transparent world, we actually do not have any choice.

To the professionals who are out there, you need to accept that politics and professional management have to mix. Sometimes, you need to stand up and say, “I will take a bullet for the company.”

Then pray hard that you will never literally have to!