Dr Kamal Monnoo
Despite regular claims by our economic managers, the reality is that Pakistan’s economic recovery remains adrift. Could it be that our turnaround endeavours, while laudable, end up missing focus on our core strengths and, as a result, the outcome becomes one step forward and two backwards. It would be pertinent to note here that almost all economic success stories of the last five decades, including China, have come about by capitalising on the respective economy’s core economic strengths, and once the basics were addressed, value additions and diversifications came organically. In fact, today the most successful global corporates have gone back to management structures that are product-driven rather than wider cluster-driven, meaning simply wanting to operate in areas where they feel they can be market leaders.
For example, within a twelve-month stretch spanning parts of 2024 and 2025, five iconic American companies replaced their CEOs: Nike, Starbucks, Boeing, Intel, and Target. The business press noticed something beyond the usual turnaround narratives. Headlines spoke of companies that had “lost their way and focus.” In his latest research paper, John Iwata, former IBM executive and now an executive fellow at Yale, talks about companies that forget who they are and the need for them to re-find themselves. National economies, in many ways, are no different, and perhaps this is precisely the malaise the Pakistani economy seems to be suffering from as well: losing connection with its core identity and strengths. The result is an unprecedented erosion in agriculture and rapid deindustrialisation, both historically central to our economic model, which ensured not only sustainable levels of employment and poverty alleviation in a highly populated country, but also a sustainable model of growth that carried significant synergies with our core strengths and geographical-cum-demographic advantages.
In his paper, Iwata also makes a compelling case that the conventional turnaround playbook—restructuring, portfolio reshaping, and process redesign—is inadequate when a company or country has lost connection to its core identity. What is needed in such cases is what he calls “re-founding.” He offers a thought-provoking framework, also raising important questions worth considering alongside his insights. Let us evaluate some and then try to see whether or not they fit the economic pattern being witnessed in Pakistan today.
The insidious nature of drift: This refers to a shift owing to executive decisions that collectively pull an organisation or economy away from its foundational identity. Ironically, leadership changes often accelerate drift. This happens, for example, because change introduces competing priorities and preferences that inject a new culture of managing operations. Alternatively, leaders may remain focused on measurable financial outcomes while missing the degradation of intangibles such as experience, operational authenticity, and a conducive environment that helps businesses and industries remain engaged with a country. From a corporate lens, Boeing’s trajectory illustrates this pattern starkly. Its 1997 merger with McDonnell Douglas brought executives who prioritised financial optimisation over the company’s historic commitment to technical rigour. Starbucks drifted as growth and pandemic adaptations overshadowed its founding vision of creating a “third place” between home and work. Automated machines replaced manual brewing methods that once enabled barista-customer interaction, and store designs began prioritising mobile pickup over comfortable gathering spaces. Each decision by itself made operational sense. Together, they eroded what made Starbucks distinctive.
Re-founding is not nostalgia: One may argue, then, why even change? Iwata has been careful to distinguish re-founding from waxing nostalgic. Economic managers rightly resist looking backward, since economies often falter precisely because they cling too long to past successes. The relationship with the past that re-founding requires is fundamentally different. It is about distinguishing what should endure from what must evolve. Steve Jobs remains the most instructive example. When he returned to a near-bankrupt Apple in 1997, he did not simply impose a new strategy. He rediscovered the ethos he and Steve Wozniak had originally embedded—empowering human creativity through intuitive, beautifully designed technology—and reinterpreted it for a new era.
Questions worth asking: The re-founding framework is meritorious, but we should approach it with clear eyes about its limitations. First, there is a survivorship bias problem. We see the re-founding stories that worked, but some do not. For example, Kodak attempted to reclaim its imaging heritage without success, and Sears tried unsuccessfully to return to its catalogue-era identity as the “everything store.” This means that sometimes change is necessary, as long as it does not destroy the very legs an economy stands on.
From articulation to embedding: These cautions noted, Iwata’s research offers insight into what separates rhetoric from results. Purpose statements alone are insufficient; character must be embedded into operational systems. What needs to be ensured is that any new governance processes see to it that traditional partners and integral stakeholders are not excluded from new operational decision-making.
The leadership development gap: If it is correct that re-founding moments are increasing as disruption accelerates and stakeholder expectations evolve, we may be systematically under-preparing markets for this challenge by not providing a competitive environment for business and industry. When an economy is struggling to find a way forward, this gap deserves attention, because if economies and countries keep forgetting who they are, someone needs to help them remember their real and sustainable strengths.
We see this precise phenomenon taking shape in Pakistan today, where economic managers are busy altering the very nature of the operative environment of the Pakistani economy, albeit without paying attention to core strengths or without properly ascertaining which steps may work and which may prove counterproductive. While individually the new legislations, when broken down as isolated steps, may make sense, collectively they may in fact be damaging or even destructive. Naturally, a beeline by multinationals to exit Pakistan and the rapid folding up of domestic manufacturing are indicative of flawed economic policy decisions being implemented by the current economic managers.
The writer is an entrepreneur and economic analyst. Email: kamal.monnoo@gmail.com
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