ceo
celebrating excellence in organisations Vol 19 No 3 - 2019
Tax Revolt Stirrings Abound
Generation Flex Employee Power
Porsche Cayenne Meek, Mild & Wild
SA’s Agriculture Sector
9 771726 274709 1
R29.95 (INCL VAT)
72
Overcoming Systemic Challenges
A Sho’t Left
Offers more than you think
South Africa’s Minister of Tourism, Mmamoloko Kubayi-Ngubane
120743L
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HIV/AIDS
“AIDS is the disease that is hard to talk about” – Bill Gates HIV/AIDS prevalence among sexually active South Africans by province are:
KwaZulu-Natal: 25.8%. Mpumalanga: 23.1% Free State: 18.5% North West: 17.7% Gauteng: 15.2% Eastern Cape: 15.2% Limpopo: 13.7% Northern Cape: 9.2% Western Cape: 5.3%
In 1983, AIDS was diagnosed for the first time in two patients in South Africa. The first recorded AIDS-related death occurred in the same year.
Statistics South Africa’s mid-year population in 2017 estimated that the total HIV pervasiveness rate for the country is 12.6% and the HIV prevalence rate for all adults aged 15 to 49 is 17.9%, for women aged 15 to 49 is 21.2%, and for youth aged 15 to 24 is 4.6%.
UNAids dataset sourced from the World Bank recounted that in 2016, the HIV incidence rate for adults aged 15 to 49 was 27% in Swaziland, 25% in Lesotho, 25% in Botswana and 19% in South Africa.
KwaZulu-Natal still has the highest infection rate at 15.5% in the province with the lowest infection rate, the Western Cape, the total number of people with HIV/AIDS doubled between 2005 and 2008.
In 1990, the first national antenatal survey to test for HIV found that 0.8% of pregnant women were HIV-positive.
In 2015 more than 55% of all South Africans infected with HIV resided in the KwaZulu-Natal and Gauteng provinces.
HIV/AIDS is the most serious health concern in South Africa. The United Nations ( UN) reported that the country possesses the fourth highest HIV prevalence rate in the world. Source: en.wikipedia.org
EDITORSNOTE
EDITOR’S note
Profit
– A New Approach
I
n this edition we carry a couple of articles that give various perspectives on the issue of Profit with Purpose. For some pundits this approach as a natural extension of the environmental sustainability ethos which has taken root at a number of the world’s leading organisations over the past few years. For others it revolves around issues of morality and the social impact of business. Whatever your take on this issue, and there are many more perspectives, the reality is that expectations upon business to recalibrate approaches to profitability and the manner in which it imparts benefits to its employees and broader stakeholder groupings are growing. It is clear is that corporate social responsibility and investment initiatives are no longer enough. Often these programmes are driven separately from an organisation’s main business activities. What’s presently being called for is business leaders to consider the vision and mission of their organisations in the context of a rapidly changing world. As we transition to a world where the Fourth Industrial Revolution takes hold and the world of work changes dramatically, visionary leaders will do well to inculcate a spirit of humanity in their business culture or risk seeing their profit base eroded by an all too familiar Machiavellian approach to commerce.
Valdi Pereira
It is clear is that corporate social responsibility and investment initiatives are no longer enough. Often these programmes are driven separately from an organisation’s main business activities.
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Help us teach more children about water safety We visit schools around the country teaching children about water safety, what to do in an emergency and how to do basic hands-on CPR. We focus on children from poor communities, where access to information is limited and the need is great. These are the children most likely to drown. Our water safety lesson fits into one school period and teaches children in fun and interactive discussions.
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CeO 2019 Vol 19.3
INSIGHTS INsights
Ryan Falkenberg
Ryan Falkenberg - Co-CEO, CLEVVA
The Rise of the
digital
While some commentators talk about the 4IR as something that is happening in the future, the reality is a little more immediate. Not only are we currently living through the fourth industrial revolution, the machines have arrived and are working alongside us.
D
advisors, digital workers are here, and they’re engaging you more often than you probably realise. Within many legacy companies, digital workers first arrived in the back office with robotic process automation, which takes manual, replicable system-based tasks and automates them. So now staff don’t need to do as much of the system capture work they can hand this over to digital workers who are happy to work 24/7 365 days a year just doing that. Now we are seeing digital workers move increasingly into the front office, where they work alongside humans and assisting them navigating in real time all the complex sales and support processes while they focus their efforts on the customer. Rather than the exception, this is increasingly becoming the norm. The reality is that digital workers can perform all the rule-based decisions and actions that humans can, just faster and with no errors, making them ideally suited to repetitive tasks that are governed by defined processes. Humans, by contrast, are better suited to tasks that require them to engage their unique traits - empathy, creativity, problemsolving, collaboration. Working together, digital and human workers can offer new levels of customer service and benefit both the organisation and its client-base through improved efficiency, productivity and problem-solving. Digital workers will soon be installed across all stages of any given process and, contrary to popular fears about
on’t believe me? Who do you think you were talking to last you got an insurance quote on your providers website? Or when you asked Siri to call a specific friend or send a specific message? Or when you handed over the job of providing directions to Google Maps instead of your partner? From chatbots to virtual assistants and virtual
co-worker
the rise of the machines, are expected to lead to greater employee satisfaction as they relieve humans of tedious, repetitive tasks, and free them up to do things they can derive real enjoyment from. The future of work is one in which humans and digital workers partner to collectively perform at levels previously unimagined. The building and deployment of digital workers is getting easier and quicker, and given the ability of digital workers to rapidly expand their numbers and capacity to handle changing work volumes, it means that most companies now view a digital workforce as a critical means to scale. Digital workers also offer agility within a legacy reality. So if you have not yet started to build and deploy digital workers within your existing business, it may be time you did.
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CONTENTS 10
LEADINGedge
South Africa’s Minister of Tourism, Mmamoloko Kubayi-Ngubane shares her perspectives on the tourism opportunities open to Africa, how South Africa stays on top of changing traveller trends, efforts by her department to ensure economic inclusivity and the potential impact of the Fourth Industrial Revolution on tourism.
PERspective
REGULARS
2 Your World Unravelled 3 Editor’s Note 5 Insight 8 Flip Side 32 On Point 33 What’s Hot or Not 72 In Conversation With
28 Atishoo! The impact of season change
INtheKNOW
30 Exchange Traded Funds A capital market approach
34 Gen Flex
44 Virtual reality for brands
The Employee Power Shift
46 Communicate don’t Police
36 Food Security Do we have an acute case of food wastage?
47 The Transformation Challenge
38 Resilience is Key
50 Not a Good idea
The future of organisational structure
52 Abundance & Opportunity
40 Business Process Outsourcing
54 Making Difference
Job growth and forex influx
42 Why change fails Avoid the pitfalls
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56 Avoid poor Hiring 58 Already underway 60 The new Way Forward
ENTREpreneur
LIFEstyle
14 Big Business
62 The Table Bay
Entrepreneurship can benefit big business
Dream Job
16 Executive Leadership
Reaching New heights
Heading for Extinction
18 Collaboration Key to Entrepreneurial Success
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20 Crowd Sourcing Enabling opportunity
22 Global Green Brand About more than just sneakers
24 Green-fingered Entrepreneur Agriculture generating livlihoods
26 Creativity and numbers The key to landscaping
64 Wine show 66 FORTY NEW HOTEL PROPERTIES Exciting new venues on the continent
68 Porsche Cayenne The meek, the mild and the wild
GLOBAL Expand your business Horizon
Publisher CEO Global (Pty) Ltd Tel: 0861 CEO MAG Fax: (012) 667 6624 Tel: 012 667 6623 info@ceomag.co.za www.ceomag.co.za Chief Executive Annelize Wepener annelizew@ceomag.co.za Director: Strategic Development & Editor in Chief Valdi Pereira valdip@ceomag.co.za Director: Corporate & Financial Services Carl Wepener carlw@ceomag.co.za Business Development Manager Joseph Gumbo josephg@ceomag.co.za General Manager: Global Services George Wepener georgew@ceomag.co.za Head of Production/Creative Manager Channette Raath channetter@ceomag.co.za Associate Editor Terry Owen terryo@ceomag.co.za CEO Class Administrator Nyahsa Rugara nyashar@ceomag.co.za Tawanda Mandizvidza tawandam@ceomag.co.za Farai Mandizvidza faraim@ceomag.co.za Manager: Corporate Support Raymond Mauelele raymondm@ceomag.co.za
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* No article or part of an article may be reproduced or transmitted in any form without the prior written permission of the publisher. The information provided and opinions expressed in this publication are provided in good faith but do not necessarily represent the opinions of the publisher or editor. All reasonable efforts have been made to ensure the accuracy of the information contained in this publication. However, neither the publisher nor the editor can be held legally liable in any way for damages of any kind whatsoever arising directly or indirectly from any facts or information provided or omitted in these pages, or from any statements made in or withheld by this publication.
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FLIPSIDE
Phone fraudsters are stealing billions every year around the world
Telephony-based fraud is getting out of hand on a daily basis and unfortunately there hasn’t been a major breakthrough to dealing with this massive challenge. The fraudsters have made billions over the past decade through a scheme called IRSF. The International Revenue Share Fraud (IRSF) centers around the existence of premium phone numbers. Premium phone numbers have existed in the telephony landscape for decades and they’ve been introduced to support automatic phonebased purchases. Several people have raised the issue of telephony-based fraud but it seems as if these fraudsters are one step ahead because they vanish after committing these crimes.
Investigators can now use a drone to track the owner’s identity
Some people often use drones for wrong reasons but investigators have found a way to end this challenge. Even if investigators found a damaged drone they have the resources and abilities to reveal the pilot’s personal details. Drone forensics is an emerging field that finds hidden clues inside these trendy flying devices. In recent years, drones have caused problems such as crashing into crowds and carrying drugs over international borders. Drones are proving to be an important part of investigations. Investigators could spot that a drone repeatedly takes off from the same location. In addition, drones might have user information such as username or credit card details that could link the drone to its owner.
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FLIPSIDE
The magical watch, the impossible made possible No batteries required, Matrix PowerWatch2 is powered by the sun and the heat of your body. Thanks to the 21st century for reaching the unpredicted within a short period of time. Who have imagined that by this time in the world, there would be a watch that can easily accommodate everyone and doesn’t require new batteries? Wearables provide a huge amount of health and fitness data but gaps exist in this data collection process when they are on the charger. There’s no need to take it off when the owner wants to charge it. Your body heat and solar will perform the function. It possesses several unique elements such as the thermoelectric and solar cell technology. What a time to be alive!
Facial recognitions fail to live up to expectations for smart phone models A Dutch non-profit tested 110 smartphone models and found that facial recognition feature used for locking devices has left several people disappointed after failing a basic photo test. The study, carried by Consumentenbond and its international partners, found that holding up a photo of the phone’s owner is enough to unlock 42 of the tested smartphones. Photos obtained from social media, CCTV footage and other means can be used to access the owner’s phone meaning it’s not safe. Using a printed photo of the owner’s face is the first test that regular users, pen-testers, and attackers alike would use to break into a facial ID-protected smartphone before they move to try more complex attacks. Any facial recognition that fails the ‘photo test’ is regarded as useless.
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CeO 2019 Vol 19.3
South Africa’s Minister of Tourism, Mmamoloko Kubayi-Ngubane
LEADINGEDGE - Ministry of Tourism South edge Africa LEADING
A Sho’t Left Offers More than You Think by Valdi Pereira
This edition’s cover story features an interview with South Africa’s Minister of Tourism, Mmamoloko Kubayi-Ngubane. The Minister shares her perspectives on the tourism opportunities open to Africa, how South Africa stays on top of changing traveller trends, efforts by her department to ensure economic inclusivity and the potential impact of the Fourth Industrial Revolution on tourism.
The global tourism market is a highly competitive one – if you consider Africa as a destination, what do you think makes it appealing to international tourists? In Africa you find a good mix of nature and a rich human history that is not easily replicated in other parts of the world. The fact that Africa is also the cradle of humankind is something which resonates with international tourists and serves as an important draw card. There is no doubt that Africa offers great opportunities for tourism but a lot of work still needs to be done. If one considers that the continent has about 67 million tourist visits a year compared to other regions on the globe that receive some four to six times more tourist per year, the scale of the opportunity becomes more apparent. Why do you think Africa’s tourist visit numbers lag other regions? There are a number of factors, the most important probably is that historically Africa has not benefitted from world-class infrastructure and this has impeded the growth of tourism. Unfortunately moving around Africa and sometimes even within countries can be challenging. The situation is certainly improving and the launch of the Africa Free Trade Agreement is in our view an exciting development because it will facilitate the movement of goods and people, ultimately also giving a vital boost to tourism. What do you think South Africa’s key differentiators and draw cards are for foreign tourists? I think we are in a fortunate position because we have global attractions like the Kruger National Park, Cape Town and Sun City. At the same time we also have a number of nature reserves like Pilanesberg
and venues like God’s Window and the Blyde River Canyon, which offer unique experiences but that are not well-known. What this means is that we have the potential to delight tourists with so much more than just our globally recognised attractions. It also places an onus on us to market more of our destinations across a wider range of potential tourist markets. We have tremendous diversity and can cater for tourists that want either a rural, township or cosmopolitan experience. Our utilisation of a grading system in our hospitality sector also provides tourists a level of comfort by knowing in advance what level of accommodation they can expect to experience. In fact, we are working with some countries on the continent who want to introduce similar systems because of the benefits it can bring to their tourism sector. Our history, which in some respects is unique amongst people of the world, is also an attraction for tourists. Many of them would like to know how we managed to break with an evil past and traverse change to become a diverse and unified nation. Our Apartheid museums offer intriguing insights into this process and hold valuable lessons for all people. It is important to note that when we share the stories of our past we have worked hard at ensuring we don’t only give one language, tribe or culture prominence over others, we strive to constantly project a balanced view of our people and country, which is appealing to many tourists. Changes in traveller tastes and demand for particular experiences are changing all the time. How do you ensure that South Africa is targeting the right markets and promoting itself amongst tourists that will visit South Africa? There is no doubt that tourism trends are evolving and at an increasingly rapid pace too. The Ministry works closely with South African Tourism to make sure we understand market trends. Our membership of the United Nations World Tourism Organisation (UNWTO) is also beneficial in this regard. In this manner we stay on top of developments. Currently there is a strong move towards tourists partaking in cruise ship travel. With our wide maritime expanse around us, there are clearly opportunities that we can leverage off - the challenge for us is to package products that will convince tourists to spend money with us when they dock in South Africa as part of their cruise experience. Internationally there is also a clear trend for conference attendees to combine their business with leisure. As a country
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LEADINGEDGE - Ministry of Tourism South Africa
we therefore focus on bidding internationally for particular events because there are revenue generating opportunities for our country around these conference. We are always looking for ways to expand opportunities in this space. The Presidential Investment summit is a good example. Investors may travel here on business but afterwards you can expose them to what South Africa has to offer from a leisure perspective. Domestically we have also seen a definite trend emerging in the last few years where guests at family gatherings and
other special occasions are making use of bed and breakfast facilities in the vicinity of the event, as opposed to making use of traditional family hospitality. We are analysing this closely in order to ensure that rural areas in particular have adequate hospitality infrastructure to cater for this trend. ‘Over tourism’ has in recent years emerged as a critical challenge in a number of urban tourism destinations in Europe and North America. How do you think South Africa can benefit from this challenge, whilst simultaneously maintaining a balance that ensures sustainable tourism trade? Environmental sustainability is very important and is high on our agenda given the fact that our country’s natural splendour is often the hallmark of tourist experiences. That being said, I don’t think we are close to suffering the degrading effects of ‘over tourism’ on our natural environment. In many ways it was a wise decision by President Ramaphosa to keep the ministries of Tourism and Environmental Affairs separate. In this way, we can pursue our mandate to the full and Environmental Affairs can equally strive to fulfil their responsibilities with respect to the environment. In this way I believe a sustainable balance will be achieved. The rise of ‘over tourism’ also alerts us to the need to make sure that those parts of South Africa that have global prominence
in terms of tourism destinations are carefully managed and that we market the many other beautiful destinations and experiences our country has to offer. Ensuring local communities benefit from global tourism opportunities has long been one of the focus areas of the tourism ministry. Aside from Tourism Amendment Bill what are interventions do you have in place to benefit marginalised sectors of our society? We have the Tourism Incentive Scheme, as part of this scheme we are looking at ways to support emerging entrepreneurs. This scheme includes incubation services where owners of hospitality facilities, are assisted to understand how to run a successful business. It covers a wide range of topics dealing with day-to-day management all the way through to financial management issues. We also have the Tourism Transformation Fund which is aimed at helping owners of facilities that might be in need of a refresh or revamp, to access funding. Applicants will typically approach the National Empowerment Fund (NEF) for a loan and if this is granted we will match the value of the NEF loan with grant funding from our fund. We also provide support to small companies that have products but that are struggling to enter the market. We take them along on our road shows and assist by showcasing their offerings to international markets and give them the opportunity
What this means is that we have the potential to delight tourists with so much more than just our globally recognised attractions.
