Broad-Based BEE. Jonathan Goldberg
often by executives. Hiring methods, performance management systems and staff screening need to be included in key strategic change processes. Poorly implemented values can, however, poison a company’s culture.
“The right cultural fit” is an often-cited factor in a successful broad-based BEE transition. In essence, the cultural fit refers to the enactment of key values, including integrity, character, trust, honesty, ethics and morality. Look for, reflect on and work through any basic differences in values that could compromise the business.
TRUST – THE “SUPERGLUE”
Trust is an important value in business and other systems and provides the glue that binds people together. Trust means that one can rely on and have confidence in the truth, worth and reliability of a person or thing. It is essential that broad-based BEE stakeholders trust one another and those in business leadership positions so that they can work together collaboratively.
Trust implies people have the freedom to develop, grow and become unique. Trust also implies risk – the risk that someone’s actions might not be congruent with the other person’s values and that such actions could prove to be damaging.
The Chinese maintain shinyung, or trust, as the superglue that binds clans and groups. It is absolute, and Chinese families and clan elders apply strict rules of trust. In order to progress and become a fully-fledged member of the family business you had to demonstrate your trustworthiness repeatedly – it was not automatically bestowed on family members. Deep commitment is required, as well as serving a long apprenticeship, during which time the next generation needs to demonstrate their abilities and absolute shinyung.
Whilst it is relatively easy to speak about trust, in practice trust is difficult to implement. Within many organisations there is an element of distrust between people, often caused by individuals purposefully trying to achieve their own individual goals rather than those of the business.
A broad-based BEE initiative has an inherent ability to create distrust within a business and make it difficult to operate effectively. Many businesses will need to introduce processes that serve to eliminate undesirable reactions and build trust within the organisation.
Trust is enhanced by addressing conflict, having a shared vision, establishing appropriate communication, decision-making and governance structures, sharing information and avoiding secretiveness, as well as by ensuring appropriate sanctions in circumstances where trust has been breached.
As the ownership structure and business get more complicated, with more people becoming involved in ownership, business governance and decision-making, the informal start-up systems and structures invariably need to give way to more disciplined and professional structures that enhance trust and communication.
The entire broad-based BEE transformation process stands or falls on the capacity of stakeholders to build trust and foster collaboration. Almost every aspect and solution will require broad-based BEE parties to converse and discuss issues together and collaborate across “boundaries”. Trust grows
•when people have confidence in one another’s competence;
•when there is congruency between what a person says they will do and what they actually do;
•when behaviour is consistent, predictable and not erratic;
•when compassion, empathy and fairness guide people in their interactions, keeping the interests of all stakeholders in mind – particularly those who will be affected by the broad-based BEE transformation process, as well as
•when communication is clear, timely and consistent.
FATAL FLAW – “IN MY NATURE”
The following story of the “frog” and the “scorpion” illustrates the potentially fatal dynamic that can arise in ownership succession and business continuity planning:
CASE STUDY
A frog and a scorpion are marooned on a small island in the middle of a river. The level of the water is steadily rising as the rain continues to fall in the catchment area, threatening to flood the island. The scorpion pleads with the frog to give him a “ride” on his back to the river bank, where they can both move safely to high ground. Initially the frog flatly refuses, stating that the scorpion would probably sting him on the way to the river bank and both will die. The scorpion continues to plead, arguing that to do so would be illogical and doom them both. Eventually the frog relents, the scorpion hops onto the back of the frog and they set off. Halfway across, the frog’s worst scenario comes true. The scorpion stings the frog and frog’s dying words are: “Why did you do that, we are both doomed”, to which the scorpion answers: “Because it’s in my nature.”
Sadly, some owner-managers in mid-adulthood (ages 55 to 60) enter a period of confusion of purpose. One day the business owner wants to build new branches, the next day to sell. This confused and insecure state usually results in a propensity to do nothing. There are many questions but few answers. There is no business or succession planning; becoming more insecure and static, some business owners inexplicably and impetuously “poison” the business by failing to respond to strategic imperatives such as those presented by BEE.
GOOD TO GREAT LESSONS IN TRANSFORMATION
Why some businesses make the leap and others don’t is addressed in Jim Collins’s book Good to Great. Some of his messages, relevant in the context of broad-based BEE transformation, are:
•Good-to-great transformations often look like dramatic, revolutionary events to those observing from the outside, but they feel like organic, cumulative processes to people on the inside. They never happen in one fell swoop.
•In a good-to-great transformation, people are not your most important asset – the right people are.
•Begin the transformation by first getting the right people on the bus (and the wrong people off the bus) and then figure out where to drive it. When in doubt, don’t hire – keep looking.
•Good-to-great management teams consist of people who debate vigorously in search of the best answers, yet who unify behind decisions, regardless of parochial interests.
•When you combine a culture of discipline with an ethic of entrepreneurship, you get a magical alchemy of great performance.
•There is no single defining action, no grand programme or killer innovation, no solitary lucky break, no miracle moment. The process resembles relentlessly pushing a giant flywheel in one direction, turn upon turn building momentum until a point of breakthrough is reached, and beyond. This underscores the notion that broad-based BEE is a process not an overnight event. There is no silver bullet.
•Those who failed to transform tried to skip build-up and jumped immediately to breakthrough.
•It is interesting to note that the good-to-great leaders spent essentially no energy trying to “create alignment or manage change”. Under the right conditions, the problems of commitment, alignment, motivation and change largely take care of themselves. Alignment principally follows from results and momentum, not the other way round.
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