Strong leadership can drive an SA Inc turnaround
The emergence of a new wave of nationalism has increased the risk of Africa and South Africa being left behind, lost among the throng of emerging market economies that are vying for global investors’ attention. “Africa seems to be [pushed] to the bottom of the queue, and that has a lot of implications for us as leaders, especially in the private sector,” said Kuseni Dlamini, Chairman of JSE-listed Massmart Holdings Ltd. He was delivering the keynote address to the 2021 IIG CEO Forum, titled leadership in uncertain times.
Three stages of nationalism
Dlamini identified three types of nationalism that have affected global trade and industry in recent years. The first, was economic nationalism as contained in Donald Trump’s “America first, everyone else second” policy during his stint as US President. Second, was the personal protective equipment (PPE) nationalism that sprang up in the early stages of the Covid-19 pandemic and was punctuated by countries jostling for position to secure PPE supplies for their citizens. And the third, was so-called vaccine nationalism, where rich countries were seen to be hoarding vaccines to put their people first.
Nationalism is one of many factors contributing to an increasingly complex and uncertain business environment, with South Africa’s business leaders expected to navigate issues such as gender diversity, inequality, transformation and unemployment in addition to their daily governance and operational functions. Dlamini told his audience of insurer CEOs that effective leaders had to embrace complexity and uncertainty. “South Africa needs leaders who are enthusiastic and have the courage of their convictions to stand up for building and promoting decent, inclusive and empowering societies,” he said. His message resonated with the assembled insurance sector leaders, who remain close to the pulse of the South African economy.
A powerful engine for innovation
The private sector, and particularly the financial services sector, is a powerful engine for innovation. “We need to realise the massive power that we have, and having done that, to leverage this power to the best of our abilities,” said Dlamini, before reminding the assembled CEOs of the influence they had over their employees. In an environment afflicted by civil commotion, violent service delivery protests and violent strike action, it was beholden on leaders to inculcate principles and values through their workforces, from the top down. According to Dlamini, a focus on philosophy and values is essential for globally competitive companies.
One of the key messages from the keynote address was that effective business leaders can chip away at South Africa’s many social ills without dropping the ball on shareholders’ often narrow ROI interests. The suggestion was that businesses that sought to address inclusivity, inequality, poverty, unemployment and other social ills within their businesses and communities would enjoy greater support. “I believe that business thrives in societies that are more inclusive, that are more decent and that are based on a set of values that are common and shared,” said Dlamini. He used the example of certain businesses being protected by the communities they served during the widespread civil commotion that ripped through parts of Gauteng and KwaZulu-Natal in July this year.
Using influence for true progress
“As leaders, we have to ask ourselves, what can we do in our respective spheres of influence to promote the right kind of progress towards the eradication of poverty and reduction of unemployment and inequality,” said Dlamini. He suggested a new model for business build around shared values and stakeholder capitalism, that included a social compact between businesses and communities. These are not new concepts and, at first glance, it would seem that pandemic and lockdown forced many companies to make progress towards such lofty goals. As Dlamini noted, management’s first instinct, post lockdown, was on how to ensure the safety of their employees. And then they set about figuring out how to continue servicing their communities.
South Africa’s large insurers have long advocated for risk mitigation over risk transfer. Unfortunately, traditional risk mitigation strategies fall flat in the face of inequality- and poverty-driven rioting. Sasria SOC Limited has learned this the hard way, with the claims following a single outbreak of civil commotion wiping out its entire balance sheet and more. If only big business had heard Dlamini’s speech a decade or two ago. “We need to prioritise positive and constructive relationships with our communities, focus on building a strong social compact and begin championing initiatives that promote social cohesion; this is the best insurance we can have,” he said, reiterating that social and political stability were essential prerequisites for successful private enterprise.
Take action, or suffer an Arab Spring
Leadership is about collaboration, empowerment, engagement and partnership … and most of all, about unlocking shared value. If one strips out the political context of the July 2021 civil commotion, one is left to pick through a range of socioeconomic factors to determine the event trigger. Whether you pick inequality, lawlessness, marginalisation, poverty or unemployment, the reality is that many South Africans have given up hope of ever improving their lives. We will not delve into the psychology behind these feelings of anger, futility, frustration or hopelessness; but suffice to say this collective mood could fuel South Africa’s own Arab Spring shock.
The bottom line, according to Dlamini, is that people who have something to lose will not go out on the rampage; and that people who have skills would rather focus on earning a decent living than risking having a criminal record. The challenge issued to the industry CEOs in attendance was to invest in human capital and ensure that South Africa’s youth benefit from the economic dividend of the fourth industrial revolution (4IR). “We must do whatever we can to invest in knowledge workers and the digital capability of our work forces; those that have the appetite to play in the 4IR must be helped with the right ecosystems to enable them to lead the charge, and create the next tech giant in Africa,” he said.
“The issue is really about creating ecosystems of success, innovation and entrepreneurship,” he concluded. “The challenge and the opportunity is for every South African, alongside our private sector leaders, to create enabling platforms that incentivise our innovative young people to remain in this country and play their part in building world-beating companies … there is no reason why the next Amazon or Facebook should not be established here in South Africa”.
Writer’s thoughts:
This presentation, and the Africa regional discussion at the 2021 GSG Global Impact Summit, gave this writer hope that we can bounce back from our current socioeconomic lows, and achieve real change in South Africa and the continent. It is all about mindset, and if each of us plays our small part we can move proverbial mountains. Do you think SA corporate leadership is doing enough to promote shared value and stakeholder capitalism? Or are these constructs that you decry? Please comment below, interact with us on Twitter at @fanews_online or email us your thoughts editor@fanews.co.za
