The road to real transformation: Lessons from the Beier leadership team
When it comes to the minimum requirements of the Broad-based Black Economic Empowerment (B-BBEE) scorecard, many businesses appear to have compliance all wrapped up. In reality, however, meaningful transformation does not look like a line of ticks in a series of mandated boxes.
The Beier Group has been able to show that successful B-BBEE in the manufacturing environment is an achievable and rewarding goal – but only if businesses can sidestep the pitfalls of “tick-box empowerment” and put their efforts into effective, sustainable solutions.
President Cyril Ramaphosa’s programme for getting South Africa back on a path to growth focuses on re-industrialising the economy to create jobs, and we believe local manufacturing is the key to sustaining and creating those new employment opportunities.
It’s imperative, therefore, that we work towards growing and transforming this sector – and the past 15 years have brought us valuable lessons on how this can be achieved.
Adopt a ‘transformation attitude’
Attitude is what has allowed the transformation agenda to take root and flourish at the Beier Group. As a historically forward-looking business, we recognised early on that B-BBEE would become a crucial policy instrument, and we decided to deal with the subsequent changes proactively and on our own terms. This allowed us to seize upon the vast opportunities inherent in transformation: not to pay lip service to B-BBEE legislation, but to make it an integral part of our business strategy.
Seeking out and recognising the value of reliable and accurate B-BBEE advice has certainly been important in this, but it is even more critical that a receptive and enthusiastic attitude towards transformation becomes embedded within the company culture.
We embarked on our transformation journey in 2005, when black shareholders purchased a 26% stake in the Beier Group. Today, following significant growth and transformation, our black shareholding stands at 51.25%. We’ve also made enterprise and supplier development (ESD), along with socio-economic and skills development, a fundamental driver in our business.
Choose the right partners to unlock shared value
The Beier Group operates by the ethos that true transformation requires total commitment from all the parties involved, and it must be based on a shared vision and a willingness to build a synergistic whole.
This requires not only that we choose candidates with the right skills when filling vacancies within the Beier Group, but also that we exercise due diligence when selecting our ESD partnerships, to ensure these are based on shared values. The latter is crucial for building trust and successful cooperation.
Our approach to ESD is highly strategic: we actively seek opportunities to leverage our strengths and to unlock maximum value for both our partners and the Beier Group. Partnerships based on mutual benefit result in sustainable, high-performing suppliers that allow us to sharpen our competitive edge.
Finding the right match starts with looking at our business objectives and selecting Small, Medium and Micro-sized Enterprises (SMMEs) that have the appetite to grow, innovate and align with our business objectives – and then actively developing and capacitating them to deliver. This was our approach when the need arose to localise our wool supply, and it allowed us to successfully replace imported wool with local wool supplied by a fully black woman-owned SMME.
Support SMMEs by understanding their challenges
Beier proactively supports several local SMMEs and integrates them in its value chain. But for partnerships like this to be truly successful, it’s crucial that bigger businesses develop an awareness of the unique, day-to-day challenges faced by small enterprises – whether it’s maintaining a healthy cashflow or navigating red tape and bureaucratic hurdles. These challenges can result in sub-standard performance and delivery, and yet awareness of them by bigger corporates is all too often absent in the ESD development space.
Part of the solution is to keep the channels of dialogue open. Communication is what allows us to identify problems and areas of need, whether this is assisting our suppliers with acquiring essential equipment or facilitating access to financing or new markets to boost their growth trajectory.
Prepare for a marathon, not a sprint
Over a 20-year period, the Beier Group has completely transformed its ownership and management structure, and it has done so steadily and purposefully. Taking the long view has allowed us to avoid the pitfalls of “microwave-ovening” transformation for the sake of expedience.
We take the same long-term approach with our SMME partners, and the communities in which we run our CSI programmes. Our commitment to real empowerment is driven by a strong sense of loyalty and responsibility, and this is why we resist interventions that deliver quick wins yet have no sustainable or lasting impact.
We’ve seen the benefits of a long-term approach reflected in the results of our seven-year (and ongoing) CSI partnership with the Sithokozile Secondary School in KwaDabeka. Effective transformation cannot occur in a short time frame, because time is what’s required to ensure that the development impact of our investment is realised.
Sithokozile’s recent matric results reflect the vast potential of sustained, long-term interventions. The school’s pass rate improved from 57.1% in 2017 to 86.2% in 2018, beating out bigger and more affluent schools in the area (you can read more about these achievements here).