LEADING EDGE | BMF
by Valdi Pereira and Andrew Ngozo
South Africa’s political and business landscape has changed dramatically in the 20 years since the dawn of democracy. One of the key drivers, to have effected this change in the business arena, has been the Black Management Forum (BMF). In this issue, Bonang Mohale, President of the BMF, reflects on its journey so far, the calibre of leaders South Africa has produced in the past 20 years and most importantly, how South Africa and Africa, should step up to the plate to secure their spot in the global economic arena.
In 1997, when you were named BMF’s Manager of the Year, did the thought ever cross your mind that two decades later you would be the President of this Association?
I can’t say it did. At the time I formed part of a generation of young black managers, who were energised by the political change our country had undergone. We were fearless and believed anything was possible. In short, we were looking to boil the ocean and make seismic shifts in the way things had been done. We were members of the BMF because we believed that we had a role to play in
galvanising it in pursuit of its objectives. We wanted it to help it realise its potential for developing the managerial competence and leadership ability, primarily but not exclusively, among black people. We also wanted to support socio-economic transformation, which we understood to be a process whereby we would fundamentally change the order of things.
You have been a BMF stalwart for many years – what value has it added to you as business leader?
As a young man making my way in the business world; it made an enormous difference to my life. The issues we dealt with in the BMF relating to people, sustainability and governance, environment, due diligence, stewardship and probity, were at a very high level. Much higher in fact, than in the organisations we were working in.
Because we were given the chance to wrestle with these challenges within the BMF, our competence in the workplace grew and was rewarded with promotion and other forms of organisational progression. In my own case, the first opportunity I received to sit on a board was at the BMF. As chairman of the Johannesburg branch I was allocated a seat on the BMF’s board. The lessons I learnt there, from those around me and people I looked up to were invaluable. What it meant for me in the workplace, where I was a middle manager, was a new understanding of how my role impacted upon and could positively influence the company in pursuit of its objectives.
The BMF gave me an unparalleled opportunity to stand on the shoulders of giants and benefit from their wisdom and experience. I also started gaining an increasing appreciation of the contribution women make in the business world, such as Mama Mojane, who was probably the first female chairperson of a BMF branch and later on, the leadership of Nolitha Fakude as our first female President. In 1996, I was the managing director of the world’s oldest elevator company Otis. We listed it in 1996 and subsequently delisted in 1998 because the shares were simply held too tightly for it to make financial sense to continue the listing.
What stands out for you in terms of the contribution the BMF has made to the political, social and economic transformation during the past 20 years?
The BMF spent a lot of time, both before and after democratisation, thinking through new opportunities open to the country. We also realised that while we were a leadership and management association, our political leadership did not have a voice for a very long time.
Because we believe that leadership requires a thorough understanding of the socio-political and geo-political context in which you operate, it was important for us to consider that because of 350 years of subjugation, oppression and discrimination, our operating environment made it impossible for black people to excel. Therefore, we realised that even as an apolitical association, we needed to realise that the environment had become politicised and we would have to address it from this perspective, even though we have no political ambitions.
Our response was to start framing an economic future that would make our economy more inclusive. This included elements of spatial planning, dismantling Apartheid legislation and issues of remuneration requiring intervention to break entrenched poverty. The biggest structural challenge of all had been to prevent the continuation of inequality.
I think history reflects that we were able to exercise positive influence in some of these areas. Of course, these challenges don’t evaporate overnight and we are still haunted by stubbornly high unemployment figures and the impact this has on our country’s efforts at bridging the inequality gap. I certainly believe one of the lasting contributions BMF has achieved was to produce black professionals with demonstrable skills, whether financial or other skills, all the way to boardroom level.
We were able to deploy these members amongst like-minded corporate members as non-executive directors in organisations like Nampak, SA Breweries, Unilever, International Business Machine, Coca Cola and Shell. This helped produce a generation of black business leaders like Reuel Khoza and the late Humphrey Khoza and Lot Ndlovu.
Along the way I think we have also encouraged our members to be selfless and learn the value of planting a seed or digging a well. In the knowledge that they will never enjoy the shade of the tree the seed will produce, or quench their thirst from the water the well will provide. Instead their focus is on creating opportunities for their great grandchildren.
What does the BMF view as the cornerstone of leadership?
We have always held leadership as central to everything we do, simply because we believe that is the path toward producing superior business outcomes. Consequently, we define leadership as an absolute obsession with the development of others. It is contrasted with management, in that we view it as a focus on effectiveness and efficiency in climbing the corporate ladder.
In our view there are three important issues in this regard. The first is that if we want to be progressive leaders, we need to understand South Africa’s long history of oppression. The second aspect relates to setting direction. You can’t be docile and subservient whilst hoping to get a seat at the corporate table. You need to dare to dream about big achievements so you can set the direction in pursuit of those.
