Acumen 25 by Contact Media

THE SIX Cs OF STRATEGY PROF. NICK BINEDELL

TURNING THE

ELEPHANT SABC NEWS CHIEF PHATISWA MAGOPENI A MIGHTY SHIFT IN CULTURE

SASOL CEO BONGANI NQWABABA

WORK AND STRESS ARE KILLING US

STANFORD’S PROF. JEFFREY PFEFFER

ISSUE 25 Third Quarter • 2018 R40.00 R39.95 incl incl vat vat

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Contents

5 Hiding From the Light GIBS Dean, Prof. Nicola Kleyn wonders whether corporates use CSI to deflect attention from ethical shortcomings?

6 Network 10 Dying for a Paycheck Stanford GSB's Prof. Jeffrey Pfeffer believes many modern management practices are killing the workforce – literally.

14 The Six Cs of Strategy and the World We Work and Live In GIBS Prof. Nick Binedell sets out six lenses through which to view the development of a coherent strategy.

Turning the SABC ‘Elephant’

Phathiswa Magopeni tells Acumen about how she is turning the SABC's News & Currents Affairs around.

28 Are You an Imposter? Dr. Gavin Price explains why so many South Africans, particularly women, suffer from Imposter Phenomenon and how it could be keeping their careers back.

Lights! Camera! Travel!

Eugene Yiga reports on the growing possibilities for South Africa as a film tourism destination.

36 Bongani Nqwababa Sasol CEO Bongani Nqwababa tells GIBS about the cultural transformation underway at his company.

40 Insurtech Arrives to Challenge and Redeem Insurance Arthur Goldstuck explores the rapid growth and customer focus of insurtech.

43 The Rise of the Digital Nomads (and the Impact They’ll Have on Business) Futurist Dion Chang identifies the rise of the Digital Nomads and their impact on business.

The VAT Hike Impact

Two GIBS experts give their views on the effect of the recent VAT hike, especially on poor South Africans.

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Editor Chris Gibbons Gibbonsc@gibs.co.za Layout and Production Contact Media and Communications (Pty) Ltd Designer Quinten Tolken Proofreader Angie Snyman Publisher Donna Verrydt Donna@contactmedia.co.za Contact Media and Communications (Pty) Ltd 011 789 6339

76 Meet, Play, Work Away Caroline Hurry packs her bags but takes her work with her on vacation.

Advertising Sales Sean Press Pressman@contactmedia.co.za 082 888 1137

Business Wear in the Spring Time

Acumen's business fashion guru Cheska Stark celebrates spring.

82 The Motoring Business 56 Keeping the Spark Alive Through Customer Engagement Profs. Danie Petzer and Estelle van Tonder delve into what it takes to engage with your customers.

60 Fair Exchange: The Business of Bartering Tamara Oberholster trades time and words for knowledge about the barter economy.

Engaging the Public

Rising PR industry star and GIBS MBA Reatile Tekateka tells Eugene Yiga what makes a great PR professional.

68 Dangerous Living Ex-Recce Johan Raath tells Acumen about the business of being a Private Military Contractor.

72 Solving the SME Disconnect

Get behind the wheel with Acumen's Stephen Smith, who reviews the new VW Arteon and Alfa Romeo's Giulia.

Contributors Aki Anastasiou Prof. Nick Binedell Dion Chang Arthur Goldstuck Caroline Hurry Prof. Nicola Kleyn Godfrey Mutizwa Tamara Oberholster Prof. Danie Petzer Gavin Price Anke Schaffranek Stephen Smith Cheska Stark Prof. Estelle van Tonder Eugene Yiga York Zucchi GIBS Managing Editor Luleka Mtongana

Technology for Business

Acumen techno expert Aki Anstasiou looks at South Africa's first Smart Factory along with Nokia's comeback bid.

Contact Acumen 26 Melville Road, Illovo, Johannesburg P O Box 787602, Sandton, South Africa, 2146 011 771 4000 Acumen@gibs.co.za Brought to you by

87 Books Chris Gibbons reviews Dying for a Paycheck, which counts the cost of toxic workplaces, and Political Tribes, which explains the Trump phenomenon.

Disclaimer: Acumen is the official publication of the University of Pretoriaâ&#x20AC;&#x2122;s Gordon Institute of Business Science (GIBS). All material is strictly copyright and all rights are reserved. No portion of this magazine may be reproduced externally, wholly or in part, in any form without the written consent of GIBS. The views and opinions expressed by the contributors to this publication are not necessarily the views and opinions of the publishers, GIBS or its associates. While every effort has been taken to ensure the completeness or accuracy of the published information, errors and omissions may occur. The publishers, GIBS and its associates cannot accept responsibility for any loss, damage or inconvenience that may arise from the unauthorised use of this publication.

Entrepreneurs and investors York Zucchi and Anke Schaffranek take a fresh look at what's needed for SMEs to succeed.

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Dean's Note BY PROFESSOR NICOLA KLEYN

Hiding From the Light I was recently trudging along in Heathrow’s Terminal 3 when I was arrested by a life-size picture of a rhino. The billboard’s white and yellow tagline proclaimed: “Sometimes it’s the strongest amongst us that need the most help.” I peered closer to discover that the advertisement had been sponsored by SAP, who proudly declared that SAP HANA © was trusted by the non-profit, Elephants, Rhinos & People (ERP), to integrate drone footage and GPS data into their efforts to keep endangered elephants and rhinos safe from poachers. Perhaps the average traveller wandering through Terminal 3 who happened to notice the communication had warm, pleasant feelings towards SAP’s ability to enable the preservation of endangered species. Maybe they even smiled wryly at the clever nomenclature that shifted ERP into something with a deeply noble meaning. My response was neither of these. Anyone who has followed amaBhungane’s “Gupta-leaks” knows that a number of multinationals – including SAP, KPMG and McKinsey – have been directly implicated in the systematic, large-scale plundering of state coffers that was orchestrated by the Gupta family in partnership with corrupt politicians. SAP acknowledged earlier this year that its own investigations confirmed it had made payments to Gupta-related entities and had found indications of misconduct relating to the management of Gupta-related third parties and irregularities in the adherence to its own compliance processes. Communication from the Germanheadquartered entity noted that it voluntarily disclosed the situation in its South Africa business to the US Department of Justice and US Securities and Exchange Commission, pledging its “full and complete co-operation.” Adaire Fox-Martin, the member of the Executive Board of SAP SE, into whose portfolio Europe, the Middle East and Africa (EMEA) fall, went as far as issuing an apology for the profound impact that the allegations of

wrongdoing in the South African business had on employees, customers, partners and the South African public. After suspending and dismissing a number of executives, an interim Acting Managing Director, Claas Kuehnemann was appointed. According to SAP’s own website, his priority was to “ensure the business continues to focus on driving revenue and growth across its local operations.” Despite the carefully worded apology from headquarters, no mention was made at this time about how the business intended to recalibrate its moral compass. Whilst the scope and scale of these corporate misdeeds were being investigated, SAP continued to make large investments in numerous global and local social initiatives. Its social impact report for 2017 reveals that the software giant has donated a total of €24 million to workforce development and youth entrepreneurship projects around the globe. Whilst one hand had taken away, the other was certainly giving. Lest you think I’m overly focused on one organisation that led to my deep musings about the role of corporate social investment at a time when an organisation experiences a deep ethical breach, the picture for McKinsey and KPMG is not markedly different when it comes to social investment. Both companies’ South African and primary websites emphasise the good deeds and report significant amounts that have been donated on a global scale to a range of causes. When it comes to acknowledging the internal rot that had occurred in each, McKinsey was slow out of the blocks. In January 2018, Business Day ran a report with the headline “McKinsey strongly denies corruption allegations concerning

Prof. Nicola Kleyn

Eskom and Trillian, point by point”. Only in July of this year was a public apology delivered – at GIBS – by McKinsey’s new global managing partner Kevin Sneader, who confirmed that over R900 million had been repaid and that the firm “had taken too long to find out what happened and have come across as arrogant and unaccountable.” Until that point, KPMG had been a lot more forthcoming about its ethical breaches. In April it detailed several internally focused measures being taken in order to rebuild public trust. In an apparent conflation of CSI and remediation of an ethical breach, it has also claimed that it will donate the R40 million earned in fees from Guptacontrolled firms to charity and refund a further R23 million rand. So why did a corporate billboard prompt more than a passing glance? For me, it was a potent provocation of how corporates can and should secure and maintain their social license to operate. I don’t dispute that saving rhinos is a virtuous and muchneeded cause. But before our corporates invest in a range of social imperatives, they need to not only clean up their own houses but reassure us, their external stakeholders, that they are not funding social causes in an effort to divert focus from building ethical organisations. What society needs from businesses more than CSI is that they prioritise and communicate how they are developing and, where needed, repairing, both appropriate controls and organisational cultures that foster ethical decision-making. Gordon Institute Of Business Science

Network

Our regular look at GIBS’ events and guests

Free, but not equal While the end of political apartheid, where people were separated by race, had been achieved, economic apartheid and a lack of access to economic opportunities still persisted, said Reverend Jesse Jackson, veteran US civil rights activist and political firebrand. “We fought and won political apartheid, which gave us freedom. But it had almost nothing to do with economic resources,” Jackson told a GIBS Forum co-hosted by the Young Professionals Association and the Ikusasa Le Afrika Foundation (ILAF), adding that “The tools used to end political apartheid must now be used to end economic apartheid. We are free, but we are not equal.”

Defining the next stage of the struggle

Drawing parallels between the American Civil Rights Movement and the South African struggle for freedom, Jackson, visiting South Africa for the funeral of Winnie Madikizela-Mandela, said the next stage of the struggle must allow for access to capital, industry and technology. “Our segregation struggles have ended, but we are denied access to capital, banks, insurance, access to university and ownership of the mass media. In the last struggle, freedom was not the goal; but we had to be free in order to get equal. But now, whites are richer, and blacks are free.”

The next level of the struggle needs to be defined Dr. Zweli Mkhize

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“The playing field, whether it be access to capital, banking or international trade, is not equal.

Rev. Jesse Jackson at GIBS

While the race separation battle has been fought and won; the battle of resource separation has not been fought,” said Tebogo Moalusi, chairperson of the Young Professionals Association. He told the gathering that South Africa was on the cusp of a movement of black excellence: “Young people must take their place at the table where decisions are made. We must make black excellence an obsession until wealth creation, access to jobs and opportunities for black people become a reality.”

Economic emancipation in South Africa South Africa had recently lost a number of leaders from the struggle who embodied the ideals of black excellence, Dr. Zweli Mkhize, Minister of Cooperative Governance and Traditional Affairs and the Chair of ILAF, told the Forum.

“We must draw inspiration from Mama Winnie, who defended the capacity of black people to think for themselves and to be determined. We must thus be inspired by her memory when we speak of black excellence,” he said. Despite the system of Bantu Education, South Africa had produced a significant number of highly qualified black professionals. The growth of the black middle class is part of the strategy to transform South Africa and to drive economic transformation, Mkhize explained. However, the country was still far from reaching its goals: “The pace of transformation of the economy is still too slow, and the skewed nature of ownership and leadership patterns need to be corrected. It is not sustainable if the majority of our people are excluded from the economy,” Mkhize said. He explained that many obstacles prevented black professionals and businesses from entering and participating in the mainstream economy. “Often, being black means you have to be better to be equal. Corporate South Africa remains an impenetrable fortress where black-owned firms struggle to get meaningful contracts. Until these networks are dismantled and the subtle barriers are removed, we won’t be able to transform the economy. We need to see black excellence shining.”

This Land Is Ours With land reform high on the political agenda, guests packed into GIBS main auditorium in May to hear the views of Advocate Tembeka Ngcukaitobi, lawyer, author and political activist, whose book, This Land Is Ours, has been critically acclaimed. Flanked by Land Bank CEO T.P. Adv. Tembeka Ngcukaitobi Nchocho and joined via video link by another land expert, Professor Ruth Hall, Ngcukaitobi’s central thesis was that black South Africans are living as though apartheid is still in existence. “Part of the problem I have with South Africa today is denialism,” said Ngcukaitobi, “denialism of black pain and denialism of the occupation of South African land by white colonists and the replication of that pain, not only over time, but also over generations, so today, we are, in a sense, still living according to the construct of the empire, to the construct of the colony, the construct of the total control and domination of wealth over the black body. We are still living as imagined by Europe. So, the past is not really the past; the past continues to live with us, not in abstract ways, or philosophical or intellectual ways, but in practical ways because access to property is still largely determined by race in the South African context, whether one talks ‘property’ as in access to the Stock Exchange or ‘property’ as in access to a basic commodity like land. The fact of the matter is that those are still largely determined according to one’s race. “The laws, of course, have changed but we must recall that the change of the laws takes place in a rigid socioeconomic environment that still makes it difficult for people like my mother and my grandmother to access basic necessities of living, in the open market. “If we want a serious discussion about land reform, we should probably get out of the denialism of black pain and the denialism of black dispossession and recognise that the constitutional framework was itself intended as an instrument for the liberation of the African people over the colonial framework… I see the Constitution as an instrument for socioeconomic transformation,” he said.

GIBS again in Global Top 50 for executive education GIBS has once again been ranked among the world’s 50 best business schools by the esteemed UK Financial Times in its 2018 Executive Education ranking. This is the 15th year that GIBS has been ranked in this annual ranking which covers both customised programmes which are tailor-made for corporate customers and open programmes designed for leadership within organisations. A number of parameters are used to compile this ranking which is based on the satisfaction levels of corporate clients and individual participants. With a combined ranking of 42, GIBS continues to hold its own as the leading African business school in this highly competitive space, on par with the world’s premier business schools such as London, MIT Sloan and Stanford. GIBS Dean, Professor Nicola Kleyn said, “This ranking amplifies that GIBS is indeed a global centre of excellence that offers state-of-the-art education. A collective effort from our faculty and programme execution team ensures that we keep delivering value to our clients.” The ranking looks at the best 90 business schools offering customised programmes and the best 75 offering open-enrolment programmes worldwide and highlights the quality and suitability of the programmes and teaching excellence. Lerato Mahlasela, director: Custom Programmes at GIBS said, “We work hard to ensure we deliver quality programmes that are in line with our customer needs. This ranking is a clear indication that our executive education programmes are in line with market expectations.” Nishan Pillay, director: Open Programmes at GIBS, said “GIBS benchmarks itself against top business schools across the world and this ranking is testament to the quality produced at GIBS from design through to delivery.” Gordon Institute Of Business Science

Economic policy and land reform

Prof. Nicola Kleyn and Mmusi Maimane

Hope for the majority Democratic Alliance (DA) Federal Leader Mmusi Maimane believes his party should not only speak about change, but also offer hope to the majority of South Africans.

South Africa must agree on how the economy is to be structured, Maimane said. The DA’s major task is now to ultimately shift its constituency to the poor and unemployed living below the poverty line in order to “become the party for those who are left behind. I am doubtful that we invest enough into the sense of anger of those who are left out,” he said. The party’s economic policy believes the state must be the employer of last resort and focuses on city-led economic growth. De-concentrating and de-monopolising the economy are key to breaking down the ‘two nations’ narrative he said.

He expressed the expectation that South Africa is entering a critical phase where politics will move away from personalities to rather focus on policies that can grow the economy.

“It is an injustice that a government that still has nine million unemployed people, killed people in Marikana and allowed the Life Esidimeni tragedy to occur, can continue to claim legitimacy as a government that cares about poor people.”

“The discussion missing from South Africa today is the discussion about our future. What is our tomorrow? What is our dream?” he asked a recent GIBS Forum. “The choice in the next election is stark: between a patronage organisation, and an open organisation which is driven by hope and change.”

While Maimane said he believed South Africa’s political future lay in coalitions, he cautioned that coalition politics is hard work, as “not every party is interested in government. It is hard work to govern, you have to deliver and be accountable to citizens.”

The country must move away from the divisive rhetoric of the liberation movement and towards a phase of constitutional democracy, he added.

He said the DA was able to be in coalition with the EFF in a number of metros as they both “agree that South Africa needs change.”

No ministerial interference at SABC With an allusion to the deep political interference of previous years, was the newly appointed Minister of Communications, Nomvula Mokonyane, also throwing her weight around in a negative way at the SABC? That was the pointed question from a delegate at the recent GIBS Conference on High Impact Strategic Communications and Reputation Management to another recent appointment, Chris Maroleng, Chief Operations Officer at the giant broadcaster. Maroleng was quick to say that he did not speak for Mokonyane, “but what I can say is that to date there has been no negative interference on her part… I can speak on record today and say that there has been no attempt to interfere with the independence [of the SABC] by our minister. In actual fact, it’s been the opposite: in our most recent meeting with her, discussions were held about the financial position of the SABC and how the SABC can begin funding… let’s call it its “unfunded mandate”. 8

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Chris Gibbons and Chris Maroleng

Maroleng explained that the SABC was duty-bound to cover a number of things deemed to be of national importance – certain events and sports, for example – “but that mandate has not been funded for the longest period of time.” Recent discussions with the SABC, said Maroleng, “were centred around this and if you have tracked the conversations we’ve been having with the Portfolio Committee in Parliament recently, as we gave presentations to this committee about the financial position of the SABC, what we can do to turn it around and restore that sustainability – not around how they can manipulate elections. And I’m not saying this as a fake news, post-truth guy, I’m saying this as a guy who is telling the truth about what is happening.”

JEFFREY PFEFFER, IN CONVERSATION WITH CHRIS GIBBONS

Dying for a Paycheck

So you want your company to outperform the competition? What do you need to do?

Well, no. In fact, according to a new book – Dying for a Paycheck by one of the world’s acknowledged experts on HR – Jeffrey Pfeffer, if you follow that course of action, you’ll do irreparable harm to both your employees and your company. The book’s subtitle sums it up: How Modern Management Harms Employee Health and Company Performance – and What We Can Do About It.

Acumen editor Chris Gibbons spoke to Pfeffer at his home in California and began by asking him why these heroic, supertough, high-performance workplaces turn out to be highly toxic or worse even – deadly? We’ve got people who are working way too long hours, under conditions where they don’t really control the conditions of their work, so they’re facing high job demands and low job control. Oftentimes of course in today’s economy, with economic insecurity, there come some lay-offs and unplanned changes in their shifts and therefore unplanned changes in their income from one week to the next. All of this creates stress and stress 10

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creates ill health. We’ve known this for a long time. We know the pathways through which stress elevates cortisol, and the constant presence of cortisol in the bloodstream actually creates quite a number of physical problems. In some sense none of this is new and my book is an attempt to bring this together, to get people to pay attention to the enormous toll that work environments are having on humans, and – by the way – on company performance.

...stress creates ill health. Do these scenarios always come with a toxic manager – usually, but not always, a male toxic manager? I am sorry to say, or happy to say, depending on your perspective, that there are many female toxic managers! Of course, the individual manager bears some responsibility, but these are really a consequence of organisational cultures that permit managers to put undue stress on their employees, and then, in some cases, actually encourage managers to place undue stress on their employees. If the senior person says you’ve got to get the work done and I want you in the office all the time, and I’m going to do as somebody in a medical software firm once did, writing an infamous email, complaining that the parking lot wasn’t full enough at eight o’clock at night, I would not blame the individual managers in that organisation for overworking their employees. This is a culture which has been created by the senior leadership.

IMAGE SHUTTERSTOCK

The traditional answer is force employees to work extremely long hours and take work home with them, drive them as hard as possible, tongue-lash them if they don’t perform (really, don’t take any prisoners or suffer any fools) and slash all costs like medical aid and pension fund contributions to an absolute minimum. In other words, really sweat the assets – especially the human ones. Right?

When I was a young manager – more years ago than I care to remember – I was always told: “hard work never killed anyone”. When does hard work become dangerous? You may have been told that but whoever told you that obviously had not read the epidemiological literature. Work hours in studies – and these are prospective, predictive longitudinal studies written up in some of the leading medical journals – work hours beyond a certain point are systematically related to cardiovascular disease, systematically related to high blood pressure, systematically related to mortality. So hard work actually does kill people!

In Dying for a Paycheck, you single out several key practices – lay-offs, for example, and their accompanying economic insecurity? Lay-offs have been associated – not surprisingly – with a doubling in the rate of suicide. You can see now in New York City, taxi drivers, because of competition from Uber, can’t make money and are not surviving financially in any other way either: they’re killing themselves. Lay-offs are extremely toxic and, by the way, don’t help the company either.

Yes, and the US, of course, is one of the few leading, industrialised countries that ties health insurance to whether or not you are employed and to what your employer decides to do about that health insurance. I mean, if your readers wanted to become even more depressed than they are from this conversation, they could go to the Gallup website (and there’s also US government data on this) and ask the following question: what percentage of people are unable to fill a prescription, or receive medical care during the preceding year, because they can’t afford it? In the US, according to Gallup, one-third of the respondents said they had either foregone filling a prescription, or had failed to see a doctor because they thought they could not afford the doctor visit. It should be pretty obvious – but people have in fact studied this as well – that when you don’t access medical care in a timely fashion, that adversely affects your health. By the time you do show up, the disease is more advanced, you’re not getting preventive screenings and prevention is of course much more effective than remediation. So, no health insurance is very bad for health. In fact, the absence of health insurance in the US is probably killing somewhere between forty and fifty thousand people a year.

One of the core themes of Dying for a Paycheck is that the ‘drive ’em till they drop’ management style does not have any beneficial impact on the company’s bottom line. Quite the reverse, in fact? That is right. It would not surprise anybody that the higher your levels of stress on the job, the more likely you are to quit. We also know that turnover is expensive. It should not surprise anybody that when you work sick, you’re not as productive. And it should not surprise anybody because we’ve known this for decades: giving people more control of their work, i.e. more autonomy, increases the level of engagement and increases the level of motivation and therefore increases their performance. And it should not surprise anybody, but might, that studies of the consequences of lay-offs find that they do not increase stock price, and they do not increase profitability, and they do not increase productivity. And that people work better and are more effective when they are able to deal with their family obligations and have less work-family conflict and the stress that comes from this. So, companies are doing a bunch of things that aren’t making them better, but they are certainly extremely toxic to the workforce. And there is literally a death toll that can be attributed to some of these work practices, which are in the aggregate and as well as individually, as harmful as second-hand smoke, a known and regulated carcinogen.

One of your chapter headings says it all: “No health insurance, no health.” We call it medical aid here in South Africa, but whatever term you use, if you don’t have it, it can be a massive problem?

More and more companies – countries, even, like France – are beginning to realise that laptops, smartphones and email need to stay in the office, every evening and over weekends? Are we making progress – or not? Are we making progress? I think we’re making some. We’re not making sufficient progress and it’s not coming fast enough. There are countries, France is one, and the UK, I think, is another – although that goes back and forth – that recognise that particularly for a country that runs a nationalised health system, like the UK or France or most of the other countries in Europe, that when you permit

Dying for a Paycheck by Jeffrey Pfeffer is published by Harper Collins USA at R420.

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companies to make employees ill, those costs are passed on to the general public in the form of increased numbers of doctor’s visits and disability claims, etc. So these countries are trying to do for the social, for the human environment, that which they did decades ago for the physical environment. Which is to say, we are not going to permit you to externalise your costs onto the broader public. As we’ve done with environmental or social pollution, you need to either prevent or clean up your own mess. But this has still not gone quite as far as it should. Many governments still believe that stress is an inevitable part of work – which, by the way, it’s not – and that this is something that we just have to put up with in the modern economy.

How should a senior executive reading this article begin to discover if there really is a problem in his or her organisation? It turns out there are a bunch of measures that you can look at. One simple one – depending upon your access to this data – is to ask what drugs your workforce is taking? There’s now, again,

...hard work actually does kill people! systematic evidence that if a high percentage of your workforce is on antidepressants or other psychotropic medicines – maybe sleeping pills, maybe ADHD drugs to keep people awake – when people are psychologically as well as physiologically stressed and feel bad, they’re going to do things to medicate themselves. Some of this, of course, is going to be self-medication through alcohol and over-eating and maybe taking drugs that don’t appear through the pharmacy. But a lot of this will be, in fact, through prescriptions. So you might look at prescription data; what percentage of your people are on antidepressants? It seems to me that if people come to work for you and they go on antidepressants, that’s probably not a good sign. That’s one measure. Another is a single-item measure of selfreported health, which basically asks people how healthy they feel on a five-point scale? Studies have shown that this prospectively predicts mortality and morbidity down the road.

