Tuesday, July 18, 2006
Amid complex strategic choices, leaders, managers go for ‘laws’
In the midst of information overload on the so- called “best”, “time-tested” and “fail-safe” marketing strategies and tactics, you can almost hear confused and exasperated leaders and managers saying: “Enough!”
This is one phenomenon of the age. In this complex world, people thirst for the simple- and, yes, the elemental. With the avalanche of choices, people yearn for old-fashioned order.
Imagine the chief marketing officer or a CEO bewitched, bothered and bewildered by so many tactics offered by numberless consultants, innumerable books- and his irrepressible board!
This explains the widespread hunger for a set of principles, leaving tactics and methods to the leader and the manager.
And this explains the drawing power of the “Al Ries Brand Marketing Conference,” held recently at the Philippine Plaza.
The father-and-daughter tandem, Al and Laura Ries talked about the “immutable” laws- meaning, unchanging, forever relevant, and eternally constant principles.
Take the “Law of Leadership,” for example. The Rieses have a one-liner to explain it: “It’s better to be first than it is to be better.” And they cite known brands- Coca Cola, McDonald’s, and IBM. That looked unarguable, at first glance.
And there is another law that seemed to contradict the first, according to one participant- the “Law of Opposite”- which is also a one-liner: “If you’re not the leader, then you need to be the opposite.”
They cited Pepsi Cola, which became the cola of the “younger crowd”- and thus was born the “Pepsi Generation.” Coke is 120 years old.
So, on the midst of such seeming contradictions, why are the Rieses so credible? The reason could be that one law works for one, and another law works for another. They are not actually contradictory; they may be stand-alone laws that work.
Another particular pointed out the seeming conflict between the laws of “focus” and of “divergence”. The focus law stipulates: “Every company needs to resist the temptation to keep adding products and services.”
The Rieses, underscoring the need to focus, compared the success of Southwest Airlines, which they called a “one-fork” airline- no other destinations but business, no other class but coach, and no other flights but domestic.
The other airlines take the best of many worlds. They observed: Southwest is currently worth $12.4 billion, or more than three times the other airlines.
In another breath, though, they offered the “Law of Divergence,” with this explanation: “Over time, a category will diverge and become two or more categories.
Taking off from Charle’s Darwin’s “Origin of the Species,” they explained: “A species starts out as a single species and then, over time, diverges…Divergence has created new categories of automobiles such as the sport utility vehicle and the mini van.”
The Rieses have been observing the marketplace and have come up with the “natural laws” that govern the market- and gave each law a name.
These laws seemed to have stood the test of time simply because they provided some “anchors” or “principles” to market players. In turn, these players took these principles to heart- and their actions were blessed with success. A principle that has spawned many successes must be a valid one.
That is the reason behind the ever growing following of the speaking, writing and consulting tandem. Such activities reinforce one another.
The books that precede their visits country-to-country or city-to-city continue to have a growing following. Thus when a conference is organized with them at center stage, such a gathering is consistently assured with great success.
There is actually a heart warming quality that Al and Laura share: While they are mentors to over half a million people around the globe, they are also enthusiastic learners.
That’s the secret behind their success. Their capacity to listen is as huge as their capacity to be heard in a very compelling and inspiring way.
Monday, July 17, 2006
Communicate in a ‘recession’ or be a victim of ‘depression’
Principle has not changed; it pays to advertise during hard times
THE FOLKSY STATEMENT- “OUT of sight, out of mind”- is the best argument among couples that being apart too long would be detrimental to a relationship. This is also a compelling argument for branded products to remain on the shelf- and be visible at all times- to solidify customer loyalty.
Being within sight- and within reach- are also time-tested marketing principles, which the uninitiated or the backslider can ignore at their own peril. And yet, this truism- to advertise, publicize or perish- is soon forgotten when hard times strike, and the knee jerk response of companies is to cut down on such essential functions as advertising and public relations.
In the late 70’s and early 80’s, there were already persuasive arguments in favour of advertising during a recession. In fact, in a section in my MRR (Management Research Report, the equivalent of a master’s thesis) at the Asian Institute of Management, I argued in favour of advertising in the midst of a recession that was already felt then in the early 80’s.