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LEADINGEDGE - Ministry of Tourism South Africa
to sell their products. We also help them with the packaging of their offerings – often you find entrepreneurs have good ideas but they are not packaging it in a manner that makes it attractive to potential buyers. We are also attuned to the need to do more to involve our communities. As part of the Expanded Public Works Programme we are for instance able to build a lodge in a region and then hand this over to the community for them to manage for their own benefit. Involving communities is very important to us. I recently met with the communities around the Numbi Gate at the Kruger National Park and it became clear to me that much of the unrest and disruption tourists experience in this area is because the communities feel left out of the economic activity taking place on their doorstep. We hope that in the new financial year we will be able to assist this community in a meaningful way. Another area of concern for me is making our tourist experiences more accessible to persons with disabilities. There is a lot we can do to share our country’s heritage and natural beauty with those that are physically challenged and we will be focusing on this as a department. Overall we are working on a number of initiatives. If you were to ask me if we are doing enough? I would say, without taking anything away from the work being done by the staff in the department, that there is room for more to be done and I hope we can achieve more in the period ahead. There is a lot of angst and concern around the rise of technology and the impact it will have on job security and the role of humans in the working world of the future. As a member of the Global Artificial Intelligence Council, where you are providing strategic guidance to the global community on this matter, you have some unique insights in this regard. How do you think policies should formulated in order to ensure a harmonious future between man and machine? I was recently at a UNWTO event in Saint Petersberg, Russia. During some free time available to me, I decided to take a bus tour of the city. The bus had no human tour guides and made use of technology to inform tourists about what they were viewing around them. I realised during this tour that technology cannot easily fully replace human interaction. There were a number of sights on that tour which I would have liked to know more about. However, it
wasn’t possible for me to ask questions or interact with anyone that was knowledgeable about the city and could give me more information. The experience confirmed to me that technology helps us be more efficient but that it is not possible to replace human interaction in its entirety. As people I think we have a tendency to see technology as a threat. We don’t analyse what it offers and see how it can possibly empower us in different ways. It is important that as the world enters a transition period where technology will increasingly influence the world of work that we find ways to focus on the new opportunities it will open up as opposed to focusing only on how things are currently done. I am optimistic about the future, South Africa and Africa, have large youth populations and young people are intrigued by technology and its utilisation. Young people are flexible and adaptive in their thinking and they can see the potential that technology holds, so I believe we will ultimately find ways to integrate technology and work opportunities in the future. The drive towards promoting mathematics, science, robotics and analytics in our schools reflects the steps that are being taken to help prepare our youth for the future. When it comes to the tourism and hospitality sector, there are certain unique aspects of human interaction that cannot be easily replaced. Imagine returning to your hotel after a long and busy day taking in new sights and experiences to be greeted only by a robot! Technology will no doubt help us perfect what we do but the ability of humans to display empathy and connect with each other based on shared experiences will always be needed. When the time comes for you to move onto new opportunities, what do you hope your tenure at the Ministry of Tourism will be remembered for? I always try to focus on making an impact, whether it be in large or small ways. So, I hope people will be able to reflect on my time at the ministry and note that I was able to make a difference. More specifically I want to be able to help all South Africans feel included in our country, specifically from an economic activity perspective, so that everyone is able to share in the opportunities our land offers. It is also my intention to help South Africans re-affirm the pride we have in our country so that from a tourism perspective we realise that we are all hosts and that anyone who arrives in our country, is our guest.
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ENTREpreneur
How Investing in small business
Entrepreneurship can benefit BIG business
By Len Brand, Chief Executive Officer at TATA Africa Holdings and Head of Distribution Vertical at TATA International
Businesses are dependent on the social, environmental, and economic sustainability of the communities in which they operate. Investing in initiatives which empower more people to become self-sufficient can have far-reaching benefits. The proverb ‘give a man a fish, and you feed him for a day; teach a man to fish, and you feed him for a lifetime’ is still one of the most powerful ways businesses can pay it forward.
B
efore I came on board in August 2016, the TATA Africa business was not in good shape. But execution of strategic initiatives which involve leading major organisational and cultural change to propel and sustain revenue growth is what I live for. It was a challenge that I relished. Fast-forward two-and-a-half years and I’m pleased to say that, through a clearly defined ‘uptime’ turnaround strategy, we managed to achieve a 20% jump in turnover, and the business was returned to solvency.
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It’s all about uptime In essence, uptime is the opposite of downtime. For commercial vehicles like trucks and buses, uptime is the period when that vehicle is up and running, and downtime is when it’s off the road for maintenance or repairs. Obviously when human capital or other assets go down, the business suffers financially. So, the quicker we can get that vehicle back on the road, helping its driver or owner to earn an income, the better. Access to parts and service Before the implementation of our uptime strategy, TATA Africa’s network consisted of independent 3S and 2S dealers in South Africa and Kenya, with TATA acting as importer and dealer elsewhere on the continent. All these facilities were in the main cities of each country. A 3S facility is a dealership which offers sales, service, and spare parts. A 2S facility, usually owned by a private individual, offers only services and spare parts. Up till that stage, a 1S facility was just a guy selling grey import spare parts out of a container. In order to truly grow our footprint, to create the economies of scale we needed across the continent, we had to transform TATA’s network in Africa through an innovative development programme. So, in line with the ethos of the Tata family conglomerate and their unwavering commitment to job creation, education, and skills development, especially in the areas of youth employment, and community and social upliftment, we set out to empower existing small business owners to become entrepreneurs. Empowering entrepreneurs It’s important to understand that not all small business owners are entrepreneurs. While they are both self-employed, there are some distinct differences. Small business owners are often sentimental, seeing their business as part of the community and part of the family. They are generally happy with the way things are, and content to simply carry on making a living, with limited growth and profitability. Entrepreneurs, on the other hand, are not in business to simply achieve a level of income to support their current lifestyle. They are driven by passion or opportunity, and focus on innovative offerings, targeting rapid growth and high returns. Our development programme was focussed on identifying those small business owners with entrepreneurial flair, and equipping them with the skills they needed to implement business processes and operating efficiencies to take their businesses to the next level.
ENTREpreneur
We chose existing 1S facilities, strategically picking the ones already operating in prime locations, and offered to sell them genuine spare parts at a discounted rate, with a one-year buy-back guarantee. We also offered free training for roadside mechanics, bringing them into one of our 3S or 2S facilities for three or four days, and training them on how to fix our vehicles. Investment bears fruit Our 1S pilot in Tanzania was a huge success. We’ve already seen the entrepreneurial results of the time and money we’ve invested in this programme. When one of our customers’ trucks or buses break down, these TATA-trained roadside mechanics now go to their nearest 1S facility, buy the genuine parts, and fix the vehicle as quickly as possible. There has also been a shift in our buying behaviour, as they have started buying spare parts from 1S facilities closest to them. Not only are they supporting small businesses in their communities, but in doing so, they are also able to get their customers’ trucks and buses up and running as quickly as possible. All of this supports and bolsters our uptime strategy – positioning ourselves as the brand of choice in Africa for vehicles with the least amount of downtime. It’s a virtuous cycle. The whole is greater than the sum of its parts In South Africa, we still have more than 30 3S dealers, and have increased our 2S touchpoints to 91. We can reach a broken truck or bus in less than two hours. We are doing the same across the rest of the continent, where we have expanded our own 3S facilities beyond just the main cities, and added numerous independent 2S and 1S touchpoints. As you travel through Africa, you know there will be a TATA touchpoint somewhere along the way. Our aim is to continue growing our brand awareness, to be top of mind for commercial vehicles on the continent, and ultimately for the TATA brand to be as big and respected in Africa as it is in India.
Prior to his current position as CEO at TATA Africa, Len Brand spent 22 years focussed on agricultural mechanisation equipment, and golf and turf equipment, in subSaharan Africa, Germany, and the United States, six of which were spent in the role of MD at John Deere Sub-Saharan Africa. He is a University of Pretoria alumni, with a BSc in Industrial Engineering, and also sits on the BRICS Institute’s Advisory Board. CeO 2019 Vol 19.3
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ENTREpreneur
Why
Executiv Leader
e
ship
will soon
be
Extinct
To say that the world of work is changing would be a colossal understatement. Forget the Fourth Industrial Revolution‌there is an even more fundamental revolution taking place, which is empowering self-starters and disempowering those who cling on to old ways.
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CeO 2019 Vol 19.3
ENTREpreneur
H
ow so, you ask? The workplace is being fundamentally re-imagined – and recreated – with traditional organisational structures and top-down leadership styles fast disappearing. Much like the oft-cited story of Kodak’s demise, the entire architecture of corporate culture is tumbling – and is being replaced by a radically new blueprint for business growth, innovation and human-centric development. Beyond the hoodie Inspired by the seemingly casual yet fiercely dynamic approach of global tech juggernauts such as Facebook, Google and Spotify, fast growing companies across all spheres of business are now embracing a more fluid, organic approach to work – in which employees create their own ‘structure’…and more importantly, are evaluated not by archaic timesheets - but by creative and commercial output. Beyond the apparent nonchalance of teams sporting hoodies and sneakers, this cultural ‘revolution’ is a direct response to the need for agility, creativity, and free thinking – which in turn translates into work that transforms not just one business…but entire industries. In this world, there are no dictatorial CEOs and suited up executive teams. Instead, there are mentors who provide guidance and advice. Similarly, there are no departments and silo’d divisions – these are small, fluid teams that are formed to solve specific business problems, operating with autonomy and self-appointed ‘leaders’. This approach is based on the premise that it is your people – not your leaders – who create value, and who should thus guide the nature and pace of work. Ok, so what does this really look like in practice? Fuelled by collaborative working Underpinned by smart technology (yet not dictated by it), the new world of work demands that you learn a new language: a language that has no vocabulary for traditional leadership and hierarchies, but instead describes an ecosystem characterised by collaboration and the ongoing cross-pollination of skills, energy and vision. At Basalt, we have created an ecosystem that is modular and set up to scale. We work in pods of up to seven people, whereby a leader is allocated who has certain KPIs to meet. Our teams spend 80% of their time on clients, and 20% of their time on the business itself. The latter can include categories such as mastery, incentives, business development and innovation. Essentially, employees select what they want to work on, which naturally leads to higher engagement and better results.
Wayne Zwiers, Chief Executive Officer & Co-Founder - Basalt
Often, it is junior employees who step up to the plate and volunteer to be a team leader. They flourish in this role, as they are given the opportunity to learn, and they are highly incentivised and motivated from the start because they have volunteered themselves. Every team leader takes part in check-in calls, during which this person explains what the team has achieved, and how it stacks together (not up) to meet a strategic objective. In this way, new best practices are continuously created and shared - and the business manages itself! Purpose-Driven Work While there is no doubt that the face of the workplace is transforming, let’s not mistake trendy new appearances for the underlying change: the shift from purely profit-driven business models to purpose-driven work. At Basalt, for example, profit is important, of course, but it is not our reason for being. Instead, we exist to bridge the gap between technology and humanity – providing technology solutions that propel business innovation and growth. Our people and partners buy into this vision, creating a synergy that produces pioneering work. This approach fosters organic growth, and yes, profit. We are ditching the suits and breaking the rules. Step into this world, and you step into the future.
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Collaboration gives local brand wings B
urgundy Fly is the brainchild of Nobesuthu and Nhlanhla Ndlovu, a duo whose look book is a reflection of today’s South African woman. After the closure of their Rosebank store, Foschini extended an invitation to a collaboration with the brand, thereby assisting the local business to extend its reach, while ensuring that customers will be spoilt for choice in a Foschini store. “The collaboration with Burgundy Fly is an expression of the brand’s commitment to serving up dynamic local merchandise. It is a first of many collaborations that are as much about a locally invested business as they are about meeting the evolving needs of the South African woman. We are very proud of this moment in our business,” said Pride Maunatlala, Head of Marketing at Foschini. Burgundy Fly fashion is now available at the Sandton City Store. The owners of the brand, with assistance from Foschini staff, will run the floor of the store with their merchandise. “This is a great opportunity for our business. Firstly, it has meant that we have a store in Johannesburg again, which is great for the bottom line of the business. Secondly, having our merchandise on the floor of a store as big as the Sandton City branch means that because of the high footfall, a lot more women will get to see, touch, feel and purchase our clothes. This partnership with this heritage fashion retail brand is deeply meaningful to us. The agility that such a huge brand like Foschini has shown here is exemplary, and we too will thread it forward support other SMEs,” said Nobesuthu and Nhlanhla Ndlovu, owners and directors at Burgundy Fly. “In the pipeline are other collaborations with local creators we believe will add value to our customers, and in their success, to the
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economy. And these will not be limited to fashion – other local creators whose offering resonates with the customers will be part of this local commitment. We are actively meeting local needs, through the local means of our various creators. For instance, at the Foschini All Woman concept store in Fourways, Johannesburg, local hair and beauty care brand, Candi & Co. is one of the collaborators. The result is a truly intuitive shopping experience that meets the needs of the South African woman. The aim is to bring value to our customers, and also thread it forward and contribute positively to South Africa’s retail sector,” concluded Maunatlala.
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ENTREpreneur
On-demand delivery enabled by
Crowd Sourcing
The on-demand economy is changing customer expectations, they now require a faster, more personalised and cost-efficient delivery service. Crowdsourcing is the answer to these expectations, it is one of the largest opportunities for package delivery companies today.
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ccording to new global research study by Zebra, almost 90% of retailers expect to use crowdsourced delivery to handle specific orders by 2028. The crowdsourced delivery model, also known as the Uber package delivery fulfilment model, creates a completely new type of delivery system with the flexibility and scalability to handle same day and last mile deliveries at a predictable cost. Picup HR manager Ashley Arendse says until now, many companies tried to offer this service by on-boarding delivery drivers and promising them the world. “They offer them the freedom of working for themselves, whatever working hours they prefer and good compensation for longer hours. However, these recruitment techniques often bring challenges with retaining drivers.�
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ENTREpreneur
There are several start-ups like Picup that have now know who they are, and they know who we are. The Legends attracted huge funding to fulfil the vision of on-demand also help in every possible way to improve the driver app.” delivery. The future of on-boarded drivers holds a lot of The Picup app is fundamentally an app that is built by potential within the age of on-demand services, but one drivers for drivers. This ensures that the Legends are using needs to build a virtual driver culture and create a positive an app that will benefit them, the brand and the consumers. relationship between the driver, the customer and the Legends now focus on customer experiences rather than on brand. This can be done through the use of strategic how much money they are trying to make. crowdsourcing techniques. “They know that, by guaranteeing excellent customer experience, they are both becoming more successful “In the beginning, Picup used a driver application process themselves and helping the brand to become more successful, which was extremely impersonal. There were 20 to 30 potential as they retain the customers who have had the exceptional drivers that were involved in each orientation with three experiences,” he says. sessions per day. The potential drivers underwent training the following day, a criminal check was done and if successful, their The future of the Picup Legends holds a lot of potential. profiles were activated,” he explains. As the world moves deeper into the on-demand age, people start to learn to become more skilled at what they The purpose of this impersonal mass on-boarding do for a living, even for what they were not originally technique was to attract 120 active online drivers for Cape qualified to do. The convergence of different specialisations Town. There were soon some interesting challenges, a few is an essential part of who we are of the online drivers’ mobile becoming as human beings and devices were incompatible The future of on-boarded drivers as employees in the age of onwith updated versions of demand services. the app, drivers became holds a lot of potential within despondent as they were not “It therefore goes without the age of on-demand services, making enough money and saying that drivers are evolving the reliability of the vehicles too. In South Africa, we are starting but one needs to build a virtual on the platform were not what to see crowdsourced drivers driver culture and create a positive was envisioned. working on different platforms, at different times. Picup Legends Faced with the challenges relationship between the driver, the are doing Picups during the day at hand, Picup needed to make customer and the brand. and switching over to Uber Eats at a few changes. It decided to night, for dinner deliveries,” he adds. design a process that would create ‘Legends’. The orientation process became a one-onHe says crowdsourced drivers will continue to migrate to one meet and greet session, where applicants were scored platforms that allow the most favourable earnings. “Our goal based on their personality. is to ensure that our Legends are earning optimally on every delivery and we designed our Parcel and Rate Calculating The following week, the top scorers from orientation System (PARCS) to achieve this.” attended a training session where they had to achieve at least According to Arendse, the crowdsource model for Picup 90% on a test. This test was based 80% on customer service and has seen significant improvement since the start. “We now have 20% on the driver mobile application. an excellent model that we are constantly refining, and consider On passing the test, the potential legends had to do a our Legends’ feedback of utmost importance in this process. vehicle assessment and once they met the expectations, a final Our previous methods to crowdsource Legends have taught us background check was done. This entire process could take up which techniques are best and what we need to do to ensure to 10 working days. our drivers maintain a high standard for customer experience.” “Our Legends know that becoming a successful entrepreneur involves a lot of determination and hard “Our Legend mindset is aligned to provide an on-demand work. They know that, to win in tomorrow’s on-demand, gratification that today’s consumers are expecting. The future last mile market, they need to focus on the customer is exciting as the world moves towards a more convenient experience,” he adds. Picup process, with the fastest possible delivery times, a high standard of customer service and excellent customer Arendse says Legends are the heart of the company and satisfaction,” he concludes. Picup’s goal is to ensure that the relationship between the brand and the Legends is a collaborative one. “On-boarding Businesses in all industries will face major challenges in Legends is a 360-degree relationship, we ensure that we maintaining a reliable crowdsourced network.
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ENTREpreneur
The proudly South African CEO behind a
Global Green
Brand An innovative, environmentally friendly and first of its kind sneaker care product; designed, manufactured and distributed by sneaker specialist Sneaker LAB is taking the world by storm, and it’s all thanks to its founder and CEO, Jo Farah.