Even controlling for current health status. So you can ask people how healthy they are and hold yourself accountable for moving that indicator in the right direction. You can certainly look at prescription drug use and see if that is indicating that your employees are under enough psychological stress, that they are getting lots of psychotropics to help them cope.

Once you have a truly toxic and dangerous culture in place in an organisation, how difficult is it to change? I don’t think it’s difficult to change at all as long as you’re serious about it. You need to decide what you want to do. You can certainly do things to help provide people with social support. You can certainly do things to try to end the micromanaging and the absence of job control that most people experience as stressful. And you can certainly do things to signal to the people in the organisation that we take human health and human sustainability seriously, just as we take environmental sustainability seriously. You do that by the senior executives modelling the behaviour they want other people to engage in, and by them not tolerating people who are abusing their workforce. If I said to you, we’ve got an employee who has this enormously expensive piece of equipment, which he is overusing and not properly maintaining and therefore putting the well-being of that piece of physical equipment in danger, we would probably fire the person. We’d say, look, you are damaging a very expensive piece of equipment that we spent a lot of money to purchase. The analogy, I think, is clear. Companies spend a lot of money and a lot of effort trying to recruit a wonderful workforce; we should take the preservation and maintenance of that workforce as seriously as we do the preservation and maintenance of the capital equipment that companies have invested in.

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Six key takeaways from Jeffrey Pfeffer’s Dying for a Paycheck Toxic workplaces cause ill-health and sometimes death amongst employees.

Laying people off is a false economy and benefits neither the bottom line nor the share price.

If you feel happy, healthy and relations with your family are good, you will be more productive at work.

Stress and anxiety are not automatic byproducts of a job.

Skimping on employee health insurance (medical aid) is also a false economy with the resulting costs often passed on – unfairly – to broader society.

Employers need to give as much care and attention to nurturing healthy employees as they do to maintain expensive machines.

JEFFREY PFEFFER is the Thomas D. Dee II Professor of Organisational Behavior at the Graduate School of Business, Stanford University, California.

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PROF. NICK BINEDELL is professor of strategy and leadership at GIBS and was its founding Dean (2000-2015). He lectures frequently at the Rotterdam School of Management and was recently a Visiting Professor at London Business School.

BY PROFESSOR NICK BINEDELL

The Six Cs of Strategy and the World We Work and Live In

GIBS founder and former dean, Professor Nick Binedell, one of South Africa's foremost thinkers on strategy, provides six areas for thought and research to assist the development of a coherent strategy.

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Concept

Competition

Strategic Leadership

Capacity to Change

Conviction

Connectedness

Continuity

Exhibit 1 – Strategic Leadership

A general manager and a team of functional executives have taken a day away from the office to consider their strategy for the next year. The PowerPoint presentations are up and flip charts are being filled out. This regular ritual is sometimes a source of frustration. In many companies, the budget is more important than the plan as it is based on numbers – the ideas are vague, and not strategic or realistically actionable. Nevertheless, the job of thinking hard about the future strategy of the business is the core task of leadership. Generating ideas is easy; making them coherent, practical and, most importantly, useful is not. A clear strategy without a solid plan of implementation is pointless, as is being able to implement

without a coherent, innovative and value-adding strategy. This article provides a variety of angles or lenses through which to think through the strategy of a business. It has a flow and all elements matter. Seeking and sustaining competitive advantage remains the livelihood of all good general management. The ability to develop a competitive strategy and to ensure its effective execution is at the centre of business sustainability. The Six Cs of Strategy include: Concept, Competition, Connectedness, Continuity, Conviction, and the Capacity to Change. They are elements of the broad process of thinking about how a business develops its strategic depth and capacity.

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Concept The essence of good strategy is to build competitive advantage and move an organisation forward by making choices in an uncertain environment. A good strategist will have the insight and skills needed to shape the idea and make it happen.

A pioneer in the understanding the process of how science advances, Thomas Kuhn, introduced the concept of paradigm shifts.2 A paradigm shift is the reframing of a concept or a scientific field through the abandonment of traditional data, assumptions or points of view by creating new insight that can be tested and verified, leading to a new concept or paradigm. An example would be Einstein’s work on energy conceptually or Porter’s work on industry analysis as a form of competitive advantage. A working definition of the concept of strategy should be able to answer the following question: “What can this business do that the market wants (insight) or will want ( foresight) that its competitors can’t do?” Every business needs a defining or central concept – for Henry Ford, it was mass production and the famous slogan “any color so long as it is black”; for McDonald’s, it was the core idea of using production technology in a fast-food restaurant setting; for CNN, it was the provision of low-cost news 24-hours a day; and for Uber, it is the ease of urban mobility. In South Africa, Nando’s has stuck to the fast-food chicken business for more than 30 years, building a global brand and reputation in the process. Discovery disrupted the medical insurance industry with a number of innovations, including the Vitality programme. Most businesses that survive the initial start-up phase tend to settle on a set of principles, ideas or business concepts that sustain them over a long period of time. They may adapt them, create new ones and abandon some, but commonly, research has shown they develop a philosophy, ideology, set of policies and strategic capabilities connected to products and services that are long-lasting. This core business concept normally involves three to six fundamental elements that create a particular synergy and reinforce a concept. 16

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Every business needs a defining or central concept... McDonald’s provides fast, low-cost, consistent burgers and related meals on a massive scale around the world. It manages its supply chain and procurement process with strategic intensity, focuses heavily on training, and is well known as a major realestate buyer with a particular emphasis on the location of the property it acquires or leases. Sometimes, as in the case of Coca-Cola, the concept focuses primarily on a particular product and process technology associated with it. While other times, in companies such as General Electric (GE) or Bidvest, the emphasis is on a managerial ideology or management system that can be replicated across multiple business units. It is vital to profitability and sustainability that the competitive concept creates value for a defined or chosen market space. It is important to note that competitive rivalry as well as market or consumer loyalty are always at the margin and based on relative advantage. Two companies may offer similar services, and yet one emerges as the dominant player over a period of time. Normally, this is related to a feature or element of a strategy that gives sufficient differentiation to a business, and allows consumers to choose it over another. The capacity of leaders in a business to clearly identify what makes the marginal difference is central to the business concept. Reflection on the development of computer-driven search engines will show that a number of firms competed for the search engine space. There were many seemingly viable options, out of which Google emerged as the dominant player, much like Ford and General Motors did in the motor industry in the past. The constant testing of assumptions, upgrading of the strategic central capability, and a clear understanding of what causes that capability to create value and how to further develop them, are critical to strategic value in any business.

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The leadership needed requires individuals and teams of senior executives to be able to develop good ideas for the future of the business into campaigns or projects through an appropriate organisational structure, culture and with the right co-operation to implement and execute the decisions. As Rumelt said, a coherent strategy is one that co-ordinates policy and action, while also creating new strengths through shifts and insights relevant to the future of the business.1

Competition The capacity to compete or excel is at the centre of the human enterprise. To excel can be an objective independent of competition. However, for most organisations, institutions and countries, the capacity to excel is deeply dependent on the nature of their competitive advantage. In a sense, competition is like a boxing match between two fighters, one of whom will be the winner. This form of direct competition is often unavoidable in business, particularly when products, services and markets are provided by energetic competitors competing with similar products and services in the same market. In some markets, either because they are growing, fragmented or evolving, strategy is not an encounter where there is one winner. For example, in the 100m sprint at an athletics world championship event, the winner will run the best time of the day. However, he or she does not need to prevent the other runners from running â&#x20AC;&#x201C; they compete on the best time. This form of competition requires performance excellence on the part of the winner, still in reference to the other competitors, but based purely on the capacity of an individual player to excel. This is often the case in technology industries, where new products or services are disruptive and create value by being unique. The urge to compete is based on the instinct for survival. Considering all the complexities of modern life, the world is mainly filled by the capacity of clear institutions to operate competitively in a battle involving direct head-to-head competition with a distinct winner or loser.

...competition is like a boxing match between two fighters...

Connectedness Connectedness to a changing environment has always been a key element of strategy. From the basic idea of having a product or service that creates value for clients, to the complex web of interactions, with real-time feedback, significantly faster cycle times, and the ability of a business to build relationships and interdependencies in an agile manner being central to its value. In an increasingly interdependent world, all companies of scale face a complex and ever-changing environment. As supply chains stretch, global networks develop, and far-reaching brands with partners are built, all the while doing business in a 24/7 economy, the nature of connectedness of a business becomes strategically more important.

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The concept of connectedness occurs when a company engages with a set of customers and stakeholders with interests and needs, who have a greater or lesser ability to exercise power and influence on a business. While product or service users are at the centre of the strategy, the complexity of business networks, interdependency of systems from suppliers to end users, increasing dominance of the digital economy, and nature of intangible assets, such as reputation, all become central to a businessâ&#x20AC;&#x2122;s value. Risk for large, mature businesses is the gradual desensitisation that often occurs as they become increasingly bureaucratic, less responsive and insufficiently adaptive. Memory becomes stronger than vision, with success from one era becoming the mantra for success in another. Gordon Institute Of Business Science

Consumer insight, engagement, exploration and experimentation all become vital features of good strategy and execution. And yet, for the majority of large organisations, the rate of change often means that nothing can be further from the truth. There are constant reminders that big companies often suffer strategic drift and lose the key ideas and relevance that originally gave them strength and vitality. To avoid this, key insights from field work or experience are vital to the shaping of strategy. A good indicator of connectedness is to examine the diaries of executives, and to establish where they spend their time. Although much management has moved to a virtual world, either through email, social media, online business or online meetings, the necessity to be in the field, and experience the use and joy (or not) of products and services remains critical. A successful strategy can be likened to opening a door with a key, with the test raising the question of whether the key fits the lock. A successful strategy requires a level of “fit”, so that the key matches the lock inside the door exactly, and is able to open it. That is, the strategy should unlock the market, because the product or service offering’s level of precision fits the needs of the marketplace.

not hundreds of thousands, of employees to deliver a consistent quality service is a great asset. While adapting the product and services to different markets becomes a key leadership task, connectedness is also related to the internal dynamics of the business. It ensures that leadership is powerfully connected through the levels of management to the frontline, and that there is a flow of critical information and insight from the top to the bottom, and vice versa. Many strategists would argue that a core element of strategy is building the ecosystem (that is, the value chain) that extends to suppliers all the way through to users, and perhaps even the customers of buyers. Given the speed of change and the rate of innovation, this broad ecosystem needs to be continuously managed to ensure alignment and value. Increasingly questions are being asked about the generation and sharing of value. In South Africa, the question of an inclusive economy is becoming part of the debate on the role of business, equity and transformation in South Africa. Porter and Kramer published an interesting approach to this, which provides useful ideas and concepts through the development of a shared value approach.3 Transformation and inclusiveness are likely to become central to market, community and organisational connectedness.

Consumer insight, engagement, exploration and experimentation all become vital features of good strategy and execution. Value can be created by meeting customer needs through innovation in the market, or alternatively, by increased efficiencies and operational excellence in the business.

It is through connectedness that not only an emotional and intuitive link to the market is gained, but also the potential to have the critical insight needed on how the market is changing shape or how it might evolve. Another area of connectedness that is also vital is related to insight, best practices, and relationships outside the confines of a market or industry, ensuring the ability to leverage insight, from other industries and sectors. This ensures the best practice has been built in both the products and services offered, as well as the nature of the organisation. “Learn from everyone and copy no one,” is a powerful way to develop strategy through the best practices of others, ensuring your organisation is innovative. For companies, such as Samsung, BMW or Tesco, the ability to manage and motivate an organisation of tens of thousands, if 18

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Continuity Equity markets push for short-term results. The pressure from investment analysts, banks and portfolio managers of large institutions are frequently said to push short-term gains at the expense of long-term sustainability. Most entrepreneurs report that in the early days of the startup period of their businesses, a key part of survival was the focus on the short term. Most good business ideas flounder not

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An obvious, but often overlooked, truth about strategy is that the most important reality is outside the business, except for the value created or destroyed inside.

The balance that teams need to find is between efficiency and long-term sustainability. because the product or service is not sound, but rather because in the short term, they are unable to fund the expansion of the business with appropriate cash flow, and find themselves in an uneconomic situation. In large South African companies which dominate our economic landscape, the budget or planning process requires projects for approval on condition they meet an investment hurdle that exceeds the current cost of capital. This moves business leaders’ focus to ensure sustainability. Once a business has reached a significant scale or has a significant market share, the agenda shifts. Big companies become defensive in their strategy, incremental in their investments, and seek to protect their rates of return and stabilise yields, profits and dividends. The balance that teams need to find is between efficiency and longterm sustainability.

an enlightened self-interest element, which for a big business means that, unless the market grows, the business does not have a future. It also means that the market requires a viable and sustainable political economy. Sustained continuity is a philosophical question that relates to the purpose of the business. The complicated dynamics of the frontline of technology innovation can be contrasted with the long-term sustainability and the role that business plays as a healing agent, generator of taxes, and part of the political economy that behaves in a legal and ethical way that is fairly regulated and legally compliant. That is why governance and strategic leadership need an agenda beyond the budget and returns to shareholders. Capitalism has evolved over the centuries, and the stakeholder model ensures that all who have an interest in the sustainability of the firm receive a fair benefit from its activities and behaviour.

Successful CEOs find the balance to ensure that companies are making investments that guarantee long-term sustainability and viability. The first area of this consideration concerns investments in research and development, absorption of new technology, and development of new products and services in new markets. This should be a core essential issue for leaders of a business. Companies need to look beyond the short-term horizon and into the three- to five-year timeline to ensure they are making the type of investments that are sustainable in the medium to longer term. Some industries have different investment horizons, capital intensities and clock speeds. Some industries think of the longer term more than others. Mining has a 20- to 30-year capital investment horizon, while a year is a long time in advertising. However, the same principle applies in both cases.

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Given the many issues concerning sustainability – climate change, biodiversity and scientific interventions in natural processes, such as genetic modification and the use of chemicals in the natural food cycle – society is beginning to question the balance between short-term profit and long-term sustainability. Therefore, businesses need leaders with the skills of philosophers and diplomats, rather than just battlefield commanders. It is interesting to note that many of the world’s leading business entrepreneurs of the 21st century have turned to these questions in more substantive ways. From Henry Ford, Bill Gates and Warren Buffet, to the Tata family in India and many pioneering businesses in South Africa, successful entrepreneurs have sought to sustain businesses and enterprises by contributing to the macro-system through charitable and social involvements. It must be acknowledged that this investment and continuity has

Individuals or teams that take on a mandate or a mission to lead an organisation frequently find themselves isolated.

Conviction Those engaged in strategic leadership occupy a lonely position. Individuals or teams that take on a mandate or a mission to lead an organisation frequently find themselves isolated. Personal relationships at work are often constrained and artificial, especially when tough calls need to be made. Institutions and individuals are resistant to change the existing order if the Gordon Institute Of Business Science

status quo provides comfort and results. Yet the very role of strategic leadership is to ensure the long-term sustainability of an organisation in a fast-changing and competitive environment. This requires a level of conviction, courage and the willingness to impose a new set of ideas and investments on an existing reality. This courage of conviction is often at the heart of good personal or team leadership because strategy involves uncertainty. Outcomes cannot be predicted, but commitment, resources and time are required in the difficult practice of moving the organisation into a new domain, adopting a new technology or developing a new market. In an often complex, competitive and fast-changing world, it is the leaders who are willing to place a bet, adapt as conditions change, and persevere with determination over a long period of time without reckless gambling, who lie at the centre of good judgement, insight and foresight. Successful entrepreneurs are said to be passionate, if not sometimes with an obsessive level of focus, determination and courage. Courage is normally developed as a consequence of experienced hardship, and implies an implicit possibility of loss, failure and defeat. This quality is both a personal and organisational culture that may be a choice, but is often brought about involuntarily by difficult circumstances. Courage and determination are a key capacity to see a team through hard times and the difficult choices that need to be made. Any choice faces resistance, and crucial choices are often made in the midst of significant uncertainty or major opposition. Courage is the capacity to overcome both of these in a creative and positive way.

in the 1980s – a decade in which technology changed the global economy. He argued that all institutions suffer from the danger of success breeding failure, and memory becoming stronger than vision. In the past, Nonaka advised top Japanese companies about what, in his view, would prevent them from becoming dominant global players in their various industries. To answer this, he looked into the reasons why the Japanese had lost most land battles after the first flurry of victories in the Pacific theatre of World War II. His conclusion was that the Japanese military relied excessively on outdated methodologies and strategic thinking. This which they had gained from their military experience in China in the 1930s, and from their earlier naval victory – that is, when Japan defeated Russia in 1904/1905, the first time a Western navy was beaten by a non-Western sea power. Nonaka argued that the success of both these encounters led to a stagnant thinking in the Japanese military, causing the country to be unable to adapt to the modern technology available in the 1940s when it went to war with the United States. This perspective is relevant to CEOs today. Nonaka argued that the CEO’s job is to “destroy” the thinking in their business because, without doing this, leaders in the organisation are likely to cling to previous methodologies which are no longer useful. The human mind prefers the stability of the present to the uncertainty of the future. From a neurolinguistic view, the brain is more geared to protection than it is to opportunity.5 There are few individuals or organisations willing to gamble what they have achieved or what they have by risking a major new venture or initiative. Change comes as opposition to control and stability, and there is resistance in most societies unless it is absolutely necessary. Proactive strategy means that an organisation or individual will step into the unknown for a superior insight, idea or technology. They do this to develop a new format, ecosystem, product or service, which they believe will have a major impact, be supported by the market, and give them competitive advantage.

Capacity To Change Nonaka, a well-known Japanese scholar, argued that the Japanese economy was unable to achieve its grand objective in the 1990s, which was to continue to grow and innovate, and become the world’s leading economy.4 He believed Japan relied excessively on the methods of the 1960s and 1970s for the challenges faced 20

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Napoleon showed in his early European campaigns that his method of organisation and deployment of military resources was superior to that of his rivals. He moved away from besieging walled cities into a form of highly organised mobile warfare, in which his command and control structure was radically altered to increase the speed with which the army could move. This speed of manoeuvrability and the decision-making skills of his delegated field commanders was a massive advantage. In those European

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French historian Fernand Braudel argued that strategic culture is the most important factor that determines national success.6 He placed it higher than geography, demography or history as a determinant of what a nation might be capable of doing to advance its interests. The same is true of companies and industries. Most companies develop a mode of operation and thinking that executives reinforce – sometimes unconsciously – when in fact they are being confronted by very high rates of change.

Conclusion

There are few individuals or organisations willing to gamble what they have achieved...

Together, the six Cs of strategy – concept, competition, connectedness, continuity, conviction, and the capacity to change – provide a basis for executives to review and assess the strategic capacity of the business. From a strategic and competitive perspective, they can be used to evaluate strengths and weaknesses of the business. Although the factors overlap, each asks a fundamental question in a different dimension of the overall strategy, and together, should provide a straightforward framework for analysis. Working through each question with evidence or argument, data or judgement should give sufficient impetus and structure to evaluate an organisation’s strategy.

battles, the time it took for information to go from the front line to the central command, and for a response to be given to the alteration of strategy or tactics was much slower than the speed of the actual battle.

SUMMARY The Six Cs of Strategy

Commenting on the speed of the Zulu victory at Isandlwana, military historian David Rattray said that the battle happened faster than he could meaningfully tell the story (as cited in Knight, 19987). This is the challenge of change that most organisations face today. Most industries still have organisational forms and structures that are more suited to the industrial era than the knowledge economy, and more suited to the manufacturing of tangible goods than to the service economy and intangibles. In other words, organisational structures, systems and processes have fallen behind the rate of change.

Good strategic leadership involves: Concept “What can this business do that the market wants (insight) or will want (foresight) that its competitors can’t do?” It is vital to profitability and sustainability that the competitive concept creates value for a defined or chosen market space.

Competition

Therefore, the capacity to change thinking and the form of organisation becomes a key to good strategy.

Considering all the complexities of modern life, the world is mainly filled by the capacity of clear institutions to operate competitively in a battle involving direct head-to-head competition with a distinct winner or loser.

For example, Google’s European offices are designed for maximum interaction. The employees are lively, global, young and energetic, communicative, fast, and intense – all of which fits a high-speed, inventive and successful modern business.

Connectedness

While all large organisations need to follow principles of co-ordination, alignment and planning, the culture of the organisation determines its pace. Successful organisations today embed key mechanisms for fast decision-making cycles, high levels of innovation, and to ensure that the organisation’s individuals have sufficient discretion to innovate and change their domain of operations to ensure there is an adaptability and agility to the organisation’s strategy long term. It is overcoming the personal and organisational fear of, and resistance to, change that is a key to strategy. More importantly, the ability to handle that change and manage it well remains vital.

Continuity Successful CEOs find the balance to ensure that companies are making investments that guarantee long-term sustainability and viability.

Conviction In an often complex, competitive and fast-changing world, it is the leaders who are willing to place a bet, adapt as conditions change, and persevere with determination over a long period of time without reckless gambling, who lie at the centre of good judgement, insight and foresight.

Capacity to change The capacity to change thinking and the form of organisation becomes a key to good strategy.

References Rumelt, R. (2011). Good strategy bad strategy: The difference and why it matters. London, Profile Books. Kuhn, T. (1970). The structure of scientific revolutions. Chicago: The University of Chicago Press [I1]. Porter, M. E., & Kramer, M. R. (2011) Creating shared value: How to reinvent capitalism and unleash a wave of innovation and growth. Harvard Business Review, pp. 89 (1/2), 62-7 4 Nonaka, I. Lessons from the Japanese military: Operations and tactics (Unpublished manuscript), date unknown. (Personal communication) 5 Macoveanu, J., Ramsøy, T., Skov, M., Siebner, H., & Fosgaard, T.R. (2016) [I2]. The Neural Bases of framing effects in social dilemmas. Journal of Neuroscience, Psychology, and Economics, 9(1), 14-28 6 Braudel, F. (1994). A history of civilizations. New York: Penguin Books. 7 Knight, I. (1998). Great Zulu battles 1838-1906. London: Cassell & Co. 1

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...who do you think you are and how do you think youâ&#x20AC;&#x2122;re going to change the environment?

Phathiswa Magopeni

Gordon Institute Of Business Science

BY GODFREY MUTIZWA

Turning the SABC ‘Elephant’ It may be the most difficult challenge in journalism in South Africa: restoring reputation and impartiality to the SABC's news operations. GIBS MBA and DBA candidate Phathiswa Magopeni has taken it on.

On her return to the South African public broadcaster in March, Phathiswa Magopeni was openly mocked. “Several people have tried and failed and it’s men who have tried,” a staffer said to her face at a second meet and greet session. “So who do you think you are and how do you think you’re going to change the environment?” Fast forward two months later, the staffer’s praise of the new South African Broadcasting (SABC) head of News and Current Affairs was close to embarrassing: “Oh we needed this,” he gushed. “We have been waiting for this and I support this fully. This has to work.” For Magopeni, 48, the exchange perfectly illustrated the scale of the challenge to rebuild the credibility of the public broadcaster as a trusted news and programming source after years of pandering to political whims, corruption and indifferent managers scarred by limp leadership. “I found a news division where there was misalignment between what was meant to be done and what was actually being done,” Magopeni told Acumen. “We know it’s a public community service meant to serve the public impartially and without any influence but the kind of structure that I found wasn’t talking to any of that.”

A glaring example was the clear division between radio and television news services where each conducted its own diary meeting and planned coverage with little co-ordination.

the tenure of former chief operating officer (COO) Hlaudi Motsoeneng, who ordered censorship of protests and fired journalists who resisted the abrupt policy turn and his dictates.

“These two pillars that are meant to anchor the SABC’s editorial character were spoken of in the corridors and informally but there was nothing in the

The policy was eventually declared illegal by the Independent Communications Authority of South Africa (ICASA), but the damage had been done as several journalists quit while some executives resigned. Maroleng was made COO from February.