It was supposed to be a compelling logic for organizations to seize the communication initiative when hard times strike. I cited a study made by the Laboratory of Advertising Performance (LAP) of McGraw-Hill Research covering the period 1974-1975.
Advertising equals sales
In the study findings, McGraw-Hill vice president for research, Dr. David Forsyth, cited the “common experience of companies that continued advertising”: In 1974-1975, their sales grew 15 percent higher than those who cut advertising. By 1978, companies that continued advertising had sales of 132 percent above 193 sales levels. Those who trimmed advertising managed a mere 79 percent over 1973 levels.
These figures are, of course, dated. The latest figures from the same McGraw-Hill Research analyzed 600 companies in the US between 1980 and 1985. The results showed that business-to-business firms that “maintained or increased their advertising expenditures” during the 1981-1982 recession averaged “significantly higher sales growth” both during the recession and for the following three years.
And in 1985, the sales of companies that were “aggressive recession advertisers “were 256 percent higher than those which “did not keep up their advertising.” This is a higher figure compared to the 132 percent advantage in 1978.
There is a more encouraging fact, established by a study of another research firm – Meldrum & Fewsmith. The findings are conclusive: Aggressive advertising did not only grow revenues; it even increased profits.
More recently, as pointed out by Dave Donelson, author of “Creative selling: Boost Your B2B Sales,” we should not be perturbed by post-Sept. 11 jitters. “The best way to combat paralysis is to get on with the business of living,” he said. And the business of living includes the “for-profit businesses” as we know them.
Donelson continued, as he zeroed in on advertising: “Numerous studies, including one by the AAA (Association of Accredited Advertising Agencies) of the recessions from 1948 to 1982, show that consumer spending actually grows from the quarter when the economy peaks to the quarter in which it bottoms.” That’s one to really think about.
Preference, awareness
A more comprehensive study is one conducted by the Cahners Research and the Strategic Planning Institute (PIMS). The institute stated: “As awareness increases, preference increases.”
The study, mind you is not without basis. It was based on a survey made in July- September of 2001, covering 88,000 businesses in the US and based on the responses of 23, 341 businesses. The survey sought to correlate preference levels of awareness.
There is direct relationship (researchers call it “correlation”) between awareness and customer preference. Susan Mulcahy, PIMS vice president for research, shared these key insights: As awareness increases from 25 percent to 35 percent, the preference increases from 10percent to 15 percent. As awareness grows from 35 percent to 45 percent, the leap in preference is greater- from 15 percent to 23 percent.
And the largest jump occurs when awareness is 85 percent to 95 percent: preference rises to 56 percent to 71 percent. Such awareness can only be “driven” by the communication discipline of advertising and public relations.
In the same 2001 study, the marketing expenditures of the surveyed companies are channelled to the following: print advertising, 33 percent; sales/promotion materials, 22 percent; television, 11 percent; trade shows, 10 percent; and others include Web advertising, direct mail (print and e-mail), seminars, newsletters and billboards.
Principles the same
What is the message of these figures? The principle has not changed- whether in the ‘70s or the ‘80s- and, in a post 9/11 era. It pays to advertise during hard times or even a recession.
Where does the practice of public relations- or, more specifically, publicity-come in? At the turn of the century, companies have taken the wiser step of using a mix of advertising and public relations to increase sales, expand market share, and build a corporate brand.
A new discipline also emerged: “below the line of advertising.” It is obvious that the phrase was coined by advertising people- showing that the discipline with clout, is still advertising. That this influence may change through time is arguable.
So, how does one make of the audacious statement of Al Ries and Jack Trout, which is also the title of their book: “The Rise of PR and the Fall of Advertising’? Did the tandem sound the death knell of advertising? Far from it, they quickly add. They just underscored the increasing value of PR.
PR, Ries and Trout say, “builds a brand”; while advertising” maintains the brand”.
Vivian Lines, Asia Group president of Hill and Knolton, told a group of PR professionals recently: “Both PR and advertising build brands.”
Advertising builds recall with its complete control of form and content; PR uses the power of third party endorsement. Actually, even this attempt at drawing the lines is still open to challenge.
Dr. Atichart Suntharos, executive vice president, strategic planning of Lowe Lintas & Partners states: “Branding is even more critical in times of crisis. There’s also a need to gain insight into consumer’s changing values.” It may be said that this agency man is biased, but his message is compelling.