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neaker LAB’s products are distributed worldwide through its fashion retail partners and online. Farah has also recently raised capital in an international partnership with Buffet and KLT, to advance the brand’s global growth strategy. The local brand will use the partnership to accelerate its growth, primarily through increased brand presence and marketing effort. But as with any thriving business, it all started with an idea: After returning from the United States in 2008 with just one thing on his mind – to help cure South Africa’s conundrum by creating jobs for the unemployed, and in-turn fostering economic growth, Jo invented a one-of-a-kind sneaker care product, and put shoulder to the wheel to establish his business in 2013. “After being abroad for so long, missing home and keeping an eye on the happenings in South Africa; it one day dawned on me that I wanted to be part of the solution
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to the challenges South Africans face. The only way to do that was to come back,” Jo says. Coming home became part of his plan and building and developing a local brand of good stature and elevating it to a global status was his goal. Once sustainable, it would be his contribution to directly addressing SA’s levels of unemployment. Starting a sneaker care product range was a natural choice, especially considering Jo’s passion for sneakers, streetwear and urban culture. He also wanted to create a complimentary product to accompany the list of sneaker brands that’s inspired him over time. Jo’s work behind the scenes commenced in earnest and in no time, he conducted enough research to support his theory – there was a gap in the market for branded sneaker care products. He knew that he was on a good business wicket. “There already was a range of non-branded products on the market, but my research revealed there was a healthy
behin
nd a
ENTREpreneur
After being abroad for so long, missing home and keeping an eye on the happenings in South Africa; it one day dawned on me that I wanted to be part of the solution to the challenges South Africans face. appetite for branded, environmentally friendly sneaker care products. That spoke directly to my business model,” he says. Today, Sneaker LAB is the only sneaker care product range in the world to be Green TAG certified, environmentally friendly and biotech driven. Its products are water-based, readily biodegradable, and the packaging is suitable for recycling. Sneaker LAB’s unique solution functions on a molecular level. The biotechnology formulas use bacteria and enzymes to hyper-escalate nature’s natural cleaning process. But their green credentials don’t end with their products: Sneaker LAB is currently working with WeForest, a global organisation committed to restoring forests for climate change and conserving and restoring ecosystems and have committed to planting 2000 trees in Africa this year. They have also partnered with local NGO Greenpop. The brand’s latest green initiative collaborated with a creative illustrator and graffiti artist to create customised Sneaker LAB recycled glass water bottles. The business currently operates internationally, in more than 60 countries across Africa, Australia, Asia, Europe, Scandinavia, India and the USA and is growing rapidly. “I have committed to manufacture our products locally. The only elements we import are items that are not manufactured in South Africa, so we have no choice but
to import them. Our factory is where the product solution is mixed, bottled and packaged, ready to ship to over 60 countries,” Jo states. In addition, Sneaker LAB has an experiential store in Braamfontein, as well as in downtown Los Angeles – a formula that speaks to the brands local roots and global expansion. Jo says he’s most proud of the business’s exponential growth. Today Sneaker LAB’s products reach around over 6 000 doors in the USA alone, up dramatically from 25 doors locally when it started out. When asked if there’s one thing he wants customers around the world to know, he responds: “Sneaker LAB was nurtured and developed in South Africa”. “Few people know that we are a proudly South African business, and we’d like them to start making that connection. I love and am so proud of the fact that we’re making a complete success of a brand that’s been rolled-out in South Africa,” he says. And that’s not all, people also need to know that he’s centered his business model around giving back and making a positive contribution to the countries in which Sneaker LAB operate. Farah’s main aim is for Sneaker LAB to leave a lasting impression on everyone it comes into contact with, in more ways than one.
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Green-fingered Entrepreneur transforming Rural Eastern Cape Town
A passion for the environment and a desire to promote agro-tourism in the rural Eastern Cape has seen ex-schoolteacher Thembisile Ralarala, 55, take on the challenge of developing a sustainable “green economy” and tackling poverty in the small town of Mount Fletcher – one tree at a time.
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s Ralarala’s company INCREW (Innovators Create Wealth) environment grew out of her role as a teacher at Nolufefe is a retail nursery also offering florist, landscaping and Primary School, where the school’s greening efforts won garden services to homes, businesses and schools in numerous environmental awards. the area, and is now establishing a botanical garden as a tourism Ms Ralarala said her proudest moments in her business destination and events venue. had been winning contracts to supply plants to retailers such She said she was inspired to change the face of Mount Fletcher as Build-It and Spar, as well as local guesthouses and schools. – “where nothing catches the visitor’s eye or makes them want to She said the SBA programme had been especially beneficial stop” – and at the same time develop a profitable business and in helping her to formulate a business plan. eco-tourism attraction that would make “maximum use of the local “The SBA opened my eyes, and I see it as the key that assets” of land and people, to create employment and economic will open doors to greater business opportunities. I know development. that in starting a business you need to be a lifetime learner, Her innovative approach and growth in her business to grow your business network, and to access mentorship, skills earned Ms Ralarala the Top Student award in the and the SBA programme provided all of that,” she said. Small Business Academy (SBA) programme presented by This was the third year of the JoGEDA partnership with the University of Stellenbosch Business School (USB) in the USB Small Business Academy to bring their development partnership with the Joe Gqabi Economic Development programme – specifically designed for historically Agency (JoGEDA) in the Eastern Cape. disadvantaged entrepreneurs in low-income areas – to She was one of 20 small business owners who recently the district and sponsor participation by selected local completed the annual programme, which provides sponsored entrepreneurs. business tuition and mentorship from USB academic staff and JoGEDA chief executive alumni to empower entrepreneurs She said she was inspired to change the Ayanda Gqoboka said to grow sustainable businesses in the Eastern Cape’s northernmost face of Mount Fletcher – “where nothing that results for the more than 60 businesses that district. The mostly rural Joe Gqabi catches the visitor’s eye or makes them have now been through district includes Aliwal North, want to stop” – and at the same time the programme had been Barkly East, Burgersdorp, Maclear, “outstanding” in enabling Steynsburg and Ugie. develop a profitable business and ecoentrepreneurs to structure, Ms Ralarala runs the only retail tourism attraction that would make focus and plan for their nursery in her area, based in the “maximum use of the local assets” of land businesses. Ezingonyameni Village of Mount Fletcher, with a second outlet in He said that and people, to create employment and Maclear as she serves many clients empowering small economic development. there and in nearby Ugie. businesses to move out The nursery and fledgling botanical garden also provides of survivalist mode and become sustainable engines of education for local schools in environmental appreciation and economic growth and employment creation was part of conservation, and the importance of greening public spaces and JoGEDA’S strategy to diversify economic activity in the homes. district, unlock the potential for growth in sectors such Describing her long-term vision, she said: “Building up our as agro-processing and manufacturing, and create local nursery into a botanical garden will become a unique tourism employment opportunities that would retain young destination in this poor rural community and create a venue for people in the district. weddings, festivals and conferences. SBA head Dr Marietjie Theron-Wepener said the programme was developed, and first rolled out in the “We will also enter agro-processing and produce addedtownships of Cape Town, in response to the high failure rate value products such as perfumes, soaps, oils, fruit juice and of small businesses, and she was delighted with the positive dried fruit, thereby creating employment and enabling results seen in its extension to the Eastern Cape. people to be active participants in sustainable economic development of this area.” “Our vision is to make a difference in the lives and businesses of small business owners in low-income Although Mount Fletcher is in one of the most remote, rural communities, building sustainability and eventually and poverty-affected areas of the country, she said the business supporting them in such a way that they can play a vital had a strategic advantage in being located on the R56, the shortest role in alleviating poverty by creating employment,” she route between the Eastern Cape and KwaZulu-Natal, and hence its said. potential to attract tourism and other business. Her love of nature and passion for protecting the
Landscaping:
creativity and numbers
Landscaping isn’t a career, it’s a calling. The types of people drawn to horticulture are driven by a love of beautiful spaces and a need to create and find the beauty if it’s not there to begin with.
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his is according to James Hedding of Eden Projects, wise, means I’ve come to rely more on technology and a provider of turn-key landscaping solutions in its ability to assist me in ensuring project profitability Johannesburg that offers end-to-end services from and budget adherence.” design and planning to outside landscaping and paving. Hedding says he depends on his cloud-based accounting software when it comes to managing and “Being passionate about landscaping stems from being tracking all of his company’s projects and says he makes inspired by seeing something come from nothing,” he says. “It full use of the solution’s ability to help him connect with was in 2010 that I took my last pay cheque and invested it in Eden Projects as a way of ensuring inspiration became a larger clients and suppliers at the touch of a button and from any device. part of my life, but many lessons have been learnt over the “QuickBooks has introduced a new feature, called past nine years.” Project Profitability, and it has extended my ability to Small businesses all face similar challenges, regardless quote from anywhere and at any time while keeping a of the industry they serve, says Hedding. “Effective time constant eye on the management, controlling true costs of every paperwork and building Being passionate about landscaping project,” he says. cash flow that enables you stems from being inspired by seeing With this feature, to compete with larger, more Hedding is easily able established competitors are all something come from nothing to create projects, areas that require focus in order track income versus to keep our businesses afloat.” However, he adds, one of the main areas requiring intense expenses, add and track timesheets (both billable and non-billable), track profitability in real time and, of course, focus lies in ensuring project feasibility and profitability in a create and send quotes and invoices. All of this on-the-fly trying economy. “The state of the economy has added complexity in that and on demand. “This has given me an edge over the competition,” he many are faced with having to adapt to shrinking customer says. “All of my company information lives in the cloud budgets, which have resulted in a defined shift from outdoor garden projects to requests for indoor office plants and follows me wherever I go – gone are the days where and green walls or vertical gardens. All of this, coupled with being out in the field meant being unable to respond to pressure from government to ensure our gardens are water- customer queries or requests.”
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C-SUITES & BUSINESS 4.0 15 October 2019, Summer Place, Sandton, Johannesburg
Keynote by Prof Tshilidzi Marwala Vice-Chancellor & Principal, University of Johannesburg (UJ) Deputy Chair, South Africa's Presidential Commission on Fourth Industrial Revolution
Panel of speakers include:
Anton Fatti, Group Chief Digital Officer, Discovery Grant Field, Chief Executive Officer, FedGroup Natalie Jantjies, Director: Digital Transformation, Heineken South Africa Daniel Padiachy, Chief Marketing, Communications and IT Officer, McDonald's Ravikumaran Govender, Digital Executive, Nedbank Avsharn Bachoo, Chief Technology Officer, PPS Insurance Julia Phillips, Head of Digital Client Experience, Rand Merchant Bank Sagren Pather, Executive Head - Digital, Direct Marketing & Marketing Analytics, Standard Bank Group Lee Naik, Chief Executive Officer, TransUnion Africa Justin Spratt, Head Of Business Development: Africa and Middle East, Uber
It's time for the digital transformation conversation to shift to 'how' rather than the 'what' and 'why". Brought to you by
Partners
For queries, booking seat and/or to be a Partner, email wanl@mgafrica.com or call 011 2507300 or visit https://qkt.io/MG-CSuites-4IR For special rate of R1000/p use promo code Csuites2019 when booking online
At i sh ooO ENTREpreneur PERSPECTIVE
the impact of season change
A change of season does not only bring transformation to our wardrobes, it also impacts our well-being. We may have made it through winter but we are not completely in the clear as with every change of season people suffer from upper respiratory infections (URIs), which includes flu or sinusitis.
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hile this places a financial burden on the individuals themselves, it also has a significant impact on business productivity, with the cumulative cost of treatment running into billions of rands each year. According to a study by the Global Hygiene Council across 17 countries including South Africa, the average person misses 4.5 days of work due to URIs, resulting in a loss of R2billion to the economy every year. Momentum’s Effective Employee IndexTM also revealed that South African companies lose an estimated R25 billion a year due to absenteeism. Over and above this exorbitant cost of absenteeism, is the cost of presenteeism, which refers to the unproductive time that employees spend at work due to being distracted. Considering that physical health distractors, such as headaches and flu, account for 19% of South Africa’s presenteeism, the cost of treating seasonal illnesses expands
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even further than what the absenteeism statistics suggest. With this kind of financial outlay at stake, South African businesses have a vested interest in keeping employees healthy throughout the year. South African companies should be more proactive in this regard. Employers need to take measures not only to reduce the instance of illness-related absenteeism in their workforce, but also the costly impact that presenteeism is having on employee productivity levels. This indicates that employers and their employees face a significant challenge when it comes to workforce incapacity. There are a number of ways to initiate these proactive measures, but the provision of innovative, bundled employee benefits solutions is always a good place to start. This highlights the important role financial adviser’s play in ensuring that their clients’ employee benefits offerings are appropriate and at the right level to protect their businesses and their employees against the financial impact of season changes. Financial advisers should consider partnering with a progressive employee benefits provider that offers integrated benefits specifically designed to cover the financial gaps that are caused by every day sicknesses. This will enable financial advisers to craft and deliver fit for purpose solutions elegantly tailored around the needs of each unique client and provide members with holistic financial advice. Partnering with a service provider who will bundle retirement, health and insurance solutions will ensure that the health and financial wellbeing of employees is covered, while allowing for innovative reward programmes that will benefit the body and pocket simultaneously.
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Over 17 years of professional photography experience working directly with clients, agencies and private individuals. Our extensive portfolio includes portraits, events & conferences, brochure photography, food & product shots, board members, annual report images and conference videos. Registered on the Central Supplier Database for the South African government and B-BBEE compliant.
monsoon P H O T O G R A P H Y
brenda 083 452 4530 brenda@monsoonphotography.co.za www.monsoonphotography.co.za Pretoria East | Gauteng
PERSPECTIVE by Ben Volkwyn, Head of Private Clients, Cannon Asset Managers
Are ETF’s destroying
capital markets?
Exchange Traded Funds, more popularly known as ETFs, have undergone exponential growth over the past 20 years without any signs of slowing, irrevocably changing the way in which investors interact with the market. According to Ernst & Young’s Global ETF Survey (2018), given their low-cost diversification benefits, the assets invested in ETFs have grown by about 630% over the last decade.
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here are now at least 5,000 ETFs trading globally, ranging from the more traditional index, sector and industry or style-specific ETFs to the more exotic inverse, leveraged and tax-deferred ETFs. However, while it is easy to get caught up in the fast growth of these increasingly popular instruments, their opponents argue that the meteoric market growth could pose a danger to capital markets and investors. Liquidity concerns Critics warn of the potential dangers resulting from a lack of liquidity in ETFs, especially in the event of a market crash or mass selloff in the asset class. Before we address this specific risk, it is important to understand the mechanism by which ETFs are created. Effectively, ETFs are wrappers that enable
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you to buy and sell a basket of assets, such as the largest 500 companies listed on stock exchanges in the United States, an S&P500 ETF. Buying and selling of ETFs is facilitated by the fund being listed on stock exchanges, much like stocks. This allows individual investors to gain exposure to an array of assets or financial instruments through a single point of entry. Authorised participants (usually investment banks and large trading houses) then make sure the underlying assets are held in the fund, while also regulating the supply of ETF shares in order to align their pricing more closely with the net asset value (NAV) of the underlying portfolio. In contrast to stocks which have a limited number of shares available, the number of outstanding shares in an ETF can change daily owing to the continuous creation and redemption of shares by authorised participants.
PERSPECTIVE Indeed, these very discrepancies have led some to claim that ETFs may in fact boost market liquidity, as authorised participants profit by trading on price differences between ETFs and their underlying assets. Historically, stocks have experienced a boost in demand and consequently excess price performance in the days immediately preceding their official addition to an index, while the anticipated removal of a share from an index would see its price fall – a phenomenon known as the ‘index effect’. However, research on US markets by Anthony Renshaw, Director of Index Solutions at analytics provider Axiom, shows that the index effect has become substantially muted since 2013, coinciding with the rise of ETFs and passive investing. Renshaw suggests that the two may be connected, as intensified trading activity by authorised participants hoping to seize the advantage of price discrepancies in the run-up to index changes may mute any sustained positive or negative price momentum, thus adding liquidity to the market.
Effectively this means that ETF structures derive their liquidity from their underlying assets, carrying the same liquidity risks as the underlying portfolio – which should be understood and considered before investing. A greater caution may, for instance, be placed on leveraged or derivative ETFs, but these pertain to the nature of the underlying assets, and not to the ETFs themselves. However, given that ETFs are publicly traded, investors would be wise to be wary of ETFs that are very thinly traded and that have wide bid-offer spreads, which could have an unnecessary cost implication. Also, it is important to be aware that although ETFs generally track the underlying assets quite well, discrepancies do occur from time to time.
Concentration and systemic risk Another concern often raised is that passive investors continue to buy ETFs with little care for value, decoupling share price and performance from fundamentals and heightening the potential impact of a market correction, leaving investors more susceptible to the effects of a market crash. Additionally, as most equity indexes are weighted by market cap, critics argue that ETFs will continue to place undue emphasis on larger cap shares, raising the potential risk of ignoring the value to be found in mid- and small-cap shares. But this is not a new phenomenon: for most of our investment history it has been shown that larger-cap shares are more efficiently priced than their smaller-cap counterparts. Furthermore, with the ETF ranges currently available, we now see all shapes and sizes of portfolio compositions. However, as with all investments, it is worth emphasising that investors should buy ETFs when they show value, and not only buy blindly due to their low-cost structure. Investors need to ensure that their portfolios are balanced, taking valuation and cost into consideration. It is worth noting that, despite their recent surge in popularity, ETFs represent only a small percentage of the investment universe, perhaps making dire warnings about their potential impact somewhat hyperbolic – especially as unit trusts and other collective investment schemes invest in many of the same assets. Ultimately, although they are not without risks, ETFs are a great addition to investment markets – especially funds that include gearing and derivative instruments. And ETFs can add great value to any portfolio, whether as a core or satellite component. The key is to be aware of their potential disadvantages or pitfalls, and, as with any investment vehicle, to select wisely, putting risk and valuation at the head of any investment decision.
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What’s Hot or Not The amazing headsets that paint a picture to the listener’s minds Oculus Rift is regarded as one of the best 3D headsets in the market, being able to convince the user mentally that they are actually inside a video game. In the Rift’s virtual world, you could turn your head around with ultra-low latency to view the world in high motion display.
More work for your eyes and less work for your hands A cannabis extract that doesn’t make you feel stoned but guess what, it does offer quite a lot of health benefits as anticipated. Pharmacy is not the only place you can find it; a CBD infused high tea is also available in a number of restaurants.
Getting to know the Amazon Kindle Paperwhite with audible For clumsy and sluggish people, Amazon Kindle Paperwhite with audible will help and make things easier for you. This extraordinary waterproof device can go as far as 60 minutes of immersion in fresh water. For those of you who find it challenging and tiring to read, this highly-rated tool has an audible function that allows you to switch from reading to listening and it also comes with enough storage for its users to enjoy this technologically equipped gadget.
The new Amazon Echo Dot The Amazon’s fourth generation is now fabric covered like its smooth new older brothers and it is unquestionably a good speaker for its size. It won’t exactly fill a room with a banging bass but it will surely lighten-up your mood on a bad day.