There was no protection of the editorial character of the SABC. brand itself that actually anchored them. The structures were not there. There was no protection of the editorial character of the SABC. It was a very subdued newsroom but you could sense they were ready for change.”

Out with the old...

Her appointment, following the arrival of former MTN Group executive and past eNCA Africa editor Chris Maroleng and the establishment of a new board, marks a new chapter in the government’s attempts to revamp the SABC after

And into cauldron walks Magopeni, who cut her journalism teeth at the SABC in 1998, starting off as a desk producer in Cape Town where she had obtained her first degree, a BA in Humanities from the University of the Western Cape in 1992. Education was to keep her there for a further five years; first, as an Honours Structural and Sociolinguistics degree student in 1993, and then working as a junior lecturer from 1994 as South Africa became a democracy with Nelson Mandela as its first black president. An MPhil degree in Applied Linguistics followed in 1997, the same year she left for the University of Cape Town. “It may sound odd but I think journalism found me,” she says with a laugh about the move that forever changed her career trajectory. “I was busy enjoying my time in

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academia, but just as I was starting to find my rhythm, journalism happened and I have never looked back.” The next 17 years were spent between the SABC and eNews where she flourished, rising through the ranks to become head of Terrestrial News Services until February when the SABC reclaimed her. One of the highlights at eNews was her role in conceptualising and co-ordinating the launch of an isiZulu news service now airing on the OpenView HD channel.

The challenge

Magopeni is clear about the mandate she has been given at the SABC after the scandal-ridden years of Motsoeneng, who was aided by Simon Tebele, the former head of News and a key figure in the wrongful dismissal of eight journalists who criticised Motsoeneng’s policies. Seven of the eight have since been rehired while Suna Venter passed away. “Firstly, I have been tasked with stabilising the newsroom, following a period of editorial distress and uncertainty, as well as ensuring that SABC News delivers on its core mandate as a public news service. This is about ensuring its editorial independence and impartiality is espoused and becomes central to all decision-making in the gathering, processing and dissemination of news. “Secondly and most importantly, my presence here is about protecting the newsroom from all forms of interference, both external and internal, as this has potential to contaminate our editorial independence and compromise our integrity.” So far it’s been hard but rewarding work. There have been no editorial or late night calls from either Communications Minister Nomvula Mokonyane or from President Cyril Ramaphosa and other

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Phathiswa Magopeni

African National Congress bigwigs. Magopeni says she has no complaints so far, including the state of her relationship with Maroleng. “I have been given space to do what I meant to do and this is straight from the board. I report to the COO in terms of operations and I report to the CEO in terms for my upward editorial referrals. The lines are very clear.”

A new brand

The second week of June saw the rebranding of SABC News with a promise of transforming the organisation’s culture, and a commitment to independent and impartial journalism across its 18 radio stations, four television platforms and digital portals. “We are moving away from a fragmented approach that is based on defining our operation as isolated platforms, that is, radio, television and digital. This is going to allow us to focus on what our audiences come to us for, regardless of where, when and how they access our content. “Our content distribution approach will take care of this and ensure that what audiences experience is consistent and seamless across platforms. Key to this is breaking down silos, and in particular, cognitive barriers that are hardened by specialist mindsets. It is not going to be easy to deal with entrenched traditional thinking but there is a way to bring everyone along.”

Growing up tough

That dogged determination has been a constant in the life of a woman who grew up poor in the Eastern Cape, raised till she was eight by a disciplinarian mother and a migrant father scratching for a living in Cape Town. Magopeni recalls several late and hungry winter nights and early cold mornings looking for that one lost sheep or goat.

“With my mother, you would go to bed hungry and she wouldn’t blink. She would say, ‘It’s not going to change, and you will only eat in the morning.’ You wake up and the first thing that you to do is to find that goat before you go to school,” Magopeni says, before adding, “Yes, I think in fact she was harsh.”

...dogged determination has been a constant in the life of a woman who grew up poor in the Eastern Cape... It was discipline that later came to help her survive during even harsher times after her mother died giving birth to a fifth child when Magopeni was eight. With an absent father, the young Magopeni took on the responsibility of helping look after her siblings while continuing with school without basics like uniforms and shoes. From an early age she loved singing but without the appropriate uniform, the school rules dictated that she couldn’t participate. No worry, the village made a plan: one family would lend her a uniform, another some shoes and another something else until she was admissible. “We shared our poverty and we didn’t think that it was poverty. We just thought it was how it was meant to be,” she says with no hint of anger or bitterness. “I didn’t have professionals or business people that I could look up to in terms of strength. It was all from within the village.” Having survived the village, the college years living with her father and another

man in a single hostel in the township of Langa in Cape Town were to test her further. Food shortages and money to go to university were constants. It is a period she doesn’t talk about a lot.

The learning habit

With education having played such a prominent role in the transformation of her life, Magopeni has remained a life-long student. In 2005 she got an Integrated Marketing and Advertising diploma from the AAA School of Advertising, receiving a trophy for best brand management student. Six years later she was selected for a Menell/Duke Media Fellowship Programme in the United States and by 2014 she was back, receiving her MBA from GIBS. She is now studying for a DBA at GIBS, with a focus on the financial viability of journalism in South Africa.

It’s education that is coming in handy as she tackles the challenges at an institution that has ossified over the years because of political interference and has lost some of its best talent and market share to upstarts including eNCA and international broadcasters. Professor Louise Whittaker, executive director of Academic Programmes at GIBS, who is supervising her PhD says she has found a keen student in Magopeni. “Phathiswa is focused and dedicated, able to see the big picture but also understand the importance of detail. She is incredibly self-effacing and modest but very strong at the same time. I have really enjoyed working with her thus far.” At the SABC, Magopeni has found that focus on detail is vital while also having to pay attention to the environment in which her new charges are working and the evolving news industry. “The key challenges are leadership capacity, management processes and

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work environment. These include the technological and a safe psychological environment for people to speak out without fearing victimisation. The fortunate part is that in dealing with these, I am going to rely on the vast experience of existing talent in our newsroom. SABC News is fortunate to have professional journalists who take pride in their craft and have respect for the South African public they serve. What has been a surprise for me was to find an organisation that is ready to transform, with people who have made it their responsibility to initiate the process.”

Technology-led change

She says the changes in the industry, especially those that are technologydriven, affect both the way news is understood and how the task of news gathering and dissemination is executed while sifting what is relevant for South Africans. “One of the primary questions we ask ourselves is – What problem are we solving? How do we frame and define this problem in a way that is beneficial to the South African citizen who relies on us for their news and information needs? The reality is that as part of the knowledge economy we are not only competing with other news outlets but with other sources of information as the Internet has made access much easier. “In crowded spaces like ours there are tough choices to be made, such as exercising disciplined focus and remaining absolutely clear about who you are, what you are about and what you cannot be as a news outlet. We are going to tell this story in its light and shade. “Also, continued changes in news consumption patterns that have led to audience fragmentation mean that advertising as a primary source of revenue is under threat. News gathering is an expensive endeavour and this requires different approaches and innovative ways

to generate revenues to sustain credible journalism.” Caxton Professor of Journalism at Wits University, Anton Harber agrees that Magopeni’s elephant is a very large one indeed: “One should not underestimate the challenge: she has to rebuild and modernise the SABC’s capacity to cover news in a highly competitive and rapidly changing environment, and will have to fight to re-establish the independent

She will face major financial, political and personnel challenges.... public service journalism that produces quality. She will face major financial, political and personnel challenges, and work under intense public scrutiny. It takes strength, skills and solid values to tackle this, and Phathiswa has these qualities. “Phathiswa is a strong and highly qualified woman, with a fierce determination. She has moulded her career for this formidable challenge and I believe she has the right experience and values to take it on,” says Harber.

Meet the team

Magopeni has already visited the SABC’s 30 offices throughout the country’s nine provinces and in the months ahead will make tough decisions on who moves forward with her among the corporation’s 950 news staff, which includes 300 freelancers. Inside the newsroom, Magopeni is also making her mark. At the countrywide meetings, staffers have been urged to air grievances

in the presence of their superiors to deal with past complaints. First, she tells everyone: “My name is Phathiswa and I am not GE (Group Executive)”. And it’s been eye-opening. “The stuff that came out! I want us to create space for a courageous conversation. We need to allow constructive dissent within the newsroom and no editor is going to say ‘shut up’. Because if you don’t listen I have no reason to believe you are going to bring the multiplicity of voices in our news content. If you don’t listen to the forces that make you uncomfortable here I have no reason to believe that you are going to bring in different voices from outside.” Regarding the encounter with the staffer who doubted her, Magopeni recalls laughing and telling him the best way of turning the elephant that he said the SABC was, was by beginning with small parts such as the ears and tail and eventually moving the entire thing. So far, it appears, the big elephant is responding.

MAGOPENI’S PRIORITIES • • • • •

Strengthen leadership capacity Streamline management processes Improve the work environment Address technology requirements Communicate the editorial position/ approach/stand

CHALLENGES • Manage political demands • Expand & strengthen news management process • Improve the quality of news offering • Prepare for increased competition

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DR. GAVIN PRICE is a full-time senior lecturer at GIBS, where he lectures and publishes primarily in the areas of leadership, ethics and persuasion. He is an admitted attorney and, besides practicing as such, has also held a number of leadership roles in the property development, banking and finance industries. Gavin also has considerable experience and knowledge through his work in the property development, retail and motor industries.

BY GAVIN PRICE

Are You an Imposter?

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Imposter Phenomenon â&#x20AC;&#x201C; the unassertive fraud

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Assertiveness is a key trait of an effective leader... Feeling like a fraud in the world of business is something many of us have experienced. The term for this, Imposter Phenomenon (IP), was coined in 1978 and was defined as: “A common experience that occurs when an individual, normally considered as a high achiever, undergoes an internal experience of self-doubt and feeling like an intellectual fraud or has fear of failure upon reaching milestones or achieving success.” Our paper, Effects of the imposter phenomenon on measures of assertiveness in female professionals in South Africa, co-authored by Lyapa Nakazwe-Masiya, Karl Hofmeyr and me, was based on GIBS MBA alumna Nakazwe-Masiya’s research which revealed some interesting insights into the phenomenon. Initially Nakazwe-Masiya’s research sought to specifically look at the impact IP would have on the assertiveness of women in the workplace. Interestingly, it found that irrespective of race and gender 85.5% of South Africans will experience at least a moderate fear of failure and feel guilty about their success at some point in their career. The difference between men and women is that when it comes to assertiveness, there is a negative relationship between IP and the assertiveness of women. The importance of this finding helps in the understanding of why women may be under-represented in or are not conquering the boardroom. Assertiveness is a key trait of an effective leader and leadership development has a positive association with assertiveness. Research has found that female executives who can master the art of assertiveness have greater expectations of achievement and better coping mechanisms in their personal and professional lives. In contrast, women who lack assertiveness tend to be more negative and do not have the same drive to achieve. The impact of IP and a lack of assertiveness can, in fact, increase the risk that feeling like a fraud becomes a self-fulfilling prophecy for women in leadership positions as it will ultimately impact their performance as leaders, which will then confirm them as imposters.

...they still fear not being worthy and question whether they are good enough to hold their position.

Nakazwe-Masiya, consultant on C-suite and executive board placements in Africa for international leadership advisory firm Egon Zehnder, has found “that there are many executives that grapple with the idea of being placed in senior executive roles in unfamiliar industries and functions. As much as they have the right skills and experience, and they have really worked hard to get to where they are, they still fear not being worthy and question whether they are good enough to hold their position.” The underlying causes of IP, especially in women, may be varied. One thought is that it stems from childhood, where children who are not validated by families need to work harder to get approval and recognition from those families. It is also argued that women, minorities and marginalised members of society are socialised to expect to not advance at the same rates as their male counterparts.

Why do we need to take note? The effects of IP can be significant. On a personal level IP can prevent people, both men and women, from climbing the corporate ladder and succeeding. Our paper notes that IP has been found to actually hamper career growth in all individuals (irrespective of race and gender) – even though our study focused on women and assertiveness. So although men are less likely to openly discuss the IP experience, and rather focus on the task on hand, it can also negatively impact their career progression. However, when one looks at the macroeconomic impact of women not participating at executive level this is where it really starts to make business sense. We cited an interesting study in our paper: “A recent McKinsey study proposed that if women played an identical role to men in the global labour market and economy, as much as 28% could be added to the global GDP by the year 2025.” At a local level, the Johannesburg Stock Exchange, an organisation which strongly pushes for greater female representation in senior positions, argues that unless South Africa can develop and retain high-calibre female leadership the country cannot hope to compete on the international stage. Having diversity of thought, diversity of attitude and diversity of mindset have all been demonstrated to enhance decision-making, so diverse viewpoints optimise business decisions. At a macro level, inclusivity in the workplace would have a dramatic effect on the economy and South Africa’s global competitiveness. Unfortunately, South Africa is losing ground when it comes to female representation at board level, so although having female representation on boards and in professional roles has been on the agenda for business globally, it continues to be a South African challenge.

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In other words, society has a low expectation of them succeeding. Some women have reported that success would require them to give up their feminine characteristics and that being assertive or smarter would leave a negative impression on their peers and colleagues.

Defining assertiveness Stepping stones to inclusivity Creating an environment of inclusivity in the boardroom is becoming increasingly important. However, for women to be able to be effective leaders and contribute, they need to be developed. Many women have the necessary skills and experience, but lack the courage to show up, and that is what limits them. And assertiveness is a key trait that needs to be developed for this to happen. So understanding IP and its effect on the performance of women becomes vital as businesses start to compete on a global playing field. Our paper noted that, until now, organisations have an inherent gender bias. It is the result of being created by men for men. And although many may argue this is an unintentional consequence, the reality is that social practices are subtle and often insidious. These ‘social norms’ disadvantage women, and compromise their ability to function in the workplace effectively. It is, therefore, imperative for businesses to create an environment that allows women to thrive, and do away with the proverbial ‘boys’ club’.

In the context of this discussion, understanding the definition of assertiveness is important. Often, when women display assertiveness it is misconstrued as aggression. For the paper we looked at a few academic definitions and the relationship between IP and assertiveness, and then how these elements advance women at work. The definition that we used describes assertiveness “as an element of emotional intelligence: an assertive personality is not only able to perform emotional reflection, which facilitates the understanding of one’s own feelings and emotions, but also one who is able to manage personal impulses, thereby exhibiting self-control and behaving in an appropriate manner and with appropriate dynamism.” Assertive people have the ability to communicate their needs and desires. They are able to say no, and freely discuss their feelings, to form networks, as well as to initiate, maintain and conclude conversations. Being able to communicate assertively is a foundation stone of good leadership.. However, women who feel like imposters will veer away from assertive behaviour.

Action steps for business – creating an inclusive boardroom

Change the representation of your boardroom. As the boardroom changes, advancing from one female director to three, the culture in that room is going to change. It will automatically modify the way people conduct themselves.

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Encourage a more caring and empathetic mindset with stakeholders at the core of decisionmaking. Empathy is as important as a singular focus on the bottom line in order to create shareholder value.

Ensure assertiveness in women is perceived as that, assertiveness. All too often assertive women are viewed in a negative context.

The boardroom should neither be considered a man’s world nor a woman’s world. It should be considered a businessperson’s world. By introducing more feminine qualities and traits into the space these behaviours will become more acceptable.

Openly facilitate discussions around the issues facing women in the workplace. Getting toptier men and women to freely discuss the issue of IP, as well as challenges facing women generally, can be an extremely productive way to encourage greater female participation at management level.

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Co-author of the paper on IP, Lyapa Nakazwe-Masiya is experienced in facilitating organisational change in her role so, together with the research, we offer some practical suggestions to help create female-friendly boardrooms:

The converse relationship between assertiveness and IP, our research predicts, can lead to, and is not just related to, a negative impact on assertiveness. Assertive people are perceived by their peers as more powerful in comparison to their passive colleagues and will tend to find themselves in more senior roles due to this behaviour, in their social networks too. However, women are typically conditioned to be passive and in the past typically operated in non-assertive roles. If women do find themselves in positions of leadership, they will often try and behave like their male counterparts and are viewed as aggressive rather than assertive.

Action steps for women – defeating IP It is important for women and men to understand that feeling like an imposter is normal and is perfectly understandable. Lyapa Nakazwe-Masiya stresses that it is a common occurrence felt by driven and qualified executives. It is a global phenomenon that affects everyone. Women, however, need to be mindful of their approach to assertiveness in order to manage the imposter feelings. Here are key takeaways from our experience and research to help women – and men – deal with the impact of IP:

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Try not to let IP get the better of you. When you understand that you are not alone in this feeling, you can then push through and still be confident and decisive. In other words, make sure you are perceived as worthy of that job – your role as top-tier management is to behave decisively and communicate your decisions clearly. Psychologists suggest that assertiveness is a learnt skill. In addition, the Trait Theory of Leadership says good leaders display qualities which include extroversion, assertiveness, enthusiasm, agreeableness, openness and consciousness. It is essential for women to work on developing these traits. Women need to be willing to adopt a ‘buddy system’ and look to support each other in the form of relating experiences, sponsoring each other and introducing each other to their personal networks. Like men, women need to start getting gratification from helping their female colleagues.

Women need to realise that they bring something unique to the workplace. They need to own their space and their identity as women. Being authentic is essential. Often when women get to a certain level in an organisation, they ‘shut down’ and feel like they have to carry on alone. They need to realise that they are not islands, and to get to the top they need to offer and leverage support from other women. Talk about it. IP as an issue is very rarely talked about, yet it affects more than 85% of managers in the workplace. Offering platforms where IP can be discussed and action points can be put in place to result in change is a vital first step. And Nakazwe-Masiya offers a final interesting insight for women: “And as environments change so do the attitudes of women. Women in male-dominated workplaces still initially rely on assertiveness because they are still trying to stamp their authority once rapport has been created, [but] women are more comfortable to focus on the softer side of their leadership skills, [so] they are better able to manage how they deal with different situations using their innate skill sets.”

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BY EUGENE YIGA

Lights! Camera! Travel! Film tourism has the potential to increase the awareness and image of cities, regions and countries around the world.

How does a film or television series impact the image of the location in which it’s set or shot? This is a question Hannes Engelbrecht, an academic completing his Master’s degree in the Department of Historical and Heritage Studies at the University of Pretoria, is answering in his work. “One of the fathers of ‘place branding’ is [independent policy advisor] Simon Anholt and he said that place branding is about making a place famous,” Engelbrecht says. “And if you think about it, we don’t know about Central Park or Fifth Avenue because we did extensive research on New York. We know them because we’ve seen them in multiple films.” Indeed, one of the earliest mentions of boosting a destination’s image with film tourism comes from Nigel Morgan, Annette Pritchard and Roger Pride (authors of the book Destination Branding), who argue that one of the best forms of tourism product placement is to place your destination in a film. This worked well for New Zealand, which, according to a Forbes study in 2012, had a 50% increase in tourism numbers after The Lord of the Rings. “Whether that’s all because of Hobbits, I wouldn’t venture to guess,” Engelbrecht says. “But it’s got to do with the integrated marketing methods. The movies spotlighted the country and the

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destination marketing organisation jumped on the opportunity. And then you have something that comes out like ‘Home of Middle Earth’, which is their current slogan. It’s not to say that everyone should go that extreme and make everything fictional into film tourism, but it’s a way of enhancing what you’ve already got in any country.” Another interesting example of a study done in this regard was by Chieko Iwashita, who sampled Japanese tourists and found that 70% of them indicated that film was a major motivator for their travel to the UK. They went on to identify films with destinationspecific content – think quintessentially British titles like Notting Hill – that had a sense of culture and place. For Engelbrecht, this links back to the idea that film becomes a catalyst for showcasing who and what we are as people of the world.

‘autonomous’ if your place is in a film. You can back it up with other ads and campaigns but it has to be linked to that destination. It can be just a stand- in location.”

Fuelling the local film industry’s growth

Things can get more complicated than the Marvel Cinematic Universe when film tourism is to a place where a film is set but not made, like the Twilight saga set in Washington State but filmed

...fictional film productions tell universal stories which are highly emotional and have a wide reach.

“[Film tourism expert] Stefan Roesch says that fictional film productions tell universal stories which are highly emotional and have a wide reach,” Engelbrecht says. “But destination marketing via film and television is not perceived as promotion or as an ad to come visit. It’s more credible and more

in Vancouver or Braveheart, which was filmed in Ireland despite being Scottish to its core. It’s the same in South Africa, even as government incentives and rebates fuel the local film industry’s growth. While movies like the Nigerian title Ten Days in Sun City have a clear link to location, Cape Town is often a stand-in for other places, from Pakistan (Homeland) and Ghana (The Crown) to those that

IMAGE COURTESY OF MARVEL STUDIOS

Chadwick Boseman as Tâ&#x20AC;&#x2122;Challa in Black Panther

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The biggest opportunity right now is for products related to Black Panther...

“What we have in South Africa is a complicated history and it always comes into play,” he admits. “But in many ways, we’ve done film tourism in South Africa for years; we’re just not linking it and spotlighting it and focusing on it. To a certain extent, I’m referring back to The Gods Must Be Crazy and to what it did for travel to the Kalahari and wanting to see that community. It’s positive and negative on how we depict people in film and so forth but, as always with tourism, we need to negate that negative effect on communities.” Another aspect to be aware of is the potentially negative image that tourists might associate with the country after gritty films like Tsotsi, District 9, and Chappie. “If there’s a negative image being portrayed, maybe don’t shine the light on that as a destination marketing tool,” Engelbrecht advises. “But you can make some products out of that, like the [dark tourism] Jack the Ripper tours in London, which are well attended. For example,

you could do a Halloween tour inspired by Resident Evil: The Final Chapter, where the breakout of the zombie plague happens on the Cape Town cable car.”

Opportunities for guides and studios

Tours to locations or sets are an easy option, especially given how popular South Africa is becoming as a destination that has every landscape a production company could wish for and how fascinating many fans would find the process of making a movie or TV show. Other ideas include creating maps for

specific films (like the Afrikaans comedy Pad Na Jou Hart), specific regions, or even to areas where celebrities like Trevor Noah or Charlize Theron grew up. All these are opportunities for guides and studios to earn extra income. “It’s great to see the shift from niche Afrikaans films to those with wider appeal, like Love is a Four Letter Word, but there’s a bit of disjointedness in how we do things,” Engelbrecht says. “Film doesn’t know about tourism and tourism doesn’t know about film; often it’s difficult for us to talk to each other. The advice is to go out and engage with your local

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don’t exist, at least not yet (Black Mirror). Similarly, not many people realise that Avengers: Age of Ultron filmed a big fight scene in Johannesburg because the city wasn’t ‘featured’ as itself.

Scene from The Crown

How To: Film tourism in practice Consider the broader creative industries In recent years, the economic importance of the creative industries has been recognised, with the United Nations Conference on Trade and Development coining the term ‘the creative economy’. Broadly defined, this includes fine arts, music, publishing, games, festivals, design, architecture, television, and film. “The creative industry has been recognised in terms of its economic importance for innovation and trade, social inclusion, cultural diversity and environmental sustainability,” says Charlene Herselman, an academic in the University of Pretoria’s Department of Historical and Heritage Studies. “The importance refers to the interface between creativity, culture, economics and technology in the contemporary world.” 34

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Be patient

Spread the benefits

Because the film industry also needs tourist facilities – accommodation, transport, guides – helping them find what they need is one way to get them to return the favour and allow the tourism industry to use their intellectual property for film tourism. “The Department of Arts and Culture and South African Tourism are going to talk to those production companies and arrange with them that we keep the sets to have some form of tourism associated with it, that we can have usage rights for images to say that a certain film was produced in South Africa, and that we can create the products we want to create for film tourism,” Herselman says. “So things are happening. They’re just happening slowly.”

It’s not just that tourism reaps all the benefits. For the creative industries, these partnerships expand the audience for creative products, support innovation, revitalise the creative industry, open up export markets and it promotes professional networks and knowledge development. “All these benefits of the creative industry can enhance and diversify tourism: from adding new products to using creative technology to develop and enhance the tourism experience,” Herselman says. “A lot of the innovation comes from the creative industry that we can later apply in tourism. It improves the image of countries and regions in the specific context of destination development.”