And harder to ignore is this advice: In good times, communicate to stand apart; in a recession, communicate to gain unbeatable advantage.
Speaking of a recession, a celebration author once distinguished it from a depression: “In a recession, your neighbour loses his job; in a depression, you lose yours!”
It may be good to consider communicating- via advertising or public relations- or else, you will be overtaken by our own “recession” or “depression”!
THE FOLKSY STATEMENT- “OUT of sight, out of mind”- is the best argument among couples that being apart too long would be detrimental to a relationship. This is also a compelling argument for branded products to remain on the shelf- and be visible at all times- to solidify customer loyalty.
Being within sight- and within reach- are also time-tested marketing principles, which the uninitiated or the backslider can ignore at their own peril. And yet, this truism- to advertise, publicize or perish- is soon forgotten when hard times strike, and the knee jerk response of companies is to cut down on such essential functions as advertising and public relations.
In the late 70’s and early 80’s, there were already persuasive arguments in favour of advertising during a recession. In fact, in a section in my MRR (Management Research Report, the equivalent of a master’s thesis) at the Asian Institute of Management, I argued in favour of advertising in the midst of a recession that was already felt then in the early 80’s.
It was supposed to be a compelling logic for organizations to seize the communication initiative when hard times strike. I cited a study made by the Laboratory of Advertising Performance (LAP) of McGraw-Hill Research covering the period 1974-1975.
Advertising equals sales
In the study findings, McGraw-Hill vice president for research, Dr. David Forsyth, cited the “common experience of companies that continued advertising”: In 1974-1975, their sales grew 15 percent higher than those who cut advertising. By 1978, companies that continued advertising had sales of 132 percent above 193 sales levels. Those who trimmed advertising managed a mere 79 percent over 1973 levels.
These figures are, of course, dated. The latest figures from the same McGraw-Hill Research analyzed 600 companies in the US between 1980 and 1985. The results showed that business-to-business firms that “maintained or increased their advertising expenditures” during the 1981-1982 recession averaged “significantly higher sales growth” both during the recession and for the following three years.
And in 1985, the sales of companies that were “aggressive recession advertisers “were 256 percent higher than those which “did not keep up their advertising.” This is a higher figure compared to the 132 percent advantage in 1978.
There is a more encouraging fact, established by a study of another research firm – Meldrum & Fewsmith. The findings are conclusive: Aggressive advertising did not only grow revenues; it even increased profits.
More recently, as pointed out by Dave Donelson, author of “Creative selling: Boost Your B2B Sales,” we should not be perturbed by post-Sept. 11 jitters. “The best way to combat paralysis is to get on with the business of living,” he said. And the business of living includes the “for-profit businesses” as we know them.
Donelson continued, as he zeroed in on advertising: “Numerous studies, including one by the AAA (Association of Accredited Advertising Agencies) of the recessions from 1948 to 1982, show that consumer spending actually grows from the quarter when the economy peaks to the quarter in which it bottoms.” That’s one to really think about.
Preference, awareness
A more comprehensive study is one conducted by the Cahners Research and the Strategic Planning Institute (PIMS). The institute stated: “As awareness increases, preference increases.”
The study, mind you is not without basis. It was based on a survey made in July- September of 2001, covering 88,000 businesses in the US and based on the responses of 23, 341 businesses. The survey sought to correlate preference levels of awareness.
There is direct relationship (researchers call it “correlation”) between awareness and customer preference. Susan Mulcahy, PIMS vice president for research, shared these key insights: As awareness increases from 25 percent to 35 percent, the preference increases from 10percent to 15 percent. As awareness grows from 35 percent to 45 percent, the leap in preference is greater- from 15 percent to 23 percent.
And the largest jump occurs when awareness is 85 percent to 95 percent: preference rises to 56 percent to 71 percent. Such awareness can only be “driven” by the communication discipline of advertising and public relations.
In the same 2001 study, the marketing expenditures of the surveyed companies are channelled to the following: print advertising, 33 percent; sales/promotion materials, 22 percent; television, 11 percent; trade shows, 10 percent; and others include Web advertising, direct mail (print and e-mail), seminars, newsletters and billboards.
Principles the same
What is the message of these figures? The principle has not changed- whether in the ‘70s or the ‘80s- and, in a post 9/11 era. It pays to advertise during hard times or even a recession.
