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I have had what I believe is the privilege of working in the B-BBEE

space for 11 years. My unique experience in this space has

allowed me to have a bird’s-eye view of how organisations have

approached B-BBEE since the implementation of the Codes

of Good Practice (Codes). Over the years, I have seen many

organisations moving from the transactional approach to the

transformational one in implementing their B-BBEE Strategy.

However, more attention still needs to be paid to moving more

organisations towards embarking on the transformational

approach when developing or evaluating their B-BBEE Strategy.

In my experience working in the B-BBEE arena, I have witnessed

various B-BBEE approaches undertaken by organisations.

Some are impressive – entirely transformational. Others are

short-sighted – a mix of transformational and transactional; and

of course, there are the ones that simply boggle the mind –

totally transactional, as they do not benefit the organisation or

‘Black’ People. A good indication of whether an organisation will

implement a B-BBEE Strategy that is transformational versus

transactional is its initial approach towards strategic development

or evaluation. My birds-eye view of the initial process, more often

than not, provides two scenarios:

1 “Let’s get this done quickly; where do we find the points and

people to make this happen”; and

2 “If we’re gonna do this, let’s do it sustainably, so we yield a

long-term return on our investment”.

The first scenario indicates that an organisation is going to

throw money at their B-BBEE Strategy and create an illusion

of transformation. The second scenario, indicates it is going to

meaningfully contribute to a transforming South Africa. Although

these approaches are at separate ends of the scale, they do

have one common denominator: each organisation believes its

approach makes good business sense. However, each scenario

establishes whether it is gearing towards a transformational or

transactional approach.

Transformational Approach

Applying a transformational approach to B-BBEE Initiatives

means an organisation’s focus is on changing its internal

DNA. Consideration should be on what a transformed

organisational DNA will mean for the business and the

economy at large.

Based on the desired outcome, an organisation must

evaluate the scorecard they are measured on, then decide

what initiatives will support the end goal. Using the B-BBEE

Scorecard as a benchmark of transformation, as opposed

to the end goal itself, the points on a B-BBEE Scorecard will

organically lead to a transformational approach.

Four questions to consider when developing or evaluating a

B-BBEE Strategy that will yield long-term results:

1 What sustainable internal changes must take place to

realise the points offered on the B-BBEE Scorecard?

2 How will this impact business over five years?

3 How can we use the indicators in the B-BBEE Scorecard

to optimise performance and productivity?

4 Is the B-BBEE Strategy robust enough to be sustainable

in the long term?

Transactional Approach

Applying a transactional approach means an organisation focuses

on the points they can earn, not considering what impact it will

have on its internal DNA.

More often than not, an ill-considered transactional approach is at

arms-length. The focus is on circumvention, a minimal investment

in people and quick-fix solutions. Thus, it creates an illusion of

transformation with no long-term benefit.

Organisations applying this approach generally return to the

B-BBEE drawing board annually to rehash another transactional

approach with no tangible return on their investment.

Four questions to consider when developing or rehashing a

B-BBEE Strategy that yields quick fix results:

1 How much money will have to be spent to get the points

on offer?

2 What are the cheapest points available on the B-BBEE

Scorecard on which the organisation is measured?

3 How do we claim the points using as few resources

as possible?

4 Can we recoup the money we spend?

Suppose there was no B-BBEE framework in place. Would

organisations consider who owns a business before procuring from

them? Would they have processes in place to ensure fair representation

of employees in their workforce? Would they invest in Skills

Development? Would their preferred suppliers be representative of

our national demographics? Would they develop small ‘Black’-owned

businesses? Would they participate in income-generating activities to

develop ‘Black’ Beneficiaries? Perhaps they would, marginally, but not

to the extent necessary to include more ‘Black’ People in the economy

and balance out the deficit of wealth facing our country. B-BBEE

legislation may not be the perfect solution. Still, it is the chosen policy

to transform the country, which is optional for organisations, as they are

not legally obliged to have a B-BBEE Certificate.

Granted, B-BBEE has garnered reputational damage over the years

as tenderpreneurs, profit-driven Joint Venture agreements and

questionable ownership schemes drive the transactional approach

to B-BBEE. Unfortunately, they have outshone the meaningful

and sustainable impact B-BBEE has had on many organisations

and ‘Black’ People alike. However, regardless of which approach

organisations take, one must remember that B-BBEE legislation

guides organisations. Still, people of all races and genders either

embrace it or circumvent it.

It is essential to accept that B-BBEE is an economic policy that

aims to invite more people into the economy. By design, it creates

a synergy between all South Africans, as it is an unworkable policy

without the buy-in of white-owned businesses or the participation of

‘Black’ People. South Africa’s B-BBEE legislation is globally unique.

However, we have to remember that the foundation for B-BBEE

began when the Native Land Act of 1913 was promulgated.

Over the years of my in-the-field experience in the B-BBEE arena

there have been negative connotations attached to ‘Black-owned

businesses winning tenders. There is an immediate assumption

that the business was gained through corruption. In effect, if a

legitimate ‘Black’-owned business wins a tender, it highlights the

success of B-BBEE legislation.

I was recently party to a discussion whereby members of a white owned family business did not want to change their ownership

structure as they wished the business to be passed down in the

family. The answer is simple, as B-BBEE compliance is not a legal

requirement. They should not go the route of B-BBEE. However,

in choosing to implement B-BBEE, it must be done within the

legal parameters and spirit of the Codes. Such an organisation

would have to measure the pros and cons of not transforming.

Subsequently, if they choose not to have a B-BBEE Certificate

and its clients have chosen the transformation route, there may

well be a challenge to gain and retain business. It is essential to

further take on board how such a white-owned family business

established itself during the Apartheid era.

From my bird’s-eye view, like it or not, a B-BBEE Certificate is

key to conducting business in South Africa. Over the years, I

have seen more organisations choose the ‘Penny wise Pound

foolish’ approach to B-BBEE that commands financial output,

little resources and instant gratification that benefits nobody.

Remember, the bigger picture, sustainable B-BBEE, invites more

people into the economy, allowing government coffers to invest in

the national infrastructure to benefit all.

07 - A Birds Eye View - Transactional vs Transformational B-BBEE
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