Nest Hello is one of the best video doorbells It performs the same function as your old fashioned front door bells while allowing for excellent video playback via its 160 degrees wide-angle camera and two way conversations using the postie with its inbuilt microphone. This is definitely bad news for the burglars and thanks to the latest technology for being able to merge a door bell and a camera at once, making it difficult for the house robbers to make a successful getaway. www.zdnet.com
RETIREMENT
CALCULATIONS: IT ALL ADDS UP A recent analysis conducted by Old Mutual Corporate Consultants estimates that more than 40% of retirement fund members contribute 10% or less of their salary toward retirement savings every month. It is however advised that retirement fund members should contribute at least 15% of their salary toward retirement, to have enough saved up when they retire.
I
t is imperative for employers to take a holistic approach to the financial wellbeing of their employees by incorporating a solid employee benefits package that is designed to deliver sound outcomes. Many employees make the mistake of believing that mere membership of a retirement fund assures them of a comfortable retirement. The reality is that not all retirement schemes are created equal. Some are optimally structured to deliver a pension that resembles the employee’s salary while they were working, but other schemes are only a retirement fund by name. Those funds usually do not deliver the benefits members expect. The value of advice In the time-starved environment that most executives of companies find themselves in, actuaries are very specialised professionals and provide a valuable service – particularly in the retirement funding industry. They calculate replacement ratios, fund valuations, fund interest declarations and employer liability valuations. They establish and convert funds, advise on mergers and acquisitions and manage Section 14 transfers. There are many reputable retirement and actuarial consultancies in South Africa, each bringing their own unique blend of strengths to the table. Although this can be a costly service, the value of the advice will far outweigh the consultancy costs. By examining issues such as the overall cost effectiveness of the fund and its impact on members’ benefits, Old Mutual Corporate Consultants’ actuarial services provides valuable information to trustees and other stakeholders to help them make informed decisions. Tracking your fund’s progress Having a retirement fund in place that provides benefits to employees is one thing. But how healthy is that retirement fund and, more importantly, is it delivering on its promises? By regularly monitoring a fund’s progress and taking steps to improve the assets accumulated by members, funds can deliver superior retirement benefits to a much higher proportion of members. Tracking tools have the potential to transform the way trustee boards and
By Malusi Ndlovu, General Manager of Old Mutual Corporate Consultants
employers approach their retirement funding arrangements. OnTrackTM, a new consulting tool launched by Old Mutual Corporate Consultants, helps trustee boards and management committees to assess the effectiveness of their funds and benchmark them against other schemes of similar size or in the same industry. OnTrackTM sets clear target levels of asset accumulation, using savings as a multiple of annual salary, for each member, based on their number of months of service in the fund. The actual level of assets accumulated by each member is then compared to this target to determine whether they are ‘on track’ or not. What can employers and fund trustees do? Speak to a consultant that has the expertise and a proven track record to help you package your employee benefits to suit your business’ unique needs and budget. Ideally, one that is focused on delivering specific, well-defined outcomes for your employees. That means they partner with you to ensure that your staff are on track with their retirement savings and the outcomes they want for the future.
Call us to create a smart strategy for your business Rodney Msimango: Head of Business Development +27 011 217 1420 or RMsimango@oldmutual.com
PERSPECTIVE
Welcome to
Generation Flex
The Employee Power Shift
Meet Generation Flex – an ever-expanding pool of independent, skilled workers for whom employment no longer means a destination to reach or a rigid daily routine. Tech-savvy, smart and dynamic, this is a modern workforce that expects – indeed demands – a more flexible approach to working. And it’s not afraid to make its feelings known.
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ccording to a recent Global Workspace Survey undertaken by IWG, the International Workspace Group and leading global flexible workspace provider, 83% of workers around the world said they would turn down a job that didn’t offer flexible working. Gen Flex has clear ideas of how its working day should look and, if businesses can’t accommodate this promising talent source, they’re the ones at risk of losing out. To prove this point, more than half of the 15,000 professionals surveyed by IWG say that having a choice of work location is more important to them than working for a prestigious company. The work landscape has undoubtedly changed. With half of the respondents working outside the main office for half the week, the power is shifting towards the employee.
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And, as flexible working becomes the new norm, any business that is serious about building a successful future, needs to adapt accordingly. With other benefits of flexible working for businesses including increased productivity, lower overheads and accelerated speed to market, it’s no coincidence that, over the past decade, 85% of employers have implemented a flexible workspace policy or are planning to do so. So, what is it exactly that Generation Flex wants and how can businesses reap the flexible working rewards, too? Work smarter, not harder Generation Flex has grown up alongside the rapid acceleration of technology. In a couple of years, it’s said
PERSPECTIVE
Gen Flex has clear ideas of how its working day should look and, if businesses can’t accommodate this promising talent source, they’re the ones at risk of losing out.
Getting the balance right This is, after all, a generation for whom the work/life balance is crucial. It wants to be able to manage work around life, not the reverse. The IWG survey found that flexible working is seen to improve this balance by 78%. Indeed, a third of survey respondents (32%) say that flexible working is so important to them that they would turn down a job did that not offer it. Instead, they’re looking to work for a business that offers a collaborative community and a more inclusive working environment, which can particularly benefit returning parents, older workers and those suffering from stress or mental health issues.
that 80% of the world’s population will own a smartphone. And with this remarkable shift in technology has come a significant change in attitudes towards the workplace. Skilled workers can now plug in and work from anywhere. As such, these digital nomads appreciate flexibility. They want to work their own hours in remote locations as well as coworking spaces. What they don’t want is to be tied to one place. This is especially the case when it comes to the work commute, often deemed lengthy, expensive and, at times, stressful. According to the IWG survey, two-fifths of people worldwide see commuting as the worst part of the day (40%), while more than half of respondents believe it could be obsolete by 2030.
Back to business Flexibility not only makes workers happier and healthier; it gets the job done. Giving employees the freedom to complete work where and when it suits them, without a fixed work pattern, has seen more than a third of business leaders report that businesses can increase productivity by more than 40%. These figures take on even more resonance in light of the UN reporting that the global slowdown in productivity is one of the most prominent features of the world economy in recent years. Flexible working can also play a key strategic role in recruitment and motivation. It not only means that the talent pool to choose from, expands, but also that 77% of businesses are introducing flexible working to improve employee retention. Not to mention that, with uncertain financial times ahead, flexible working allows businesses to be more agile and costeffective. More than a third of businesses are looking to expand internationally in 2019, and 64% say flexible working accelerates speed to market in new markets. In addition, without expensive, inflexible overheads, it can significantly reduce a company’s capital and operational expenditure. A meeting of minds While Generation Flex is looking to work in different ways that suit its lifestyle, smart businesses – in order to attract these talented professionals, as well as increase productivity and prepare for changing circumstances – are adapting their workspace strategy accordingly. And, with everyone set to benefit, the case for flexible working really does add up, ensuring a great day at work for all.
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PERSPECTIVE
Is South Africa food
insecure or do we have an acute case of
food wastage? Pausing on the cusp of discarding unwanted food, many may hear the wise voice of their parents who once warned them against such actions.
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“B
efore you throw that half-eaten sandwich away, think of all the starving families who struggle to secure a daily meal, possibly while roughing it on the streets.”
food while a number of restaurant chains are loath to donate all uncooked or unused food supplies to either staff Waste not, want not, right? members or others in need. South Africans are not heeding the call of that well“What we need in this country is a known English idiom. According to a shocking report, model which resembles the one currently 2017 Food Loss and Waste: Facts and Futures, compiled by used in France, where surplus food is the World Wide Fund for Nature South Africa (WWF-SA), provided to the needy instead of being a third of all food in the country is not eaten but wasted. discarded,” says Muller. Quantified, this equals 10 million tonnes of food annually, In 2016, French grocery stores were a third of the 31 million tonnes of food produced in South legally compelled to give leftover food Africa every year. Of the wasted foods, 44% comprise fruits to charity. Stores that failed to comply and vegetables, 26% are grains, 15% are meats, and the would be fined up to 4 500 dollars. other 13% is made up of roots, tubers and oilseeds. A large Similarly discussions around donating proportion of this food wastage occurs both at production unsold food to charity began in Italy and retail levels. around the same time. Italy’s stance The Council for Scientific and Industrial Research (CSIR) however was to give rubbish collection estimates that a whopping R71.4 billion was lost to inedible tax breaks food waste in 2013. The to businesses figure could be much All of this food wastage occurs while an that took part higher today. estimated 12 million South Africans go to in this initiative as an Two years ago, South Africa was ranked 44th bed hungry every night, with scores more incentive. In South Africa, however, it of 133 countries when it facing gross food insecurity remains illegal to sell or donate came to the affordability, perishable food which has gone beyond its use-by dates, availability, quality and safety of food - based on the even if the food is still safe for human consumption. Economist Intelligence Unit’s 2017 Global Food Security Section 61 of the South African Consumer Protection Index report. Act reads: “The producer or importer, distributor or retailer “All of this food wastage occurs while an estimated 12 of any goods is liable for any harm caused wholly or partly million South Africans go to bed hungry every night, with as a consequence of supplying any unsafe goods, a product scores more facing gross food insecurity, ” says Karl Muller, failure, defect or hazard in any goods and inadequate Operations Manager of the Tiger Brands Foundation. instructions or warnings provided to the consumer.” “Many well-meaning consumers are guilty of this. During Apart from France, there are other countries which support their weekly or daily grocery shopping, fruits, vegetables surplus food distribution, if the food is found to be edible. and meat may be bought with the intention of cooking and “Perhaps this country needs to re-look the current consuming them. However, their busy lifestyles may get in legislation which regulates the use-by and sell-by dates of the way, resulting in the now bruised, wilting, moulding or food. In a country where millions face gross food insecurity, rotting food being thrown away as it has or is near or has we appeal to government to amend these laws to allow already reached its best-before date.” food manufacturers, distributors and even the ordinary man Supermarket chains and restaurants have also been on the street to donate food to those in need, in good faith, found guilty of food waste. Supermarket chains have come of course,” Muller concluded. under massive fire recently for discarding edible surplus
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RESILIENCE
THE FUTURE OF ORGANISATIONAL STRUCTURE Future adaptable, agile and resilient structures could be the key to success in a world characterised by disruptive technology and the intelligent automation and connectedness offered by the Fourth Industrial Revolution (4IR).
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he need for businesses to compete in a digitally transformed world is likely to have a significant impact on South Africa’s already high rate of unemployment. This means that all businesses should be grappling with the challenge of how to take up the opportunities of the 4IR to improve productivity, efficiencies and drive down costs, whilst retaining employment. Whilst much of the current debate and discussion about the 4IR is focused on what work will look like by 2030 and the need for re-skilling, little attention has been paid to how the structure of organisations themselves will need to change. “Organisations need to plan how to transition to this future world of work in a way that minimises disruptive restructuring exercises where everyone reapplies for their jobs. “Redesigning work and jobs for technology whilst simultaneously providing the learning opportunities required, may be the greatest challenge for organisations in the transitional decade to 2030,” said Deidre Samson of the University of Stellenbosch Business School (USB). Samson focused on the concept of ‘structural resilience’ in her recent Master of Philosophy (MPhil) degree in Futures Studies at the USB and said the need to remain competitive by driving down costs acts as a driver of structural change. This leads to “organisations announcing layoffs in a cyclical manner as core technology, systems and capabilities change”. The ‘tectonic disruption’ of intermittent restructuring can be avoided by developing structural resilience, using futures methodologies and tools including forecasting and scenarios, to timeously envision future structural changes and the impact on jobs.
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ENTREpreneur PERSPECTIVE
“Organisations can then change in a prescient manner that allows for ongoing re-skilling, lifelong learning and adaptation,” she said. In an environment of increased breadth and pace of change, she said, organisations would transition from hierarchical to “networked structural arrangements” such as the “exponential organisation” – becoming ecosystems where participants add value, rather than work in a rigid structure defined by employment contracts. “The exponential organisation has a more permeable boundary with the external world, invites ideas and innovation and embraces unrelenting change as a way of life. At its core, it is made up of small, agile, multi-disciplinary teams excellent at solving large complex problems. “Work can be contingent, remote, outsourced or part of the emerging gig economy of freelance, flexible, on-demand workers. Melding the best of the gig economy with the best of traditional employment brings in diverse, fresh thinking, whilst maintaining institutional wisdom and allowing meaningful innovation”, she said. Samson said the jobs of the future would be reconfigured to take advantage of uniquely human attributes not easily replicated by technology: curiosity, imagination, creativity, social and emotional intelligence, intuition, personal empathy, collaboration, lateral thinking and innovation. “The opportunity is to reimagine work around solving complex business problems, providing new products and solutions that empathetically meet deeper, rapidly changing customer expectations whilst at the same time optimising costs, increasing flexibility and boosting levels of engagement experienced by those performing work.” Demand for jobs requiring technological skills is growing exponentially – SAP Africa has estimated that global demand for data analysts grew by 372% and for data visualisation skills by more than 2000% between 2012 and 2017. “The reality is that it is not only jobs but the competencies required that are being disrupted. The 4IR is pushing work boundaries into exciting, yet daunting new territory. “Artificial intelligence, predictive analytics, robotics and the Internet of Things (IoT) are innovation fields that not only change how consumers expect product and service delivery, but also create new work opportunities whilst eroding traditional ones,” she said. Jobs are expected to evolve based on core skills and the way value is delivered. “Skills that can be easily codified, standardised or made routine are the most vulnerable to being automated, while those that require hands-on, situation-specific real-time problem solving are less likely to be. “The ways that value is delivered will also change the nature of jobs, although not necessarily the core skill required. For example, a university lecturer whose expertise was typically delivered face-toface, classroom style, may now deliver the same knowledge through online platforms, massive open online courses (MOOCS) or through virtual tutoring using intelligent, adaptive personas that change based on students’ unique learning styles.”
For organisations to prepare for the challenges of 2030, Samson recommends: 1. Rethink and redraw organisational charts to take account of the greater role of gig economy workers, remote employees and outsourced specialists, and represent them visually as part of the organisation. Rather than focusing on functional units with teams of employees, focus the organisational structure on each of the company’s distinctive capabilities and embrace all parties contributing value. 2. Rethink the role of Human Resources as a strategic partner in aligning people-related capabilities to strategy execution. The traditional role of HR, focused internally on traditional employment relationships, should cover all people who contribute value to the achievement of the organisation’s goals. The needs of outsourced contractors, consultants or remote workers for engagement, and integration and alignment with the organisation need to become an essential part of HR’s overall peoples’ mandate. 3. Pro-actively map the impact of technology on jobs. Break the boundaries between operations, HR and Information, Communication and Technology (ICT) divisions so they can pro-actively plan for the evolution of jobs and understand the impact on the workforce. 4. Rethink the role of management. Technology may be able to replace many routine aspects of a manager’s job and improve the availability of intelligence and information for decision-making. This will free up managers to spend more time on strategic insight and people engagement through coaching and mentoring. The span of control of individual managers could increase by removing routine work and automating transactional tasks. 5. Consider a new ‘L structure’ that is potentially flatter and better aligned, where managers have peers with less experience or less complex portfolios report to them for coaching, mentoring and performance enhancement, rather than to a direct manager. This would increase spans of control for senior managers, enable collaboration and resource sharing. 6. Engage policy makers on formative learning, talent mobility and a new social contract. Factors that enhance competitiveness such as educational innovation and the global mobility of highly-skilled people, are traditionally outside the control of companies. They can however be influenced by engagement at different levels of government. As employment opportunities change and shrink, governments and society need to be ready to deal with the needs of people displaced from jobs or unable to develop the skills required for technology-augmented jobs. As a party to the ‘social contract’, companies should initiate these conversations about the contribution of people in a ‘post-work’ world, with policy makers.
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PERSPECTIVE
BPO sector
could spur job growth and forex influx
With South Africa’s unemployment figures continuing to rise and the rand remaining weak against the US dollar, it is a good time to explore the investment potential of sectors that could benefit from earning foreign exchange and create jobs for many of the country’s youth.
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PERSPECTIVE
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he unemployment rate in South Africa reached 29% in the second quarter of 2019, up from 27.6% in the first quarter, while the rand continues to hover at around R15 to the dollar. However, it is not all doom and gloom, according to Andre Schoeman, Executive for Lines of Business at Jasco, who says that given the rand/dollar exchange rate, the country is an attractive market for businesses to invest in the Business Process Outsourcing (BPO) sector as there are opportunities to attract FDI and create employment. “We need to explore how contact and shared service centres can spur growth from a South Africa perspective, as well as how we can create job opportunities within the BPO sector,” Schoeman says. He notes that while there is a skills dearth in South Africa – not only in terms of specialised skills, such as engineering, but also in terms of soft skills – this is not a prohibitive factor for the BPO industry. “Yes, we have a structural problem in terms of skills. We have a lot of youth who are capable, but simply do not have the skills to find employment. But this is something that can be overcome in contact centres,” he says. Schoeman explains that contact centres can deliver consistency to clients via technology and can provide scripts to agents who do not have to be highly trained to deliver good value, but can be guided to service a client and any gaps can be picked up. “These employees are already being prompted by the systems that are in place and quality management systems can highlight issues and problems and pinpoint where more training and guidance is needed,” he says. Schoeman says that one year into a contact centre job, an employee with the ability to deal with people in a business environment has picked up sufficient skills and computer literacy to either continue in the role or move into a customer service role, or they can choose to pursue a completely different career. “At the end of the day, it’s about setting the individual on a path to proper employment,” he says. Schoeman adds that not only is this a good way to mitigate the unemployment crisis, most BPO operations are outsourced for companies and are a good source of foreign currency earnings for the country. “Entrepreneurship does not have to be foreign-based. We could well see a rise of local entrepreneurs, who use local technology and skills to service foreign clients,” he says. Jasco is a member of Business Process Enabling South Africa (BPESA), a not-for-profit entity that serves as the industry body and trade association for Global Business Services in South Africa, serving the international and domestic markets.