“Black Panther is breaking records all over the show and for specific reasons,” Engelbrecht says. “The world is being shown cultural products they haven’t seen before – tradition, fashion and things linked to numerous countries – on a mass scale and in a positive light.” A challenge relates to copyright and trademark, which is why Engelbrecht suggests that discussions about the usage of specific terms be negotiated upfront. “Nigeria is claiming it with the Nollywood movie Wakanda Forever – I’m not sure if they’re going to get into trouble for that – so all the film tourists from Black Panther will go there first,” he says. “But we can also claim it, perhaps marketing the Eastern Cape as the home of the Wakanda language, advertising tours to the region in between movie trailers at the cinema, or having a competition to win a holiday that links the film to the place.”

IMAGE COURTESY OF NETFLIX

Scene from Black Mirror

film commissions and start developing film tourism products. If you see a film being shot, you need to know which film it is. Locate the spots where each scene was shot so you can start recreating those images. If somebody famous is in town, tweet about it. If there’s a set being built, ask them what’s going to happen afterwards. For example, the Shakaland Zulu Cultural Village in KwaZulu-Natal was bought [from the Shaka Zulu

Bring people together Once a film project is approved, all the relevant organisations should connect with their counterparts in the tourism industry, which is how it works in the UK. “When Creative England and Creative Scotland have film productions coming through, they give a ‘heads-up’ to the tourism organisations to tell them about productions that align with the destination image and ask if they want buy-in,” Herselman explains. “They are sent the script, the tourism organisation decides if they want to be part of it, and then they work together with the creative industry and film industry to create products. The reason it works well is because they are mutually beneficial. The film can promote the destination and the destination can promote the film.”

television series] and turned into a tourist attraction.”

New cultural products

The biggest opportunity right now is for products related to Black Panther, the first film to reach over R100m at the South African box office and the reason Hotelscan.com and Hotels.com are both reporting spikes in searches for the fictional nation of Wakanda.

Collaborate and communicate Unfortunately, the film industry in South Africa is often described as being unapproachable. Herselman believes the problem is because those in tourism don’t necessarily understand how the film industry works and vice versa. And even though it’s not a surprise to her (or anyone) that government departments don’t always work well together, there are still solutions. “There are certain ways in which we can do things – there are ways that you can get beyond things like copyright and trademark laws – and develop products but we need to go higher up,” she says. “We need to lobby the other decision-makers.”

Other suggestions from Engelbrecht include talking to the studios about creating a documentary or extra content for DVDs about the area portrayed in the film but with more factual information. There’s also the chance to produce other experiences, like Johannesburg Ballet staging a Black Panther-inspired performance at the Cradle of Humankind, drawing attention to the attraction. The bottom line is simple: “If it’s your cultural product, own it.”

Find the links For the creative industry to play a role in all these sectors, one must find the links as exemplified in the relationship between film and tourism. By showcasing and promoting other creative industries through increased awareness, film tourism also benefits itself in the process. “Film tourism has been one of the earliest and most prominent examples of these two working together,” Herselman says. “It’s a mutually beneficial relationship with creative industries and tourism each having decided benefits for the other. In terms of tourism, we have the development of tourism potential of destinations. And oftentimes it’s an intangible product. Tour guides take people to a location where filming happened but there’s nothing left so visitors take photos to say they were there and use their imagination to fill in the blanks.” Gordon Institute Of Business Science

Bongani Nqwababa

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BY TAMARA OBERHOLSTER

Bongani Nqwababa Driving value creation through cultural transformation. Sasol is best known to many people as Africa’s fuel giant, but Bongani Nqwababa, Executive Director, Joint President and CEO of Sasol Ltd., says its future is in chemicals, and a transformed culture is what will make that transition a success. Nqwababa spoke at a GIBS Forum in June about accelerating the transformation of corporate culture through leadership at Sasol, as well as the company’s future – including potential expansion into Asia. Plus, we asked him about his recipe for success in managing the joint company custodianship with his counterpart, Stephen Cornell.

Culture can’t be separate from strategy

“Organisations that successfully transform their cultures do not view culture, strategy and leadership as separate,” says Nwqababa. “Together, these components drive high-performance culture and create superior value for all stakeholders.” Nqwababa was presenting Sasol’s plan to shift its leadership style towards “aspirational” from what he described as “command and control”. He reasons that people are key to this process. Everything else – strategy and process, for example – can be copied, within reason. It’s an organisation’s people that are its sustainable long-term competitive advantage. For this reason, Sasol is undergoing a culture transformation – to deliver superior value to all stakeholders. “Culture is not a variable to be paid attention to from time to time. It’s essential,” Nqwababa says, as he shares the process of critically reviewing the company’s culture and leadership approach. He notes that this needed to be facts-based, and included a company-wide culture survey, Heartbeat, undertaken in 2016. Leadership interviews and workshops were also held with the company’s extended leadership teams. Nqwababa admits that the shift will not happen overnight and is a long-term plan that will take three to four years to realise. The company needs to move from being stuck to the past, to ready for the future. One of the biggest barriers, Nqwababa says, has been the leadership style. Command and control leadership is rooted in fear and silence, and focused on activity, rather than creating value. While it’s common in energy and chemicals companies, it’s not ideal. The focus at Sasol now is on inspirational leadership that cares for people, lives the Sasol values, and drives high performance and innovation. Sasol is working on cultivating “multiplier

leaders” – those who create positive energy to help employees bring their best performance and ideas to work every day. The company has identified five key behaviours of multiplier leaders who grow others. These people are talent magnets, liberators, challengers, debate-makers and investors. The Lead Sasol Programme has been developed to provide practical tools to Sasol leaders to cultivate these behaviours. The Group Executive Committee has also been through this programme. While Nqwababa reiterates that it’s not a quick process, he says results have been encouraging so far.

It’s an organisation’s people that are its sustainable long-term competitive advantage. Proudly South African but building a global company

Nqwababa notes that Sasol in currently represented in 33 countries globally, although the bulk of these are sales offices. “There are just under 10 countries where we have substantive operations, including South Africa, Mozambique, Italy, Germany, Qatar, Nigeria (where we have a joint venture) and the USA, where we are growing.” He admits that the company is looking at Asia, which will account for 40% of chemicals demand globally in the next 10 years. “We’re building a relatively small ethylene oxide plant in China for $100 million,” he says. “It’s on track and we’ll go and see it before the end of the year.” He has also visited India to explore how Sasol can grow there, where he says the demographic and growth rates are favourable. “It took them 50 years to get to a GDP of $2 trillion; it will take another six years to get to a GDP of $4 trillion.” Gordon Institute Of Business Science

Nqwababa is adamant, however, that “South Africa will certainly remain Sasol’s ‘nerve centre’.” He says he’s watched South African companies that have listed abroad, and the majority have failed. “They tried to be what they are not,” he says. “There’s only one success I can think of, and they were bought by a rather successful beer company.” He says that while Sasol is a global company, it remains proud of its home market and its commitment to South Africa has never wavered. “Notwithstanding our expansion and growth overseas, South Africa is where the majority of our employees are based – housing 90% of our 31 000-strong global workforce – and where we continue to invest significant capital, both for growth and sustenance, as well as social investment.

...an effective joint-CEO partnership is rare. “In our last financial year, we invested R115 billion in capital and operational spend in our South African operations. We also invested R1.6 billion in skills and socioeconomic development programmes globally, 80% of which was in South Africa. We also remain the leading taxpayer, contributing at least R35 billion annually to the fiscus.”

Shifts for sustainability

Sasol is the second-biggest emitter of carbon dioxide in South Africa and while South Africa’s government wants to reduce harmful emissions by 34% by 2020, Sasol has already admitted it will need to apply for postponements. In June 2017, the company said it intended to apply for an extension for some of its plants to 2025, and that reducing its SO2 (sulphur dioxide) and H2S (hydrogen sulphide) emissions would be a particular challenge. “What we are doing about it starts with our strategy,” says Nqwababa. “We are now actually more of a chemicals company than an energy company. Diversification is helping us to reduce our emissions. Our operations in Sasolburg are now almost fully gas-powered, where they used to be coal-powered. Yes, it’s still a fossil fuel, but it’s a much lower carbon intensity. We now only use coal for steam generation for the industries nearby. In Secunda, up to 15% is being transitioned to gas. In addition to portfolio change, we’re focusing on energy efficiency.” Sasol recently unveiled one of the largest Air Separation Units (ASU) ever built (constructed and managed by Air Liquide). The air production facility is based at Sasol’s synthetic fuels and chemicals complex in Secunda and cost an estimated R2.9 billion. It has a total production capacity of 5 000 tonnes of O2 per day, which will be used to produce synthetic fuels. According to Nqwababa, it uses 20% less electricity (avoiding approximately 200 000 tonnes of carbon dioxide emissions per annum) and the oxygen capacity created will allow Sasol to operate the Secunda complex up to at least 2050. 38

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“From a technology perspective, we’re investing more time in how we can design our plants to reduce emissions,” Nqwababa says. “It’s a long journey, but we are on our way and we are not denialists.”

Sharing responsibilities as joint CEOs

Business Leadership South Africa recently criticised the trend of appointing joint CEOs in South Africa, saying that it “perpetuates the narrative that black people cannot manage either a complex business and/or a global business on their own.” After two years of joint custodianship of Sasol, Nqwababa says his partnership with Cornell is working. “The manner in which the Sasol Limited Board designed the office of the joint presidents and CEOs, recognises that both Steve and I share fiduciary obligations and that we must actively work in close collaboration to drive long-term shareholder value,” he says. “To this end, our respective portfolios reinforce that, as individuals, we share equal responsibility for Sasol and we are jointly accountable to the board. Our priorities are very clear: Sasol first, team second and individual third. I believe our joint custodianship does function effectively since Steve and I have complementary expertise and attributes, while our portfolios – comprising a mix of Sasol businesses, functions and regions between us – requires that we work in full alignment, regularly share information and take decisions in an integrated fashion.” Each man brings different experience and talents to the table. “I am a chartered accountant, while Steve is a chemical engineer,” Nqwababa says. “Sasol is a large, complex business present in 33 countries around the world, so the board felt that in appointing us as joint CEOs our complementary qualifications, skills, experience and backgrounds enable the creation of a formidable team to take Sasol into the future. This has indeed proven to be the case. We have also worked across a range of diverse sectors in different markets. I, for example, have worked mostly on the African continent for companies such as Anglo Platinum, Eskom Holdings and Shell in the mining, electricity and oil and gas industries. I have also had assignments in The Netherlands and United Kingdom. Steve, on the other hand, has experience in petrochemicals, refining and logistics, having worked in the USA, Europe, the Middle East and Asia for Exxon, Total and BP.”

South Africa will certainly remain Sasol’s ‘nerve centre’. Yet research shows that an effective joint-CEO partnership is rare. “From the outset, the headhunters supporting our board said to us that research has proven that joint CEO arrangements typically do not work with a failure rate as high as 90%,” Nqwababa says. “They gave us numerous case studies and academic papers to review so that we had insight into the pitfalls of dual leadership structures and what to avoid if we wanted ours to be successful.”

Moderator Morris Mthombeni, Executive Director of Faculty at GIBS, talking to Bongani Nqwababa

How, then, has the duo managed to buck the trend? “The bottom line was that we had to manage our egos,” says Nqwababa. “Steve and I fully appreciate that, in legal terms, we are both jointly and severally liable. This means that we are equally and fully responsible for Sasol, so the only way we succeed is if we work together as a unit. Apart from formal business meetings that we

either chair or participate in, we also regularly have informal discussions and lunch together. These touch points ensure we remain in sync and abreast of key issues in our respective portfolios. It also helps that our offices are next to each other. The structure intrigues most people, but what is important is that it works for Sasol and us.”

Driving multiplier leadership in your business The five key behaviours to drive multiplier leadership that Sasol is implementing were first pioneered by Liz Wiseman, who juxtaposes multipliers with diminishers. Wiseman authored Multipliers: How the Best Leaders Make Everyone Smarter and The Multiplier Effect: Tapping the Genius Inside Our Schools (co-authored with Lois Allen and Elise Foster). Wiseman defines multipliers as “leaders who use their intelligence to amplify the smarts and capabilities of the people around them. When these leaders walk into a room, light bulbs go on; ideas flow and problems get solved. These are the leaders who inspire the people with whom they work to stretch themselves and surpass expectations. These leaders use their smarts to make everyone around them smarter and more capable.”

Nqwababa explains the key behaviours multiplier leaders cultivate as follows:

Talent magnet: this leader hires smart people, identifies their strengths and puts them to work. These leaders are not threatened by employees that are smarter than them – they understand that translates into a smarter organisation.

Liberator: gives people space to think and expects their best work.

Challenger: gives people ‘stretch’ opportunities and expects them to go beyond what they previously thought was possible.

Debate-maker: sets up debates before decisions are made to ensure people understand the decision and can quickly implement. They understand that people who hold different views to them are not necessarily opposing them – they may just think differently. Many views create a stronger holistic picture.

Investor: gives people ownership, holds them accountable and delivers results. Gordon Institute Of Business Science

BY ARTHUR GOLDSTUCK

Insurtech Arrives

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to Challenge and Redeem Insurance

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There will come a time, before long, when terms like fintech, agritech and medtech will be redundant. All industries will be built on technology or operate via technology. But until then, we will see a rash of clumsy terms to describe the intersection of technology and business. The clumsiest of these is surely insurtech. It is broadly about technology-driven insurance, but more specifically about the new technologies disrupting insurance. The vast range of these technologies, and the extent to which they make insurance more targeted, efficient, cheaper and – paradoxically – more profitable, means that insurance providers will soon not be able to survive without embracing disruptive technology. In South Africa, the fintech landscape is largely driven by banks or attempts to compete with banks. But the insurance industry is arriving fast, partly thanks to tech-savvy entrepreneurs who have stepped out from under the shadows cast by the monolithic presence of giant insurance companies. Typical of these are Sumarie Greybe, Alex Thomson and Ernest North, three tech-savvy actuaries who worked for major insurers for many years. Two years ago, they broke away and formed one of South Africa’s first insurtech-focused companies, called Naked. With R20 million in funding and backing from Yellowwoods and the Hollard insurance group, they offered car insurance based on artificial intelligence. Significantly, the trio wanted to build a business on a foundation of social good. “We saw first hand how insurers’ focus on underwriting profits overshadows claims handling, premium fairness and customer service,” says Thomson. “We realised that to fix these problems we needed to change how we make money, to remove the inherent conflicts of interest.” The solution was GiveBack, a system that uses a fixed portion of premiums to run the business, with the balance going into a pool to cover claims. Money left over in the claims pool at the end of the year goes to charities nominated by customers. “Naked GiveBack means that paying less in claims cannot grow our bottom line, so customers can be confident that their claims will be paid fairly and efficiently,” says Thomson.

Pay for what you use

More importantly for customers, though, Naked brings a level of flexibility to insurance that was never possible with legacy, paperbased systems. For example, the company’s app allows customers to change cover instantly at any time, or even pause accident cover if the car won’t be used for a day or more. In effect, pay-asyou-go insurance. One of the keys to insurtech is system design, so that one is not locked into databases that don’t allow for quick changes. Such systems constrain not only the customer, but also call centre agents who are limited in how much assistance they can provide. Worse, it imposes onerous demands on the customer.

Says Greybe, “A lot of traditional systems have database diagrams that are insane, with tens of thousands of fields, so small changes become major projects.” This just adds to the burden on the customer, says Thomson. “People typically experience the insurance company going from being nice to becoming quite confrontational. You’re almost treated like a criminal when you’re looking to claim. Obviously, there are criminals out there trying to defraud insurance companies, but the companies start with that assumption. It’s not surprising people find the experience horrible.”

Claim via selfie

“We’re trying to get as smart as we can to process as many claims as possible without a human. So we moved from filling in forms to video selfies describing the incident. We run algorithms to detect fraud indicators with all kinds of techniques, including how often you changed your video submission, to data like how long you’ve been a customer, your payment and claims history, or adjustments you’ve made that are atypical.”

...paying less in claims cannot grow our bottom line... The Naked app is the key to the cost-effectiveness of the business. It allows most processes, especially claims and cover changes, to be managed seamlessly, without involvement of a call centre. AI-based fraud algorithms allow many claims to be approved instantly. “We’re trying to change the relationship people have with insurance fundamentally. We see two primary problems that we are trying to address. Firstly, if you ask people about insurance, you hear a lot of negativity: they don’t trust insurance, it’s a grudge purchase, they’re not confident the company will pay claims, they don’t understand how they determine premiums. “The second issue is that the insurance industry globally and locally has lagged behind the shifts we’ve seen in the way service providers deal with clients. The direct insurers are almost exclusively dealing through call centres. To buy a policy from a major insurer, you’re spending 45 minutes on a phone call. Online direct sales that do exist for full service are typically tedious to the extreme, and almost always end up back in the call centre. “A lot of the insurtechs are building sales engines but, when you want to change anything or claim, it goes back into the traditional call centre model.” The irony is that many insurance companies already have an app. However, they do not allow end-to-end applications, approvals and claims, and apps often merely add to the time it takes to deal with the call centre. It is precisely this flaw in customer experience that insurtech promises to repair. Gordon Institute Of Business Science

The app and the databases behind it are hosted in the cloud, on the Amazon Web Services platform, further reducing the cost of infrastructure, as Naked does not have to maintain or provision its own servers. It also allows Naked to take advantage of new functionality that is constantly introduced in the cloud. The data is housed in Northern Ireland, meaning that the hosts have to comply with the onerous data privacy requirements that the General Data Protection Regulation imposes in Europe. Greybe says: “The technology is flexing its muscles at the moment.”

Rooting for you

This means that there is room for any number of new players, including those that want to facilitate the emergence of more players. If Naked is an example of the technology flexing its muscles, then a business called Root provides a kind of virtual gym.

...people find the experience horrible. Root describes its offering as “programmable banking for software developers”, providing a “financial services toolkit” for others to build their “own banking experience with code”. It then allows almost anyone to integrate insurance into their products through an application program interface (API), which allows software to interact. “We seek to make businesses like Naked easier to bring to market,” says Louw Hopley, CEO of Root. “At the moment, insurtech start-ups are very scarce, and the reason is barriers to entry are so high. We collapse barriers to entry so that businesses like this can become more ubiquitous.” Despite the shortage of start-ups, there is frenetic activity in the sector, says Jonathan Stewart, head of Exponential Ventures at insurance giant MMI Holdings, which is working closely with Root. “People are innovating around product, pricing, new ways of leveraging data, techniques to create personalised pricing, and marketplaces for different insurance products, while others are focusing on distribution or the front-end customer experience. There is no single dominant area or player. Incumbents are trying to transform themselves at the same time, for a host of different reasons, including those oft-quoted legacy systems that are not architected to be open or flexible or fast.”

Fintech on fire

Hopley built Root as a project of OfferZen, a technology jobs board created by seasoned innovators Philip and Malan Joubert, founders of the FireID high-tech incubator in Stellenbosch. The stable includes SnapScan, the groundbreaking mobile payments app acquired by Standard Bank, and Luno, South Africa’s leading cryptocurrency exchange. 42

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In short, a hotbed of fintech. Hopley didn’t want to stop there. “At some point we said, what are things not available to developers, who are creating the future, who are building what is to come? Given what we had learned, given that community, we started out trying to figure out how to bridge the gap between the developer community and financial services. “We started with banking, being the core of financial services, and said, what would it take to make it programmable? We started Root Bank to lower barriers for developers, to enable them to prototype fintech products and take them to market without first having to get a bank partner on board and negotiate equity.”

AlphaCode’s insurtech start-ups Rand Merchant Banks’ fintech investment arm, AlphaCode, is one of the leaders in insurtech incubation. Its investments include: Click2Sure, a digital insurance platform that allows anyone, from retailers to brokers, to offer custom-developed insurance products at the point of sale or online. Hepstar, which offers travel insurance when one checks out after purchasing a ticket at online travel booking site Travelstart. Fo-Sho, which groups policyholders into risk profiles for short-term insurance, and then group insures them. StockBox, an inventory tool for consumers to photograph and list their possessions for insurance planning. “Insurtech has gained momentum over the last two years in South Africa,” says Dominique Collett, head of AlphaCode. “It was initially seen as a major threat by insurance companies, but now insurers are taking a far more proactive approach to seize opportunities in this space and are starting to collaborate with start-ups. Exciting new models are transforming a staid industry characterised by opaqueness and outdated systems.”

Meanwhile Jonathan Stewart was appointed by MMI to head up Exponential Ventures for productive innovation, to bring innovators and entrepreneurs in from outside the business.

“The thought came to me to try to open MMI’s natural competitive advantages, at scale, using the benefits we have, the licences and the intellectual property, and try to make those available to software innovators through an API. Justin Stanford of 4Di Capital introduced me to OfferZen and then to Louw. It was quite complementary, because Root has access to the developer community, while MMI has the licences and so forth. “One of the big challenges of insurtech is that they often have to build their own full insurance stack, and it’s quite a barrier to entry. Root ‘platformifies’ this, so innovators can employ their creativity and market insights at the front without having to build the heavy back end. It’s cloud for insurance.” MMI’s involvement with Root sheds light on the most common question in the sector: Will the insurtechs own the future, or will the incumbents? “We feel it’s more a sensible combination of the two,” says Stewart. “We would rather collaborate with the wider range of skills available. To grant seamless access to innovators on a heavily scalable platform in the back end, you bring to market a richer range of innovation than an insurance company can do on its own.”

ARTHUR GOLDSTUCK is founder of World Wide Worx and editor-inchief of Gadget. co.za. Follow him on Twitter on @art2gee.

BY DION CHANG

The Rise of the Digital Nomads

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Starbucks is widely credited for creating the concept of a “third place”: that in-between zone that’s neither home nor workplace but feels a bit like both. Add technology like smartphones and cloud computing to the mix and a new breed of global worker has been spawned – the digital nomad. The ripples are running through business and specifically, a growing workforce that demands flexibility.

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“work/life flexibility” is the new mantra In many of the talks and workshops I do, I ask a silly question: “Who in the room has answered an email on their phones, outside of office hours?” It’s a rhetorical question because we all have, but my point is that we’re all, technically, remote workers. For me, the 40-hour work week – one that starts at 9 and ends at 5 – is a quaint relic of the 20th century. Technology has blurred the lines between work and play. Even the quest for “work/life balance” is obsolete: “work/life flexibility” is the new mantra. A younger workforce no longer “looks for a job”, it rather “looks for a lifestyle”. An older workforce scoffs at this notion, but it’s the same generation that views work as “a job” versus a younger workforce that views work as something that is ideally more meaningful and in line with their value systems. For the sticklers of the 9 to 5 template, I ask why we still have to endure rush hour traffic, twice a day, five days a week, when a bit of flexibility could turn those hours of lost time into something more productive. (If your one-way work commute takes an hour, that’s 40 hours of unproductive time wasted every month.) In 2012, one of the “new urban tribes” we identified at Flux were the techno hippies. These were the frontrunners of today’s digital nomads. They considered themselves “the new rich”: not rich in material wealth but rich in space and time – they could work whenever they wanted, wherever they wanted. Today’s digital nomads are now being called “the new elite”. They have not A labour market characterised only embraced the gig Economy* by the prevalence of short-term but are also using the global village contracts or freelance work as as their office. These nomads take opposed to permanent jobs. advantage of multinational companies who render global services using cloud-based technologies. For example: A digital nomad could be working from Bali on a tourist visa, creating a website for an American company, to be used in France, but based on a server in Switzerland. This kind of lifestyle makes flexitime seem like an archaic employee benefit.

*Gig Economy:

established brands – which have now also seen the worth of the gig Economy and the rise of digital nomads – have partnered with WeWork to provide additional services for this workforce. Samsung is offering pop-up “care centres” for device repair or maintenance while you work, Airbnb has stepped in to provide unusual, offsite meeting spaces, while Mastercard has supplied metered payment technology so that gig workers can be charged on a project-toproject basis in the WeWork network. Other technological disruptions in other industries seem to be dovetailing perfectly with a nomadic lifestyle. In the automotive industry, the concept of “digital mobility” rather than car ownership is not only openly discussed but the car manufacturers themselves are providing these services, and the business models are both varied and unique.

