Better Business Basics: Real transformation is needed

24 October 2020

The extent that ill-advised transformation projects contributed and continue to contribute to the demise of our economy cannot be ignored.

A true analysis of transformation, or the lack of it, since the dawn of democracy needs to be based on more than just the racial imperative.

I firmly believe that even if we were to achieve complete racial transformation of the economy (whatever formula one chooses to use to measure this), without fixing the myriad of structural problems inherent in our national economy, the dynamic, flexible, inclusive and globally competitive economy needed to meet the needs and aspirations of all citizens, will never materialise.

The reality is, given our fractured past and the ugly legacy of apartheid, any policy that pursued race-based transformation (ownership of the means of production), or structural transformation of the economy independent of the other, was doomed to fail.

Certainly, the governing party must be given credit for introducing some admirable legislation such as the Employment Equity Act (to promote transformation in the workplace), and Black Economic Empowerment (to change ownership patterns).

Both were well crafted pieces of legislation that suffered from the key failure that they relied on the honesty and willingness of existing owners to comply.

Thus, when enterprising companies took to ‘fronting’ and other creative methods to get around them, the government was unwilling or unable to use more ‘stick’ and less ‘carrot’ with defaulters.

Given that the enforcement efforts quickly became fertile grounds for the ‘enforcers’ to supplement their government salaries with the ubiquitous ‘brown envelopes’, the various departments quickly gave up the ghost, essentially adopting the attitude that the legislation is on the statute books…we have tried our best.

Take the case of state-owned enterprises (SOEs), where swathes of incumbent management (mainly white), were enticed to leave by huge golden handshakes.

It would have been fine if the incoming cohort were technically able to take up the reins, but alas this was rarely the case.

The ruling party chose to use this opportunity to perfect its policy of cadre deployment, where large numbers of the party faithful were parachuted into SOEs.

It appeared in most cases that seniority in the party leadership was the sole determining factor in placement.

The results are clear to see – the staggering incompetence, corruption and mismanagement have brought the likes of SAA, Prasa and Eskom to their knees.

We rode the wave of the commodity super cycles, feeding China’s insatiable appetite for our coal and steel as they transformed their economy into the second largest in the world in 30 short years.

Alas it was not to last, as China moved into large scale manufacturing, we clung to the hope that the next cycle would rescue us.

It was not to be, as we delayed the roll-out of much needed infrastructure, and frittered away our resources on vanity projects, it was inevitable that the chickens would come home to roost.

So now we sit with the hangover of the Covid-19 pandemic, searching for the silver bullet that will revitalise our prospects, ruing the billions stolen from under our noses by foreigners ably and openly abetted by the highest in our land.

That silver bullet will only be found in a transformation of the way we think, act and interact as a country.

Leadership has got to be seen in all sectors: honest, caring and capable government.

A business sector in touch and in tune with all their stakeholders and a citizenry that values consistency, sharing and civic responsibility above all.

After matriculating, Vijay Naidoo studied Economics in the UK. Upon his return, he joined the family construction business as MD for 10 years.

He subsequently joined his sister in their furniture manufacturing business as director for quality assurance and operations. He was responsible for all quality aspects of their products, and led the project to the business achieving an ISO 9000 quality accreditation. As an export focused business, this was important for our international competitiveness.

Mr Naidoo has an abiding interest in quality management and productivity improvement, particularly in manufacturing.

More recently, he has focused a lot of his time on giving back to the community by way of mentorship of small businesses and sitting on the executive of the South Coast Chamber of Commerce. He also sits on the Board of the Ugu South Coast Development Agency.

Source: South Coast Herald at https://southcoastherald.co.za/417880/real-transformation-is-needed/?fbclid=IwAR38F1F0ugxSRkv09dlqfdDrkOJMSsGfiU6mv_lJsgfGH4wyk_NMKPs6oeE