ACREINC@20: SEEDS OF AN ENTERPRISE (PART 1, CHAPTER 3)

An internet-circulated story tells of a teacher who brought a glass jar to his class. He took out a bag of marbles and stuffed them inside the glass jar until it was filled up to the rim. He asked, “Is the jar full?” The students said yes.

The professor then pulled out another bag of sand and slowly poured the sand into the glass jar until the spaces in between the marbles were all filled up. He then asked the students, “Is the jar full?” Embarrassed, the students said yes.

He got the cup of coffee on his desk and swiftly emptied it into the jar. As the coffee slinked into spaces in between the sand, he asked, “Is the jar full?”

The teacher explained that we take life as being full, often with things that are not so important and therefore fail to find space for those that have more significance and should fill up our lives. On hindsight, this story presents a viewpoint that inspired the founding of Acre, Inc. 20 years ago.

In chapters 1 and 2 of Part 1 of this series on the 20-year journey of Acre, Inc, I talked about three of the four seeds that served as inspirations that led to the establishment of Acre, Inc. These seeds were external. The fourth seed of enterprise is internal, an idea that is more difficult to rationalize and explain. For lack of a better term, I will call it value creation.

There are three elements in this seed – generational wealth, rightful knowledge, and desired future.

Generational Wealth

Generational wealth usually suffers through generations, with heirs dividing the wealth of forebears. There were many landed families whose third or fourth generation successors did not enjoy the luxury of their ancestors. I have encountered many such cases in Negros. My nephew-in-law whose family comes from that province suffered the same fate. Whatever was left for his generation had to be surrendered to the agrarian land reform program.

Fortunately, my generation did not get much from our parents except the power of knowledge and education. What was passed on to us was less than 50 hectares of unproductive property spread out in two provinces and one city. We therefore have little to pass on to our children. Following the tradition of dividing wealth would further dissipate this generational wealth and leave practically nothing to the next generation of 13 children.

From anecdotes and readings and advice of lawyer-friends, this trend is reversible in two ways, something that we are experimenting on. First, keep the passed-on property intact by converting land into shares of stocks and creating wealth by engaging in productive enterprises. Second, create new wealth through enterprise development activities.

What stirred up the birth of Acre, Inc. in 1989 was more of the second idea – creating new wealth through enterprise development. Catalytic entrepreneurship is about converting a new idea into an enterprise. Classic examples of this type of entrepreneurship are Cars (when horses were the popular means of transportation), Video Tape (when the bulky projector was the mode of viewing movies), Fax Machine (when Telex and Telegram were the preferred means of communication) and Walkman (when the big stereo components were the standard).

There is a second type of entrepreneurship, one in which the entrepreneur translates an existing enterprise that is more responsive to consumer needs and has a potential mass market. I’d like to think that Acre, Inc.’s inception is in the border and overlaps between these two concepts. We wanted to apply the full weight of technology in research.

Economic Value Added (EVA), a management framework popularized by Stern Steward, suggests that management’s objective should be to build capital, not destroy it. By monitoring performance based on EVA with a built-in threshold for policy decisions, management institutionalizes an environment where resource management is geared towards building capital and moves away from activities that destroy capital.

EVA became popular in the late 90s and became a standard management metric in the 21^st century. Without the accounting equation of an EVA, the principle of building value from what exists was really the idea that spurred the start of Acre, Inc. The desire to add up to what has been passed on to my generation and to share more than what the present generation enjoyed.

Rightful Knowledge

Helene Deutsch wrote, “The ultimate goal of research is not objectivity, but truth.” This philosophy was not just a thought in putting up Acre, Inc. It was a commitment, a promise.

In the beforemath of the snap election in 1986 that brought an avalanche of protest and put Cory as president of a revolutionary government, a large research agency put Marcos ahead of Cory in a pre-election poll conducted in Metro Manila. When experts analyzed the results, the agency did not report the big percentage of non-response and used those who responded as the base. In an environment of fear, such as during the martial law years, voters tend to be non-committal when asked for their preference.

Unfortunately, this subversion of truth was repeated in the 2004 elections. GMA was made to appear the winner in Metro Manila which was far from the truth. Many voters were undecided because the alternative candidate was a popular movie actor and did not have much in resources to communicate a legitimate platform.

“The ultimate goal of research is not objectivity, but truth.” That is a seed that helped build Acre, Inc.

Desired Future

A lot of the articles I have written and published talk about a desired future. The article on Marketing Convergence, which became the theme of the Philippine Marketing Association during the term of Donald Lim, is the most downloadable piece in the Acre, Inc web. It is used as a material in a class in marketing in one of the leading universities.

“The best way to predict the future is to invent it,” writes Alan Kay. Ralph Waldo Emerson is more resolute about the idea of creating a desired future when he wrote “What we call results are actually beginnings.”

This seed is not about a desired future for Acre, Inc. This seed is about a desired future for our country. A future where the country ranks high in all aspects of development. Based on a discipline of strategic thinking and decision making.

Acre, Inc.’s unwritten advocacy follows the mission of SPSS – to drive the widespread use of data-driven decision making. Since its founding in 1989, it has invested (without expecting a short-term returns) in data-driven decision making tools and frameworks.

We have trained thousands of executives on these tools and frameworks, often for free. I continue to spread this gospel to executives in industry and government. Among these tools and frameworks are analytics, deployable predictive analytics, CAD/CAM, balanced scorecard, EVA, ABC/M, BPE, and many more.

(This is the third and last chapter of part 1 of a series of articles on the history of acreinc@20. Part 1 talks about the pre-acreinc@20 days and attempts to answer the questions: What were the conditions that led to the development of this new enterprise? What were the challenges? What were the management and enterprise development principles that became the bases for the new enterprise? What were the resources needed to start it up and roll over for long-term viability? For comments, write to abfontanilla@yahoo.com or nick.fontanilla@gmail.com)