The third aspect relates to organisational capabilities, which in turn has four legs to it. The first leg relates to people, which means we first need to be preoccupied with the who, then the what. The second leg relates to structure. It is often said that structure follows strategy – if you don’t have your structures in place, entropy is sure to follow.
Systems and processes are critical to sound functioning and this constitutes the third leg. The fourth and final leg, which is very important in this context, is the question of culture. We need to make sure our people are highly engaged change agents who want to understand why we do things the way we do it. Culture is very important because it is one way to set people apart. A simple reality is that no great leader is born that way, they are the product of confidence, guidance and mentoring offered to them by those who believed in their potential.
We think of our culture as comparable to the four seeds – there was fundamentally nothing wrong with each individual seed. Yet, only one seed was lucky enough to find its way into fertile ground and flourish.
For us the lesson is that a farmer does not spend his time tending to individual seeds. He spends 80% of his time preparing the soil, so that any seed that falls in it can grow, flourish and bear fruit. Culture, starting at the very top of the organisation, therefore needs to be about creating an environment where individuals, irrespective of their age, colour, gender or creed can fulfil their potential.
Is there any particular reason so much emphasis has been placed on the importance of culture?
Quite simply, culture is something starting at the very top of an organisation. We have always stood for preparing a leadership cadre that can lead at the very top levels of organisations. Culture is also, so often, about the small things. If you are a leading executive at an organisation and you decide to take home some of the company’s stationery you have to ask yourself what type of signal are you sending out? Because in effect you are saying to everyone in the company, it’s fine, go ahead and steal from this organisation one brick at a time.
Culture keeps you completely attuned with your people and allows you to have a keen appreciation for challenges around the perimeter of their personal lives, which can affect their performance in the workplace. If I know that a staff member has to leave his or her home in KwaDukuza at 4am in the morning and is occasionally late for work, I don’t have to condone it, but I can certainly be empathetic. I can then also understand that leaving for work early in the morning and arriving home late at night, impacts on his or her relationships at home and acknowledge the attendant challenges this brings to their life.
The right organisational culture will allow you to evolve sustainable solutions in conjunction with that particular individual. In this way, contributing towards keeping your organisation competitive and preventing you from falling into a trap where you unfairly condemn an individual.
The reality is that close relationships in the workplace are of critical importance if a company is to perform at optimum level. Fostering the right culture is therefore indisputably important if this is to be achieved.
The BMF has traditionally been associated with developing corporate workplace competencies. Yet, the demand amongst SMEs and the youth for skills and knowledge to use to their economic advantage is at a very high level. Does the BMF plan to refocus?
The ideal candidate for transformation is always the corporation, not the individual. Consequently, we have spent a lot of time working at getting transformation on track at white owned corporations. This has necessitated a strong focus on corporate South Africa. However, we are cognisant of the role we need to play in supporting SMEs and the youth.
If we consider that within BRICS, our associate countries have 50% of their working population employed in SMEs and contributing 50% to their GDPs, it is clear that there is work to be done on our part. In fact, if you consider that our SMEs contribute less than 15% to employment, while our total unemployment is currently 25.7% and in excess of 50% amongst our youth, the enormity of the challenge is brought into sharp focus. To help address this challenge, we have at our last AGM recognised that for the past 38 years, we have operated primarily in the corporate space, whilst growing into the public sector space. Along the way we have not paid sufficient attention to the SME environment and we are going to address this.
We now have a special category for SMEs and have started running pilot projects in Soweto, in conjunction with the IDC and some other corporate partners. It is taking the form of a competition where the winning company will receive a financial shot in the arm.
Perhaps more importantly, it is not only about identifying a winner, it is about attracting entrepreneurs so we can promote and entrench the spirit of entrepreneurship. Thus far we have really been impressed by what we have found. The entrepreneurial stories which came to the fore are both humbling and inspiring. It is also evident that people are realising that successful entrepreneurship is a life changing experience.
Do you think South Africa will be able to move towards being an economically competitive nation?
As a country we are constantly wrestling with challenges of transformation, equality and inclusivity. These are no longer uniquely South African challenges. For us the issue is that can we produce world class managers to deliver value to organisations, to such an extent that they can take their acquired skills onto the international platform. The experience of the past 20 years tells us that we are indeed succeeding in this regard. Many a multi-national company have looked at and are impressed with South Africa’s ability to deal with the complex and diverse cultures in a country where, for centuries, the very same cultures could not find a common cause. The matters of diversity, transformation, inclusiveness and the appreciation of what makes people different, are now viewed as strengths rather than challenges. This has translated into the country producing some of the most outstanding managers of our time. A lot of the big companies are run by South Africans who have proved their mettle. BHP Billiton, Checkers and MTN are some of the many examples. We have the resilience and the required perseverance, as well as the appreciation of managing in a multi-cultural, multi-dimensional and multi-linguistic environment where people, who used to view each other as enemies, have been able to pull together for a common, commercial purpose for the betterment of enterprise.
