If you ran your small business like the political elite
Have you ever stopped to consider what might happen to your financial or risk advice practice, or any SA-based small and medium enterprise (SME) for that matter, were you to run the show with the arrogance, entitlement and general incompetence of a politician or senior government leader? To jump straight to the conclusion, dear reader, you can be sure that your business will fail in record time, or putter along in a going-nowhere-slowly holding pattern, for as long as your customers will tolerate you.
Oh my, where to begin…
There are so many challenges in appropriating, and then applying, the Politician’s Best Practice (sic) Manual for Business (PBPM4B), that is difficult to decide on a starting point. So, let us begin at the top, with the appointment of your executive and management teams. You will not, as business school taught you, throw the net far and wide to attract the most suitable candidates. No, dear reader, the PBPM4B requires that you make a shortlist of fawning friends, preferably without any backbone, and hold a lucky draw to decide who heads up administration, distribution, finance, marketing etc. This part of the policy is non-negotiable, as you need blind loyalty to prosper.
You can never admit your hiring policy to anyone, even when challenged by your shareholders. Case in point, the ruling African National Congress (ANC) does not care to reveal how cadres who single-handedly destroy a department, municipality or state institution are simply whisked away to repeat the destruction in new and often more important roles. In fact, SA’s ruling party is currently touring every court in the land to prevent it from having to reveal its demonstrably damaging and demoralising cadre deployment policy to South African voters.
The latest court battle kicked-off with a victory for the opposition Democratic Alliance (DA), who successfully petitioned the Pretoria High Court to force the ANC to hand over “all records pertaining to its cadre deployment committee since 1 January 2013, when Cyril Ramaphosa became its chairperson,” as reported by News24.com. The High Court decision was upheld by the Supreme Court in September, which immediately saw the ANC knocking on the Constitutional Court’s door.
Focus on wasteful, unauthorised expenditures
If you run your business per the PBPM4B, then your legal budget will exceed everything but executive salaries, with the obvious caveat that both will be dwarfed by wasteful and unauthorised expenditure over time. The key message here is that business leaders who wish to emulate government or the political elite should never walk away from a fight, regardless of its merits. If someone points out a flaw or legal transgression, go to court; if a court rules against you: challenge, challenge, challenge; and if you fail at the final court hurdle, stall on implementing the remedial action, or switch track, or both.
Another important PBPM4B clause is to always choose the fight that will have the worst possible outcome for your customers, citizens or supporters: it helps with the guide’s unofficial Stockholm Syndrome perpetuation imperative. If the country needs clean, renewable energy, then put out tenders for Independent Power Producers, but try and get the dirtiest among them, both in terms of the environment and financial transparency, the largest share of the tendered gigawatts. Extra points if you can cover up your ill-thought policies with absurd deflections. So, if your business trades predominantly with the West, then definitely side with Russia when it sends its military into Ukraine, prefacing all of your pro-Russian claptrap with a “we remain neutral in this matter” lie.
Unfortunately, the big difference between business and government is that you do not have access to an endless supply of taxpayer funds. This funding construct is slightly different for ruling political parties, who opt for a combination of not paying their bills, including pensions and salaries; rent seeking; and questionable donors to get by. Readers should note that in the South Africa context there is a thin ‘veil’ between the ruling party and the state, which explains many of the absurdities you read in the daily news.
On the PP and Stalingrad defences
One of these crazy reports centres on the legal fees to remove a toxic public protector (PP) when a sub-section of cadre deployment strategy backfired. Sub-section used here because although the ruling party does not have a direct say in the PP appointment, it does hold the bulk of the power through the process.
News24 recently reported that “it took ZAR160 million to remove Busisiwe Mkhwebane, and to defeat her Stalingrad campaign”. And this writer reckons the ZAR10 million gratuity which the PP will allegedly forfeit following her removal will be paid too. PS, the PBPM4B has an insanity clause that holds that “doing the same thing over and over again has different outcomes,” explaining why the appointment process for the new public protector is as flawed as that applied to her predecessor.
If your financial or risk practice hopes to emulate government or the political elite, you will also need to hone your ‘do nothing’ capabilities. Doing nothing in the face of allegations of impropriety, crumbling infrastructure; declining revenues; or procedural flaws is non-negotiable if you want to walk the business-as-a-government route.
Lapses soaring, do nothing; new business declining, do nothing; cracks in the façade, do nothing; court order instructing you to address something, do nothing. Unfortunately, the do-nothing approach is not customised for SMEs, or even large businesses that cannot access large cashflows that are uncorrelated with produce or service. And of course, the ‘do nothing’ clause is always superseded by the ‘deny any accusation of wrongdoing’ clause. In such case, do everything to push your judgement day into the future.
Just consolidate your stuff-ups, stupid
Some recent advice for larger businesses is that you can plaster over the ill effects of your ‘do nothing’ strategy by bringing all of your divisions under a single umbrella.
If your divisions are shot to hell, simply follow Minister Pravin Gordhan’s example and create a mega division with a new cadre leadership (sic) team etc. Government’s idea to bundle all its failing state-owned enterprises (SOEs) into a single cluster is a classic example of this approach. Actually, the minister deserves kudos for the smoke and mirrors here. Going forward, each parastatal, already overseen by government, will be overseen by government. Hurrah. On the plus side, reporting on debt, and listing the annual SEO bailouts should be easier for one super entity.
The entirely made up PBPM4B is little more than a smokescreen itself. It only works for politicians, and then only in a crumbling socioeconomic environment. To appreciate why, you need to reflect on the SA-specific differences between citizens, customers, taxpayers and voters. All citizens can vote; but not all pay taxes; all citizens can vote; but not all are your customers. The ruling elite has perpetuated a system in which the growing number of marginalised and poor give up their vote in return for some or other promised social benefit, leaving the dwindling number of taxpayers unable to shake the political status quo.
Private sector strategy turnaround?
As a small business, the growing number of marginalised and poor citizens are lost to you, they cannot become customers. And the taxpayer, whose annual income is shrinking in global terms, and whose tax burden continues to eat into monthly disposable income, cannot support you as much as before. The solution is to abandon the PBPM4B and get government and the ruling party to buy into another yet-to-be-written manual, the Private Sector Strategies for Success Guide (PSS4SG); but that is a story for another day.
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