Now is the time to come to the aid of SA
THE man who was Barloworld’s first black executive director, Isaac Shongwe, says business has a “civic duty” to involve itself more effectively in the affairs of the country to try to arrest what he sees as an inevitable slide to disaster.
Citing the latest GDP growth figure of 1.3%, he says that “if we continue growing at the rate at which we are growing, if we continue this way and we don’t have the government realising that you can’t have a situation where an Eskom, for example, is not working, not realising that the impact of that alone on business is huge, then we are headed for a cliff”.
Business needs to speak truth to government before it is too late, he says.
“As business leaders we lack courage. Legislation upon legislation is being piled on us and I think some courage is required, some foresight.”
Shongwe recently told an audience at the University of Stellenbosch, where he was the keynote speaker at the annual Frederik van Zyl Slabbert Honorary Lecture, that instead of giving up on South Africa they must “get into the arena and get your faces dirty”.
For business, he says, this means speaking out unambiguously.
“The role of business in society is to be a catalyst for social change. Business needs to think very hard and very carefully about its civic duty.”
He concedes that for business leaders to raise their heads above the parapet entails risks and is not an easy thing to do.
“They fear being labelled unpatriotic. I mean, look what happened to Reuel Khoza.”
The recently retired Nedbank chairman was vilified by the ANC after questioning the government’s competence to run South Africa.
Shongwe says the government must face the fact that it cannot pull South Africa back from the brink on its own.
“It will be very difficult for the government to come up with a plan that will get the country out of the mess it is in if the government is going to work in isolation.”
It needs to work with business instead of against business.
“You can’t have labour continuously going out on the street because they believe that big business is selfish and they’re not sharing enough.
“That just takes us lower and lower. At some stage, true leadership has to emerge.”
Shongwe has dedicated himself to nurturing young African leadership talent. He says the quality and quantity of young talent in South Africa, much of it smothered by a dysfunctional education system, is extraordinary. He is frequently struck by the “disconnect” between this rich talent and the country’s poor political leadership.
Nobody exemplifies the story of hidden talent better than 53year-old Shongwe himself.
He was born on a farm and went to a farm school until Grade 7. His mother was a farm labourer who died when he was 12. He never knew his father.
When his mother died, he was brought up by dirt-poor relatives in what was little more than a shack in Alexandra, across the road from Sandton.
He had one stroke of luck. He met a benefactor, a teacher from a white school that shared an outreach programme with Shongwe’s school in Alex.
So impressed was the teacher by Shongwe that he arranged for him to attend St David’s Marist College in Illovo, where he was one of only two black pupils at the time.
Shongwe won a Rhodes Scholarship to Oxford, where he got an MPhil in management — his master’s dissertation was on affirmative action, which he advised against — and a Blue award for football.
Back in South Africa, Shongwe started a management consulting company, Letsema Consulting, and an investment company, Letsema Investment.
He joined Barloworld in 2005 after buying 26% of its logistics business. To protect his independence he decided to raise the money himself rather than go the much easier vendor financing route.
After that, he was determined to be part of the business, help grow it and pay off his debt.
“I didn’t want to be one of those BEE guys that do a deal and then move to the next deal,” he says.
He was put in charge of business development before becoming CEO of its African logistics operation. A year later, he became CEO of all its logistics worldwide.
He was the first black executive director at Barloworld but his achievement was soured by Brian Molefe.
The Public Investment Corporation (PIC) boss gave Barloworld a very public tongue- lashing and an ultimatum to appoint a black executive director after his appointment was already a done deal, he says.
“It was a bit disappointing because it gave the impression that I was only being appointed because Barloworld was under pressure. The PIC did me no favours by getting involved. I was already there,” he says. “I thought it was a little unfair on Barloworld itself.”
Shongwe saw himself as an entrepreneur and only intended staying at Barloworld for five years. Because of the 2008-09 economic downturn, he stayed until last year. “I felt I hadn’t really delivered or achieved what I’d gone there to achieve.” It was a steep learning curve. “It was tough. I was running logistics globally with people in 26 different countries including China, Hong Kong, Spain, Germany and Dubai. Being in charge of 4 000 people and with all those different currencies, it was a baptism of fire for me.
“It’s one thing doing a deal, it’s another thing actually rolling your sleeves up and running a business.”
Nobody in the government has done this, which he believes is why we’re in such a deep hole. If they had, they’d know that “if you’re a business you can’t operate in a dysfunctional environment”.
He says that if more black people knew what it took to build and run businesses, they might have put more pressure on the government to create a more enabling environment for business.
“Grappling with issues like if the labour laws are in a particular way and you’re being affected by that — yes, you have to have progressive labour laws but at the same time you have to have labour laws that are enabling for businesses” — would have been a terrific incentive for black businessmen to force the government to learn something about basic eco- nomics, he believes.
This is critical “because at the end of the day government is not cash-generative. Government relies on the taxes that businesses pay.”
The government needs to get the message, he says.
“Eventually people in Alex, if unemployment continues to grow and people don’t have this and don’t have that, one day they will cross the highway. We in Sandton can build our walls higher and higher, but it’s unsustainable.
“Government cannot continue putting in social grants so that those people don’t go hungry because there isn’t enough money coming in to the coffers. You can’t continue to spend what you don’t have.”
Simply criticising the government ignores the “probability” that it is incapable of doing any better, he says. “Probably the ANC is trying the best that they are capable of doing. Up to a point you can’t do what you don’t have the capacity to do.”
Which is why business and civil society need to show more leadership. “Otherwise, if we’re happy to keep heading in the same way, then we probably deserve the leaders we have.”
If we’re happy to keep heading in the same way, we probably deserve the leaders we have