Baby steps If the thought of switching your workforce to a remote one proves to be too challenging or simply unrealistic, then there are ways and means to give workers incremental options that will provide flexibility without compromising productivity. Flextime: The most basic time management system that still falls within a 40-hour work week, but can make a huge difference to parents, specifically a growing female workforce that is embracing delayed parenting. These career-driven women who are becoming mothers later in life inevitably mean that when they embark on motherhood they are part of a more senior workforce, one that any business needs to retain. Compressed Work Week: standard work week is compressed into fewer than five days, with longer hours. The most common is one of four 10-hour days, providing the 5th day off. Soma, a company that makes sustainable water filtration systems, allows their staff to “work from anywhere” for one week every business quarter.

But if the corporate world is still struggling with the idea of a nomadic workforce, businesses that cater to it are already racing ahead to capitalise on the trend.

Don’t feel like being driven by Uber or the many other car-hailing services? Then you can drive yourself (without owning the car) using BMW’s Drive Now network. You simply find the closest, available car on your app, let yourself in using a pin code and drive off to your destination. Once there you just leave the car wherever you’ve parked it, for another driver in that area. This system is already in South Africa with a company called Locomute.

WeWork, the company that pioneered co-working spaces for GIG workers and was founded in NYC in 2010 is now valued at $20 billion. (Still think the gig economy is a passing fad?) Recently,

But the global network of digital nomads is growing, so it’s no longer just about gig workers in a specific city or country. International residential clubs for nomads are starting to

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Some pros and cons of a nomadic workforce Pros IBM’s Smarter Workplace Institute found that remote workers tend to be happier, more productive, more engaged with their jobs and perceive their companies to be more innovative because of flexible work arrangements. Remote workers are actually more focused. They are removed from office distractions, like meetings, ringing phones and office small talk. They also tend to remain in their jobs longer or are more loyal to the company, decreasing employee turnover. Allowing a portion of your staff remote options allows the company to utilise office space more efficiently, and also grow without adding expensive office space.

Cons The notion of physically being together ensures there is constant, even if subliminal, communication throughout the day. A remote workforce would perhaps miss out on nuances of daily office exchanges. How do you tax digital nomads, especially ones who work globally, without formal work permits, for multinational companies which provide services that are also global, or cloudbased? Labour laws for the new world of work will have to be overhauled. A remote workforce requires a different style of management. The company culture will have to shift from a time-based, clock-watching culture to performance or output-based culture. When managers say they can’t trust whether or not their remote workforce will be productive if they are not on site, then I simply tell them that they’ve hired the wrong people.

Once there you just leave the car wherever you’ve parked it, for another driver in that area.

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mushroom. Designed specifically for globetrotting nomads, these clubs charge a membership fee, which allows them access to a global network of residential clubs, so you no longer even have to find an Airbnb for the duration of your gig. One of the most recent additions to this accommodation category is Stayawhile. It caters specifically to a growing middle tier of multi-city gig workers they have identified as “upscale nomads”, which indicates that the emerging digital nomad is not just a Millennial techno hippie, but that more and more professionals are adopting the lifestyle. Stayawhile leverages an interesting trend called Airspace: a harmonisation of decor and design aesthetic in whichever apartment you are in, across multiple cities, so that there is a uniformity of environment for these nomadic travellers. This is the kind of considered detail these businesses have delved into when tapping into this booming demographic.

However, if you are the sceptical executive who still believes that productivity is best achieved when your workforce is trapped in their corporate cubicles, then consider the 2018 Mercer Global Talent Trend Report. This report gathered input from 800 business executives, 1 800 HR professionals and 5 000+ employees from 21 industries and 44 countries around the world. The overarching message that came through loud and clear was that, no matter where in the world, flexibility was the most frequently admired perk of a job. James O’Reilly, co-founder of NeueHouse, an American-based company that specialises in collaborative workspace, maintains that in this day and age, “The more talented the individual, the more flexibility he or she can warrant.” It is clear that perhaps with a Millennial workforce firmly entrenched in the workplace, and a much more challenging Gen Z workforce about to enter the workplace, the reward systems of the old corporate world need to be reassessed. Quickly. It’s not always the money that lures. As the nomads say, “I don’t want a job, I want a lifestyle”.

DION CHANG is the founder of Flux Trends. For more trends as business strategy, visit: www.fluxtrends.com.

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Sponsored Case Study

Creating a More Efficient Food System in Africa Together Corteva Agriscience™ is the name of the new Agriculture Division of DowDuPont™. With the merging of three leading companies, namely Dow AgroSciences, DuPont Crop Protection and DuPont Pioneer to form Corteva Agriscience™ – a market-shaping, standalone agriculture company – the future of the agricultural sector in southern Africa, and the rest of the continent, is in good hands and set to grow from strength to strength. Despite the African continent’s abundance of land and natural resources, and the associated potential for farming success, hunger and malnutrition among its people remains one of the biggest threats to its development. As the world’s second largest continent, it is regarded as the poorest and most underdeveloped in the world.

respective industries through productive, science-based innovation to meet the needs of customers, serve communities, uphold sustainability and help solve global food security challenges. DowDuPont will support its leading new agriculture brand until Corteva Agriscience™ becomes fully independent in 2019.

In 2017, The State of Food Security and Nutrition in the World report revealed alarming figures showing that sub-Saharan Africa had one the highest prevalence of undernourishment (PoU), affecting an alarming 22.7% of the population in 2016. That’s about 224 million people. Compared to 2015, it was an increase of 24 million. The report was jointly prepared by the Food and Agriculture Organization of the United Nations (FAO), the International Fund for Agricultural Development (IFAD), the United Nations Children’s Fund (UNICEF), the World Food Programme (WFP) and the World Health Organization (WHO).

From a South African perspective, and for Africa as a whole, doing business with a company that has both a global footprint and the capabilities to enhance and increase both current and future food production using advanced science and technology for the purpose of feeding rapidly growing populations, is a sound decision.

Corteva Agriscience™ (kohr-’teh-vah), which is derived from a combination of words meaning “heart” and “nature”, will bring together its heritage companies’ complementary portfolios that provide materials and specialty products that lead their

“This is the start of an exciting journey,” said James C. Collins, Jr., chief operating officer, Agriculture Division of DowDuPont when the news was announced earlier in the year. “Corteva Agriscience™ is bringing together three businesses with deep connections and dedication to generations of farmers. Our new name acknowledges our history while looking forward to our commitment to enhancing farmer productivity as well as the health and well-being of the consumers they serve. With the most

We are bringing together DuPont Crop Protection, DuPont Pioneer and Dow AgroSciences to create a market-shaping, standalone agriculture company with leading positions in seed technologies, crop protection and digital agriculture. 46

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James C. Collins, Jr., chief operating officer, Agriculture Division of DowDuPont

Prabdeep Bajwa, commercial unit director, Africa Middle East, Corteva Agriscience™, Agriculture Division of DowDuPont

Sponsored Case Study

We will work across the global agriculture value chain to create a more efficient food system.

balanced portfolio of products in the industry, nearly a century of agronomic expertise and an unparalleled innovation engine, Corteva Agriscience™ will become a leading agriculture company, focused on working together with the entire food system to produce a secure supply of healthy food.”

The company aims to help farmers maximise the value of their investment through high-performing genetics and effective science-based solutions that optimise yield and crop quality, thereby helping farmers get the most out of every acre or hectare of land.

Corteva Agriscience™ brings together DuPont Crop Protection, DuPont Pioneer and Dow AgroSciences to create a marketshaping, standalone agriculture company with leading positions in Seed Technologies, Crop Protection and Digital Agriculture.

Corteva business platforms include Seeds, Crop Protection and Digital Agriculture (Emerging). The core products include:

The intended company has developed some of the best talent, technology, innovation and R&D capabilities that will uniquely position it to transform our food system by helping farmers grow better, abundant and healthier crops while using fewer natural resources.

Realising the potential of agriculture

Corteva Agriscience™ aims to positively affect food production in South Africa. Prabdeep Bajwa, commercial unit director, Africa Middle East, Corteva Agriscience™, Agriculture Division of DowDuPont said, “Our company is investing in innovation, drawing on our knowledge of genetics, chemistry and digital to give farmers in Africa more and better products and ensuring their success.”

Business platforms

Thanks to the merger and with a strong focus on collaboration, Corteva can now offer integrated and greatly expanded solutions that combine genetics, chemistry and precision agriculture.

Insecticides

Herbicides

Fungicides and Fumigants

Pest Management

Nitrogen stabilizers

Seeds, Traits and Oils

“In Africa, we will continue to invest in some of the most recognised and premium brands in agriculture: Pioneer®, PANNAR seed brands, as well as our award-winning Crop Protection products, such as Aproach® Prima fungicide and Quelex™ herbicide with Arylex™ active, while bringing new products to market through our solid pipeline of active chemistry and technologies,” said Bajwa.

Innovation

The company invested R100 million in the Africa technology centre in Delmas, which currently employs African scientists and skilled technicians to support local research efforts across the continent. By combining the highly complementary research programmes, Corteva Agriscience™ is positioned to solve the African grower’s most complex challenges, including Fall Armyworm, with a Gordon Institute Of Business Science

use and eventual disposal of waste, including empty product containers and management of obsolete pesticide stocks. The company is also committed to transparency and compliance with various environmental and health bodies.

Farmers are the first to face an ever-changing landscape, while constantly striving for higher yield, resilience and desirability.

Sustainability and environmental protection

Corteva recognises the crucial role science plays in preserving resources for future generations. The company’s commitment to sustainability aims to advance human progress by:

greater array of innovative solutions. Some of these products, including STRONGARM 840WG, a herbicide for soybean and peanuts; SURESTART SE, a herbicide for maize and UPHOLD 360SC, an insecticide for maize and vegetables, are a game changer and will enable farmers to realise greater yield potential, better quality and improved productivity for a more successful crop. “In Africa Middle East, our R&D is also lining up some very interesting products which will be launched between now and 2021. The crop protection products reduce risks and increase farmer control over pests, weeds and diseases, while always keeping the environment in mind,” said Bajwa. Corteva’s digital tools deliver essential and illuminating insights across an entire operation, and the advanced technology applications ensure sustainability.

The Granular Suite comprises industry-leading farm management software tools with the operational, financial and agronomic information needed to make the best call every time. Encirca services gives the user the ability to accurately track fields throughout the entire year and draw from a wealth of information tailor-made to help plan, prioritise and manage the entire operation. By aiding decision-making, a successful and profitable growing season can be ensured year after year. AcreValue analyses terabytes of data about soils, climate, crop rotations, taxes, interest rates and corn prices to calculate the estimated value of an individual field.

Corteva brings responsible and ethical management to their agricultural chemicals throughout their lifecycle. This begins with research and development, includes manufacture, transport and storage, extends through integrated pest management, responsible

Mitigating environmental impact in manufacturing, packaging and shipping.

Skills transfer and mentorship

Corteva actively supports educational institutions, programming and community activities that serve to identify, nurture and provide incentives in the development of tomorrow’s scientists, technicians, engineers and mathematicians. The company supports several initiatives related to STEM education, including promoting the significance of STEM in everyday life and as a career choice; and enhancing recruitment and retention of qualified STEM teachers. Farmers are the first to face an ever-changing landscape, while constantly striving for higher yield, resilience and desirability. By standing on the ground alongside them, listening first and then innovating collaboratively, Corteva can enable their success. The company’s priority is the success of the farmer because when producers thrive, the world will thrive.

ABOUT CORTEVA AGRISCIENCE™, AGRICULTURE DIVISION OF DOWDUPONT Corteva Agriscience™, Agriculture Division of DowDuPont (NYSE: DWDP), is intended to become an independent, publicly traded company when the previously announced spin-off is complete by June 2019. The division combines the strengths of DuPont Pioneer, DuPont Crop Protection and Dow AgroSciences. Corteva Agriscience™ provides growers around the world with the most complete portfolio in the industry – including some of the most recognised brands in agriculture: Pioneer ®, Encirca®, the newly launched Brevant™ Seeds, as well as award-winning Crop Protection products – while bringing new products to market through their solid pipeline of active chemistry and technologies. More information can be found at www.corteva.com.

BARBRA SEHLULE MUZATA

JOHAN JANSE VAN RENSBURG

Head of Communications – Africa Middle East Phone: +27 (0)12 683 5726 Email: barbra.muzata@pioneer.com

Marketing Specialist – Fungicides and Insecticides Southern Africa Phone: +27 (0)21 860 3620 Email: JansevanRensburg@Dow.com

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Contributing to community success through meaningful collaborations.

Global citizenship

These include:

Product & biotechnology stewardship

Discovering and developing solutions that help preserve the quality of our land, water and air.

Phone: +27 (0)12 683 5700 +72 (0)21 860 3620 (Paarl) Website: www.corteva.com www.dow-dupont.com Address: Block A, 2nd Floor, Lakefield Office Park, 272 West Street, Centurion

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LINDA SING

PROF. ADRIAN SAVILLE

is currently assigned to the University of Pretoria as Acting Director Marketing and Communications, responsible for the branding, advertising, internal and external communications, publications and event management functions. She is also an adjunct faculty member at GIBS, where she lectures in economics, strategy and innovation. She has an MBA (cum laude) from GIBS, where she graduated as top student in her year. Her research project focused on the interplay between the introduction of e-government services and the facilitation of national economic growth. She also holds a MPhil (Futures Studies) (cum laude) (Stellenbosch) and BComm (Hons) (Wits).

is Professor of Economics and Competitive Strategy at GIBS, and Chief Strategist at Citadel. He has lectured and taught widely in both South Africa and around the world, has received the Excellence in Teaching Award at GIBS on nine occasions since 2007, and in 2012 was nominated for the Economist Intelligence Unit’s Business Professor of the Year Award. While completing his doctorate in economics, he formed an investment vehicle which became the forerunner to the investment business Cannon Asset Managers, now part of the Peregrine/Citadel stable.

BY TAMARA OBERHOLSTER

The VAT Hike Impact The recent increase in Value-Added Tax (VAT) from 14% to 15% came into effect in April 2018. The hike is expected to raise R22.9 billion in additional revenue in 2018/19. As the first VAT increase since 1993, the move has been understandably controversial.

Linda Sing, adjunct faculty, economics, strategy and innovation at GIBS, notes that inflation has crept up month-onmonth from 3.8% in March to 4.4% in April, which can in part be attributed to the VAT increase, coupled with increasing fuel levies and the sugar tax. Dr. Adrian Saville, professor at GIBS and chief executive at Cannon Asset Managers, explains that inflation refers to a process whereby there is a general increase in prices across a broad basket of goods and services over long periods. “By this definition, the increase in the VAT rate constitutes a price increase, but is not ‘inflation’. That said, the reality is that 50

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this once-off VAT rate increase is likely to have served as an agitator or catalyst that provokes a set of knock-on price increases as the April rate increase passes through the system and nudges prices higher over a drawn-out period, rather than a naïve case of ‘once and done’ on 1 April 2018,” he says. Sing believes that the VAT increase will continue to contribute towards higher inflation in the short to medium term. “In the long term, we’ll adjust our spending, but that then impacts aggregate demand, which puts pressure on things like unemployment and income inequality. It doesn’t help that there are external factors impacting us too, like the investor flight away from emerging

markets, which we’ve seen globally, which impacts on the exchange rate and makes everything more expensive. It just exacerbates the whole inflation problem.”

Impact on business

Saville notes that arguably the biggest immediate effect of the VAT increase on businesses was in the administrative impact of ensuring prices were adjusted for the 1 April VAT rate increase. “The administrative challenge has taken a range of forms, including the need to re-issue invoices on transactions that were not completed; resolving VAT receipts that were lost to the company through early invoicing and late payment;

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Impact on inflation

“It just exacerbates the whole inflation problem.”

and having to get product and service prices adjusted with very little lead time or warning, and no experience of having to deal with VAT rate adjustments since 1993, when the VAT rate was last increased from 10% to 14%,” he says.

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“Some businesses could be out of pocket if they contracted just before the increase,” says Sing. “You were contracting at 14%, but you’re buying at 15%, so you might miss out on that 1% on an existing contract.”

Impact on low-income households

Government countered accusations that the VAT increase would

disproportionately affect low-income households by citing a list of zero-rated items, along with an “above-inflation increase in social grants”. However, Sing notes that increasing inflation always disproportionately impacts the poor and that low-income households don’t only buy zero-rated goods. “Things like electricity, cleaning products or clothing are not VAT exempt. Some research suggests that VAT-exempt items and services represent a low proportion of what poor people buy.” She adds that while social grants may also have increased, it’s not obvious whether these increases were sufficient to take into account not only the VAT hike, but

increased fuel prices and the sugar tax too. “To be honest, I don’t think our current research truly understands the way poorer households shop and their buying behaviours. That would be great research to have to understand the real impacts of the increase in VAT.” Finance Minister Nhlanhla Nene, in his Budget address, noted Treasury had established a panel to review VAT-exempt products and to consider how best government could mitigate the impact of the VAT increase on poor and indigent households. The panel’s terms of reference were later amended to allow the panel more flexibility to make proposals that might Gordon Institute Of Business Science

be taken into account in the 2019 Budget. The panel may also receive and consider submissions on the zero-rating of nonfood items.

problem is that the increased pressure on consumers is making it even less affordable for them to save.

However, writing for the Daily Maverick, Dr. Seán M. Muller, senior lecturer at the School of Economics and econometrics and research associate at the Public and Environmental Economics Research Centre (PEERC) at the College of Business and Economics, notes that there are two major problems with expanding the number of zero-rated goods. The first is that government loses out on revenue on these goods that it currently gets from high-income households and the second is that the removal of VAT may benefit producers more than consumers.

Sing does not believe that there is much more fiscal leeway for government to provide any more of a “social safety net”, unless it does something “silly” like implementing price caps, which would cause market disruptions in terms of demand and supply.

“The danger of ill-considered zero-rating is that in some circumstances it could simply transfer government revenue

Looking ahead

“Our social safety net at the moment is as much as we can afford,” she says. While she notes that initiatives like the NHI could in theory help to mitigate healthcare costs, it’s another thing that requires spending and it’s unclear how it will be funded. “The danger is perceived pressure on consumers,” she says. “I’d imagine that people with wealth are looking at uncertainty around land reform and arguments for higher wealth taxes, and then the possibility of medical aids being affected with the introduction of national health insurance (NHI). I guess it’s a question of how much relatively privileged South Africans will be able to bear. It’s a fine line we need to walk.”

...there is no viable way to fully protect the poor from the VAT increase. to firms, worsening the distributional effects of the VAT increase rather than mitigating them,” Muller writes. “While the National Treasury has pointed this out in the past in response to proposals to zero-rate books, it is a danger that is continually omitted in commentary on the subject.” His view is that, despite government commitments to the contrary, there is no viable way to fully protect the poor from the VAT increase.

She adds that the VAT increase also needs to go hand-in-hand with better governance and use of resources. “We can’t keep on hearing how the public should fund the fiscal gap, and then the Auditor General’s report comes out and shows we’ve lost billions through the municipalities.”

Sing agrees, adding that zero-rated goods are a form of government subsidy and that all such subsidies tend to favour the wealthy. They can also impact public finances. For example, if electricity were to become zero-rated, Eskom’s funding would be severely affected. For an entity that is already in financial difficulty, that could be catastrophic. A further

Saville is less inclined to venture an opinion on the longer-term effects of the VAT increase. “We need to see how it materialises in the form of inflationary pressures and establish the impacts on different income groups and different consumer groups,” he says. “As much as we might want to speculate, I think the reality is we have to wait and see.”

Key takeaways Hidden VAT surprises for consumers

Saville says there are many places consumers don’t easily see price increases. “For instance, where spend is a very small component of the total basket – such as ATM fees. Another way in which the VAT increase passes into the consumer basket, but is disguised, takes the form of items such as a car financing,” he says. “The car price will have moved 1% higher on 1 April 2018, and the cost of financing the car will have similarly increased. Even if the impact is modest, it unquestionably represents a higher cost of financing.”

Passing on the increase

Sing says the biggest issue for businesses is whether they can pass on the 1% VAT increase to consumers, which will depend on the type of the product, the industry and business model. “I’m not quite sure how sustainable it is to just keep squeezing backwards along the value chain. For example, retailers have already been pressuring manufacturers to reduce costs for the last decade since the global financial crisis.”

Economics goes beyond fundamentals

Sing notes that it will be important to tap into Ramaphoria to manage and leverage public sentiment. “Things like economic growth prospects are critically dependent on investor and market sentiment and are ultimately self-fulfilling prophecies,” she says.

Gordon Institute Of Business Science

Sponsored Case Study

Corporate sustainability strategy, resilience and competitiveness For many companies, the word ‘sustainability’ conjures up negative connotations. It’s all about compliance, box-ticking, advisers with hairy socks and sandals, and a glossy annual report which, once written, is filed away and forgotten about. Lloyd Macfarlane, of management consultancy PSP-Icon, believes that view is wrong. In fact, Macfarlane argues that approached strategically, corporate sustainability can deliver both resilience and competitive advantage, leading to increased long-term profitability. Macfarlane says that many people still regard sustainability to be about environmental, or ‘green’ issues. “It is still about resource efficiency, cleaner production, energy, water, waste materials and green building.” Which is fine and important, he says, but it’s also about strategy and innovation – sustainability can be used to position companies for both resilience and competitiveness. “It’s seldom that you find a company that is not looking to address one of those two things. Resilience can mean future-proofing the business by viewing the business model, the strategy and other fundamentals through certain lenses, and then closing gaps and aligning everything with the management approach. Strategic objectives must reflect the material issues of the business and be relevant for key stakeholder groups. This creates a much more integrated and sustainable operation,” explains Macfarlane.

Investors are looking for long-term value creation... Tools

One method used by Macfarlane is the examination of the company’s business model using the Six Capitals, which is one of the tools promoted by the Integrated Reporting movement. The Six Capitals are categorised as financial, intellectual, human, natural, manufactured and social and relationship, which together represent stores of value that are the basis of an organisation’s value creation. “We look at what inputs go into the business, what outputs emerge and what the outcomes are. Then we can look at how well, within that framework, the business is positioned for risk and opportunity,” says Macfarlane. 54

Gordon Institute Of Business Science

Lloyd Macfarlane

Another strategic tool he employs is to view the business through the extended value chain. “Here, depending on what sector the business is in, we examine products, services and activities from raw material extraction, right through to ‘end of life’. We map the profile of that organisation and the impacts that occur along the way. This allows us to see areas in which mitigation needs to take place or value needs to be created across the entire value chain, even beyond the boundaries of direct control. In this way, corporate sustainability is far more than a box-ticking exercise or just applying a framework. It is the integration of environmental, social and governance strategies, and management of those strategies across the organisation’s value chain. This approach exposes companies to their own business case, which drives innovation and competitiveness,” notes Macfarlane.

Drivers

Several factors are helping to drive this process in South Africa at the moment, according to Macfarlane. “Carbon reporting and carbon tax are a big focus now, with the imminent introduction of a carbon tax. There is also global pressure on nations to reduce industrial emissions. South Africa has already promulgated the National Greenhouse Gas Reporting Regulation, which obliges certain companies to report on their emissions and, subject to what those emissions are, pay a carbon tax priced at R120 per ton of CO2e. My estimation is that less than 2 000 companies will pay that tax, but at least another 10 000 might be well advised to understand the minimum thresholds and to position themselves so that they’re not at risk if the thresholds change. This can be done by conducting a carbon footprint audit that helps to identify emissions sources, tax liabilities and opportunities for efficiency. Another important driver is the investor agenda. Investors are looking for long-term value creation and an increasing number of stock exchanges, including the JSE, require an Integrated

Sponsored Case Study

or Sustainability Report as a listing requirement. State-owned enterprises in South Africa are now also required to produce an Integrated Report. Key here, says Macfarlane is the alignment or integration of the reporting processes into the strategy of the business. Reporting poorly can sometimes be worse than not reporting at all. “This is where meaningful business case benefits and advantages can emerge. Certain companies listed on the JSE, outside of the Top 40, or on the AltX, are engaging us around our Resilience Package, which uses an Integrated Reporting approach to close gaps and integrate the strategy, giving the company a more relevant performance lens and a more credible long-term value creation narrative for investors. “We’ve had some high-profile examples of ‘short-termism’ in South Africa over the last few years and savvy investors, who understand the meaning of long-term value creation and responsible investing, are using reports to establish if companies are strategically integrated or just checking boxes.”