Where does the practice of public relations- or, more specifically, publicity-come in? At the turn of the century, companies have taken the wiser step of using a mix of advertising and public relations to increase sales, expand market share, and build a corporate brand.
A new discipline also emerged: “below the line of advertising.” It is obvious that the phrase was coined by advertising people- showing that the discipline with clout, is still advertising. That this influence may change through time is arguable.
So, how does one make of the audacious statement of Al Ries and Jack Trout, which is also the title of their book: “The Rise of PR and the Fall of Advertising’? Did the tandem sound the death knell of advertising? Far from it, they quickly add. They just underscored the increasing value of PR.
PR, Ries and Trout say, “builds a brand”; while advertising” maintains the brand”.
Vivian Lines, Asia Group president of Hill and Knolton, told a group of PR professionals recently: “Both PR and advertising build brands.”
Advertising builds recall with its complete control of form and content; PR uses the power of third party endorsement. Actually, even this attempt at drawing the lines is still open to challenge.
Dr. Atichart Suntharos, executive vice president, strategic planning of Lowe Lintas & Partners states: “Branding is even more critical in times of crisis. There’s also a need to gain insight into consumer’s changing values.” It may be said that this agency man is biased, but his message is compelling.
And harder to ignore is this advice: In good times, communicate to stand apart; in a recession, communicate to gain unbeatable advantage.
Speaking of a recession, a celebration author once distinguished it from a depression: “In a recession, your neighbour loses his job; in a depression, you lose yours!”
It may be good to consider communicating- via advertising or public relations- or else, you will be overtaken by our own “recession” or “depression”!
Tuesday, February 28, 2006
Coming to grips with political risks
There are happy and sad cases of projects that take off and those that would never see the light of day. You know the successful cases: their inauguration rites are flashed on television and find themselves on choice pages of newspapers.
And, soon enough, these projects would begin doing the business they know best – churn out products or provide public services.
Projects that fail. It is not so with projects that failed. They also hit the headlines alright, but these are photos of protesters brandishing placards in a barricade, news on legislators summoning project officials in a congressional hearing and, worse, a banner story of court of law or a regulatory agency ordering the project suspended!
Meanwhile, all forecasts of revenue go hay wire, and shareholders are shocked by the impunity by which government executives, proving the Shakespearean lament on the “insolence of office,” abuse their discretion.
Project proponents, particularly the multinational partners, usually have two choices: one, pack their bags and try friendlier host countries or, two, seek redress from an international court where justice, alas, also grinds so slowly.
The third way. There is a third alternative. They should wise up to the situation and deal with something they at first failed to do: use corrective measures, come to grips with political realities locally and nationally. More specifically, they must, this time, include “political risks” in their risk assessment.
Let’s face it. Engineers and construction experts may build an engineering marvel, harness the best project management methods, complete the project on schedule and within budget, go through scientifically tested simulation exercises, even perfect technical information dissemination among themselves – and yet the projects are delayed or mothballed because they are met with great resistance by people.
We are not lacking at all in books and journals on project management and risk assessment. But, a cursory reading of such books and investigation of other data bank shows a very limited appreciation of the crucial importance of reaching out to the community, listening to their hopes, identifying with their aspirations.
Political risks cannot be ignored. Often, project managers realize a little too late that beyond technical, financial, construction and other risks are the more unpredictable but very important “political risks.”
Helga Odden Resknes of Norway, in a speech before risk managers, cited the need to “establish binding contact between social sciences and natural sciences in order to create the best possible platform for risk communication.”
She meant that real communication must complement the comfort zones of engineers. “A project is never without risks,” said Daniela Van Well-Stam, co-author of “Project Risk Management,” adding that “performing risk analysis and management is actually necessary to maintain control over a project.”
Engineering precision and predictive techniques must be accompanied by honest-to-goodness stakeholder communications, and thus come to grips with community, political – even regulatory – risks.
Communities predisposed to support. Host communities – and even the usual suspects that make it difficult to put up a plant or establish a tollway – do not actually want to squander valuable time opposing worthwhile projects. After all, they would benefit more from a project that creates jobs, brings forth allied industries, and promises a much-delayed prosperity in the area.