Traci Freeman, Head of National Operations for BPESA, explains that the body is in a partnership with the Department of Trade and Industry (the dti), as well as a variety of social partners and industry stakeholders, in a bid to secure foreign direct investment and scale the access and development of required skills for the South African Global Business Services (GBS). BPESA’s partnership with the dti improves South Africa’s cost competitiveness – relative to source markets and competing countries – which is further boosted by the dti’s GBS incentive programme. This programme provides an incentive for organisations locating their centres in South Africa where they are able to extract real value from investing in the country and automatically facilitating job creation. BPESA has committed to create 50 000 jobs within the next five years, but Freeman says this figure may double, as the GBS sector has seen 28% year-on-year growth. Currently, there are more than 250 000 consultants or agents working in the GBS sector in South Africa, with approximately 50 000 of these are focused on international business only. According to Freeman, South Africa has a competitive and compelling value proposition for major English-speaking source markets such as the UK, Australia and North America (USA & Canada) and can offer capabilities that extend across the end-toend customer journey including both front and back-office service and support. “While our industry was founded on a strong English language voice capability, companies located in South Africa service a wide range of complex functions, including but not limited to, software development, tech support, education, finance, legal, and HR,” she says. Freeman explains that the local market is further buoyed by a soft rand, which is appealing to foreign clients for labour arbitrage, as well as by the fact that competing countries, such as India and the Philippines, are becoming increasingly saturated and global clients are considering alternate offshore destinations as part of their risk mitigation processes. “Investors and clients are looking for alternative geographies from which to service their customers and there has been a very strong interest in South Africa from the international market. We as a collective sector are on a big mission to achieve massive growth in this sector,” she says. To support global engagement opportunities, BPESA – along with the dti – are hosting their annual Investor Conference and Awards event in Durban, KwaZulu-Natal, in November. The event will see several investors visiting South Africa and getting the opportunity to ‘touch and feel’ the quality offering the country’s GBS sector presents. In addition, investors will engage with local stakeholders and get an opportunity to deep dive into solutions that many of the industry specialists, such as Jasco, have on offer. South Africa is one of the leading economies in Africa, with well-developed infrastructure and established trade links with the rest of the continent, Freeman says. She adds that while the country is a suitable base for servicing a global customer base, it also provides access to the rest of the growth opportunities the continent is experiencing, which presents additional benefits.
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Why
fails Research indicates that more than half of change initiatives around the world fail, with digital transformations proving even more difficult to get right. Despite this, scores of businesses are beginning to rapidly implement digital change. A critical question to ask is why these strategies fail.
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ccording to a 2018 report by leading research and advisory company, Gartner, the typical organisation today has undertaken five major firmwide changes in the past three years with almost 75% of organisations expecting to multiply the types of major change initiatives they will undertake in the next three years. Yet the report states that half of the change initiatives fail, and only 34% are a clear success. In 2016, an executive survey by McKinsey & Company found that just 20% of executives believed company change had been very or completely successful at both improving performance and equipping the organisation to sustain improvements over time. This figure remains unchanged from 2012, which might indicate that despite a collective and growing body of both theoretical knowledge and experience, implementing change is not getting any easier.
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For many organisations, digital change has become an urgent financial imperative in the bid to be responsive and relevant in a highly competitive market. From a universe of almost 2,000 surveyed business people last year across the globe and from varied industries and sizes, more than eight in ten participants said that they had taken part in at least one digital transformation in the past five years at either their current or previous company. Of the self-same group, a mere 16% believed these initiatives to have successfully improved company performance or equipped them to sustain changes in the long-term. And a further 7% believed that performance had improved but such improvements were not sustained. A large reason for the failure of change initiatives is due to a persistent misunderstanding and misinterpretation of what change management is as a discipline and what it entails. Many media articles and opinion pieces today like to refer to change management as being obsolete and unsuited to today’s business environments, where change is constant and ubiquitous. Undoubtedly there is a need for continuous change and change readiness, but this should refer more to a business’s agility in delivering change. The driving factor behind any new programme or initiative is ultimately to bring about some form of change; albeit implementing a new ICT system, or supply and logistics systems amongst others, a change will be necessary. Yet most programmes or initiatives are conceived and managed as projects rather than change programmes.
PERSPECTIVE The project is invariably plotted out as a work breakdown structure (WBS, which is a key project deliverable that organises the team’s work into manageable sections) and captured into bestpractice project management methodologies such as Prince2. Change management in these methodologies is linked to the operational environment, where its purpose is to achieve the successful introduction of changes to the IT system or environment. Success is measured as a balance of the timeliness and completeness of change implementation, the cost of implementation, and the minimisation of disruption caused in the target system or environment. The above accurately describes technical change requests rather than the full ambit of change management. Projects that will necessitate change often fall to people who are not formally trained in the aspects of change management. A major ICT or digitisation project will invariably fall to technical specialists who are neither project managers nor experienced in change management. Yet they are being tasked with implementing change that is so significant that the organisation could never be the same again. To effectively lead organisational or structural change, all systems must be in place to accommodate that change. Who usually assumes responsibility for implementing change initiatives? More often than not, change (initiatives) in whatever form, is implemented from the top. The decision most often falls to the executive team who must make the decision or agree to implement changes that address ‘bottom-up’ obstacles which may be impediments to an organisation’s performance. Change management, when defined, should include ‘effective leadership’. Effective change management demands effective and participative leadership supported by effective communication and a keen insight into behavioural aspects of the organisation. Consult, include, inform Around the world, change in highly competitive environments is arguably an ‘adapt or die’ process. The South African context is somewhat unique for certain companies, academia and the public sector who, by necessity, might operate in a highly unionised context. Here change management is critically important and it could be argued that many projects that have not been entirely successful, are as a direct result of not managing change in a consultative, inclusive and informative process both before and throughout project implementation to a conclusion. Companies often view the biggest risk with up-front consultation to delaying project implementation and thus having an impact on the project budget. Yet, budget challenges with projects come about most often through project push-backs later in the project’s lifespan. Stakeholders thus must be part of the process, not an afterthought, especially for significant projects or decisions whereas many stakeholders as possible should be included. Once there is buy-in from stakeholders, a sense of commitment and responsibility becomes part of the change process and makes it difficult for people to ‘opt-out’ as the project progresses. Effective consultation does not imply the giving up of control to various stakeholders but works towards obtaining buy-in. Ultimately, management remains responsible and accountable for ensuring the validity, timely and successful implementation and completion of the project.
Ongoing communication should take place following an initial face-to-face staff meeting or meetings, where all stakeholders are able to ask questions and obtain explanations about the anticipated changes. Communication via email updates or other forms of digital tools to staff, that consist of clear and accurate information, should be an ongoing activity as change happens. Even if there is no particular update at a given time, this can also be communicated to staff members. If communication drops off, people begin to lose momentum (of the project) with the result that the project could begin to lose the buy-in it might have had initially. Understand the impact In leading the entire process of change, effective leaders should understand what the consequences and impact may be from each decision. Up to 80% of projects fail as a result of resistance to change and staff turnover intention during the project. Turnover intention is a measurement of whether a business or organisation’s employees plan to leave their positions. Organisational Commitment There are three types of organisational commitment, which is the bond employees experience with their organisation. Affective commitment relates to how much employees want to stay at their organisation and are those employees who feel passionate about the company and are supportive of its decisions. Normative commitment is driven by a sense of responsibility to the company and an obligation by employees to do what is required of them. They will support the company through a sense of duty. Continuance commitment relates to how much an employee feels that they need to remain at the company in order to get what they need, thus coming from a position of ‘what’s in it for me’. Each of these three commitment ‘types’ needs to be considered when embarking on change and the impact that may be experienced by these different groups when the project is implemented. Before embarking on any project, consider the questions of impact and what this impact will have on the individual. Who will feel the impact? What will the impact be? How will the impact on the individual be managed? Change happens in between The definition of change management is ‘a process or system of transitioning people, processes or projects from one state of being to another state of being’ but this doesn’t really account for what is happening – or can happen - in between. Nor does change always fit neatly into change models such as John Kotter’s long-standing eight-step process or Lewin’s Three-Stage Model of Change. Implementing change today is more challenging than ever, with competing interests, rapidly changing markets and evolving digital environments. What, then, will ensure success in our dynamic business settings? If change is managed by effective and participative leadership, through a consultative stakeholder process that is supported by clear and consistent communication there is far more chance of success. Considering change management as a subproject of project implementation, or as an after-thought to manage staff push-back, will not bring about success.
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INTHEKNOW
Virtual reality for brands what’s all the fuss about?
Virtual reality has received a lot of airtime over the past few years. For retailers, in particular, the technology offers completely new ways to reach their audiences. But are we thinking about this in the right way?
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V
irtual reality (VR) is a fundamentally new media platform that we don’t yet fully understand. Remember when we first started creating websites, and we put what were effectively company brochures online? Then we made interactive pdfs. Then the power of the web emerged over time and the way we look at and develop online now is worlds away from the brochureware of the early internet era. With VR we are seeing a lot of that same thinking. Retailers use VR to create a virtual store that looks like a store. Why? Because it’s comfortable. But what if I want to buy my firelighters, charcoal and boerewors at once? VR offers lots of opportunity to cross merchandise, dynamically and for each customer uniquely. Amazon is a good example of how retailers can cross sell if they use the data they have to hand. When you go to shop on Amazon, it organises the first layer of content - for example, pots. The minute you click on the pots and head to the second layer, you get 20 things that are unrelated to but influenced or triggered by your decision. All of this still within a 2 dimensional website. Imagine if they were freed up to present the information in a series of 3D worlds? Most retail stores are still laid out very much the same way they’ve been for years. We have enough sales data to determine what people in Kenilworth, for example, want - why do we not tailor the store layout to their preferences? Why are we stocking full stores when we could use
INTHEKNOW
data driven customer insights to stock enough in the store to prompt shoppers to go from the real store to the virtual one. Planograms (ideal shelf layouts) could be unique for each store, and stores can be designed much more quickly, in a more collaborative way than is currently the case. Most store design has limited input from marketing teams, it is driven by operations people. However, marketing’s ambit has always been product, price, promotion and place. VR is an invitation to drive store layout and the retail experience very differently, because we do not know what the future of ‘place’ is, and that’s where marketing needs to be involved. To take this even further, what happens if the shopping itself is in VR: Is the future of Pick ‘n Pay a coffee shop? In other words, a relaxed environment that is carefully curated that invites you to come
in and have a shopping experience, over coffee, where you can virtually explore your options and get expert advice if you need it. Getting up close and personal - virtually As brands, we need to be invited in to our customers’ space. With VR, engagement by consumers is
voluntary. So where in VR is your brand? A banner? A product? An experience? We have to shift our mindsets about what the future of engagement looks like. If you’re selling furniture, for example, where the degree of knowledge of the person selling is important, VR enables you to provide customers with the sales person, utility and experience all wrapped up in one place. So if I’m buying this backpack, you can say to me, “have you thought of these boots?, “and, as you’re in Cape Town, would you like a virtual hike to the top of Table Mountain to inspire you?”. A 2015 WIRED article called VR “the ultimate empathy machine” because it lets you literally experience reality through someone else’s eyes. When you think about the big challenges companies face - recruitment, induction, customer service training - a lot of these are about empathy processes. VR could be the game changer for that. Who is responsible for customer service training in your business? HR? Marketing? Then both need to be at the same table. The store experience you’re developing for customers can be used to train staff on how to deal with difficult customers, or on your products. You can be very efficient using VR if we move beyond the siloed approach. Where to start, where to start? Retailers need to start creating digital images of their products now. If you don’t start now you’ll struggle to catch up. We recommend every company has a strategy to build digital objects, and the way you build these should prepare you for the near future of VR, AR and even serious games. The good news if you do it right, you can re-use these digital assets in ways that we haven’t yet imagined. VR may seem expensive but only compared to the alternative - which is to be overtaken by your competitors, or to try and do some of these things in the real world. The devices needed for it to become mainstream have just come onto the market and they’re becoming more affordable. The tech is maturing, and the devices are maturing, which means it’ll be mainstreaming soon. Additionally, VR is not expensive to do if you do the full business case. A relatively small investment will get you a properly designed virtual store - today - that will work for everyone, from HR to your customers, and put you ahead of your competitors. The future is now. Learn the processes, and the tech and lay the groundwork. You will see VR affecting all aspects of retail in the next two to three years. We’re not sure what retail will look like in the next 10 years, but VR can solve pressures retailers are under now by allowing for smaller stores, with a better experience that allows your customers to see what you have, not what you don’t. Glenn Gillis is the CEO of Sea Monster Entertainment, one of South Africa’s pre-eminent animation, gaming and augmented reality companies. He has a Business Science degree from UCT and has been a senior executive, entrepreneur and consultant with growing, knowledge intensive businesses for over 20 years.
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Overcoming systemic challenges to transform
South Africa’s agricultural sector by Gert Schoonbee co-owner of farming company Schoonbee Landgoed
According to the recently launched ‘BFAP Baseline Agricultural Outlook 2019– 2028’, South Africa’s agricultural sector needs to do more to support the targets of transformation, jobs, growth and land reform that have been set by the National Development Plan (NDP).
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peaking recently at the report’s launch, Professor Ferdi Meyer, a board member of the Bureau for Food and Agricultural Policy (BFAP), said that the future of the country’s agriculture sector would be dependent on government and industry making the right policy and investment choices. He said that there were four critical policy issues, namely, land reform and farmer support which includes policy certainty and property rights; infrastructure and technology, including water infrastructure; increasing access for local farmers to the major international agricultural markets; and the development of statistical baseline information to understand activity within South Africa’s agricultural sector in terms of the entrants of small black farms (generally deemed those of about one hectare of land) and transformation. This last point is underscored in an article written by Wandile Sihlobo, head of agribusiness research at the Agricultural Business Chamber (Agbiz), wherein he states that it is unclear how far transformation has gone in South African agriculture. He writes that a lack of data on the entry-level of black farmers in South Africa requires more research to inform agricultural development policy. What is clear is that the transformation of South Africa’s agricultural sector needs a combination of effort and support by both the private and public sector. As Meyer states, it will take “specific and well-coordinated actions and plans of the public and private sectors, with real capital and people to drive inclusive agricultural transformation and transfer of land in a just and sustainable way.” He concludes by saying that there is no lack of plans; what is needed now is a greater emphasis on implementation.
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There has been very little activity in terms of the development of significant transformative initiatives in South Africa’s agricultural sector. While it could be argued that the lack of policy certainty has put the brakes on the sector’s willingness to invest in transformation initiatives, there are a number of other challenges which include (but are not limited to) the following: an acceleration in the trend towards larger mega-farmers as the only real sustainable agricultural business model, which can be to the detriment of the larger communities within which it operates; the ongoing challenges for small agri enterprises (whether in primary production or services) to compete or collaborate meaningfully with larger enterprises and remain sustainable; the need for scale as the prevailing competitive advantage to enable commercial farmers through the adversities of droughts, floods, market excess and many other unpredictabilities; a limited pool of large, well-known black institutional investors in the agricultural industry to provide a credible voice about what sustainable transformation in the sector should look like; radically reduced the predictability of cash flows and income due to continual environmental, market and climate changes; and limited opportunities for local communities (arguably having to choose between participating in the trend towards urbanisation, or remaining unemployed and in poverty with a dependence on social grants).
Collectively there is the need to lean into the current realities of farming in South Africa and find innovative ways to embrace and leverage these challenges. What this will require is a substantial mind-shift. When considering strategies to develop farming sustainability, it is doubtful that the notion of “profit above all” will work over the long term. The sector now requires strategies that shift towards broader community inclusion and social value creation. In this context, a “profit for purpose” model becomes a compelling alternative. But what does this mean? There is no one definition of “profit for purpose” but in the main, this refers to businesses that are led by a mission to achieve social, community and environmental benefit through trading and by channelling a portion of their profits toward their mission. This is the business model that has been applied in a partnership initiative between family-owned farming enterprise Schoonbee Landgoed and black-owned investment firm, Thebe Investment Corporation, which has launched a farming initiative for the commercial production, packaging, marketing and sales of table grapes and citrus in the Limpopo Province. The initiative, known as Project CHANGE, is grounded in the spirit and principles of the National Development Plan. It consists of two recently developed farms with existing income as well as a further acquisition of just under 400 hectares of additional land with recognised water rights for further citrus and grape development, and three primary healthcare and educational facilities for the surrounding communities which will be deployed by mid-2020. It is anticipated that over 1,200 new jobs will be directly created through the initiative with an estimated impact on 8,000 jobs throughout the complete value chain in the country.
In responding to these challenges, the market tends to hone in on a specific challenge and find a solution for that particular aspect. For example, a common perception is that although commercial banks are providing support for small “black entrepreneurs” arguably this might not lead to broader social and economic sustainability given that support is for smaller projects. Furthermore, there is no distinction between the evaluation of sustainable Agri products which require sophisticated skills, infrastructure and large amounts of starting CAPEX, and other agricultural initiatives which are less capital intensive. This could lead to many missed opportunities.
Significant funding via the Land Bank supports the project. The majority black-owned initiative took two years to develop as a profit-for-purpose concept with the main imperative being to create an initiative that enables “shared value”. The central premise behind creating shared value is that the long-term competitiveness of a company and the health of the communities around it are mutually dependent. According to the partners, shared value, in this case, begins by giving dignity to workers and community members involved in the project, and this was done by addressing three specific social needs: providing employment for people living in the Loskop
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Valley and surrounds; supporting worker and wider community health by providing primary healthcare facilities and services; and unlocking human capability and breaking the systemic cycle of poverty through the provision of education and training opportunities to the farm’s workers, their children and budding entrepreneurs in the surrounding communities. What becomes important is to recognise that the concept does not compromise profitability and is not charitable in its format but seeks to be to share the value created in a specific way to address social needs in a sustainable way. This means that the funding mechanisms are – and should be - more aligned with the developmental strategy and nature of these projects. Addressing the primary healthcare and education needs of the community was never conceptualised as a corporate social initiative separate to the business. Being integral to the entire concept these aspects were ‘baked’ into the forecast commercial model. While this could foreseeably put pressure on the short-term financial returns to the shareholders, it ensures long-term sustainability for all stakeholders. Essentially, while citrus and grapes are the core business of Project CHANGE, the core purpose is to affect change in agriculture through empowerment and upliftment. From a business perspective, the initiative will have access to the local and international retail markets that partner Schoonbee Landgoed currently services. Around 70% of CHANGE’s volumes will be earmarked for export to 60 countries. As a share of global trade, South African exports of citrus and grapes have been increasing over the past decade, with the citrus market share growing from around 4% in 2001 to more than 10% in 2018, followed by table grapes from 5% to 7%. Joint management harnesses Schoonbee Landgoed’s skills, market and cultivar access, packing facilities and partnerships while leveraging Thebe’s track record in investment management and community engagement. This project seeks to become a market-leading, blackowned profit-for-purpose farming initiative that is able to service local and international markets with premium products, while at the same time empowering the communities involved in the project through job creation and the provision of education, training, and healthcare services. The project’s profit-for-purpose model has the potential to provide an innovative, long-term model for partnering between established white commercial farmers and black institutional investors while empowering local communities and supporting new entrant (including smallholder) farmers in achieving financial viability.