Belgotex

One client of PSP-Icon that has adopted a long-term value approach with considerable success is Pietermaritzburg-based flooring manufacturer, Belgotex. “Belgotex is a market leader. They have looked down the value chain and done as much as possible to mitigate impacts. They’re deriving huge advantages in terms of innovation, differentiation and reputation and this has positioned them for market dominance,” says Macfarlane. Digging a little deeper into Belgotex’s success story, he explains that the company has an initiative to recycle both at a production and consumer waste level. Instead of waste being destined for landfills, they bring it back into production, reprocess it and restore value to it as a raw material. Recycled materials help to reduce the impacts of raw material extraction and the carbon emissions associated with production. A second example is the solar array on Belgotex’s rooftop: “They were looking to reduce emissions and electricity consumption, so they installed solar panels on top of the factory roof. This has resulted in meaningful savings and the carbon emissions avoided over a two-year period have been linked to the company’s greenest carpet range which has resulted in more than 200 000 square metres of flooring that is now effectively carbon neutral. In a highly competitive sector this provides a valuable point of

differentiation for the company, as it targets customers that are themselves looking to make responsible purchasing decisions. “Imagine the competitive advantage this gives Belgotex when approaching a large corporate trying to install nine stories of flooring. Your competitor comes in at the same price, but your product is carbon-neutral – and you can pass that value on to the client! This kind of innovation and competitiveness epitomises the benefits associated with long-term value creation,” says Macfarlane.

...sustainability can be used to position companies for both resilience and competitiveness. RPC Astrapak

Another example he cites is packaging giant RPC Astrapak. “They operate in a sensitive industry – plastic has very high carbon emissions when processed in virgin state, and there are some serious waste impacts that the industry is managing. RPC Astrapak has a zero-waste-to-landfill objective, and 100% of production waste is currently being recycled. In addition, the company’s carbon footprint has been reduced significantly since 2015, through Resource Efficiency and Cleaner Production practices, but also by using recycled materials. There is a focus on the life cycle of plastic, including large investments and collaboration with industry organisations to build the recycling industry and increase consumer awareness around pollution.” says Macfarlane, stressing this began not as a compliance issue, but as a voluntary decision by a long-term investor intent on creating shared value. “PSP-Icon’s expertise lies in taking tools like carbon foot-printing, sustainability and integrated reporting, helping companies like Belgotex and RPC Astrapak interpret and apply the results, and in so doing, creating both resilience and competitiveness. We are working with our shareholder audit, accounting and consulting firm, Nexia SAB&T to drive these principles into the public sector too – consulting with state-owned enterprises and local government. It certainly feels as if there is a new appetite for sustainable change,” Macfarlane concludes.

Gordon Institute Of Business Science

DANIE PETZER

ESTELLE VAN TONDER

is a Professor and Director of Research at GIBS. He holds a PhD (Marketing Management) specialising in services marketing and is an NRF-rated researcher. His research focus area is uncovering consumer responses to organisational efforts to build, maintain and restore relationships with customers in a services context. He lectures on the GIBS doctoral programme, MBA, postgraduate diplomas and custom programmes.

is an Associate Professor at the North-West University in South Africa where she teaches Retail Management and Strategic Marketing. She has a doctorate degree in Marketing Management and her research has been published in journals such as The International Review of Retail, Distribution and Consumer Research, European Business Review, The Service Industries Journal and the International Journal of Bank Marketing. Her main research fields are relationship marketing, consumer helping behaviour from a citizenship perspective and informal knowledge sharing behaviour among consumers.

BY PROFS. DANIE PETZER AND ESTELLE VAN TONDER

IMAGE SHUTTERSTOCK

Keeping the Spark Alive Through Customer Engagement

Gordon Institute Of Business Science

Engaged customers pay more attention to the brand...

A simple, but enduring view of marketing comes from US author and businessman Bryan Eisenberg: “Our jobs as marketers are to understand how the customer wants to buy and help them do so.” Eisenberg, like many in this field, understands that the customer must be the focus of the marketer’s activities. Yet, in a world where the consumer is being bombarded by marketing stimuli, they are less inclined to trust the proffered help that is being communicated to them through the mainstream media. With trust waning, marketers must look at ways in which to reach their customers, develop relationships and inspire their clients to connect with the brand on a personal level.

Businesses are increasingly looking to adopt various relationship marketing methods to connect more intimately with their customers. They are asking questions around the value of customer engagement, why should customers be engaged, and how to keep their attention. In our 2017 paper, The Interrelationships Between Relationship Marketing Constructs and Customer Engagement Dimensions, we examine the links between perceived value, customer satisfaction, trust, affective commitment and customer engagement. The paper hypothesises that a customer satisfaction and a sense of perceived value will lead to greater trust and commitment which, in turn, result in more engaged customers.

...Customer satisfaction and perceived value lead to trust. Customer engagement is defined by Jamid Ul Islam and Zillur Rahman in their 2016 paper entitled, The transpiring journey of customer engagement research in marketing: A systematic review of the past decade as: “The readiness of a customer to actively participate and interact with the focal object (e.g. brand/ organisation/community/website/organisational activity),

[which] varies in direction (positive/negative) and magnitude (high/low) depending upon the nature of a customer’s interaction with various touch points.” There are a number of positive outcomes for businesses that are able to effectively engage their customers. Engaged customers pay more attention to the brand, are absorbed by the brand, identify with the brand, are enthusiastic about it and willingly promote it, especially through word of mouth. Ultimately engaged customers contribute to the sustainable competitive advantage of a business.

Engaging to beat the odds

Our study focused on the short-term insurance industry in Gauteng, South Africa and several findings were evident. The first thing to note, however, is that short-term insurance, as a product offering, is a grudge purchase. Secondly, being a service offering, insurers have no tangible product to sell. When customers buy insurance they are buying a promise that will only pay out at a later date, and only if it is needed, which is usually in the event of an unfortunate circumstance. Getting engagement in this type of environment is extremely difficult, but marketers need to realise that achieving engagement is important in this increasingly competitive landscape. In South Africa, the short-term insurance industry is welldeveloped and mature. Companies such as Santam, Mutual & Federal, Hollard and Outsurance hold more than 50% of the market share collectively. But with a growing middle class and tech innovations like smartphones impacting the market, insurers are going to face additional – and stiff – competition. If they are not careful they could wind up being outsmarted by young dynamic insurance providers. In addition, in an industry like short-term insurance, or any other financial services offering, customers are increasingly fickle, meaning that consumers will easily switch between companies based on factors like cost. So we believe that going forward insurers are going to need to develop strategies focusing on customer engagement to ensure they not only maintain but also grow their market share.

Engaging customers through relationship marketing

Our study found that customer satisfaction and perceived value lead to trust. This then leads on to affective commitment and then ultimately customer engagement. What we are saying is that satisfaction and value will improve the relationship with the customer – increasing the trust in the business and the affective commitment towards the business – and will ultimately lead to a more engaged customer. The result is that the customer will most probably buy more and, more importantly, become an advocate of the brand by spreading positive word of mouth. This applies Gordon Institute Of Business Science

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whether they are buying a pair of jeans, a Harley Davidson, or paying for short-term insurance.

Business action

The short-term insurance industry is first and foremost an incredibly price-sensitive sector. But that is not the only deciding factor for consumers. Depending on what customers are looking for, service providers are being challenged to provide better customer service and greater perceived value, in order to meet the unique needs of their customers. As such, short-term insurers need to be innovative in their value propositions which can include price, pay-out times, or even offering incentives like Outsurance’s Outbonus, a reward Outsurance pays its customers for not claiming. Customer engagement is enhanced by firms not only delivering on these promises but also going the extra mile.

Quick tips on how to increase perceived value

Interacting with others, for example, customers conversing with others about the business beyond the purchase, both on and offline.

The constructs that businesses need to consider when it comes to their relationships with customers with the aim of ultimately increasing customer engagement are:

2 3 4 5

Paying attention to the business, for example, learning more about the business.

Customer satisfaction – which occurs when customers experience a positive confirmation of their expectations.

Customer perceived value – the value perception a client has is based on the price paid in relation to the expectations of the product, the quality obtained in relation to the price paid, and what the consumer received. According to Valarie A. Zeithaml’s 1988 journal article Consumer Perceptions of Price, Quality, and Value: A Means-End Model and Synthesis of Evidence, it is based on the customer’s perception of the utility of the product.

Trust – which talks to the perceived credibility of the firm providing the service.

It is important to remember that customer engagement, according to So, King and Sparks’ 2014 journal article Enhancing customer relationships with retail service brands: the role of customer engagement, is all about customers:

Being absorbed with the business, resulting in an unwillingness to separate from the business. Identifying with the business, for example, seeing the business’s success as their own success. Being enthusiastic about the business, for example, being an ardent and vocal supporter of the business.

Deliver value and consistency. Perceived value is about living up to your competitive advantage and delivering to your market segment through a number of streams, including price, service, pay-out period, bonuses, online applications and claims. If you consistently satisfy your customer through giving them value, you will get a greater level of trust and effective commitment and ultimately engagement. Thoroughly understand your market segment and design your strategy to meet their needs.

Customer commitment – achieved when customers make an effort to maintain a relationship with their supplier. Affective commitment is defined in the study as: ‘[measuring] the feelings and emotional attachments customers may develop towards the firm providing the service’.

Our research finds that these constructs are enhanced when a company’s value proposition is marketed to its employees, which ensures buy-in across all levels of the firm. This, in turn, ensures excellent levels of service are maintained and results in an increase in perceived value.

Measuring engagement How enamoured are your customers really? Talk is cheap. Understanding the value of customer engagement is one thing but without tangible measures, how do you know whether your strategy is working? Of course there are formative measures that are easy to measure when using digital platforms – like the number of clicks, the number of tweets, the number of likes and comments a digital post will receive. But how do you measure real, yet intangible, engagement? In our research, we constructed a self-reporting questionnaire that asked 500 short-term insurance customers to indicate their preference towards statements measuring the constructs of the study with existing scales. These include things like customer satisfaction, customer value, trust, affective commitment and customer engagement. Each statement requires a numerical rating of one to five. People were able to reflect on their short-term insurers with respect to each of the constructs of the study.

Using a measurement tool like this can give marketers great insight into how enthusiastic and ‘passionate’ a customer is about the insurer, for example. They can predict whether or not they are going to engage in positive word-of-mouth recommendations, will interact with the brand, and actively want to learn more about the brand. Insurers can use this as a tool to see what the level of their customer engagement is. If it is done on a monthly basis they can start tracking customer engagement levels and evaluate the relationship they have with their customers. It is important for businesses to understand that a very good predictor of customer engagement is how well they satisfy their customers and the perceived value they offer. This study indicated that customer satisfaction and perceived value predict trust and commitment that ultimately predict customer engagement. In other words, building strong relationships predicts customer engagement. Gordon Institute Of Business Science

“I’ve written marketing copy in exchange for linen, wine and holidays.”

Gordon Institute Of Business Science

BY TAMARA OBERHOLSTER

A Fair Exchange

The Business of Bartering Bartering has been around for millennia. But, as an article shared on EconomicsDiscussion.net points out, it’s not a perfect system, which is why money was eventually developed to overcome some of its common problems.

For example, if I grow spinach and I want to trade my excess greens for a haircut, I need to find a hairdresser who will be willing to trade his or her services for my spinach. It might take time to find this person – time that I can’t spend on other productive activities. If I take too long, my spinach will wilt and go to waste. I might only find a hairdresser who wants to trade something I can’t offer. Or perhaps the person will want spinach but believes a haircut is worth double the amount I have available to trade. Even if I agree to supply more later, there’s no guarantee for the hairdresser that my crop won’t fail, or that I will supply greens of the same quality. It’s a silly example, but it neatly illustrates some challenges of bartering: the difficulty of locating a double coincidence of wants, a lack of a common value measure, the challenge of storing wealth, the lack of a standard for deferred payments, and the indivisibility of wealth (nobody wants half a haircut!) Bartering does offer benefits, however. Cobus Naude, CFO at Bartercard SA, says bartering is still relevant in today’s predominantly cash-based economy. “Everyone is looking for ways to hold on to their cash and take the pressure off their cash flow,” he says. “Bartercard facilitates that by making it possible for members to access the goods and services they need to grow and trade by spending ‘trade rands’. If these trade rands can be earned by selling excess goods and services, that’s a double benefit to the business.” Bartercard was launched in South Africa just over two years ago and has been operating in Australia for 25 years. The company operates in 10 countries and has a network of more than 50 000 members globally. Naude explains that the idea is to create a network of businesses that can pay for each others’ goods and services in trade rands without having to meet the classic direct barter conditions of a coincidence of wants. “Members accrue trade rands, which equate to the same rand value of goods and services, which can be bartered for goods and services supplied by any other member in the network,” he says. “The major benefits are that businesses

can reduce their cash expenses and increase their sales through the network. Trading lower cost, off-peak or excess capacity with a low cost to the company yields the greatest business benefits. Members also benefit from the support and exposure they receive from other businesses in the member network.”

OCCASIONAL EXCHANGE Even without membership of a formal bartering network like Bartercard, business trade exchanges are more common than one might think. “I’ve written marketing copy in exchange for linen, wine and holidays,” says Caroline Hurry, editor in chief of Travelwrite. co.za. “I’m very partial to a trade exchange and usually the other party has approached me suggesting a barter instead of hard cash. I invoice at my hourly or word rate. The client then pays me the financial equivalent in wine, linen or bed nights somewhere nice. I even exchange fresh eggs for an extra guitar lesson occasionally. It’s always been an ad-hoc arrangement and I probably need to adopt a more structured approach. Still, I love the concept because it’s a way of treating yourself to some of life’s luxuries that might not have been affordable otherwise.” Peter Dros, sales and marketing director for Fancourt, says bartering accommodation is common in the tourism industry. “We have international travel trade partners or tour operators that publish travel brochures. The tour operator (that is a wholesaler selling to travel agents) would feature Fancourt in the brochure on a barter basis, so, for example, we get exposure in Germany in a brochure on the travel agent’s shelf or website for consumers to look at.” Dros says these arrangements normally develop out of trusted business relationships and are negotiated on an individual basis. “If it is a new business we are starting off with, we may specify that they can only redeem the barter on the third booking, so the tour operator then also needs to make an effort on their side and it’s not just Fancourt being used. When they make a booking with us, we deduct the (predetermined) value of the barter, so they are paying us a nett booking value. It is all invoiced to make sure the books balance.”

Gordon Institute Of Business Science

“Everyone is looking for ways to hold on to their cash and take the pressure off their cash flow.” Bartercard SA member Gary Weineck, MD of Anjere Business Consulting, has had positive bartering experiences since signing up with Bartercard in 2016. “I liked the idea that I could use my surplus capacity to pay for some of my lifestyle and business expenses,” he says. “My time is my stock and obviously once available time has passed, I can’t sell it. Through Bartercard I was able to ‘bank’ that time by selling it to members using a virtual currency instead of cash, and then use that virtual currency to purchase.” Weineck has exchanged trade rands for everything from accommodation to vehicle repairs, legal fees and restaurant meals, both in South Africa and while travelling in the UK. “It is particularly nice that there is no fixed term contract and your trade rand balance does not expire and can be spent in a growing number of countries.” Naude says Bartercard’s members range from web designers to hotels, printers, courier companies and property developers. A commission of 6.5% is charged on transactions. This goes to Bartercard, which facilitates the transactions. “Bartercard fees are paid in cash and members gain access to the Bartercard network in return. This includes marketing through the member network, and access to Bartercard’s electronic services, which is a bank-like system of recording transactions and trades, a monthly statement, trading platform and a user-friendly mobile app,” he says. “We are still growing the South African member

network, so currently have a flexible approach to joining fees and are kickstarting new members with trade rand credit to build up the network and get everyone trading.” Some people find it difficult to get their heads around how the trading works, Naude admits. “Transactions don’t need to be direct – between two members. For example, a restaurateur who uses a printer’s services does not need to pay the printer back in meals. The printer can take those trade rands earned and use them to buy from other members – a web designer, lawyer, electrician, car service centre, etc. Others find the concept of trade rands confusing. It’s a onefor-one trade, so R1 equals 1 trade Rand. The value of what is bought is costed the same way it would be in cash.”

TRADING UP Telana Simpson, courage coach at Inner Coaching, has been bartering since she was a child. She really began to put trading to use as an adult after hearing of Kyle MacDonald, who made a series of trades, starting with one red paperclip and ending with a house. Simpson was inspired to do the same, starting with one matchstick and aiming to eventually acquire office space for her company. She called her project One Matchstick and has been working on it for the last few years. “My latest item up for trade is a collection of tech and gadgets (three boxes full!) that will take someone off the grid and help make them mobile – for those active, on-the-go people, or those who don’t want to be office bound,” she says. “I’m accepting trade offers via Onematchstick.co.za.”

Bookkeeping follows the same process as if cash were being exchanged. “The only difference is in the method of payment,” says Naude. “Trade rands are accounted for. Invoices are generated and paid and, if the members are VAT vendors, VAT is payable to SARS on all transactions, the same way they would if the transaction was in cash.”

4 tips for business trades 1. Just go for it. “Explore options at least, as you’ll be surprised as to how trading can work out well,” says Simpson. “Ask the person if they would consider trading rather than doing the usual cash transaction. Your chances of a yes go from 0 to 50% just by asking! It’s 100% no when you don’t even ask. Everything is negotiable, as long as you both want to make the trade work.”

2. Establish boundaries.

3. Keep records.

Just as you would draw up a formal contract for any other exchange, bartering should be no different. Pin down exactly what is included from each party’s side and set clear timeframes, deliverables and values.

Remember that VAT is payable to SARS on barter transactions and, in terms of section 20(1) of the VAT Act, VAT registered companies are required to provide tax invoices, for cash and barter transactions alike.

4. Understand that Bitcoin exchanges are treated as barter transactions. In April 2018, SARS noted that it will “continue to apply normal income tax rules to cryptocurrencies and will expect affected taxpayers to declare cryptocurrency gains or losses as part of their taxable income.” Where goods or services are exchanged for Bitcoin or another cryptocurrency, SARS says these transactions will be regarded as a barter transaction and normal bartering tax rules apply.

Gordon Institute Of Business Science

BY EUGENE YIGA

Watching The West Wing, a popular television series from the early 2000s, changed the course of Reatile Tekateka’s life. The show sparked a desire to be part of a team that combined her interests in international relations with her aptitude for communications and inherent skill in diplomacy. It’s the reason she made the bold decision to switch careers. “I think I always had a sense of PR or something communications-related as the direction I should take but I only articulated it in my early 20s,” she says. “I initially wanted to follow in my

I was surprised by the breadth of roles that fall under the definition of PR. father’s footsteps and pursue a career in the diplomatic corps, hence the choice of Political Science at UCT and Wits. The choice to switch was based on the belief that PR was a combination of my strengths. It allowed me to be both strategic in my thinking and creative in finding solutions.” Tekateka changed course to study PR at Varsity College. Upon completion, she began her career in 2005 as an account executive at Dynamo Africa, a small agency that formed part of an integrated communications group called The Gate. In 2007, she interviewed for an account manager position at Magna Carta and was there for just over a year before being approached by a former client, Blue Financial Services, to head up PR and Communications across their African operation. 64

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Engaging the Public A passion for strategy and communications inspires GIBS MBA Reatile Tekateka’s role in public relations.

“I was surprised by the breadth of roles that fall under the definition of PR,” she says. “This presents quite a challenge for the industry in terms of establishing our value for business and having a common set of standards which governs what we do. A publicist, public affairs manager and crisis management consultant do different jobs, although they may share certain fundamental skills and principles.” In 2009, she joined Liberty Holdings where she was the first group public relations manager and then group head of PR and Communications. It was during her five-year tenure that she took a management course at the Standard Bank Leadership Academy (as part of the broader group, Liberty employees were eligible for this course) that was run in conjunction with GIBS. Being exposed to a number of the institution’s lecturers made her know that she would find a way to study there. “GIBS has a solid reputation both in South Africa and abroad,” she says. “It was most logical for me given its perceived excellence and geographic location. I was not in a position to apply to for an overseas MBA programme and GIBS stood out for me as the best that South Africa had to offer.” Tekateka completed a Postgraduate Diploma in Business Administration in 2012 and an MBA in 2015, both of which

delivered what they promised. Having been a specialist her entire career, she gained a more solid grounding in general management. She also gained confidence in decision-making, which made the choice to pursue a general management role the logical next step in her career. “Over and above skills, it delivered on amazing networking opportunities as well as friendships which I will carry for many years to come,” she says. “I was exposed to some of the best minds in the country across various industries and disciplines thanks to this MBA.”

A significant move

Following a brief stint at a law firm she re-joined Magna Carta for two years starting in 2014, where she was a senior account director and then business unit head looking after clients with a pan-African footprint. She then joined Econet Media as the group head of PR and Communications across their African footprint and was responsible for overseeing the communications function for the group. Her latest role is as head of Engage Joe Public, a position she began in January this year. “It’s an exciting new chapter for me,” she says. “It’s the first time I’ve taken on the managing director role at an agency, which makes this a significant move. I’ve had an interest in building a

You can’t be in PR and not know what’s going on in the world.

Reatile Tekateka

communications practice for some years now and this gives me the opportunity to apply experience gained across my work within blue chip corporates and leading PR firms.”

These include but are not limited to corporate communications, crisis management, government relations, social media strategy and implementation, and stakeholder engagement.

Engage is the PR agency within Joe Public United, a well-respected group that represents some of the best minds across related disciplines in the marketing and communications universe. It’s why Tekateka was excited to work for a group that’s recognised for some of the leading creative work in the industry.

“A lot of people don’t realise how much strategising we do in PR,” she says. “One of the reasons I felt it important to entrench and formalise my overall business knowledge through the MBA was precisely because of the need to have a deep understanding of business. It’s only by understanding how a business operates that you’re able to provide strategic counsel to clients. This is true whether you are in-house or consulting as part of an agency. You don’t need an MBA to be good at PR but I do feel that business knowledge outside of specialist communications skills

With just a dozen employees, the agency has established itself within the PR industry, having been recognised with a number of local and regional industry awards. It offers a full suite of services to clients across various industries.

is becoming increasingly important as we are being asked to tangibly demonstrate ROI and value.”

Leveraging the diverse skills

Harnessing the power to change perceptions and behaviour when a message is delivered effectively is one aspect Tekateka loves most about her work. She also thrives on the fact that no two days are the same. “Something I’ve disciplined myself to work on every day is keeping abreast of the news,” she says. “You can’t be in PR and not know what’s going on in the world. Responding to and planning for where the news cycle is going is a critical aspect of what we do.” Gordon Institute Of Business Science

She also makes a point of touching base with her senior team on a daily basis. This lets her have a finger on the pulse of what’s happening in the business even though the day-to-day running is mandated to her team. While this is easy to manage given the relative size of the agency, she has no doubt it will prove more challenging as they grow. But it’s a management challenge she looks forward to tackling in due course. “My previous role was an integrating role looking after the overall PR and communications for a group across multiple geographies,” she says. “In addition to this, my role required that I work closely with colleagues in marketing, digital, regulatory and sales to name a few. My role at Joe Public requires similar skills in that, as a head of a specialist agency, I need to work with my counterparts across the group to optimise our output for clients and leverage the diverse skills which sit within the group.”

