"South Africa has the talent and ability to build great businesses”
05 March 2014
Adrian Gore, Discovery
Discovery CEO, Adrian Gore.
"South Africa has the talent and ability to build great businesses,” said Adrian Gore in his opening remarks at the 2014 Discovery Leadership Summit. “It is the quality of our leadership that will enable or stifle this.” The welcome address from the Discovery Group CEO set the scene for a gathering focused on leadership in business, government and civil society.
The central question at the Summit – themed Intellectual Capital. Shared – is how people in South Africa can be outstanding leaders, considering our unique complexities and seemingly intractable problems.
Gore recanted a recent breakfast meeting attended by Nobel Peace Prize laureate, Henry Kissinger. The acclaimed US statesman, who once said, "Each success only buys an admission ticket to a more difficult problem,” shared insights on the difference between how China and the West solve their problems. Gore related, "The West sees problems as an aberration. In contrast, China sees problems as ongoing, with one set of problems then naturally leading to another set.”
Gore believes that South Africa adopts the Western view to problem solving. "However, I think we should be taking some lessons from the Chinese. Years ago we faced the challenges of HIV/AIDS, poverty and the brain drain. We saw them as intractable. But we managed to handle them, and some have receded to quite an extent. Some of them have metamorphosed into other problems such as corruption, labour disputes, inequality and a universal health system. This is what our leaders are dealing with today. Problems do not go away – rather they change and transform. How we manage them is what counts.”
He then went on to explain how loss aversion in behavioural economics affects peoples’ decision making. "There must be something to lose when solving problems,” said Gore. "It’s important to look at how people make decisions under fear of risk. Interestingly, there is more motivation for decision makers in how they perceive the value of potential loss versus that of potential gain. In essence, the fear of loss clearly and significantly exceeds the fear of gain. This can be a huge motivator.”
He used an analogy based on research into golfers. Over 2.5 million putts of professional golfers were analysed and a significant improvement was found when putting for a par (which would potentially result in a loss) than in putting for a birdie (which would potentially result in a gain). "This is a clear demonstration of loss aversion at work,” Gore explained. "Playing with the aim of avoiding a bogey serves as powerful motivation.”
"But golf is a simple game and life is complex and volatile,” Gore continued. "Our leaders in all areas must have clearly defined goals. This will serve to trigger a loss aversion mind-set for them and keep them focused.”
Gore noted how some of the Summit speakers have had huge potential losses to deal with. "Former US Federal Reserve Chairman Dr Ben S. Bernanke had to address enormous risks facing the US economy and past Finance Minister Trevor Manuel took responsibility for the economy in a newly democratic South Africa. These are complex times. We must manage problems well and grasp each opportunity for South Africa to reach its potential.”