Project managers who turn a “blind eye” to and dismiss political risks as a needless distraction to their perfect engineering marvel will get a surprise of their lives. But, if you heed these project risk analysts and spend time on “people issues,” the usual distraction of engineers, your efforts would be rewarded by the community folk themselves, choosing pro-existence or, at the very least, co-existence.
So, the next time you are called upon to do a project, or a friend tells you about his dream infrastructure, advise him to do some environmental scanning in the area, do some thinking out of the “engineering box” – and deal with people issues in the area. Who knows, when his project succeeds, he may reward you with a fat contract – or, at the very least, a steaming hot coffee! (dantemvelasco@yahoo.com)
And, soon enough, these projects would begin doing the business they know best – churn out products or provide public services.
Projects that fail. It is not so with projects that failed. They also hit the headlines alright, but these are photos of protesters brandishing placards in a barricade, news on legislators summoning project officials in a congressional hearing and, worse, a banner story of court of law or a regulatory agency ordering the project suspended!
Meanwhile, all forecasts of revenue go hay wire, and shareholders are shocked by the impunity by which government executives, proving the Shakespearean lament on the “insolence of office,” abuse their discretion.
Project proponents, particularly the multinational partners, usually have two choices: one, pack their bags and try friendlier host countries or, two, seek redress from an international court where justice, alas, also grinds so slowly.
The third way. There is a third alternative. They should wise up to the situation and deal with something they at first failed to do: use corrective measures, come to grips with political realities locally and nationally. More specifically, they must, this time, include “political risks” in their risk assessment.
Let’s face it. Engineers and construction experts may build an engineering marvel, harness the best project management methods, complete the project on schedule and within budget, go through scientifically tested simulation exercises, even perfect technical information dissemination among themselves – and yet the projects are delayed or mothballed because they are met with great resistance by people.
We are not lacking at all in books and journals on project management and risk assessment. But, a cursory reading of such books and investigation of other data bank shows a very limited appreciation of the crucial importance of reaching out to the community, listening to their hopes, identifying with their aspirations.
Political risks cannot be ignored. Often, project managers realize a little too late that beyond technical, financial, construction and other risks are the more unpredictable but very important “political risks.”
Helga Odden Resknes of Norway, in a speech before risk managers, cited the need to “establish binding contact between social sciences and natural sciences in order to create the best possible platform for risk communication.”
She meant that real communication must complement the comfort zones of engineers. “A project is never without risks,” said Daniela Van Well-Stam, co-author of “Project Risk Management,” adding that “performing risk analysis and management is actually necessary to maintain control over a project.”
Engineering precision and predictive techniques must be accompanied by honest-to-goodness stakeholder communications, and thus come to grips with community, political – even regulatory – risks.
Communities predisposed to support. Host communities – and even the usual suspects that make it difficult to put up a plant or establish a tollway – do not actually want to squander valuable time opposing worthwhile projects. After all, they would benefit more from a project that creates jobs, brings forth allied industries, and promises a much-delayed prosperity in the area.
Project managers who turn a “blind eye” to and dismiss political risks as a needless distraction to their perfect engineering marvel will get a surprise of their lives. But, if you heed these project risk analysts and spend time on “people issues,” the usual distraction of engineers, your efforts would be rewarded by the community folk themselves, choosing pro-existence or, at the very least, co-existence.
So, the next time you are called upon to do a project, or a friend tells you about his dream infrastructure, advise him to do some environmental scanning in the area, do some thinking out of the “engineering box” – and deal with people issues in the area. Who knows, when his project succeeds, he may reward you with a fat contract – or, at the very least, a steaming hot coffee! (dantemvelasco@yahoo.com)
Friday, February 17, 2006
POLITICAL RISKS Handling a project’s blind spot
NOTHING ELSE IS NEW. PROJECT PROPONENTS and managers – after putting up an industrial plant, inaugurating a mining site, or erecting a cement plant – are usually shocked by the consequent hostility of host communities.
A power plant in Mindanao, a few years ago, was about complete and turbines were just about to crank out electricity, but other important installations could not be delivered to the site because the roads were blocked by protestors lying in the middle of the road.
A mining site could not start operations due to an implacable resistance by the community, raising environmental concerns. A changing of the guards was hastily made for a new tack, but even the local church prelate remains unconvinced.
