A B-BBEE MOVING ORGANISATIONS FROM HOMOGENEITY TO HETEROGENEITY STRATEGY

MOVING ORGANISATIONS FROM HOMOGENEITY TO HETEROGENEITY

A homogeneous team would include people who are as similar as

possible, with similar points of view, learning abilities and life experiences.

Heterogeneous teams include a mixture of races, genders, cultures and

ages that provides a wider range of life experiences and opinions

Building a solid business strategy is fundamental to the success of

an organisation, as it provides direction for harnessing opportunities

with foresight. Essentially, those developing a tactical plan for an

organisation need to develop the ability to think strategically through

analysing the competitive environment, then recommending a firm

position and value proposition.

The next step is measuring the impact a Business Strategy has on

a business. A mechanism used by many organisations is that of

SMART+C that measures its implementation based on:

S | Specific What will the strategy accomplish?

M | Measurable What data will measure the milestones and

shortfalls?

A | Achievable Is the end-goal achievable?

Are the right skills and resources available

to meet the strategic objectives?

R | Relevant How does the short-term strategic goal

align with the longer-term broader one?

Why is achieving the strategic goal

necessary?

T | Timely What is the time frame for accomplishing

each milestone and ultimate goal?

+C | plus

Challenges

What are the barriers to meeting the

strategic objectives?

The SMART+C evaluation is revered as the epitome of the

strategic direction to delivering results.

The Codes of Good Practice target every area of a business,

beginning with the ownership structure, to how a business

is managed, to the skills necessary to run a business, the

diversification of the supply chain and how to deliver income generating activities. Therefore, having a robust B-BBEE Strategy

that runs parallel to an organisation’s Business Strategy is

paramount to meeting its overall objectives. Essentially a

Business Strategy and a B-BBEE Strategy should be read as

one document.

A B-BBEE Strategy should be developed and measured

using the same methodology as a Business one, focusing on

growth. Unfortunately, more often than not, the importance of

correlating the two strategies is overlooked, as is its intrinsic

value. Historically organisations have developed their Business

Strategy and B-BBEE Strategy as separate entities. Hence

many fail to meet the objective of either.

To BEE or not to BEE

It is not a legal requirement for an organisation to have a

B-BBEE Certificate; however, in choosing to have one, it is a

legal requirement that it be credible and accurately depicts the

reality of an organisation’s transformation strides. Let’s unpack

the DNA of a robust B-BBEE Strategy that can provide leverage

over an organisation’s competitors and areas for consideration

to mitigate any risks.

A B-BBEE Strategy, by design, will drive good governance.

It tests finances, spending patterns, employee roles,

responsibilities, skills interventions and systems that drive

development. It can be the tool for quantifying and testing

accuracy through the systematic processing of data, which

culminates in delivering shareholder value.

A B-BBEE Verification, an evidence-based process, measures

strategic performance areas, supporting the financial objectives

and convergence of business areas through scorecard

indicators and weightings. Although not directly linked to

shareholder value, the Management Control and Skills

Development Scorecards measure how an organisation recruits,

“A Business Strategy and a B-BBEE

Strategy should be read as one document”

remunerates, trains, develops or performs. Evidence such as

employment contracts, confirming an employee’s occupational

level and renumeration, all support an organisation’s B-BBEE

Verification claims. Employment equity annual submissions and

plans support targets and performance milestones in these areas.

In effect, Management Control and Skills Development provide

Strategic Human Resource Planning.

A B-BBEE Strategy must make good business sense.

Essentially, shareholders demand a return on their investment.

A comprehensive B-BBEE Strategy measures an organisation’s

shortfalls and milestones in the overall business performance.

How an organisation performs against its B-BBEE Strategy is

crucial for the leverage in gaining and retaining business. It is

a sense of market-based voluntarism with rules of the game

guided by legislation. A robust B-BBEE Strategy is essentially

a competitive commodity that demonstrates an organisation’s

commitment to the Government’s priority of an inclusive society.

Preferential Procurement feeds into the National Development

Plan that targets small businesses as the vehicle to drive future

economic growth. The net effect of Preferential Procurement is

the diversification of an organisation’s supply chain. It encourages

organisations to shift from standard procurement patterns by

removing barriers to entry for smaller ‘Black’-owned businesses.

Core to a well developed B-BBEE Strategy are the policies that

guide it to ensure they do not inadvertently become a barrier to

entry. For example, a Business Strategy for an organisation in

the manufacturing space historically steers a procurement policy

using the matrics quality, cost and delivery as Key Performance

Indicators. Subsequently, the historic matric steers an

organisation away from meeting the targets necessary to achieve

its Preferential Procurement mandate. Consequently, it negates

‘Black’ Ownership, ‘Black Woman-ownership and support for

Exempted Micro Enterprises and Qualifying Small Enterprises.

Food for thought, there is always a sweet spot for adapting the

two metrics to meet an organisation’s strategic objectives without

creating a tug of war, which is often the case when breaking

down barriers to entry.

As a B-BBEE Strategy leads an organisation toward sustainability,

it pursues financial benefit for shareholders reasonably without

compromise. In setting the targets for a B-BBEE Strategy, then

moving to the implementation phase, an organisation must have

standard processes that include accountability systems and

procedures that align with the desired outcome. Uniformity is

crucial to ensure that everyone in the organisation steers towards

the end goal, both in their strategic and behavioural approaches

to drive the strategic objectives.

Mitigate the Risk

There is one element that neither Business nor B-BBEE

Strategies can predict, that being the human factor. There are

many reasons strategies can be taken off course, from powerful

coalitions to a surprise resignation. However, part and parcel

of both strategies is +C, the challenges, whereby managing

the leading risk factor, which is the human factor, is critical to

meeting objectives. Organisations often opt for the two-pronged

performance measured approach, which measures behaviour

against critical goals; this essentially equates measuring an

employee’s key performance and development. Unfortunately,

this approach, more often than not, yields confusion, thus putting

the human factor more at risk than ever.

A common differentiator between a Business and a B-BBEE

Strategy is the frugal budget allocated for the latter. Organisations

expect to achieve a Status Level that provides leverage over their

competitors, produces innovation, and harnesses diversity and

inclusion without any investment, which amounts to incongruence.

Findings in the McKinsey and Company study, Delivering Through

Diversity 2018, observed that: “many successful companies

regard diversity and Inclusion as a source of competitive

advantage, and specifically as a key enabler of growth”. The

report supports that Homogeneous workforces perform at

33% compared to Heterogeneous ones and where boards of

Heterogeneous are 43% likely to realise more profits. It goes

without saying that a robust B-BBEE Strategy, read with a

Business Strategy as one document, will go a long way to

organisations meeting their overall business strategy.