A consolidation of disciplines

Overall, now is a tough time for the industry. Budgets are getting tighter and there is pressure to deliver 360-degree creative solutions. Because client expectations haven’t adjusted to the limited resources, agencies have to think more creatively about how they execute and work more efficiently. Tekateka doesn’t think this is entirely bad. Indeed, the idea that necessity is the mother of invention means that there is potential to see and create great work. “The most obvious challenge is that we have to deliver the same, or in many instances more, on smaller budgets,” she says. “It’s forcing us to relook at our approach to client service and the solutions we offer. This has obvious implications for talent management strategies as well as overall positioning of our service offering in an increasingly competitive operating environment.” With corporates collapsing departments, running leaner, and seeking to deliver their mandate with fewer resources, professionals need to be able to navigate territory which they historically left to the counterparts in other specialist agencies. The consolidation of disciplines also means that, for example, it isn’t enough to

PR needs to carve out a new niche for itself...

Reatile Tekateka

be a media relations specialist who doesn’t understand how social media works. “The opportunities are there for those who are willing to adapt and have started to future-proof their agencies,” she says. “PR needs to carve out a new niche for itself and this means changing how we do things and drawing on other disciplines to further refine our offering… The business is doing well. It has built a solid model as a small agency but there is definitely room for growth.” Looking ahead, there are exciting plans for the agency. A key focus is using its position within the Joe Public United group to provide current and potential clients with value through an integrated business model. The goal is to build a creative agency that draws on the fundamentals of PR whilst learning from traditionally creative disciplines within its ecosystem. She believes this will strengthen the offering as a specialist agency and strengthen the overall proposition of the group. “Our place within an integrated agency group like Joe Public United is a definite advantage for us,” she says. “I’ve worked in big groups before but I hadn’t experienced a real commitment to integration and recognition of its value the way I have here. We are also amongst some of the greatest creative minds and strategists in the industry and I believe this will have a positive impact on the type of work we produce.”

Reatile Tekateka’s seven characteristics of great PR professionals These are people who exemplify empathy in a practical sense. If you can’t put yourself in the shoes of someone who may not know what you know or think the way you think, you cannot advise the business on how best to communicate with its stakeholders. PR is one of the few disciplines in which we are reminded daily that businesses sell to people and ultimately it is people who we need to deliver a message to. Provide clients with solutions that deliver against a holistic brand and reputation management mandate whilst bringing excellence within respective disciplines to the table. Seeing the bigger picture where others can’t. Manage reputations through scenario planning to determine how one action could lead to many outcomes, and prepare for those accordingly. Have an inherent ability to understand people, how they think and how they take in information. Trust your instinct. Once I learned to trust it, I’ve found it to be my true north.

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Johan Raath

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IMAGE CHRIS GIBBONS

Weâ&#x20AC;&#x2122;re not a threat to anybody, and I hope the world realises that...

BY CHRIS GIBBONS, IN CONVERSATION WITH JOHAN RAATH

A Dangerous Living Many businesses carry a specific set of risks, pitfalls or even downright perils. But few can compare with the rebuilding of Iraq under civil war conditions after the invasion by US-led forces in 2003. Former South African Special Forces operative Johan Raath was there for more than a dozen years, working as a Private Military Contractor (PMC). He describes his experiences in a new book, Blood Money, and he spoke to Acumen editor Chris Gibbons during the 2018 Woordfees in Stellenbosch. Do businesses fully understand the level of threat from modern terrorist groups or insurgents? Certain sectors of business understand it, like the oil companies. They’ve been at the sharp end of this for a long, long time. In places like Algeria, Libya, even in Saudi Arabia, oil installations and oil platforms have been attacked. Every time there is an attack, these companies employ more security. In Iraq, where I worked for many years, there’s heavy security on the oil fields. And it costs big money, hundreds of millions of dollars per year per firm. And that gets absorbed by the end user, the consumer. In Africa, the mines, like in the Congo, there’s always a level of security that needs to be maintained. The people in charge are normally security specialists, like me, and we get paid a fair amount of money. It does depend on the threat level in a particular country as well, but whatever happens, where there’s security involved, the consumer carries the costs.

PMCs only get used per contract, and then we go home and we don’t have work. But if you enlarge your army and you bring more battalions and divisions you have to pay those soldiers, you can’t send them home afterwards, and that’s costly. PMCs don’t need mess halls or hospitals, nor do we have pension funds, so in reality we earn much more money than soldiers, but it costs the companies and the governments involved much less than to use a regular army.

Why are so many governments so scared of PMCs? Is it because you call yourself a PMC, but, in reality, you’re a mercenary? There’s a very fine line between mercenary and PMC. An individual could be either and it’s the job description that defines which. A mercenary is classed by the UN and certain world powers as someone who partakes in active combat. And some support organisations are also blacklisted or embargoed by the UN. So, you need to choose your sides very well. Make sure you don’t get involved in offensive operations, make sure you go as a protector, trainer or mentor because if you go out with the military and you’re involved in operations, that’s classed as mercenary work. If you go to protect and you only shoot back when your life or your client’s life is threatened, that’s not mercenary activity. That’s self-defence. But you use your soldiering skills. So, me, as a soldier, I could go and fight a war in a country somewhere for a rebel group that’s on a blacklist or that’s anti-government, and I would be classed as a mercenary. Or I could go to the same country to protect people working on oil installations or mines or that are supported by the government or the UN, and I’d be a PMC. Choose your jobs very carefully is what I always tell the guys!

What’s the role of a PMC in this kind of environment? The role of the PMC in a conflict or war zone is to free up soldiers to fight the war, and that’s what happened in Iraq and Afghanistan. A lot of people say we were just hunting the money. Yes, you get remunerated well, but bear in mind you don’t have a pension fund, you don’t have a medical aid, you don’t have a housing allowance like a soldier, and governments have done calculations which show that it’s cheaper to use PMCs than to enlarge the army, because a standing army costs you money.

...whatever happens, where there’s security involved, the consumer carries the costs.

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Would it be fair to say that a lot of governments, including South Africa’s, are very scared of the PMC concept? Yes. And I understand why, because remember we are all guys with ex-military skills, we have been in combat zones, we know how to fire firearms, we know how to conduct combat, and I think governments are scared of them because of the potential for power. There are large corporations in the world at the moment, American, British, and so on, which employ upwards of 20 00030 000 private soldiers on their security teams. These are guys with experience, ex-military, ex-special forces, they’ve been all over the world, and they could very easily become a force to be reckoned with. Governments, especially in Africa, with its history of coups d’état, are scared that such people could get contracted to overthrow them. History supports that view: remember the mercenaries of the old days like Bob Denard, David Stirling and “Mad Mike” Hoare? Those guys, yes, they did things that the world frowned upon and there are still things going on at the moment. But if you look at the ratio between the good work that private military contractors do and the number of coups or wrongdoings, it’s a very low percentage. I think 97%-98% of our work is legitimate. We’re not a threat to anybody, and I hope the world realises that, not only from a support point of view against terrorism and protection but from a financial point of view, too. PMCs can really help people safeguard their assets and companies; just make sure you recruit the right companies, the right people and make sure the job descriptions and missions are of a nature that is not blacklisted, sanctioned or criminally orientated. There’s a big role for PMCs to assist business in safeguarding their assets.

The Americans seem to understand the PMC concept better than most. You end Blood Money by suggesting that more and more South Africans with your kind of background are being employed by American firms? Yes, the Americans did not sign the 1989 UN Convention that classes PMCs as mercenaries if you partake in certain missions.

They refuse to sign it. So, in their eyes, there is a big role for PMCs. They took the lead on this in the 90s in Kosovo and Bosnia – even after the ’90-91 Gulf War, they started using PMCs in a limited capacity. But it was really with the advent of Iraq and Afghanistan that it came to the fore. The American government… well, it depends who’s in power, too, because the Republicans see PMCs as an asset and the Democrats see them as a threat. But the Bush government spent vast amounts of money on private military contracting. I’ve worked mainly for American firms in my career and they’re professional and they look after their private military contractors.

Blood Money – Stories of an exRecce’s Missions as a Private Military Contractor in Iraq by Johan Raath is published by Jonathan Ball at R260.

South Africans like you – exRecces, ex-special forces, are particularly, highly regarded? I must say the British, and specifically the Americans, really like the South Africans. They see our value. We don’t complain, we just put our ears back and we work. Some of them that I’ve worked with, Americans and Brits, and so on, European nations like the French, you know, if the air conditioner is not working and it’s hot they complain. If they’re in Africa and the mosquitoes and the goggas bite them, they complain. They want to live in a way that they grew up. But we, for some reason, seem to absorb hardship a little bit better. And there’s the old saying: ’n boer maak ’n plan. I’ve seen that, because in scenarios where things go out of the ordinary, we box on our feet a little bit faster than most.

BUSINESS TAKEAWAYS SO, YOU THINK YOUR BUSINESS MAY NEED TO HIRE PRIVATE MILITARY CONTRACTORS TO BEEF UP SECURITY? IF SO, YOU NEED TO: Investigate and fully understand the level and nature of the threat the company is facing.

Discuss your concerns and options with professionals, including local police officials and other companies operating in the same environment.

Make sure you thoroughly understand local laws and regulations about what you can and can’t do: a PMC in Country A may be considered a mercenary in Country B, with severe consequences.

Gordon Institute Of Business Science

BY YORK ZUCCHI AND ANKE SCHAFFRANEK

Solving the SME Disconnect The SME sector is widely seen as Africa’s solution to joblessness and growth, and it’s receiving lots of help. Trouble is, few support initiatives are offering what SMEs need most: help building a sustainable client base.

Forget Africa’s demographic dividend. If we don’t find a way to enable sustainable economic growth that creates lots of jobs, we have a demographic time bomb on our hands. The figures tell it all: Africa is expected to account for more than half of global population growth until 20501 and its youth population will double by 2050, reaching 830 million.2 Many of these predominantly young people will battle to find work. More than half of South Africa’s youth are expected to remain unemployed, the highest in sub-Saharan Africa; in the rest of the region, the trend is expected to be downwards.3 Overall, South Africa’s jobless rate remains high at 26.7%.4 There’s consensus that the best solution is to grow the SME sector. This makes sense because already it is estimated that 72

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SMEs account for 95% of all businesses in Africa and they are therefore the biggest source of jobs. Globally, it is estimated that SMEs contribute 50% of jobs and more than 35% of GDP, and Africa is thought to be very much in line with these figures.5 Certainly, in South Africa, 35% of GDP is contributed by SMEs, with a target of 60-80% over the next 10-15 years.6 Also a plus: the huge majority of South African SMEs are blackowned: 92% of microenterprises and 82% of small businesses.7 By growing this sector, government can potentially achieve empowerment targets as well as provide desperately needed jobs. Not surprisingly, the SME sector is currently the beneficiary of a growing torrent of money, advice and other sorts of help from government agencies, NGOs and the private sector.

All well and good. These youth development funds, incubators and other SME support schemes do good work. But all these wellintentioned initiatives are failing to address the one thing that SMEs need if they are to grow and employ more people: a stable client base.

It’s not about the corporates

A key problem is that policymakers and donors see things through corporate glasses. Too much emphasis is placed on forcing corporates and government projects to employ SMEs. Great idea on paper, but in practice it does not work so well. Large projects have punishing deadlines and hefty financial penalties. Corporates, if they are honest, see inexperienced, poorly capitalised operators who need constant hand-holding as a risk, an unpalatable cost of doing business. Worst case: the SMEs employed on a big project to meet contractual or other requirements are often sidelined because they are just too much trouble. The contractor essentially pays twice, and the SME fails to get the valuable experience that would make it a better business. And, frankly, we should not blame the corporates. Shareholders and citizens alike are the ones who suffer when big projects run late or experience quality problems. But, at the same time, we need to recognise that corporates can help and want to: a growing economy and low unemployment are very much on their agendas, just not at the expense of their businesses. The same kind of dynamic, by the way, plays out with interns. Graduates focus on getting internships with corporates but end up learning little. Certainly, the corporate gets little value. Graduate interns would actually learn much more by working for an SME, and the SME would certainly benefit. Another misconception is that access to funding is an SME’s primary need. Make no mistake, funding is critical but there are already many, many funding schemes. However, many of them focus on high-growth SMEs that offer investors potential returns in exchange for shares, whereas most SMEs are not looking for shareholders so much as operating capital. In reality, the one thing that prevents an SME from obtaining funding in the normal way, from a bank, is a lack of clients and thus of cash flow.

Like calls to like

Those clients should ideally be other SMEs. An SME has a built-in advantage in servicing another SME. They are much more likely to speak the same language (in every sense), and will fit together better in terms of capacity and process maturity. The chances of building a lasting business relationship are good.

By contrast, any SME attempting to service a large corporate finds itself at an immediate disadvantage: it has to fit in with the corporate’s often onerous process and governance requirements, and it will have to tamely submit to its payment terms. A corporatesize order will often break an inexperienced SME.

Getting SMEs what they need Based on our many years of experience in this space across Africa, and as investors, the following need to be put in place to create an SMEsupportive ecosystem for the continent – and the world. SMEs lack time and capacity, so what they need is an easy way to access clients and everything else:

Thus, while big jobs with corporates or government are nice, these really are not the foundations for a successful small business in the majority of cases. SMEs should be looking for their core client base amongst their peers – which makes sense as SMEs make up the majority of the economy across the continent.

Provide SMEs with a way to find clients and/ or suppliers within their peer group, and create lasting links. Provide corporates with a way to locate SMEs that could supply them with non-critical products and services. Examples would be running a coffee shop, refurbishing office furniture or running an event.

Clients – the right clients – are what SMEs need to be successful. But our extensive experience across Africa is that while there is an abundance of SMEs run by good people, it is very hard to locate them. What you are looking for is probably there, but how do you locate it? It’s bad enough in Joburg, but in the rest of Africa it is really beyond challenging.

Provide corporates with a way to identify innovators with an idea that could improve its brand image and could ultimately benefit its bottom line – and incubate that SME within the corporate organisational structure. Provide a way for SMEs to access all the educational, funding and other opportunities that governments and NGOs offer – in one place.

So yes, incubators can help SMEs get up and running, and Provide a way for SMEs and recent access to first-round funding graduates to hook up. Interns get more hands-on experience, the SME gets a is critical. Corporates, NGOs smart person to help. and government can play a role as funders, clients and providers of information. But if we truly believe that SMEs are YORK ZUCCHI AND the engines for job creation and economic ANKE SCHAFFRANEK growth, then we have to look at their needs are seasoned investors and through their eyes, not through passionate advocates of Africa corporate eyes. business. They are part of What SMEs really need, in short, is an ecosystem designed for their realities.

the group setting up a global ecosystem for SMEs, www.smemovement.org.

SOURCES United Nations figures, available at www.un.org/en/sections/issues-depth/population. International Labour Organisation figures, available at www.ilo.org/addisababa/media-centre/pr/WCMS_514566/lang--en/index.htm. International Labour Organisation figures, available at www.ilo.org/addisababa/media-centre/pr/WCMS_514566/lang--en/index.htm. 4 Trading Economics figures for Q1/ 2018, available at https://tradingeconomics.com/south-africa/unemployment-rate. 5 Sokhna Ndaye, The rise of SMEs in sub-Saharan Africa, International Development Journal (20 May 2017), available at https://idjournal.co.uk/2017/05/20/africa-needs-smes. 6 Natasha Odendaal, Number of South African SMMEs growing, Engineering News, (26 June 2017), available at www.engineeringnews.co.za/article/number-of-south-african-smmes-growing-2017-06-26. 7 Natasha Odendaal, Number of South African SMMEs growing, Engineering News, (26 June 2017), available at www.engineeringnews.co.za/article/number-of-south-african-smmes-growing-2017-06-26. 1

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Sponsored Case Study

Harnessing the Cloud Five years ago, the cloud was thought to be a platform where people stored music or documents. Now, it has become acknowledged as a massively powerful platform that enables large organisations, like banks and other financial services providers, to move with the agility of a startup. But no matter how mature the IT organisation is, you will still need an expert to make sense of which technologies within the cloud are appropriate and to help you implement them in the most practical way, with the biggest benefit as a result. That’s where Johannesburg-based Synthesis comes in, a company that specialises in helping enterprise customers translate business strategy into IT solutions with a real, measurable business impact. Imagine rebranding a large bank. It’s a task of daunting proportions, not only because every single document issued by that bank needs to carry the new logo, but also because 100% accuracy in the documentation is a legal requirement. Get it wrong and the bank would almost certainly face a steep fine, or could even lose its licence. Absa, one of South Africa’s Big Four banks, is going through just such a process as it separates Barclays Africa from its Barclays UK parent. No less than 38 000 separate items need to be changed in South Africa alone, with work assisted by Synthesis currently underway to understand the impact of replacing the Barclays logo in Africa at a later date.

...it would be wasteful to procure the infrastructure and build the app just for this one event. Synthesis MD Michael Shapiro explains this kind of work is almost impossible to perform manually within the timescales, but it’s ideal for the cloud. “In terms of Absa’s rebranding exercise, all of these artefacts have to go through a Synthesis-developed and cloud-hosted application check to find and replace the old logos. The cloud is perfectly suited for this type of project because you don’t need to order hardware and wait for it to arrive and then purchase an application to deliver it. Cloud allows for agility and the ability to move and scale up very quickly. That’s because you’re utilising the provider's infrastructure on a pay-as-you-use basis,” explains Shapiro. The provider is Amazon Web Services (AWS) and Synthesis was first to achieve Advanced Consulting Partner status in the 74

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Middle East and Africa. Launched in 2002, AWS is a subsidiary of Amazon.com and it’s the dominant force in on-demand cloud computing, with a 34% of global market share, as of 2017. Little-known outside the industry is that one of AWS’s core service developments took place in Cape Town. Shapiro says that Synthesis’ relationship with Absa began as a cost-saving exercise: “But quite quickly they realised, like many other customers on this journey, that actually the real benefit is the innovation that these cloud technologies and services offer.” AWS has more than 130 different services sitting on the basic cloud infrastructure, and Shapiro points to two which have been vital in the Absa rebranding exercise. The first is an artificial intelligence platform called AWS SageMaker, and the second an image recognition service called AWS Rekognition. The latter can recognise objects, including human faces registering different emotions, using neural networking knowledge technology. Just the thing to pick out the old Barclays logo and replace it with Absa’s new one in every one of those 38 000 artefacts, including bank statements, templates, brochures, internal documents, proposals and so on. “Because of the combination of massive power and innovation, it’s also done in a very cost-effective way,” notes Shapiro, adding that an event like a rebranding exercise might happen only once in a decade. “So if you think about it, it would be wasteful to procure the infrastructure and build the app just for this one event. The real benefit of these cloud technologies, other than the innovation, is that they can spin it up, utilise it while a project is on the go, pay while they’re busy using it – on a per-second basis – and then, once it’s concluded, shut it down and not incur any further costs associated with the project. It makes the ROI and cost hurdle extremely low to start enabling these kinds of projects. It has also put into the hands of South African customers technology that’s available and accessible to global technology giants – obviously with the right skill set. Which is where Synthesis comes in.”

Sponsored Case Study

Part of what we do is called co-creation. 12 months, Cim has been able to launch a new business with a functional system, with a roadmap to utilise a digital-first approach to consumer finance, with a view to provide reverse innovation back into the Mauritian head office. To this end, alternative credit-scoring was noted early on in the Cim Kenya roadmap. In particular, leveraging information from Kenya’s well known M-Pesa technology and social media have been earmarked as two alternative credit-scoring sources that the business intends to utilise in the near future.

Michael Shapiro

Slow credit

Another Synthesis client success story involves Mauritian-listed Cim. Shapiro explains that Cim is a diversified group, but a large part of its business is financial services, with one part focusing on consumer finance for a lower LSM market. This segment buys relatively low-value white goods, often on credit. “The problem was that the consumer would enter the store, decide to buy an item, would need credit and apply to Cim for finance. This would involve filling out an application form, which would be sent to CIM for approval and which would only be returned a day or so later. But by that time, the consumer had left the store and might have changed his or her mind about the purchase or have bought the item elsewhere,” says Shapiro. “Our solution for CIM was to develop a tablet-based application whereby the merchant, as part of the sales process, can apply for credit for that consumer. The information goes directly to Cim head office where it’s assessed using Cim’s current credit approval system, and the credit decision is given within minutes. The consumer with approved credit can walk away with the item there and then. “It’s an innovative way of using technology to modernise and digitise a process that was fairly cumbersome and problematic to both the business and the end consumer.” Shapiro reveals that Cim has now taken a similar model to Kenya: “It’s the company’s first foray into Africa, outside of the Mauritian island, and they’ve had massive success there. Within

Synthesis was the developer of the mobile applications, the front-end application for the in-store tablet and the orchestration and integration into the respective back office systems, working with the Cim teams.

Business model

Both case studies outlined above speak to Synthesis’ business model: “We help large enterprises – mainly financial institutions, the large Tier One financial services enterprises – behave, think and innovate like start-ups. We help them to become more agile, leveraging technology to create new offerings or evolve their existing offerings,” says Shapiro. “Part of what we do is called co-creation. We’re not about taking over and running these projects. We work with the teams on site with those customers and we work with third parties like AWS, or other appropriate technology providers, to provide the best solution to enable their fintech objectives.” Asked what makes Synthesis successful, Shapiro’s assessment is direct: “It’s our ability to critically review, assess, and then implement these technologies at the right time to give the highest impact to the banking customer. To help the banks and other financial services institutions implement critical technology initiatives quicker, cheaper and in a more innovative fashion.”

Phone: +27 (0)87 654 3300 Email: admin@synthesis.co.za Address: Unit 11a, 2nd Floor, 3 Melrose Boulevard, Melrose Arch, Johannesburg Gordon Institute Of Business Science

BY CAROLINE HURRY

Meet, Play, Work Away Meet a new breed of digital nomads. If you have work to do, why not do it from a deckchair on a tropical island? Remote trips and tasks without borders have become just the job.

life I love, instead of one I wanted to escape. Now I manage my own time – working late some nights but doing yoga until after 11 most mornings – and I feel a sense of purpose.”

Meeting deadlines from a CBD office is so 1990s. Today’s creatives craving fresh perspectives pick up their projects and hit the beach in Bali, or wherever their muse might be. Why be chained to a desk when you can graft from a hammock under a palm tree? Goodbye work, hello workation!

Flexibility is key. “The traditional way of working is counterproductive if you have to sit in traffic for hours inhaling fumes,” says David Oosthuizen, 42, co-founder of Workation that connects creatives needing a place to meet and work, with hosts offering a suitable space. “We see ourselves as the Airbnb of the working place. We roll out work-friendly territories all over the world, making it seamless to work on the fly.”

It’s the latest business/travel trend; a way to experience a different lifestyle without taking the full plunge. Of course, your job should be portable ‒ needing just a laptop and Internet connection. And you should be, at least temporarily, commitment-free. For those who meet the criteria, companies such as Unsettled, Workation, and WY_CO will ‒ in return for a fee ‒ provide accommodation anywhere from Argentina to Zanzibar, a shared office space, and a ready-made community for company. After a Skype interview to make sure you’ll fit in, you sign up for a month, a year, or anything in between; then pitch for work on your first day in a foreign city, secure in the knowledge that later – if you can’t face sliding a solo chop under the grill – you’ll have friends on tap to discuss your next destination over a beer. After working as a site-bound exhibition designer, Mel Cooke, 28, of Cape Town, quit her job to start her own interior design enterprise. She decided to build her business plan in Bali and signed up for a month with Unsettled last year. “Working with like-minded people I could ask for guidance, and making friends while exploring a beautiful island is what I cherished most,” she says. “I wanted a semi-structured trip where I could figure out the process of my next project. My workation taught me to build the

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An inveterate traveller, Oosthuizen recently attended the Festival of Creativity in Nice but the Workation idea was born two years earlier in New York. “My co-founder Wayne Levine and I could not find a suitable place to pitch a proposal to an American colleague. Eventually we paid a hotel nearly a full day’s rate to use their boardroom, projector, whiteboard and printer just for an hour. I knew there were others like us, needing a working place with the necessary facilities just for a short time.”

Escape artistry

Today, while thousands combine their love for travel with work ‒ making video calls from a café in Dubrovnik or hot-desking in the nearest ‘co-working space’ sources predict the rise of a billion digital nomads by 2035.* “We enable people from South Africa to Singapore to work wherever suits them, whether a coffee shop or beach house. Millennials, in particular, don’t want to be confined to one place. They want ‘work-where-you-are’ mobility. They want a healthy travel lifestyle. It’s why freelance jobs are at an all-time high,” says Oosthuizen.