A cement plant in the north did not see the light of day due to the vigorous opposition of local residents, confronting the project proponents with serious environmental issues that remained unanswered to this day.
The good news is, the power plant in Mindanao has long begun operations, due to a belated realization that there was a “political” crisis in the community, and then officials staged a successful stakeholder communication effort.
It addressed concerns on the possible pollutions of rivers and risks on health, and reached out to the leaders in the area at all levels of decision-making, from the barangay chairman to the governor.
The protesters were not won over completely, but a mechanism of “critical collaborations” was agreed on. Thus, plant authorities to this day are always on their toes anytime the multi-sectoral monitoring group calls their attention to a possible health or environmental risk.
The mining project continues to be hobbled by a lack of genuine communication effort, but hopes are high that the entry of a high profile executive, known for his commitment to the environment, might yet resolve the impasse.
Engineering marvel is not enough. There must be a gap somewhere. And most project managers have a “blind spot” in the area of “political risks,” which can be addressed by a wide-ranging and well-informed “stakeholder communications” program. This program proceeds from the concept that host communities, among many others, are “stakeholders” of a project.
Engineers and construction experts may build an engineering marvel, harness the best project management methods, complete the project on schedule and within budget, go through scientifically tested simulations exercises, even perfect technical information dissemination among themselves (which they call “communication” in a severely limited way) – yet the projects are delayed or moth-balled because they were met with great resistance by people.
In a study I’m making, I found out that we are not lacking at all in books and journals on project management and risk assessment. But, a cursory reading of such books and investigation of other data bank shows a very limited appreciation of the crucial importance of reaching out to the community, listening to their hopes and fears.
If the project handlers do this, they will invariably find a common ground and thus achieve “co-existence,” at the very least, or “mutual trust,” at best.
Mitigating or eliminating risks. Project managers, deep into engineering disciplines, may understandably gloss over the importance of “human communication” in their risk assessment exercises. Often, they realize a little too late that beyond technical, financial, construction and other risks are the more unpredictable but very important “political risks.”
Jose P. de Jesus, president of the Manila North Tollways Corporation (MNTC) and formerly Public Works and Highways Secretary, zeroed in on “political risks” as the proverbial hard nut to crack.
In a speech before the Management Association of the Philippines, the MNTC chief pointed out that political risks “confront every major project in terms of changes in the political dispensation, community resistance, legislative inquiries, and organized opposition by civil society.”
De Jesus added that a “proactive and comprehensive public information program, government liaison and communication efforts can mitigate these risks.”
A risk management expert, Helga Odden Resknes of Norway, refers to these political risks in a more academic way. In a presentation she made before project risks managers, she emphasized the need to “establish binding contact between social science and natural science in order to create the best possible platform for risk communication.”
Go for a shared future. She meant that real communication in the realm of the social sciences must complement the comfort zones of the engineering discipline mostly grounded ion the physical sciences. If you think this sounds “too academic,” just bear in mind that considering the human and social factors might yet save your project or add an important element to your risk assessment.
“A project is never without risks,” said Daniela Van Well-Stam, co-author of “Project Risk Management ,” published by Kogan Page, adding that “performing risk analysis and management is actually necessary to maintain control over a project.” Other books refer to such analysis as “uncertainty analysis.”
Ahead of every project manager be it an industrial plant, the Olympics, a space shuttle project, an IT prototype or even a corporate anniversary celebration is an uncertainty in varying degrees of severity and likelihood.
The lesson learned is this: Engineering precision and predictive techniques must be complemented by a program on coming to grips with community, political even regulatory risks. When you do your homework, as proponents of some successful projects did, you can actually mitigate or completely eliminate the risks.
After all, even host communities would prefer to spend their time co-existing with a structure that promises them a brighter common future than to waste valuable time on the sidelines with screaming placards in opposition to an otherwise good project that has been poorly communicated.
Project managers who turn a “blind eye” to and dismiss political risks as a needless distraction to their perfect engineering marvel will get a surprise of their lives. But, if you heed the words of experienced project risk analysts and take to heart the wise counsel of veteran Ping de Jesus of flyover and NLEX fame, you will be glad you did.
A power plant in Mindanao, a few years ago, was about complete and turbines were just about to crank out electricity, but other important installations could not be delivered to the site because the roads were blocked by protestors lying in the middle of the road.