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The concept proved successful in a smaller forerunner project called the Rahlagane Cooperative and otherwise known as Peace Table Grapes. Originally initiated by the Limpopo Department of Agriculture and Rural Development (LDARD) the project was located within one of the communities close to the Schoonbee Landgoed operations in the Groblersdal and Marble Hall region. It became apparent that a commercial partner was needed to address challenges like the lead-time to secure production capital, expertise to produce world-class table grapes and access to markets with related logistics. The lack of the necessary industry accreditations, working capital and certain minimum infrastructure, common challenges to small farming market entrants, further threatened the viability of the initiative. To overcome these challenges, the small-scale, predominantly female farming initiative was brought into Schoonbee Landgoed’s existing network so as to leverage the technical support, packaging, market access and logistics of the company at a zero-management fee. Being able to market and sell the grapes to premium retailers locally and internationally, while receiving the same logistics rates and service quality that Schoonbee Landgoed receives, had a significant impact on the commercial viability of that initiative. Peace Table Grapes was a forerunner to CHANGE from two perspectives. Firstly, it enabled Schoonbee Landgoed to learn a lot of critical lessons on how to partner with a different entity, which was then applied when shaping the legal and business model of Project CHANGE. Secondly, it proved that small farmers could collaborate meaningfully with large commercial farmers, and it is anticipated that CHANGE will be a catalyst for more small farmers to collaborate in a similar way through the opportunities that the initiative will unlock. The profit-for-purpose model is a deliberate shift away from a singular focus on the wealth of shareholders to the long-term health of the company when looking at its wellbeing through the different lenses of financial, social (and environmental) perspectives. Because these aspects are critically interlinked, the agricultural sector’s task is to develop holistic business models where these challenges converge into one practical and workable solution. Without this, it will be difficult to ensure the broad and sustained transformation that South Africa’s agricultural sector needs.
Don’t police it,
Policy it:
The importance of a communication policy Do you feel that you need to check and re-check the way that things are communicated in the office? Do you worry about what your colleagues might be sharing on social media? Does your team know how and what to communicate during a crisis? Stop feeling like the office police officer! Have you considered implementing a communication policy? If you have, when was the last time you updated it?
“A
t Reputation Matters we believe that it is all about consistency. Consistently doing something in a certain way (good or bad), will build (or breakdown) your reputation”, says Chanell Kemp, reputation specialist at Reputation Matters. An updated communication policy has numerous advantages and will help everyone in your organisation to know what is expected from them regardless of the communication scenario. Six compelling reasons why you need to invest in a communication policy TODAY. A communication policy assists with: 1. Preventing mixed messages from being sent; get everyone on the same page about when to communicate what to whom. 2. Organisational awareness and reputation building: effective communication is key
3. 4. 5. 6.
when building awareness about your organisation. Wrong messages can have a negative influence on your organisation’s reputation. Linking the correct channel of communication with the right message to reach the desired audience. Identifying the right person to communicate the message: we don’t want the whole team sending out conflicting messages. Clearer communication: a communication policy helps with clear and consistent messages. Yielding the correct information during a crisis situation and ensuring that everyone is staying true to the organisation’s vision and mission.
In essence, the communication policy will assist your team to know exactly what the protocols are when it comes to communicating different scenarios internally and externally as well as highlighting important do’s and don’ts during a crisis situation. The question you should be asking yourself is not why a policy is important? But rather, how have I survived so long without one!
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by Nic Horn, Director and Durban Regional Head, Citadel
Five key reasons not to
DIY your investment The rise of new technologies and fintech has made investing simpler, more transparent and cheaper than ever before, leading many to adopt a DIY-approach to their finances. So, in a world where investing is as easy as ordering take-out, what are the dangers of self-managing your investments, and why should you consider seeking professional financial advice?
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itadel Director, Nic Horn notes that there are essentially five key reasons to think carefully before adopting a DIY approach to your investments:
1. Asset allocation Many people focus exclusively on starting costs as the measure of a good investment solution, which is a very poor approach to making investment decisions. Rather, once you have started to grow your savings and have a reasonable build-up of funds, discussions around asset allocation become absolutely critical. As global investment citizens, South Africans currently enjoy far greater flexibility and fewer offshore investment restrictions than ever before. Whether you had invested in a low-cost ETF that tracked the Johannesburg Stock Exchange (JSE) Top 40 for the past five years or a managed unit trust or share portfolio which both carry higher costs, the results would have been very similar and, sadly, almost equally poor. You could have performed better elsewhere. A good financial advisor may have recommended that you make use of your offshore allowance to invest in the US markets, despite the fact that the investment costs may have been slightly higher. And in this instance, you could have earned compounded double-figure returns in dollars over the five-year period, while also benefitting from currency accumulation owing to a weaker rand/dollar exchange. But the point here isn’t to be clever with hindsight. The answer would have been to have invested both locally and offshore, with different weightings at different times. Investing in just the JSE or
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just global equities amounts to backing only one outcome. In a world where the future will surprise, and it invariably does, you need to cater for a range of possible outcomes in your investment strategy. Costs are a secondary consideration. 2. Diversification I often hear people comment that they believe they are well-diversified because they hold investments with a number of different asset managers – no names, no pack drill. However, true diversification is about your underlying investments and asset allocation – not the allocation to institutions. In many cases, all people do by investing across different brands is add a layer of costs while the institutions themselves invest in similar underlying assets. This ironically increases their levels of concentration instead of their diversification, with added costs. In this case, a financial advisor would be able to guide you towards achieving true diversification by investing across different asset classes, sectors and regions. In fact, if you cannot pull up your overall portfolio instantly and know what the asset allocation is, then considered diversification is not a part of your strategy. It’s accidental. 3. Managing investment risk A good financial advisor will be able to help you to manage your investment risk in order to generate consistent compounded returns, no matter the prevailing investment environment. Through understanding the correlation between different asset classes and by adopting a highly active rather than a static investment approach, true risk mitigation can be achieved. For example, as we enter a risk-off environment, our advisors are guiding their clients to add defensive elements or shock-absorbers to their portfolios in case equity markets decline, increasing investors’ exposure to bonds or hedge funds.
This stands in contrast to simply investing in, say, a balanced fund with exposure to different asset classes, given that a balanced fund’s mandate is to beat a benchmark or index rather than to safeguard each client’s wealth. This is not a criticism aimed at the fund manager – that is simply and absolutely their brief. It is the advisor’s or your own DIY job to control your asset allocation or which combination of funds you hold. Unless this is changing, your asset allocation will remain largely static. Remember, too, that there is a second race, and that is the relative race between fund managers. In other words, if a balanced fund sheds 10% over the course of a year, and its benchmark sheds 12%, the portfolio manager would still have cause to celebrate, additionally because they will probably be ahead of their peers, which is often a more important deliverable. Again, an advisor’s job is to help you put a plus sign in front of your returns and generate wealth no matter which direction the market is moving in. 4. Weathering your emotions Greed and fear are the two extremes that threaten all investment behaviour, and the danger of doing it yourself is to allow these emotions to cloud your judgement. This is perhaps most evident when people invest their money in volatile assets such as equities or currencies for short-term goals, placing their capital at the mercy of unpredictable market movements. However, to make money and grow your investments above inflation over time, you do need to be able to embrace volatility, and have enough time on your side to ride this volatility out. In other words, volatility is the enemy in the short-term and inflation is the enemy in the long-term, and you need to compartmentalise your investments accordingly. This means
that you need to invest the funds that you will need to access within a year or two in a very specific way, and the funds that you will only need in ten years in a completely different way. An advisor’s role is to guide you on the appropriate investments for both long-term and short-term goals, and stand between you and your emotions, preventing you from making any hasty investment decisions based on short-term considerations. 5. Crunching the numbers on decisions With the looming threat of a global recession on the horizon, deciding whether to sell out of certain assets and how to best position your portfolio can be very difficult. There is capital gains tax to consider in doing any switch, and, of course, the fear of missing out, or trying to squeeze the last little bit out of the market. Sometimes greed and the fear of missing out work together! In this case, an advisor would be able to help you calculate the tax implications of selling out of certain assets, and offer objective advice on whether it is worth taking the pain to reposition your portfolio against a market fall. Then there’s the issue that people are often vulnerable to making investment decisions based on the latest trends, or the grandiose promises made by fund advertisements, without reading the fine print, considering whether it is aligned with their long-term investment strategy, or realising that their money may be locked in for a period of time, taking away any flexibility. A professional financial advisor would be able to help you objectively assess the benefits and risks of any new investments, and assess whether they are truly appropriate to your individual needs.
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Unlocking
Africa’s
abundance & future-proofing your business for industry X.0. Africa might have fallen behind during the prior industrial revolutions, but the continent is now bursting with possibility to leapfrog beyond Industry 4.0. Many African companies are poised to futureproof their businesses for Industry X.0. – a convergence of breakthrough technologies – analytics, artificial intelligence, mixed reality and more – that enable mass customisation with smart and connected products in real-time. As a leading digital accelerator, we at Accenture have come to the breakthrough realisation that Industry 4.0, is no longer the embodiment of industrial digitisation, as the very notion of industry itself is transforming.
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his modern world is driven by rapid, exponential, and, above all, continual change. The true solution is therefore not in yet another industrial revolution, but rather in a wholesale digital transformation in both the things we create and the manner in which we create them. This is the ‘new’. African businesses who wish to remain relevant and competitive in Industry X.0., will need to transform their operations to be more intelligent, agile, efficient and innovative, to mitigate the threat of being disrupted. Technology, a key enabler of intelligent operations The very foundation on which any ‘new’ business with intelligent operations is built on, is technology. As opposed to the conventional standardising of processes or reduction of
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Kabelo Makwane, Managing Director for Accenture Operations in Africa.
headcount, technology enables a smarter approach that leverages data, as well as the insights gained from data, to strategically and proactively drive business-specific outcomes. One such ‘smart’ technology-driven process is hyper-personalisation. In an increasingly competitive business landscape, businesses have no other choice but to place clients at the heart of their operations. In the financial services sector especially, ‘know your customer’ has almost become a buzz phrase. Hyper-personalisation consists of a multitude of technologydriven processes that enable you to do exactly that. Amongst other, there is a tool that enables ‘social listening.’ The main objective of social listening is to get to know as many details about your clients
INTHEKNOW
or potential clients as possible. This includes what people are mostly talking about, which TV shows they watch, which recreational activities they participate in and which social media circles they move in, so that you can design your marketing campaigns to reach them where they are at. It can also enable you to gain an invaluable understanding of what motivates your target audiences’ investment decisions, what their buying patterns are, and how likely they are to be interested in your product. Ultimately, your goal is to analyse and leverage this data to gain wallet share from it. In the words of Steve Jobs, you need to “get closer than ever to your customers. So close that you tell them what they need before they even realise it themselves.” To obtain such intelligent analytics however requires a substantial paradigm shift, a willingness, and even an eagerness to depart from all those dated techniques and convert to the ‘new’ way of doing business as a matter of urgency. Utilising man and machine in tandem for optimal operations Another cutting-edge branch of technology that ‘new’ businesses with intelligent operations must take advantage of, is robotics. By design, robotics can replicate a myriad of human actions, but intelligent operations is never about replacing humans with robots. It is rather about man and machine working side by side and by exploiting machines to automate those rudimentary, mind-numbing and laborious tasks that are essential to the business operations but that do not necessarily justify a dedicated human resource. A ‘new’ business will rather utilise its valuable human resources for all those intelligent, creative tasks that require all those unique human thought processes and human ingenuity. To outsource, or not to outsource Changing into a ‘new’ business with intelligent operations necessitates one ultra-critical question: “What is the ideal ratio of organic organisational capability versus capability sourced ‘as-a-service?” By ‘organic organisational capability’ we mean those internal resources that form part of the very core of the business and by ‘as-a-service,’ we mean all those things that are required for the day-to-day operations and the everyday world that businesses function in. This could include elements such as cloud technologies and e-commerce systems. It almost goes without
saying that the ideal combination of organic resources versus ‘as-a-service’ elements will be the one that impacts optimally on the operations of the business, and ultimately, on the bottom line. Moving from the old to the new Another critical consideration in the transformation from an ‘old’ business to a ‘new’ business, is how to source and embed experienced talent to drive specific business process outcomes. Conventionally, the practice of labour arbitrage has commonly been deployed to research and find the most economical sources and workforce to produce goods or services. This sometimes leads to a direct reduction of headcount. Other times it leads to organisations moving their operations offshore to nations where the cost of labour and doing business is much lower, due to environmental factors such as regulations. Today, when we talk about intelligent operations that are in line with the next business evolution, labour arbitrage is no longer a factor. A greater imperative in this day and age, is to know how to source and match the right people and resources required to proactively support and drive your business goals and objectives. The future belongs to intelligent operations Accenture has become an intelligent operations partner-ofchoice for organisations who wish to seamlessly navigate through the ebbs and tides of digital transformation and to continuously ride the waves of success in this perpetual ocean of change. Some of the main advantages of partnering with us, include the fact that we are able to assist organisations with scaling more rapidly and efficiently. This is amongst others accomplished by bringing top talent to the table, setting up offices in remote locations, and training up resources to add tangible business value, in no time. Whilst we have proven capability and flexibility to accelerate your business digitally almost instantly, you are empowered to dedicate your efforts where it matters most; to free up your internal resources to focus on your key ‘care-abouts,’ which is to accomplish competitive outcomes for your business. Essentially, the future belongs to ‘new’ businesses with intelligent operations. To stop playing catch-up and start applying digital at the core of your business to reinvent for the new era of industry, Industry X.0.
ABOUT KABELO MAKWANE Kabelo Makwane is the Managing Director for Accenture Operations in Africa. Makwane returned to South Africa after spending just over three years in Nigeria where he was the Country General Manager for Microsoft Nigeria. Prior to this, he was the Segment Director: Public Sector for Microsoft South Africa where he directed the strategy for government in line with national priorities. He also worked with various ministries to enable Government to deliver effective services and foster economic growth through innovation. One of his most significant achievements was establishing the National Private Cloud Project with State Information Technology Agency (SITA Pty, LTD) for government. Makwane joined Microsoft in 2009 from Cisco Systems, where he was employed as regional manager for Public Sector in South Africa for six years. A major accomplishment during his time at Cisco was to enable cities to deliver e-services by leveraging telecommunication broadband infrastructure for digital inclusion. He was part of the Limpopo Provincial Government Premier’s Advisory Councils on ICT and also held a seat with the Department of Communication Human Capital Committee on ICT as an advisor. Makwane graduated with an MBA from Wits Business School in 2006 and holds a bachelor’s degree in Commerce (BComm) from the University of KwaZulu-Natal in South Africa.
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Investing in
digital
experiences can make a difference
Providing optimal digital experiences has become a key business differentiator, if companies don’t act quickly and put their customers first, they’ll lose their relevance and a majority of their revenue. Innovative forward thinking businesses use the Digital experience platform (DXP) to build, deploy and continually improve their websites, mobile apps and other digital experiences.
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here is a new wave of complex and innovative solutions that offer cross-channel continuity across the entire customer journey. The DXP is an integrated set of core technologies that support the composition, management, delivery and optimisation of contextualised digital experiences. Bluegrass Digital CEO Nick Durrant says this is exactly how new disruptors capture market share, by offering a superior customer experience. “The online expectation of consumers has increased significantly over the past year, they now expect experiences that are consistent and unified across every touchpoint.” The DXP is an emerging category of software solutions that can help businesses create compelling customer experiences. It could be a single product or a suite of products
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that work together to provide an architecture for companies to digitise business operations, deliver connected customer experiences, and gather actionable customer insight. In its second Magic Quadrant for Digital Experience Platforms, Gartner found that through 2021, 85 percent of effort and cost in a DXP program will be spent on integrations with internal and external systems, including the DXP’s own, built-in capabilities. Gartner also predicted that 90 percent of global organisations will rely on system integrators (SIs), agencies and channel partners to design, build and implement their digital experience strategies. Content management systems (CMS) and other web management systems are no longer sufficient to execute successful online campaigns. CMS has limited
INTHEKNOW
The online expectation of consumers has increased significantly over the past year, they now expect experiences that are consistent and unified across every touchpoint.
personalisation functionality which gave rise to the web experience management (WEM) platform. “The WEM offered more advanced analytics to determine user behaviour and provide user specific content at the right time. With a more centralised system, WEM also ensures greater collaboration between departments,” he explains. The DXP builds on the personalisation features of the WEM, but on a much larger scale. The main difference is the DXP’s ability to unify content across digital touchpoints beyond the web. This includes IoT devices, online, in-store, billboards, kiosks, customer portals and eCommerce systems. The digital experience is no longer just a way of getting customers in the door, it is now critical to growing customer satisfaction and loyalty post-acquisition. The digital journey is no longer just a marketing function, the entire business is responsible for it. Back-end applications are being used by each department to handle their piece of that journey. Durrant says DXP connects the business. “DXP is not the only tool, businesses still need a marketing platform to bring customers in the door and a business management platform to handle inventory and transaction.” The DXP connects the internal systems with all the digital channels, it sits at the centre of these platforms, using APIs to aggregate and orchestrate data to determine and show customers the perfect experience every time they come through the door.
