At­ti­tudes sti­fle de­vel­op­ment

Done cor­rectly en­ter­prise de­vel­op­ment can im­prove the bot­tom line

Finweek English Edition - - Inthespotlight - SIZWEKAZI JEKWA

AS ONE OF THE KEY PIL­LARS of black eco­nomic em­pow­er­ment codes, En­ter­prise De­vel­op­ment Ini­tia­tives (EDI) may be vi­tal in en­abling pre­vi­ously dis­ad­van­taged peo­ple to mean­ing­fully par­tic­i­pate in South Africa’s econ­omy. How­ever, EDI re­mains a ma­jor stum­bling block, says KPMG’s em­pow­er­ment ad­vi­sory ser­vices, which ad­vises and con­sults nu­mer­ous South African com­pa­nies op­er­at­ing in var­i­ous in­dus­tries and sec­tors.

“We see that com­pa­nies are still strug­gling with the EDI por­tion of their em­pow­er­ment com­pli­ance while other cat­e­gories – such as em­ploy­ment eq­uity, skills de­vel­op­ment and own­er­ship – have proved much eas­ier to ex­e­cute,” says Moses Kgosana, CE of KPMG.

Kgosana says there are cur­rently some gross mis­con­cep­tions about EDIs and Gov­ern­ment’s true ob­jec­tives in that re­gard. “We’ve seen many com­pa­nies just throw­ing money at the prob­lem, dish­ing out bun­dles of cash to start-ups with­out pro­vid­ing the nec­es­sary tools and re­sources to make those ven­tures sus­tain­able,” says Kgosana. “We’ve also seen com­pa­nies ig­nore EDI for fear of cre­at­ing new black com­peti­tors in their in­dus­try.”

That’s the rub. Kgosana warns such at­ti­tudes to EDI are ill con­ceived. “En­gag- ing mean­ing­fully in en­ter­prise de­vel­op­ment doesn’t mean your own busi­ness will suf­fer as a re­sult. Done cor­rectly, en­ter­prise de­vel­op­ment can en­hance your busi­ness and even im­prove the bot­tom line.”

His point? Un­like some cat­e­gories of SA’s em­pow­er­ment codes, sus­tain­able EDI com­pa­nies will re­quire a medium- to longterm vi­sion and approach and are un­likely to yield re­sults over the short term. For­tu­nately, progress with re­gard to EDI isn’t all bad news. To il­lus­trate the point, Kgosana cites the suc­cess­ful SA Brew­eries pro­gramme in the early Nineties that saw it giv­ing trucks to driv­ers to al­low them to start their own beer de­liv­ery busi­nesses and out­sourc­ing much of SAB’s trans­porta­tion needs to them.

“SAB knew that man­ag­ing fleets of trucks wasn’t its core busi­ness. It was mak­ing and mar­ket­ing al­co­hol. So the com­pany de­cided to em­power its driv­ers to be­come sup­pli­ers of a ser­vice it needed. And by pro­vid­ing con­tracts to those driv­ers it was able to en­sure sus­tain­abil­ity and im­prove its bot­tom line costs,” says Kgosana.

The SAB case study con­tains all the nec­es­sary el­e­ments of a sus­tain­able EDI project: it’s not threat­en­ing to the ex­ist­ing busi­ness, it im­proves its bot­tom line and it cre­ates real busi­ness op­por­tu­ni­ties and pro­vides the

“SA com­pa­nies re­ally need to think out of the box,

es­pe­cially those who op­er­ate in pro­fes­sional ser­vices-based in­dus­tries

like our own.”

nec­es­sary re­sources for sus­tain­abil­ity.

There are other large com­pa­nies that also pro­vide use­ful work­ing ex­am­ples of first-class en­ter­prise de­vel­op­ment that oth­ers would do well to learn from and em­u­late. For ex­am­ple, An­glo Amer­i­can has one of SA’s most suc­cess­ful EDI pro­grammes – An­glo Zimele. It has seen it de­velop count­less en­ter­prises in­volv­ing min­ing-re­lated ac­tiv­i­ties rang­ing from re­cy­cling mine wa­ter for bot­tling, clean­ing ser­vices, min­ing equip­ment re­pair and man­u­fac­tur­ing, bus trans­port for mine work­ers and plat­inum ben­e­fi­ci­a­tion. Last year alone it in­vested in nine new em­pow­er­ment ven­tures and an­other four through its ju­nior min­ing in­vest­ment arm, An­glo Khula.

In her ex­pla­na­tion of its con­certed ef­fort with re­gard to EDI, An­glo Amer­i­can CEO Cyn­thia Car­roll re­cently said: “What I like about An­glo Zimele – which has been some­thing of a pi­o­neer in the small busi­ness de­vel­op­ment space in SA – is that it cre­ates real jobs through the cre­ation of real op­por­tu­ni­ties in the real econ­omy. An in­te­gral part of the unit’s work is the trans­for­ma­tion of our sup­ply chain.”

Kgosana warns that to ig­nore EDI re­quire­ments would be a fa­tal mis­take for any SA com­pany, re­gard­less of which sec­tor it op­er­ates in. “SA com­pa­nies re­ally need to think out of the box, es­pe­cially those who op­er­ate in pro­fes­sional ser­vices-based in­dus­tries such as our own. But there are still real op­por­tu­ni­ties there too. It just re­quires some cre­ativ­ity.

“For ex­am­ple, KPMG has planned an EDI day where all the pro­fes­sion­als of the group will do­nate an en­tire day to en­trepreneurs and small busi­ness own­ers by pro­vid­ing all our ser­vices free of charge to SMMEs through­out the coun­try.”

Fear of black com­peti­tors the prob­lem. Moses Kgosana

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.