Management must lead BEE change

Management's commitment to BEE as a business strategy is key to the success of the transformation process.
Read time 4min 40sec

Without top management being wholly committed and demonstrating behaviour that represents leadership on how BEE and transformation is achieved in the company, it's difficult to take the enterprise on a road to sustainable transformation.

Management is either a critical ally in meeting the objectives - or it can become a saboteur of the process, wittingly or unwittingly.

Management has to undergo substantial changes in the experiential area; it's not good enough to say it now has people of diversity as friends who reside in the same suburbs and live comparable lives - that's not change or transformation.

Management has to appreciate the intricacies of what we've inherited in the economic fibre of the country and what it will take to change the landscape in a sustainable manner.

Transformation demands understanding

While management's primary objective is to deliver sustainable profits, it also needs to demonstrate an understanding of the issues surrounding BEE and the need for transformation.

If it cannot relate to the underground ravages the system has caused to people of colour; if it doesn't understand how the education system was leveraged to deny access to skills and knowledge to the majority of the population; if it cannot sympathise with the logistical nightmare of getting to work from residential locations situated far away; if it can't emphasise with these examples, the result is often a disillusionment with people of colour.

Management needs to understand the deeper issue of transformation: it must live, understand and network at all levels in the changing SA.

Networking success

BEE is not about black and white; it is a universal concept of celebrating and utilising the value of.

Hasmukh Gajjar, deputy CEO and executive director of Faritec

It's an unfortunate fact that there are few business leaders who attend black business or networking events like the Black Management Forum or the SA Communications Forum. Of the few select white leaders that network in those forums, it's obvious that their companies are becoming successful in creating sustainable transformative agendas in their environment.

For the most part though, deliberate effort is needed to invest in networking and relating to the issues on the ground, be it skills, access to capital, logistics such as transport, and advising the previously disadvantaged on how to break down the glass ceilings in the organisation.

Attract and retain

To transform, companies need black people to transform with; firms that can't attract and retain these people, cannot transform.

To do this, management must understand the impediments at the top level as well as the lower end of the enterprise and identify the glass ceilings. It is only management through leadership that can change attitudes entrenched at the top and middle layers in an organisation.

Management also has to understand that if it has BEE investors in the organisation, these individuals are there to act as partners who are driving the business to effect changes. It's not good enough to have BEE involvement for the sake of meeting industry charter quotas or qualifying for procurement - BEE investors are contributors to effect change.

Change management

The largest element in BEE and transformation is change management, but by its very nature, this has to be led by management. For management to drive this process, it also has to change. One tends to stagnate if confined to a small constituency. Management therefore has to lead by example, and should drive diversity in its ranks.

Most companies tend to pick soft targets for transformation; the lower grades tend to be transformed quite quickly, with middle and senior management much less so. People are comfortable making changes - as long as it's not around them.

For the most part, there's been a consistent pattern where black investors who invest in enterprises tend to drive change in many different areas but don't want to tinker with management. They don't want to rock the boat, an attitude that highlights a weakness on both ends between existing owners and the newcomers that tend to look at management as the last element of change.

The flip side of this though is that, generally, the company is not seen as transformed unless the CEO is also black. On a personal note, I do not support the notion that you have to remove and change all people in an enterprise. If the CEO is providing leadership on transformation and change, there is no need to replace a white leader with a black one. It is all too easy to get caught up in the emotional desire to replace white CEOs with black CEOs, but we need to be careful that we do not confuse transformation and BEE with overt racism.

The way forward

Management should embrace BEE and transformation as part of its change management agenda, and find a way of integrating and institutionalising that in the operation. BEE is not about black and white; it is a universal concept of celebrating and utilising the value of diversity.

Unless management understands what it is it needs to change, it cannot drive the leadership necessary to effect transformation that results in an enterprise that fully reflects the diversity of the country and its people.

Hasmukh Gajjar

Deputy CEO and executive director of Faritec.

Dr Hasmukh Gajjar, MB ChB (UCT), is an entrepreneur with extensive IT experience and was previously CEO of IT firm Consilience Technologies, former chairman of the Black IT Forum and past president of the Black Business Council. He serves on numerous IT and telecom bodies. Gajjar is deputy CEO and executive director of Faritec, responsible for driving business transformation and black economic empowerment.

See also