Forrester analyst Liz Herbert says “Real digital transformation spans both the experience layer and the operations core.” Although it’s beneficial to have an attractive website and mobile app, more substantial gains in customer experience require re-optimised processes with the customer in mind. This kind of responsiveness to customer needs can be obtained in a number of ways, from basic personalisation
to more advanced workflows, to full modularisation of business services that can be quickly adapted. However, not all businesses are prepared for that level of change, they might want to start segmenting audiences in order to target specific personalised offers. Ideally, the platform must have operational and marketing capabilities so that when a company starts with digital marketing, it doesn’t have to go through a second vendor selection process when they are ready for operational transformation. Businesses can track customers, map their customer journey and identify crucial bottlenecks and this will enable them to reengineer their business practises. It also enables customer data capturing, processing and profiling, providing a unified 360 degree view of each customer. “So when customer services receives a complaint, they‘ll know the customer history in advance. It could also provide sales with a potential customer’s interests and lead score before calling,” he adds. The DXP can also determine user needs by means of profiling and data prediction. The right digital experience can then be created real-time and with the right content, offer and emotional appeal - regardless of channel or device. This will ultimately lead to a better, faster and more efficient customer journey. Durrant points to Episerver Digital Experience Cloud as the only platform that puts digital content, commerce and marketing in one screen. “Episerver is a complete offering for digital transformation, it enables companies to easily create, orchestrate and personalise intelligent campaigns across the entire customer journey.” Episerver, the company transforming digital experiences, was named a leader for the 5th consecutive year in Gartner’s 2019 Magic Quadrant for Web Content Management. The Episerver Digital Experience Cloud allows companies to focus on creating dynamic websites that are collaborative with their existing systems and processes and Episerver takes care of the rest. The DXP is an open platform that connects to best of breed solutions. One can switch or upgrade a specific marketing tool whenever required, this makes marketing agile and allows businesses to grow their personalisation in manageable steps. “Quality personalised content comes at a price. DXP enables business leaders to coordinate their content and to drive reuse across multiple environments by decoupling the presentation layer from the content and its metadata,” he concludes.
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The
UNSEEN
Threat
WITHIN THE CORPORATE WORLD
INTHEKNOW
In today’s marketplace the crime and corruption within the business sector, and the country at large, is a real threat and concern for many South African business owners and managers. There seems to be a real surge of attempts at increasing security and protecting companies and businesses from potential criminal threats. What most don’t realise is that, often, their biggest threat comes from within.
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ven with highly skilled and trained Human Resources (HR) personnel, it is possible for unsavoury employees to get through the cracks of the hiring process. Many of these prospective employees lie on their CVs and know what to say in the room to make a good impression and get hired. So how do companies strengthen their hiring process, while ensuring that those currently hired by the company aren’t a threat? Kyle Condon, Managing Director of D&K Management Consultants recommends that all companies conduct appropriate employee background screening. “What most
and/or prospective employees’ factual information (such as work history, work permits, level of education, validating banking and financial details, and their criminal records) need to be reviewed. An employee screening service provider should also do a more comprehensive background screening. This is imperative in determining whether a current or prospective employee is an asset or liability. A comprehensive screening should include looking into the employees’ identity, habits, vices and lifestyle, market reputation, their true level of experience, and their address history.
If you think about the fact that these employees are within your company daily, often with access to your most vital information, it is no secret why taking the essential steps to make sure they aren’t a threat is so vital.
don’t realise is just how intensive these screening processes need to be. There are crucial elements that need to be included in a background screening to ensure that it is effective,” explains Condon. The most effective employee background screening is done when the HR department of a company joins forces with industry specialists that provide these services. This is because the industry specialists often have resources and expertise that are not always available to a company’s HR department. Together they can create a team that will give the business the strongest protection against the criminal employee threat. Condon continues to explain that current and prospective employees should be vetted through the application of thorough questioning, analytical thinking and critical exploration. Employee CVs should be screened, cross referenced and intensive fact-checking should be carried out. “The vetting process is extensive for a reason,” explains Condon. “It has been designed to ensure optimal security and to effectively minimise risk”. The process outlined by Condon is as follows: Firstly, there is the background screening, here the employee’s background needs to be screened. Employees’
Secondly, personal due diligence should be carried out. This should include verifying an employees’ personal information and preferences. Through personal due diligence a company can ascertain whether the employee is a good fit for the business culturally, as well as whether the employees’ goals align with those of the organisation. Thirdly, criminal record verification should be carried out whereby employees’ or prospective employees’ fingerprints are submitted to the Automated Fingerprint Identification System (AFIS). The employees’ criminal record is confirmed, electronically, against the South African Police Services (SAPS) database. This helps to reduce the risk of organisations being exposed to employees with iniquitous pasts, or nefarious intentions. “These are the first three most crucial steps in employee background screening. As an employee screening service provider, we would follow these steps up with services such as a polygraph test to validate given information on CVs and so forth. If you think about the fact that these employees are within your company daily, often with access to your most vital information, it is no secret why taking the essential steps to make sure they aren’t a threat is so vital,” concludes Condon.
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TA TAX AX th
revolt is already in full swing Jean du Toit, Senior Tax Attorney at Tax Consulting SA
INTHEKNOW ENTREpreneur
For some time now, there has been murmurs of a tax revolt amongst South African taxpayers. For too many reasons to mention, South African taxpayers, sometimes publicly, contemplate the notion of disregarding their tax obligations.
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he SARS Commissioner has taken note of the pervasive disillusionment amongst taxpayers and noted his concern at this year’s Tax Indaba. The reality is that, while Ms Zille and the rest of us ponder the feasibility of a tax revolt, it is already too late to close the stable door.
Is a tax revolt legal? In the average person’s reverie, a tax revolt is a situation where taxpayers in an act of solidarity resolve to abstain from their civic duty of paying their taxes. This may be in protest against tax policy, where taxpayers as a collective perceive the tax(es) to which they are subjected as being unjust. A notorious example of an ongoing tax revolt in this regard is E-tolls, one which objectively speaking is quite successful. A tax revolt may also be occasioned where taxpayers do not agree with the manner in which the government chooses to ‘spend’ the portion of their earnings they had to part with, which is likely more applicable in the present context. Under a tax revolt, one may broadly identify two types of taxpayers; those who simply do not and never have paid taxes, perhaps out of disdain for the very concept thereof and those who, from some misguided sense of virtue, feel justified in discontinuing their tax obligations. In the latter case, the taxpayer somehow legitimises their behaviour, often because they do not think they have to contribute to a leaky bucket, or they feel they have already contributed more than their fair share. These motives may also be a veneer for the actual reason for adopting a non-compliant lifestyle, which is that the taxpayer lost their fear of prosecution. It is the constituency of the latter two groups that is growing in our country. In any event, no matter how you cut it, these types of tax revolts are illegal and cannot be rationalised. Legal tax revolts There is a second type of tax revolt, a less unscrupulous kind, where taxpayers deprive the tax man of revenue by using legal means. On a small scale, this may be achieved by consuming zero-rated goods only, or by kicking your smoking habit and adopting a teetotal lifestyle, thereby depriving the state of VAT and sin taxes.A more drastic and far more effective, yet legal, act of defiance would be to cease your tax residency, in which case SARS would no longer have a claim to your worldwide income and capital gains. Arguably, it is this manifestation of a tax revolt that is currently most prevalent and the one giving SARS heart palpitations.
The exodus from the SA tax net With the surge of reports on corruption, together with the dismal economic outlook, the omnipresent threat of a downgrade and the unstable political climate in our country, many South Africans choose to leave the country permanently in search of greener pastures. Leaving the country for these reasons, however, does not constitute a tax revolt per se, even if SARS’ recent ineptitude may have been one of the driving factors in these individuals giving up on South Africa. The tax revolt we are speaking of is the one that has its genesis in the amendment to section 10(1) (o)(ii) of the Income Tax Act (colloquially referred to as “the expat exemption”). The expat landscape changed when this amendment was promulgated, which means that from 1 March 2020 expats would be liable for tax in South Africa on their foreign employment income insofar as it exceeds R1 million. National Treasury and SARS forged ahead with the amendment, despite being forewarned of the possible consequences. This forced the hand of many expats (we can attest to this from our tax practice), who have now decided to cease their tax residency specifically to avoid being caught by the amendment. What does this mean for SARS? It must be understood that, whilst the largest contributor to national revenue is personal income taxes, there is a comparatively small number of taxpayers in this segment who bear most of this burden. The taxpayers who seem to be leaving our shores are some of those relatively high earners on whom SARS rely quite heavily. These taxpayers are now lost to the fiscus forever and it may appear that National Treasury and SARS’ myopic policy formulation would amount to an own goal. What does this mean for taxpayers? For those of us who have chosen to go down with the ship, so to speak, it means that SARS will have to scratch harder to extract taxes from the individuals who remain. With the prevailing budget shortfall, taxpayers can expect increased aggression from SARS when it collects taxes this season. Moreover, to entice some of those taxpayers who have lost their fear of prosecution to rejoin the tax base, SARS has promised that non-compliance will be met with criminal sanction. In short, some taxpayers may face a torrid tax season this year and it may be wise to partner with an attorney who knows how to go toe-to-toe with SARS, to help them brave the storm.
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5 Tips
to navigate digital lead generation
S
o, what does this mean for the marketing manager, start-up entrepreneur or seasoned professional looking to grow their businesses or portfolios? “It means getting clear around your online lead generation strategy and optimising as you go,” says Jacqui. She gives 5 simple steps to ensure that you win in digital lead generation: 1. Define your audience: Having a deep understanding of who it is you want to engage with is fundamental to the success of your digital lead generation campaign. Defining an audience using traditional market segmentation strategies or the LSM framework just doesn’t work anymore. You’ve got to get closer to your audience by creating personas. What is your ideal customer’s name? Their dreams and desires? Their greatest fears? What do they care about and where do they choose to spend their time online? 2. Build your offer: Differentiating in 2019 and beyond is critical in standing out from your competitors. In highly competitive markets with customers bombarded with promotions and adverts, creating a can’t-refuse-offer is the only way to break through the noise online and ensure that your business is receiving high-quality, convertible leads you need to grow and win.
Lead generation has boggled the minds of sales people and marketers since the dawn of trade. How do we attract qualified leads at scale? Jacqueline Raw, Owner and Founder of marketing consultancy, Ycagel, says, “Leveraging technology is the answer. You can reach more people, more of the time. But, your competitors may have the same idea, so getting your digital lead generation strategy right is crucial.”
3. Map out your funnel: Define your funnel online; from choosing which platforms you’ll use to create awareness, to deciding where you’ll position your offer. Define where you’re going to capture and convert your leads is going to ensure that you never miss an opportunity to generate the leads you’re looking for. 4. Automate engagement: If you’re generating leads at scale, it’s impossible to respond to every lead in real time however, it is a non-negotiable. This is where automation plays a key role. Define your onboarding journey for new customers and ensure that you select the right automation tools that will engage them and keep your leads warm until you can respond to them yourself (that is if you cannot automate the entire sales process as well). 5. Assess and assert: Often we build what we think are going to be amazing lead generation pipelines and never stop to assess and adjust. Assessing the success of your pipelines on an ongoing basis ensures that you are able to tweak, adjust and optimise those pipelines to get better results. If you’re not continually looking at how your lead generating strategies are performing, you won’t be able to optimise as your audience changes or new technologies emerge. “Digital lead generation is not as complicated as it seems. If you’re clear about who you’re trying to reach, spend time crafting an unbeatable offer that drives value, clearly map out the online journey and automate well, you’re going to win and you’ll win big” Jacqui concludes.
Why the
Braai
is such a big part of South Africans Heritage
What makes a braai such a big part of South African heritage? The answer lies simply in the fact that the braai is as unique as us. It doesn’t matter where in the world a South African may travel to, one thing is guaranteed, the braai will join them. This fact lies behind the invention from Buddy Braai of a complete all-inclusive disposable braai that you can take anywhere.
O
ne of the many mysteries about South African history is that no one is certain when the first “braai” happened or who was there. Braaing become a common method of cooking meat around the beginning of the 1800’s with certain customs and traditions developing overtime and becoming common practice for braai masters everywhere. What we do know for certain is this - every South African today knows what a braai is. What Makes a Braai Unique? The braai has various common elements that allow the experience to be treasured by all South Africans. A braai is more than the meat or vegetables on the fire and “Braai broodtjie’ is best, it’s the gathering of friends, family, and loved ones to share time together and catch up on recent events. A braai doesn’t need a specific celebration, date, or time to happen; they can happen anywhere at any time or without any reason other than to Nou gan ons braai” (Now we are going to braai) Why We Love It: The braai carries traditions down through generations while giving each new member the opportunity to master and implement and add their own skill and artistry. There will never be two braais that are alike, and every braai master has their personal preference in how their braai is run. It’s a tradition that brings all South Africans together, unites us in one activity where all that matters are good food, good drinks, and most importantly, good company. Simple or sophisticated, summer or winter, the braai is a staple to South African weekends, allowing each new braai master to take up the coals and add their flavour to the tradition of the braai cult that we all love and know. Buddy Braai says that wherever you are, and whoever you are with there is a Braai for every occasion even if the occasion is just because we can.
Dream Job
Journey Jorika Smit has been counting stars since she got her first hotel job in 2008. Three star, four star and now five star, moving through the ranks from conference coordinator at a small hotel to Groups and Events Manager at Sun International’s five star hotel at the Victoria & Alfred Waterfront, The Table Bay.
R
ecently promoted to the position, she says she has achieved her ten year goal, “When I first started my career in hotels, I made it my goal to be part of The Table Bay team.” Smit grew up in a small town on the West Coast called Yzerfontein, on completing her matric, she studied sales and marketing. She landed her first job as a sales representative at a travel and tours company and so began her initiation with travel and hospitality. Her interest in hospitality grew and when she was appointed as a Sales and Marketing Assistant and Conference Coordinator at a Cape Town hotel, she knew she was where she wanted to be. “As I had a sales and marketing qualification, I did not know much about hospitably when I first started. The systems and procedures were all new to me. I had so much to learn,” she recalls. Between 2008 and 2015, she worked her way up the ranks at different three and four star hotels until she was appointed as Banqueting Manager at a prominent Cape Town hotel and spa. Her eye was always firmly on The Table Bay and her chance to be part of its team came in 2017, when she was appointed as Groups and Events Supervisor. For the past two years, she has become entrenched as part of The Table Bay family, immersing herself in all aspects of the Groups and Events department and grabbing every opportunity to grow her skills through the training and development programmes available to hotel employees. Smit says she has benefitted immensely from the support and mentorship of her senior managers over the years.
Jorika Smit, Groups and Events Manager at Sun International’s five star hotel at the Victoria & Alfred Waterfront, The Table Bay
“I have been privileged to work with incredibly supportive people. Through their mentorship and belief in me, I have gained the knowledge and experience I needed to get to where I am today,” says Smit who is inspired about working at The Table Bay. “I have always been fascinated by The Table Bay, which is one of the most beautiful hotels in Cape Town and perfectly located. I used to look at it was with stars in my eyes as a child. Now that I am here, I realise there is so much more to love. Our people, our guests and the experiences that we get to create for them keep me inspired and excited to come to work every day.” Smit knows that her new position is demanding but she is excited and ready for the challenges that lie ahead.
We celebrate
LIFE
Providing high quality holistic care since 1970, Avril Elizabeth Home is a leader in the field of caring for the intellectually challenged. www.avril.org.za 011 822 22 33 aehome@mweb.co.za
QVC/2013/AEH/01
Wine Show to reach new heights in 2020
With four cities already under the belt in its seven-city WINEderland 2019 tour, organisers of the TOPS at SPAR Wine Show have announced 2020 dates for SA’s largest travelling wine show along with plans to introduce a new brand look and feel.
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estinations and dates for TOPS at SPAR Wine Show in 2020 are: Durban from 7 to 9 May; Johannesburg from 4 to 6 June; Cape Town from 9 to 11 July; Port Elizabeth from 30 July to 1 August; Pretoria from 1 to 3 October; East London from 5 to 7 November; and Nelspruit from 26 to 28 November. Says Andrew Douglas, Owner and Producer, “It’s safe to say that looking back at the 2019 tour to date, we have had our best year ever in the show’s 14-year history. The collaborative efforts and buy-in of industry organisations, wine estates ranging from boutique to largescale producers as well as important content partners has resulted in the delivery of a fantastic experience for our wine curious consumer
LIFESTYLE
audience. The net effect was increased visitor numbers and record wine sales that exceeded even our greatest expectations all of this augurs well for a successful tour in 2020.” Good news for ‘early bird’ exhibitors at next year’s show is that stand prices have been fixed at the same rate as this year, if booked and paid for by 31 December. In response to the success of this year’s show, headline sponsor TOPS at SPAR has extended their sponsorship to 2022. Comments Mark Robinson, Group Liquor Manager of SPAR, “TOPS at SPAR is delighted to extend its current investment in
The quality of both exhibitors and visitors to this year’s Wine Show has been very encouraging, says Debbie Combrink, CEO of the Wine Show. “We experienced significant growth in the number of exhibitors across the board, with an average increase of 45% with Durban topping the charts with a 61% increase in wine estates showing. We had 47% first-time exhibitors and a 51% increase in boutique winery attendance. Our footfall was exceptional, with 25% growth across the four shows to date with Cape Town achieving a 41% increase year on year. We believe our targeted marketing strategy, with a strong focus on digital
The Wine Show until 2022. TOPS at SPAR have a serious role to play in the growth and wellbeing of the wine category and wine industry at large in South Africa. The show creates a time and place for meaningful conversations around wine for the benefit of wine producers, retailers and consumers alike”. Douglas adds, “In 2020 with the extended backing of TOPS at SPAR, we’re pulling out all the stops to build on the successes of the 2019 tour. The new look and feel will capitalise on the Cape’s dramatic wineland aesthetics and raw natural beauty giving consumers a “step into the winelands” experience. The popular ‘WINEderland’ catch phrase will live on with plans to build on various experiential elements including activities to further an important wine tourism agenda. More and more of our producers are utilising world class wine tourism experiences to market and sell their wine and we wish to celebrate and support them in this endeavour”. According to The Vinpro Foundation, a non-profit company representing 2,500 wine producers, cellars, and industry stakeholders and one of the show’s key stakeholders, wine tourism represents significant value within South Africa’s tourism market. Wine tourists also tend to spend more at their destination than other visitors – SA Tourism states that while the Western Cape captured 17% of international visits to South Africa in 2018, it received a disproportionate 29% of visitor spending. In recent years Wine Tourism accounted for roughly R6 billion of South Africa’s annual GDP.
marketing, extended the reach and talkability around the show.” Combrink says the move to increased digital marketing efforts has resulted in a 65% new audience to date. “This new market has contributed to the year-on-year 10% growth, which has taken our under-40 audience to 76% and of that our under-30 to 41%. It’s clear from the feedback that this new market is enthusiastic and eager to learn about wine.” Stats also show that 53% of the show’s audience earn more than R20 000 per month. Looking specifically at the Johannesburg show in June, Combrink said the purchasing behaviours were also very encouraging with a 52% growth in wine sales on 2018 with 92% of the approximately 6,000 visitors buying wine. The TOPS at SPAR Wine Show received high praise from guests in attendance this year, as reflected in Nadine Shone’s comment on Facebook: “Absolutely outstanding! I loved every minute with so much space and amazing wines. Definitely THE best show to date.” Langa Ndlovu echoes the sentiment, adding, “I’m going again next year! And the year after that!” Limited stands are still available for the remainder of the 2019 tour and exhibitors interested in securing their space for 2020, should contact Exhibition Sales Manager Heinrich Von Weilligh as soon as possible at E: Heinrich@wineshow.co.za or P: 021 824 3132.
