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BEE is not just for fatcats

Juliet Newton
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When people hear the phrase ‘BEE’, many of them roll their eyes, think, or make some comment about the Black Billionaire gravytrain tenderpreneur fatcats, and dismiss the entire concept.


They grudgingly capitulate once a year when companies have to quantify their BEE transformation contribution and get their new scores. And this is usually managed by the top financial accountants in an organisation. But in my experience, there is very little understanding of the real transformational quality the BEE codes are able to effect individually, organisationally and nationally.

The BEE codes of good practice have to move beyond a number-crunching compliance exercise for organisations…

… And become a tool that strategically focuses talent, thought, energy and resources on key levers that will help transform our country and its economy.

Let’s consider the intention of some of the codes more closely:

The:

  • Ownership;

  • Management control; and

  • Employment equity codes

are asking organisations to keep focusing on opportunities for not-white South Africans to own, manage or work in companies where, without the compelling legislation, access may not have been so readily created as a matter of priority. These are really the toughest parts of the codes for organisations to comply with as these areas, depending on the decisions and life cycles of people in organisations, are often vulnerable to change. For example, any company can get their ‘management control’ scorecard optimally balanced, only to be hit the following year with senior management exits that disrupt scorecard performance for a couple of years while they hunt or grow new talent into those roles.

But also part of the codes, and much easier to achieve because these can be targeted and managed as these involve spending, are:

  • Skills development;

  • Preferential procurement;

  • Enterprise development; and

  • Socio-economic development.  

These are very exciting parts of the codes because between them they are delivering resources into the economy at a significant scale. This is money to be spent directly on developing the skills of employees, buying from small businesses or compliant BEE companies, growing the small business sector, and looking after vulnerable parts of society and education. These are noble causes indeed, and one can only imagine how sustained investment in these areas will benefit our economy going forward.

Very few people actually understand how the codes work

What saddens me is that beyond the accountants and executives, there are so few people who actually understand how the codes work, what these are trying to achieve, and how these can be leveraged to make a difference.  

Managers across South Africa are making procurement and staff training decisions daily, trying to comply with their mandates from procurement, but are just not understanding what the impact of their decisions could be if these were applied more strategically.

We all acknowledge, for example, that the stimulation of small business in South Africa is a critical lever for our economy to grow. So, any manager in an organisation could decide that they will use their purchasing procurement power to create opportunities for small businesses to grow, with new contracts that they have the power and budgets to award. That manager could be responsible for growing and sustaining many small businesses just by taking that one strategic decision. They could, through that decision, instantly increase their BEE scorecard by procuring services from these small businesses, and, if they invested time and effort in coaching those businesses to become more effective service providers, or pay them in less than the accepted 30-day norm to help them with their cash flow management, could also earn extra enterprise development points on the scorecard. But they don’t understand it. So they don’t do it. Or think about it. And South Africa loses out in the process.

Many accountants are involved with BEE tracking and auditing. But it really is a bit like closing the door after the horse has bolted. The next logical step would be to educate managers throughout the organisation to think strategically on how to use BEE to add value to their or their client’s business. If ordinary people understood more about the strategic intent of the codes, and how they can be wielded by people in organisations to effect real transformation in our country, I believe there would be a lot more buy-in, and a lot more ‘everyman’ contribution to that change: People sitting at their desks, doing their jobs, and continually applying their minds to transformation as a part of doing what they do every day.


Author: Juliet Newton is a businesswoman, entrepreneur and passionate South African. She is the founder and CEO of learning and development company, Avocado Vision, and built it up to a 31-strong team with an impressive list of corporate clients. Juliet is also the founder of Footprint, which delivers training and skills development to the bottom-of-the-pyramid market, and acts as a founding director of Ngikwazi Field Marketing. She is a regular face on the business speaking circuit, and a prolific business writer for a range of publications. Juliet was also a finalist in the 2011 Shoprite/Checkers Woman of the Year (social business developer category).


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