A mining site could not start operations due to an implacable resistance by the community, raising environmental concerns. A changing of the guards was hastily made for a new tack, but even the local church prelate remains unconvinced.
A cement plant in the north did not see the light of day due to the vigorous opposition of local residents, confronting the project proponents with serious environmental issues that remained unanswered to this day.
The good news is, the power plant in Mindanao has long begun operations, due to a belated realization that there was a “political” crisis in the community, and then officials staged a successful stakeholder communication effort.
It addressed concerns on the possible pollutions of rivers and risks on health, and reached out to the leaders in the area at all levels of decision-making, from the barangay chairman to the governor.
The protesters were not won over completely, but a mechanism of “critical collaborations” was agreed on. Thus, plant authorities to this day are always on their toes anytime the multi-sectoral monitoring group calls their attention to a possible health or environmental risk.
The mining project continues to be hobbled by a lack of genuine communication effort, but hopes are high that the entry of a high profile executive, known for his commitment to the environment, might yet resolve the impasse.
Engineering marvel is not enough. There must be a gap somewhere. And most project managers have a “blind spot” in the area of “political risks,” which can be addressed by a wide-ranging and well-informed “stakeholder communications” program. This program proceeds from the concept that host communities, among many others, are “stakeholders” of a project.
Engineers and construction experts may build an engineering marvel, harness the best project management methods, complete the project on schedule and within budget, go through scientifically tested simulations exercises, even perfect technical information dissemination among themselves (which they call “communication” in a severely limited way) – yet the projects are delayed or moth-balled because they were met with great resistance by people.
In a study I’m making, I found out that we are not lacking at all in books and journals on project management and risk assessment. But, a cursory reading of such books and investigation of other data bank shows a very limited appreciation of the crucial importance of reaching out to the community, listening to their hopes and fears.
If the project handlers do this, they will invariably find a common ground and thus achieve “co-existence,” at the very least, or “mutual trust,” at best.
Mitigating or eliminating risks. Project managers, deep into engineering disciplines, may understandably gloss over the importance of “human communication” in their risk assessment exercises. Often, they realize a little too late that beyond technical, financial, construction and other risks are the more unpredictable but very important “political risks.”
Jose P. de Jesus, president of the Manila North Tollways Corporation (MNTC) and formerly Public Works and Highways Secretary, zeroed in on “political risks” as the proverbial hard nut to crack.
In a speech before the Management Association of the Philippines, the MNTC chief pointed out that political risks “confront every major project in terms of changes in the political dispensation, community resistance, legislative inquiries, and organized opposition by civil society.”
De Jesus added that a “proactive and comprehensive public information program, government liaison and communication efforts can mitigate these risks.”
A risk management expert, Helga Odden Resknes of Norway, refers to these political risks in a more academic way. In a presentation she made before project risks managers, she emphasized the need to “establish binding contact between social science and natural science in order to create the best possible platform for risk communication.”
Go for a shared future. She meant that real communication in the realm of the social sciences must complement the comfort zones of the engineering discipline mostly grounded ion the physical sciences. If you think this sounds “too academic,” just bear in mind that considering the human and social factors might yet save your project or add an important element to your risk assessment.
“A project is never without risks,” said Daniela Van Well-Stam, co-author of “Project Risk Management ,” published by Kogan Page, adding that “performing risk analysis and management is actually necessary to maintain control over a project.” Other books refer to such analysis as “uncertainty analysis.”
Ahead of every project manager be it an industrial plant, the Olympics, a space shuttle project, an IT prototype or even a corporate anniversary celebration is an uncertainty in varying degrees of severity and likelihood.
The lesson learned is this: Engineering precision and predictive techniques must be complemented by a program on coming to grips with community, political even regulatory risks. When you do your homework, as proponents of some successful projects did, you can actually mitigate or completely eliminate the risks.
After all, even host communities would prefer to spend their time co-existing with a structure that promises them a brighter common future than to waste valuable time on the sidelines with screaming placards in opposition to an otherwise good project that has been poorly communicated.
Project managers who turn a “blind eye” to and dismiss political risks as a needless distraction to their perfect engineering marvel will get a surprise of their lives. But, if you heed the words of experienced project risk analysts and take to heart the wise counsel of veteran Ping de Jesus of flyover and NLEX fame, you will be glad you did.
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