I go where the interesting people are. Fellow Capetonian, Annette Muller, 33, tech entrepreneur and founder of Flexy that provides companies with ‘a curated community of digital nomads, adventure seekers, innovation addicts, experts, freelance professionals, and software’ agrees. “Freelancing has exploded as more companies adopt an irregular workforce to increase productivity, relieve stress in existing teams, access global expertise and more diversity of skills, all the while cutting costs by up or downscaling on demand.” After googling ‘companies that embrace #flexyworking’, Muller signed up with Unsettled and last year alone, met her deadlines from Mozambique, Greece, Lesvos, New York, Iceland, Bali and Jeffreys Bay. “I go where the interesting people are. I love connecting with local communities and experiencing life in a new country,” she says. “By adopting a new kind of leadership without borders approach, I had to ‘unlearn’ a lot. I used to believe travel was either for holidays or work. Since I learnt to combine both, every day is an adventure. “I still have investor responsibilities and I come ‘on-site’ for board meetings but our entire Flexy team works remotely. We love it.”

Clockwise from top left: David Oosthuizen, Mel Cooke, JD Stuart, Annette Muller

The time is now

Jean Dirk (JD) Stuart, 33, from Hartbeespoort, calls himself a digital nomad. “It’s my chosen lifestyle,” says the principal engineer for a global mobile payments company, who signed up with WY_CO and now spends every month in a new country. “I still do programming sometimes, but mostly I collaborate and co-ordinate with teams across the world.” Stuart has worked in Bali, Cambodia, Indonesia, Argentina and is heading for Barbados, Split and Belgrade. He may return to South Africa later this year “depending on how things pan out”. “I always wanted to see the world but the time was never right. Newsflash! The time will never be ‘right’ unless you pick a date.

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Goodbye work, hello workation! I found WY_CO after some cursory research, applied online, did a video interview, and got accepted into the programme. The process was easy. “I’ve met accountants, software engineers, life coaches, recruiters, graphic designers, marketers, sales reps, executives, you name it. We digital nomads are a diverse bunch but travelling as a group creates a form of community. Obviously, you bond with some people more than others, but we do regular potlucks, beach days and fun excursions together. “Few enjoy being told how and where to work, yet that’s what most settle for in their jobs. For me, summer days are best spent on the beach, while I’m more productive in the evenings. I take time off when I need it. I value my holidays and whether it’s a day or three weeks, I don’t check emails. I can be reached by phone, in case of emergencies. “Spending two months in Cambodia made me realise how little we really need. Travelling with one suitcase for a year makes you think twice before buying something, accepting a gift, or packing just one more thing.” Of course, there’s nothing to stop you packing your laptop and heading to, say, Stockholm on your own for a month, but you run the risk of feeling isolated when a workation is all about community. “If I want to go paragliding, I ask Sarah and Jake. Scuba diving? That’s Mark and Jennifer. Opera house? Kerry and Barbara will have great recommendations,” adds Stuart. For women it’s more than just the social interaction. “There’s safety in numbers,” says Muller: “During my stay in Bali, seeing so many fabulous women stepping out of their comfort zones and travelling solo, inspired me to build my own company around the principles of freedom and flexibility.” Best of all, no more post-holiday, back-to-work blues since you never really left work. It just came with you!

Get going Switch off Spend enough time away from your computer to allow your new surroundings to refresh you. Set your phone to airport mode when you need time out.

Co-ordinate Ensure your destination has good Wi-Fi and arrange to keep in touch or conduct conference calls on Skype.

Prepare Plan for times that work best with your office schedule or tack a workation onto a travel conference so you don’t have to fork out extra for airfare.

Timing Prove you can deliver the goods irrespective of where you are. It’s best to propose the idea of a workation to your manager right after you’ve delivered on an important deadline.

Holiday play While workations are fun, work-free holidays are also essential for minds and bodies to rest.

Cut costs Many workationers either sub-let their apartments while they’re away or swap homes with a fellow traveller to save on accommodation expenses. REFERENCES/WEBSITES Unsettled: https://beunsettled.co Workation: www.workation.co.za Flexy: www.flexyforce.com WY_CO: https://medium.com/weroam *1 billion digital nomads figure: https://levels.io/future-of-digital-nomads

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BY CHESKA STARK

Business fashion

BUSINESS WEAR IN THE SPRING TIME A new season is always a great time to relook and refresh your wardrobe. As spring is upon us, we turn to the latest runways for inspiration on what we should be wearing, both in and out of the office.

that gets you 1 Colour noticed

There is nothing subtle or neutral here, the spring palette is all about bright and I am loving it. There are basically two ways to wear this trend: colour blocked or 1 colour: 1 outfit. On first sight, this trend may look a bit daring for you but it’s not: choose a bright dress and you will be bang on-trend. How easy is that? As for the men, pink isn’t going anywhere so you may as well embrace it, but it’s all about the right pink: blush rose is the way to go. I wouldn’t go head to toe pink, even if you are the Millennial of the moment, but think a casual hoodie or a great shirt. Seen on the runway: Tom Ford, Marc Jacobs, Dunhill (for men)

2 Anything transparent

This is such a beautiful, whimsical trend which I love. Skin-showing dresses in structured, clear silhouettes are what makes this trend very 2018: it’s not just the see-through that does it but the garment needs to have interesting lines to it. Note: Not one for the men. Seen on the runway: Jason Wu, Jeremy Scott

Denim goes fancy

OK, so you aren’t going to wear your bejewelled jeans to work but any time after dark these will be your best friend. Please note: you may not wear these with flats, they are all about the Wow! factor and think about your layering. Look out at Zara – I guarantee they will have them on the shop floor asap. As for men: your denim this season is the indigo jean (and matching jacket if you are brave enough). Seen on the runway: Valentino (men), Alexander Wang (women)

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IMAGES SHUTTERSTOCK

5 Americana

No, not the towelling-lined windbreaker that you packed for camp back in high school. This season’s anoraks have a distinct 90s vibe to them but think more urban and interesting, with great silhouettes and bold colours.

Yes, we’ve seen it before and will definitely see it again: Americana seems like a classic that shows up every spring/summer. This is not to say the stars and stripes, red, white and blue, isn’t a favourite. If you ask me, nothing beats a Coco Chanel inspired Breton stripe which everyone should own… this trend is slightly harder for men to embrace – I can’t imagine my husband rocking stars to work, but keep the trend in mind when you are picking out your new shirt or casual wear for the season. Navy: tick, white: tick, red: tick! Also, try embracing the vertical strip (as shown on the Versace ramp).

Seen on the runway: Oscar de la Renta, Calvin Klein

Seen on the runway: Calvin Klein (women), Versace (men)

4 The 90s

Mix prints up

Bold patterns came out to play at London Fashion Week and I love the result. Although I have never been very daring with my own fashion, this trend has always spoken to me: mixing the patterns creates the interest and excitement you’ve wanted from your looks. In the office, you might not want to go head to toe crazy print – but work with what you have and what is appropriate: a printed skirt and printed scarf perhaps? Seen on the runway: Burberry, Emporio Armani

IMAGES SHUTTERSTOCK

TOP TIPS FOR SHOPPING FOR THE “IT” ITEM OF THE SEASON: I like to look at the “cost per wear” factor and decide whether an on-trend item is really worth the price. We have a great variety of reasonable stores, which also happen to be the most on-trend with a fast turnover of stock. Think H&M, Cotton On and Mr Price for those very trendy pieces. When trying out trends, remember it is not “dress up” and always avoid looking costumey. You don’t need to embrace a trend for your entire look: choose one item that works for you – the addition of a scarf or bag, a great shirt or a new blazer.

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BY STEPHEN SMITH

The Motoring Business Two in-depth reviews of cars which are equally impressive, each in its own right. OUTSIDE Very few companies style a car as well as the bunch from Turin, but even for an Alfa this one has its curves in all the right places. It all starts with the trademark triangular grille, which flows into accent lines on the bonnet, merging with the A-pillars before continuing down the flanks. The lights, both front and rear, reinforce the stylish nature of the vehicle, while allwheel options (from 16-inch to 19-inch) add to the vehicle’s overall elegance.

INSIDE

Senior Management

Alfa Romeo Giulia WHAT IS IT? Sensual and aggressive, the Giulia is the car to take Alfa onward and upward, thanks to an investment of billions of dollars. With that sort of R&D budget you’d expect it to be good, and it is. Essentially it’s a new rival to the old firm of Audi, BMW and Mercedes, and the first genuine one from Alfa in years.

WHY THIS? It’s not one of the Teutonic trio, and there are quite a few people out there for whom that is very attractive. To them the office car park is too full of cookiecutter premium cars that say little about the driver, other than that they can afford to drive one. The Alfa, be it the standard Giulia or the outrageous Giulia Quadrifoglio (designed to beat the BMW M3), fulfils this brief by being Italian and gorgeous, and an uncommon sight on our roads.

As you’d expect of a driver’s car, the Giulia focuses its attention on making the driver feel actively involved – this is no American armchair on wheels. The driver’s seat is low and sets you up nicely in front of wellpositioned pedals and a lovely steering wheel that incorporates the engine start button, while the dials are all canted slightly towards you. Standard features include dual-zone climate control, the Alfa DNA system and 6.5” Connect infotainment system. One thing that is important to mention is that the Giulia achieved an overall Euro NCAP rating of 5 stars, and the highest-ever score (98%) for adult occupant protection. So you can drive one and claim you’re exercising due responsibility to your shareholders…

THE DRIVE During development Alfa executives promised a chassis that would rival anything in the class, and they have delivered on that promise. The Giulia is engaging and fun to drive, far more so than just about every rival, and the engines don’t let it down either. Standard issue is a 2-litre turbocharged petrol engine that produces 147kW and 330Nm, accompanied by an entertaining soundtrack. Shell out for the Quadrifoglio and you get something very special – a 2.9-litre V6 engine with two turbos, capable of producing a whopping 375kW and 600Nm, for a 0-100km/h time of just 3.9 seconds. All models make use of an 8-speed automatic gearbox with steering wheel paddles.

FINAL WORD If it’s important for you to have a sense of personal identity in a corporate environment, or perhaps if you’re in the creative field, give this cracking vehicle some consideration. It’s the kind of car that excites you before you even set foot in it, and considering how many hours most of us spend commuting, you might as well be excited about that part of your day. The incredible safety rating can’t be ignored either. 82

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GO GET IT On a style-for-money basis the Giulia is very hard to beat. Prices start at R616 900 and go all the way up to R1 426 000 for the Giulia Quadrifoglio. Giulias come standard with a 3-year/100 000km warranty and a 6-year or 100 000km maintenance plan. Visit www.alfaromeo.co.za for more information.

OUTSIDE The Arteon is art in motion – it is a spectacular sedan that turns heads, embracing the nowcommon concept of “a sedan with the lines of a coupé”, and doing it very well indeed. Far more aggressive and sporty than we’re used to from VW, the Arteon is particularly impressive from the front, while the low and tapering roofline masks the dimensions very successfully.

INSIDE If you ever want to bring to the boardroom table an example of how a company can evolve, show pictures of the interiors of a 1950s VW Beetle and the VW Arteon – the ‘people’s car’ has come a long, long way. We cannot stress how spacious it is for four adults, and even five. In fact, VW put such stress on rear passenger space that it seems as though the rear seats might have better leg, head and elbow room than up front! Actually, VW apparently designed the rear space specifically for businesspeople (mainly in China) who are driven to work and use the extra space to get some work done en route. There are two trim levels, Elegance and R-Line, and both are well equipped for comfort and convenience. The boot is huge, and because of the fastback design has a vast opening, which means that if you fold the seats flat you could probably fit your desk in the back.

Middle Management

Volkswagen Arteon WHAT IS IT? Step aside Passat, for here is a sedan that truly deserves to be at Volkswagen’s pinnacle. A four-door fastback with monumental interior space, premium finishes and the looks to take you places, the Arteon is the perfect package for the conservative businessman who wants a car that looks daring but is actually a sensible buy.

WHY THIS?

THE DRIVE

The Arteon is the best of both worlds (or even three worlds): it’s hedonistically attractive, more practical than you can comprehend without experiencing it for yourself, and made by one of the bestloved vehicle manufacturers in South Africa, and the world. And to be honest, it’s priced pretty competitively compared to its peers. It is the perfect car to send a strong message to your colleagues: you’ve got taste, but you don’t need your ego stroked by driving a car by one of the ‘premium’ manufacturers. (Little do they know that the Arteon is every bit as good as anything else from Germany.)

No matter if it’s petrol or diesel you’re after, you’re catered for by a 2-litre engine. The turbodiesel 2.0 TDI is economical (5.6L/100km) and powerful (130kW and 350Nm), with a 6-speed automatic gearbox. But the engine that best matches the Arteon’s road presence is the turbocharged petrol 2.0 TSI, which produces 206kW of power and 350Nm of torque, using a claimed 7.3L/100km. It has a 7-speed automatic gearbox and comes standard with VW’s 4Motion all-wheel-drive system. On the road it’s a great all-rounder, but it really stands out as a long-distance cruiser, lolloping along on its sumptuous suspension.

FINAL WORD This is the car that has elevated VW to new heights, that has given it a real chance of competing with BMW, Audi and Mercedes in the sedan and GT market. Don’t write it off for its lack of status.

GO GET IT Prices are easy to remember: R600 000, R650 000 and R700 000, for the 2.0 TDI Elegance, 2.0 TDI R-Line and 2.0 TSI R-Line 4Motion respectively. All Arteons come with a comprehensive 3-year/120 000km warranty as well as a 5-year/90 000km maintenance plan. Visit www.vw.co.za for more information.

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AKI ANASTASIOU

Technology for Business Hey Jude Time is money!

Price: R199 per month

How much is your time worth? It's an interesting thought when you consider how much time we waste trying to do mundane things or tasks that consume too much time during the day. Hey Jude is a South African app that is basically a virtual assistant at your fingertips with the help of humans. Simply download the app and once you’ve subscribed, you will be able to send texts or voice notes of your tasks to a human personal assistant on the other side. If it’s a restaurant reservation, booking flights or even getting tickets to your favourite sporting events, Hey Jude will make it happen! And you can use the service as often as you like, 24/7, all year round, from anywhere in the world. You may ask yourself how on earth do they do all of this? They have highly experienced specialist assistants or ‘Judes’ on the other side, coupled together with some artificial intelligence (AI) systems that allow them to handle large volumes of requests.

Ring 2 Doorbell The traditional doorbell reimagined Price: R6 000

Now here’s a gadget that is absolutely fascinating and has multiple uses, both on the home and business front. Imagine a doorbell with a camera and connected to your Wi-Fi network. Once the doorbell has been installed on your door (BTW if I could do it, then anyone can – I’m a DIY disaster), download the app and you’re ready to go. Anyone who rings the doorbell will get connected to you via your phone, tablet or computer. A live HD video stream will pop up on your device and you can have a two-way conversation with the person on the other end. You could also use the video feed to just check on your entrance area at any time. But for me, the business story behind Ring is what’s inspirational. The motto of this company is to make the world a safer place. Jamie Siminoff, its founder started, off in a garage in 2012 together with three engineers. In 2013 they appeared on the popular Shark Tank television show in the US in the hope of getting more funding to take their products global. He was turned down. Nobody would invest in a Wi-Fi connected doorbell. Let’s be honest, not many reading this would have either. But these guys persevered, they had a mission and they had more products to roll

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out. After countless rejections and hitting rock bottom, Sir Richard Branson came on board as an investor and today this company is worth over a billion dollars! They have a wide range of homeconnected security products from outdoor lights to intelligent lighting. It just goes to show, in this everything-connectedto-the-Internet world – anything is possible. Even the traditional ding-dong doorbell has been disrupted. It’s a lesson for all businesses in a challenging digital environment – look for that Uber moment everywhere and never give up!

Nokia 8 Sirocco Guess who’s back? Price: R11 000

If you’ve been around for a while and started using a mobile device two decades ago then the name Nokia should bring back memories. It is difficult to believe that a decade ago, Nokia was one of the world’s most valuable brands. But just like Blackberry, Kodak and Blockbusters, they failed to evolve quickly enough and understand what their customers really wanted. Can a phoenix rise from the ashes? Nokia seems to think so. They have gone back to basics offering fantastic design, build quality and a great camera. Their new flagship device, the Nokia 8 Sirocco will look good on any boardroom table. The slick design and rounded edges stand out immediately. It uses Google’s stock operating system which means it is not bloated with unnecessary software and you get the latest Google updates as they come out. It feels solid thanks to the single piece of stainless steel that has been engineered to make it feel slim and elegant. The 12MP wide-angle camera with Zeiss optics takes glorious photographs. The phone is very nippy thanks to 6GB of RAM and with 128GB of storage, you should be more than OK with space. Nokia is back with a bang but they have plenty of catch-up to do before they get close to the likes of Apple, Samsung and Huawei.

Yekani Manufacturing Africa’s first smart factory Price: R1 billion

I recently travelled to East London for the launch of South Africa’s first smart factory. I had no idea what to expect. Walking into the Yekani premises in East London’s Industrial Development Zone was jaw-dropping – a 28 000m² stateof-the-art production line, the same technology used to make the world’s top high-end devices. At a cost of R1 billion, with stakeholders such as the Department of Trade & Industry (DTI) and big financial institutions, Yekani hopes to take technology to the masses. Making smartphones and broadband more accessible has a direct impact on GDP growth and this is the impact that they hope to have on the continent. The factory will produce electronics across a broad range of industries that include aerospace and defence but the focus will be on Yekani-branded smartphones, tablets and computers. Yekani Group CEO Dr. Siphiwe Cele told me that their products will be aimed at enhancing the 21st-century classroom experience for both teachers and students, with the goal of improving the standard of education throughout South Africa. The roll-out of affordable tablets and smartphones is expected to begin during the third quarter of 2018.

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BY CHRIS GIBBONS

Books Political Tribes

Win!

Bloomsbury – R285

Jacana – R240

This is first and foremost a book about America, but it’s also about the rest of the world and how humans operate. In particular, Yale Law Professor Amy Chua explains how we form tribes, how loyalty to those tribes transcends almost every other emotion, and how such tribal loyalty affects every political dimension imaginable.

Step into any bookstore anywhere in the world and you’ll be amazed by the large amount of space devoted to books on business. Yet, at their most basic, their offer is compelling: ‘Buy one or more of us and we’ll give you the tools to open the door to a successful career with all the attendant riches!’ And if the first one doesn’t work, there are plenty more just along the shelf.

Amy Chua

Just as important, though, is her observation that where a minority tribe achieves a market dominant position with regard to the much poorer majority, there is almost always a revolution. This is why America, the most powerful nation in the world, lost the Vietnam war. Not only were the Vietnamese implacably hostile to their ancient foes, the Chinese in China, but a Chinese tribe – the Hoa – had achieved market dominance in Vietnam itself. America’s hopelessly incorrect assumption that the war was a struggle between capitalism and communism was, in fact, a push by the Vietnamese tribe for independence. It was fuelled by the fact that almost everything America did to bolster South Vietnam only served to make the Chinese Hoa richer, more powerful and more hated by the ethnic majority. At no point, according to Chua, did the US generals or politicians ever realise this. With chapters on America’s failures in Afghanistan and Iraq, as well as a penetrating analysis of Hugo Chávez and Venezuela, Chua brings us to modern America and the 2016 presidential victory of Donald Trump. In short, she suggests that he was propelled to the White House by several different, mainly white working class, political tribes, like the NASCAR supporters, or WEF fans, or followers of the Prosperity Gospel or a group of conspiracy theorists called sovereign citizens. In common, they share a sense of isolation and exclusion from the mainstream – fertile ground, according to Professor Chua, for politicians like Trump or Chávez, who are perceived as ‘not like the élite, but one of us’. She adds that this same sense of isolation and the need for tribal belonging is exactly what has fuelled radical Islam and ISIS in particular.

Jeremy Maggs

Win! is the new book from Jeremy Maggs, one of South Africa’s best-known journalists and TV presenters, and a canny operator who takes the concept to its logical extreme. Instead of arduous research in the corner of some far-off factory, Maggs simply approached 20 of South Africa’s most successful business personalities and asked them what made them successful. It’s a winning formula – pun intended – and Maggs, who began his career in print, writing for a Sunday tabloid, handles his material with ease and aplomb. Among his subjects, Cheryl Carolus, Adrian Gore, Sizwe Nxasana and Vinny Lingham, and he extracts from each one a pearl or two about how they did it. Read it – it’s easy enough going – and, who knows, you might even find the key that unlocks the door to your own mega-success.

For South Africans, with our rich white and poor black tribes, this is essential reading.

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Dying for a Paycheck

Skin in the Game

HarperCollins USA – R420

Allen Lane – R340

“For what is a man profited, if he shall gain the whole world and lose his own soul?” asks the writer of Christianity’s Gospel according to St. Matthew. Stanford Business School’s Professor Jeffrey Pfeffer might have paraphrased that famous line in more modern times by asking “For what is man or woman profited, if they shall gain the whole world, but lose their health or their life?” In his new book, Dying for a Paycheck, Pfeffer makes a compelling case that many of us are doing just that.

With three major works, Fooled by Randomness, Antifragile and chart-topping The Black Swan to his name, Taleb’s star has been ascendant for a while. He’s iconoclastic, formidably well read, highly opinionated and in his latest œuvre he sets out a simple thesis – “If you give an opinion and someone follows it, you are morally obligated to be, yourself, exposed to its consequences.” In other words, you need skin in the game.

Jeffrey Pfeffer

Pfeffer argues that many current workplace habits, encouraged by managers who should know better, cause unnecessary stress, physical and mental exhaustion, subsequent collapse of health and well-being, alcohol and other substance abuse, loss of family and even premature death through events like heart attack or suicide. His list of culprits is not long. Perhaps the major culprit is the belief that the harder and longer you work, the more productive you will be, and, as a result, the more successful. Employees in many industries in America are encouraged to pull heroic ‘all-nighters’ to get the job done and also to work impossibly long hours generally. Nor is this just an American phenomenon: I know of many industries in South Africa where young up-and-comers are egged on to do the same. That the physical and mental toll is highly damaging should be obvious, but less so is one of the key points of Pfeffer’s analysis: working such outrageous hours does not make the firm more profitable. Companies that have far more humane, even laissez-faire, policies make just as much money. Furthermore, says Pfeffer, there is also a long-term cost that is overlooked: how much you need to re-invest in hiring and training the new employee who replaces the one that has just burnt out or – heaven forbid – dropped dead. Other contributory factors cited by Pfeffer are a lack of healthcare provision by the employer and the practice of laying workers off when business slows down. Both are massively stressful and both can have a severe impact on the health of the individual concerned. Nor is all of this simply Pfeffer’s opinion. As you might expect from a Stanford GSB professor, Dying for a Paycheck is impeccably researched and referenced, his case irrefutable. His conclusion is also alarmingly simple. All of these workplace problems are well within our grasp to solve and to solve quickly.

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Nassim Nicholas Taleb

Fair enough. Taleb applies this notion to politicians, administrators, financial advisers and, of course, journalists and other forms of pundit, including book reviewers. We would have a lot less war, he opines, if armies were led by their generals and presidents and prime ministers from the front. He also makes a good case against bankers, who are paid megabucks when times are good, but never seem to have to write a check when times go bad. Skin in the game is the opposite of the “car salesman [who] tries to sell you a Detroit car while driving a Honda.” If this happens, says Taleb, “he is signaling that the wares he is touting may have a problem.” So much, so obvious and despite swathes of often amusing erudition complemented by dense technical appendices packed with algebraic formulae, I’m convinced that Taleb has fallen for his own marketing material. In other words, he’s watching and listening to himself: a flourish here, a grand gesture there, a name drop here, an obscure reference there; he’s the conductor of an orchestra more intent on the impression he’s creating with the audience than the tune the musicians are playing. I know I’m just a reviewer, that I don’t have skin in this particular game, but I’d still suggest you think twice before you invest your hard-earned cash in this particular book.