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FORTY NEW HOTEL PROPERTIES ACROSS
AFRICA - 2023 Marriott International reinforced its commitment to Africa by announcing it expects to add 40 properties and over 8,000 rooms across the continent by the end of 2023. The company also announced signed agreements to open its first property in Cape Verde and further expand its presence in Ethiopia, Kenya and Nigeria. Marriott’s development pipeline through 2023 is estimated to drive investment of over $2 billion from property owners and is expected to generate over 12,000 new jobs in Africa.
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arriott International’s current portfolio in Africa encompasses close to 140 properties with more than 24,000 rooms across 14 brands and 20 countries and territories. “Africa is a land of opportunity with untapped potential and remains core to our strategy,” said Alex Kyriakidis, President and Managing Director, Middle East & Africa, Marriott International. “The economic growth the region is witnessing, along with the substantial emphasis countries across the continent are placing on the travel and tourism sector, present us with immense opportunities for growth.”
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“With compelling, well-established lifestyle brands and Marriott Bonvoy, our industry-leading travel program, we continue to offer different attributes that resonate with the region’s fast-growing middle class and cater to its evolving market place,” Kyriakidis added. Marriott’s expected growth through 2023 is driven by a strong demand and steady growth for its premium and selectservice brands– led by Marriott Hotels with eight anticipated openings and six slated openings under Protea Hotels by Marriott. The company is expected to introduce the Courtyard by Marriott, Residence Inn by Marriott and Element Hotels brands. Marriott also continues to see growth opportunities for its luxury brands and expects to double its luxury portfolio in Africa by year-end 2023, with more than ten new openings across The Ritz-Carlton, St. Regis, Luxury Collection and JW Marriott brands. The company also expects to launch W Hotels in Africa with the opening of W Tangier in Morocco by 2023. Key markets fuelling Marriott’s growth in Africa include Morocco, South Africa, Algeria and Egypt. “Marriott’s established presence and local expertise in Africa, along with our diverse brands and the collective strength of our global platform, put us in a great position to further enhance our footprint in the region where owners are looking to develop highquality lodging with brands that can differentiate and elevate their product,” commented Jerome Briet, Chief Development Officer, Middle East & Africa, Marriott International. The company announced three deal signings, further reinforcing its commitment to Africa and the significant growth opportunity the region continues to provide. Marriott’s recent deal signings in Africa are: Four Points by Sheraton São Vincente, Laginha Beach (Cape Verde) The company anticipates making its debut in Cape Verde with the Four Points by Sheraton São Vincente, Laginha Beach. The property is scheduled to open in 2022 with 128 stylishly appointed guestrooms, three dining outlets, meeting rooms and leisure facilities, including a fitness centre and outdoor pool. Four Points by Sheraton São Vincente Laginha Beach will be situated on the second most populated island, São Vicente, in the town of Mindelo, and will also feature a
bridge to provide guests direct access to a private, exclusive area of the popular Laginha Beach. The hotel is a franchised property owned by Maseyka Holdings Investments Sociedade Unipessoal LDA and will be managed by Access Hospitality Development and Consulting. Four Points by Sheraton Mekelle (Ethiopia) Marriott signed an agreement for its first Four Points by Sheraton in Ethiopia slated to open by 2022. Owned by A Z PLC, Four Points by Sheraton in Mekelle will offer 241 stylishly appointed rooms, an all-day dining restaurant, a bar and lounge, an executive lounge, meeting facilities, a fitness center and a spa. A growing industrial and manufacturing hub, Mekele also lies along Ethiopia’s historic northern tourism circuit, which includes a number of UNESCO World Heritage Sites located in Lalibela, the Simian Mountains National Park, Axum, Gondar and the Blue Nile Falls. The hotel is located along the airport road in a prime location overlooking the city. Four Points by Sheraton São Vincente, Laginha Beach and Four Points by Sheraton Mekelle will both feature Four Points by Sheraton’s approachable design and excellent service and reflect the brand’s promise to provide what matters most to today’s independent travellers. Protea Hotel by Marriott Kisumu (Kenya) The company also expects to expand its footprint in Kenya with the signing of Protea Hotel by Marriott Kisumu in Kenya. The property is expected to be the first internationally branded hotel in Kisumu, Kenya’s third largest city and will be located on the shores of Lake Victoria, the continent’s largest freshwater lake. Scheduled to open in 2022, the hotel will feature 125 rooms with views of the lake, three food and beverage outlets, more than 500 square meters of event and meeting space and a rooftop infinity pool, along with other leisure facilities. Protea Hotel by Marriott Kisumu is a franchised property owned by Bluewater Hotels and will be managed by Aleph Hospitality. Residence Inn by Marriott Lagos Victoria Island (Nigeria) Marriott plans to introduce its extended-stay brand, Residence Inn by Marriott, in Nigeria with the signing of Residence Inn Lagos Victoria Island. Owned by ENI Hotels Limited, the property will be situated in Lagos Lagoon on Victoria Island – the financial and commercial centre of Lagos. Residence Inn by Marriott Victoria Island will be designed for those taking longer stays with 130 spacious one- and two-bedroom suites featuring separate living, working and sleeping areas and fully-functional kitchens. The property will also offer a 24/7 Grab’n Go market and Fitness Centre. Residence Inn by Marriott Lagos Victoria Island is anticipated to open in 2023.
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Porsche Cayenne: by Carl Wepener
Wild
The meek, the mild and the
I realise nobody will believe the catch phrase I have used to describe the new Porsche Cayenne. How can such a performance SUV ever be meek or mild? Not easy to explain, but, once you have driven the flagship, the Porsche Cayenne Turbo, which you too will believe is wild, any other experience even within any other derivative of this great SUV’s ‘seems’ focus please, ‘seems’ meek and mild.
T
he completely new top-of-the-range model from the third generation of the Cayenne is once again raising the bar for sporty performance in its segment and in the industry overall. By the way, the Porsche Cayenne also came second in the SAGMJ’s 2019, Auto Trader, Car Of The Year, losing out marginally to the Mercedes Benz A-Class. Improved driving dynamics includes a combination of innovative technologies, such as active aerodynamics including an adaptive roof spoiler, self-levelling three-chamber air suspension, wider rear tyres as well as the new high-performance brakes. With additional options, such as rear-axle steering or electric roll stabilisation with a 48-volt system, the SUV is able to achieve the driving characteristics of a true sports car.
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The new design, although pure Porsche does enhance the characteristics and the unique new front end and the LED headlights from the Porsche Dynamic Light System (PDLS), the Cayenne Turbo has an appearance that is very dominant. At night, the new Turbo sets itself apart from other Cayenne models with its double-row front-light modules. The side profile is enhanced by 21-inch Turbo wheels, specially reserved for this top model and flared wheel arches with painted wheelarch trims. The twin tailpipes, unique to the Turbo, is the key distinguishing feature on the rear end and delivers a very unique and exhilarating sound. The completely new interior spells sportiness and comfort at the same time. Most of the Turbo’s functions can be viewed and operated, using the high-
LIFESTYLE
resolution display and touchscreen of the Porsche Advanced Cockpit. Among them, for example, is the BOSEÂŽ Surround Sound System with 710 watts fitted as standard. Drivers and passengers get to experience this top-of-the-range model in sports seats with an 18-way adjustment. The integrated headrests are a new feature and are reminiscent of the 911. With the great look comes great power and at the heart of the Cayenne Turbo is the mighty new four-litre V8 engine with twin turbocharging. Producing 404 kW and it exceeds the engine of its predecessor by 22 kW while the maximum torque of 770 Nm represents an increase of 20 Nm. The new eight-speed Tiptronic S automatic transmission is a gem in smoothness and converts both power and torque into acceleration and speed by means of the active all-wheel drive Porsche Traction Management (PTM). The new Turbo sprints to 100 km/h in 4.1 seconds (3.9 seconds with the optional Sport Chrono Package)
and reaches a top speed of 286 km/h. The engine is especially responsive, with significantly improved power delivery. With its new lightweight chassis the Cayenne Turbo combines the precision of a sports car, the comfort of a saloon and the adaptability of an off-road vehicle. The Turbo as proven on the open road and also around Kayalami proves that the Cayenne can take on any road surface in its stride and the driving dynamics and comfort is never sacrificed. The new Cayenne Turbo is the first SUV to have an adaptive roof spoiler as a component of its active aerodynamics. This optimises efficiency, increases downforce on the rear axle and, in the airbrake position and reduces the braking distance needed from higher speeds. The aerodynamic system therefore complements the new Porsche Surface Coated Brakes (PSCB), which are standard. The top system remains the optionally fitted Porsche Ceramic Composite Brakes (PCCB).
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Now that in a nutshell was the Porsche flagship the Turbo. Does that mean the siblings are of a lesser quality or ride dynamics? No. It might be slower and not so loaded with top of the range equipment, which is optional on the two base models. Powerful turbo engines, a new eight-speed Tiptronic S gearbox and new chassis systems, alongside innovative display and control concept with increased connectivity take both sportiness and comfort to a next level. There are two newly developed six-cylinder engines to choose from: The Cayenne’s 250-kW three-litre turbo engine delivers 29 kW more than the previous model. The 2.9-litre V6 biturbo engine in the Cayenne S, which reaches speeds of up to 265 km/h, brings it up to 324 kW – an increase of 15 kW. Equipped with the optional Sport Chrono Package, the new Cayenne S
Displacement (cm3)
Max.power (kW)
The new Cayenne
2,995
250 (340 hp)
450
The new Cayenne S
2,894
324 (440 hp)
The new Cayenne E-Hybrid
2,995
The new Cayenne Turbo
3,996
Max.torque at rpm (Nm)
Variable light distribution and intensity are enabled by 84 individually activated light-emitting diodes. This results in the Cayenne offering new functions such as high beam that does not glare opposing traffic, as well as adaptive sign glare control. Cayenne and Cayenne S Firstly, the Cayenne with a six-cylinder turbo engine results in a zero to 100 km/h time of 6.2 seconds (5.9 seconds with the Sport Chrono Package) and a top speed of 245 km/h. The second model to launch is the Cayenne S. Driven by a newly developed 2.9-litre V6 engine with twin turbocharging, this model accelerates from zero to 100 km/h in just 5.2 seconds (4.9 seconds with Sport Chrono Package) and has a maximum speed of 265 km/h.
CO2 Combined fuel consumption emissions (in g/km) (in l/100km)
Price: 3year Driveplan**
Top speed (km/h)
Acceleration (0-100km/h) (in seconds)
1,3405,300
245
5.9*
9.0
205
R1 160 000
550
1,8005,500
265
4.9*
9.2
209
R1 319 000
340 (462 hp)
700
1,0003,750
253
5.0*
3.2
72
R1 707 000
404 (550 hp)
770
1,9604,500
286
3.9*
11.7
272
R2 188 000
The new Cayenne models
accelerates from zero to 100 km/h in less than five seconds. Based on the iconic 911 sports car, the brand’s SUV has been enhanced visually and features rear-axle steering for the first time. On-road capabilities of the model are also further improved thanks to active all-wheel drive as standard, Porsche 4D Chassis Control, threechamber air suspension and the Porsche Dynamic Chassis Control (PDCC) electronic roll stabilisation system. As mentioned earlier the Porsche Cayenne has the specific Porsche Design DNA. The enlarged air intakes at the front are clear indicators of the increased performance. The luggage compartment volume now offers 770 litres capacity. The iconic Porsche lettering spans across the redesigned rear lights, which feature a threedimensional design and end-to-end narrow strip of LEDs. Porsche is offering a new three-stage concept for the headlights. Every Cayenne is fitted with LED headlights, which can be combined with the Porsche Dynamic Light System (PDLS), offering a variety of light modes such as cornering light and motorway light. Alternatively, the new LED main headlights with matrix beam including PDLS Plus is the top system available.
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Both these models were really very impressive on surfaced roads, even bad surfaces and do not shy away from rough terrain. The Tiptronic S gearbox makes for excellent shifts when needed. At the other end of the spectrum, the long-transmission eighth gear ensures low torques, optimised fuel consumption and relaxed driving. On rough terrain, off-road modes make it easy for the driver to select the right setup for their journey. The SUV’s default setting is the Onroad programme, however, four other modes activate the conditioning for mild off-road terrain: Mud, Gravel, Sand or Rocks. The drive, chassis and differential locks can be selected to adapt to the relevant scenario. For power distribution, Porsche utilises the active all-wheel drive in all Cayenne models. Providing the optimal basis for the active chassis systems, which are analysed and synchronised is the integrated Porsche 4D Chassis Control system. The system works in real time, optimising handling even further. With the exception of the active PASM damper system, all other chassis systems are new developments. For the first time, the Cayenne is available with electric rear-axle steering, improving agility on bends and stability when changing lanes at high speeds.
LIFESTYLE
The adaptive air suspension with new three-chamber technology significantly increases the spread between a sporty, firm connection and the driving comfort expected of a touring car. The new Cayenne offers even more potential when it comes to sporty performance. Porsche has redeveloped the Sport Chrono Package based on the model of the sports car, with the Mode button on the steering wheel, a clear indicator of this approach. As well as the Normal, Sport and Sport Plus driving modes, the driver can select an individually configurable mode. The Porsche Advanced Cockpit is fully integrated into the sporty, luxurious atmosphere. At the heart of the new display and control concept is a 12.3-inch full-HD touchscreen from the latest generation of Porsche Communication Management (PCM).
A range of digital functions can be operated intuitively – including by voice control. The Porsche Connect Plus allows access to online services and the Internet, this includes the standard navigation. The new PCM introduces an enhanced level of interaction. Up to six individual profiles can also be configured. As well as a large number of interior settings, a preference data is stored on specifications for lights, driving programmes and assistance systems. The Porsche Cayenne is truly a sport SUV that can be enjoyed on any road surface and very few other SUV’s can achieve the same comfort or road manners for the same price at time of testing.
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Last Word As traditional boundaries continue to evolve, and markets become increasingly globalised, the digital supply chain is creating organisations that can compete anywhere in the world, from any location. This allows for source, make and delivery processes that are adapted to compete globally. According to Kree Govender, Managing Director at South Africa Qlik Master Reseller (SAQMR), data holds immense power to drive efficiency. “Data analytics plays a crucial role in the modernisation of the value chain. In manufacturing, connectivity and sensors enable product and production while data rich services ensure faster innovation for shorter product lifecycles.” The key to creating real value is to ensure that the value chain’s performance is amplified, within the manufacturing process and beyond. “Once products leave the factory, the innovation cannot end. Products must continue to evolve even after leaving the factory to stay ahead of the competition, with service updates, feature editions and product accessorising,” adds Govender. How can this be achieved? With innovations, thanks to 4IR, driven by machine data, customer usage and social media feedback. “It’ all about the data. With reliable information at hand, in an understandable and accessible format, companies can make better business decisions based on real business data. Every business holds the information they need to operate more efficiently, if only they accessed it effectively,” he says. With a shorter time to value, manufacturers can create Across the entire value chain, manufacturing insight into their businesses instead of wasting time on organisations are under constant pressure static reports. With an understandable dashboard, complex to innovate products and services. To remain data is presented in a simplified, visual way without losing competitive, greater customer intimacy must be the power of the insights. This empowers management established, and more must be achieved with less to make better decisions, faster and leads to the efficient management of global operations, driving resources. This is no easy feat. These complex trends, millions in value. when harnessed correctly, are making the modern plant “In our experience, people are smart and more efficient, productive and aware of the data required naturally assess what they are presented. This to perform better. increases when the person is involved in filtering, navigating and extending visualisations. Academia have shown how to present complex he Internet of Things and Industry 4.0 have brought about helpful data, and Qlik has enabled the business user developments in manufacturing. Modern manufacturers often to move beyond modern visualisation into a experience information overload. They are drowning in complex data, collaborative analysis playground where they which continues to stream in unabated, daily. Analytics is highly effective in can be truly involved in uncovering value in helping manufacturers to see the whole story. Without a full, birds-eye view data,” concludes Adam Barrie-Smith, Chief it is incredibly difficult to convert challenges into opportunities – or to know Technology Officer, SAQMR. when to seize these opportunities for maximum effect.
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