It is widely reported that South Africa’s private and public sectors do not see eye-to-eye, yet corruption between the two remains a major issue. What do you think the long-term solution is for both these issues?
In my view we do not have a choice. There is no country in the world that has ever attempted the kind of social economic and political transformation such as that of South Africa. At the same time, without a close intimate relationship between all social partners, (government, labour and civil society), positive change is not possible. We need all our shoulders and hands on deck just to be able to earn our mainstay in the global economic arena.
Secondly, while some would say that there are three ways in which government can get revenue, I will maintain that there are only two. One of these is the 28% made from corporate taxes. Thus, the more profit companies make, the more tax accrues to the fiscus and the finance ministry. Further to this, if people are employed and the more they earn bonuses, then the more they are able to pay in taxes.
The day all stakeholders wake up to the reality of this fact, then there will be a natural internalisation of working hand in glove between the public sector and the private sector. Like I said, most jobs are created by the private sector, hence when we embark on public-private partnerships; we have a real shot at competitiveness. Lastly, it is business continuing to work with government that will ensure these challenges keeping us awake at night, are addressed in the form of investing back into the economy for development. It is only when all role players are pulling in the same direction that we can begin to address some of the transformational impediments in our midst. In this manner, we stand a real chance at redistributing wealth, instead of the total opposite of redistributing poverty.
How would you describe South Africa as a destination for direct foreign investment? Please elaborate.
I think we can learn a lot from the Americans who enter a foreign country for the first time and proclaim their American origins/background with pride. We must be able to be proud of being South African and African for that matter. We must believe in the South African dream in the same manner the Americans believe in their dream. Interestingly, [United States of] America, the biggest economy in the world, is a nation of immigrants who have managed to build a singularity of purpose! South Africans do the total opposite, spending money, time and effort bad mouthing their own country. It is high time we realise that we are in the same canoe and if one side is leaking then we will all sink. South Africa has the potential to be the greatest country in the world by fixing just one or two things in how we conduct ourselves.
The devastation left by the 2008 global recession is public knowledge. But South Africa recorded a positive GDP growth. In those ensuing eight years of hardship, there is only one where we have seen a contraction and that was in 2009. South Africa has not been growing at the rate it wishes but, instead of viewing the glass as half empty, we should consider the glass half full. Countries such as the USA see even a growth of 1% in a positive light and yet we don’t. We must start finding the good things that make us proud to be South Africans, cease to be a nation of moaners and begin ‘talking up’ our country. I should say if one is looking for real growth, we must look at the one billion people on this continent. It is incumbent on each of us to be brand ambassadors of South Africa and the continent.
South African has more than enough resources and people should open themselves to sharing opportunities, information and knowledge. When your neighbour is hungry you are the one who cannot sleep, so it’s in our best interests to invest in ourselves, affording each other opportunities in order that everyone has a share of the pie.
What are your hopes and aspirations for both the BMF and the country as a whole long-term?
In order to move forward as a country, we need to understand our place in the global economic agenda which is driven by several factors. The one is that we need to leave this earth in a better position than when we found it, making it a better place for the future generations. However, we must not only leave a better world for our children, but we must also leave better children in the world. This will be possible by affording them economic opportunities.
Secondly is this whole notion of changing demographics. In the world today, there are more young people than old, hence we need to start listening to the younger ones about where they are coming from and where they are going, what values and utility they can bring to the country and economy at large, so that we become young at heart. It is quite unacceptable that the unemployment rate among youth is above 50%. The other important factor is technology. We need to be innovative to find solutions to our current problems with the young vitality and raw energy at our disposal. For instance, technology has allowed us to find alternative sources of energy and has allowed connectivity through items such as the cell phone.
There is also the concept of a power shift from West to East. All of us are products of Western business gurus. In this respect, we will do well to start learning from the East, a people who start planning for about 60-70 years in advance and stick to that plan. The focus is always on ruthless execution where relationships are paramount. We also need to accept that it is time we began to have different conversations with government in a country where a majority of the population are on social grants. We must not kill the golden goose, but produce more golden geese so that sustainability is perpetuated for all. There is, in South Africa, a piece for all those who live in it. However, we must internalise the fact that growing economies are built on hard work. If we were to approach work in the same manner children approach play time, then we will be more energised and more productive. We should all be thinking, though, on how to win the race and be number one. As Africans we should be considering what it is we bring to the world economic agenda which is uniquely South African. We must capitalise on that, package it and then export it for our growth.