Enterprise and Supplier Development
Amended General B-BBEE Codes of Good Practice
Enterprise and Supplier Development
Enterprise and Supplier Development
Creating New Small Business Development Engines
By Jules Newton, CEO, Avocado Vision
It has been 18 years since Juliet (Jules) Newton had a vision,
an Avocado vision. From humble beginnings, the core focus
of the business was training, in essence empowering people
to develop skills. Avocado Vision has stood the test of time,
it has evolved as it has grown and embraced the principles of
Transformation. Over the past five years, Jules and her Team
have spearheaded an Enterprise and Supplier Development
model which is unique, workable and replicable.
By now, most of us are coming to terms with the imminent 2013
Revised Codes of Good Practice. Although many are apprehensive
about their arrival, personally, I am particularly excited by the changes
that will take effect as the ‘Preferential Procurement’ and ‘Enterprise
Development (ED)’ elements merge and become known as ‘Enterprise
and Supplier Development’ or simply ESD.
The strategy behind this newly packaged element is simple – “focus
energy on building the small business sector; support and encourage
our flagging manufacturing sector back to its former glory and continue
to recognise and acknowledge solid transformational behaviour within
Although ‘Supplier Development’ is a clever tactic which encourages
investment in sustainable Enterprise Development activities, I know it is
going to trigger a headache for many organisations, as they will have
to rethink their ED strategies. Historically, many organisations, although
well meaning, merely pumped money into traditional ‘Business
Incubators’ as a way of contributing their ED spend. Many such
Incubators, although doing good work, have programmes designed to
support small business at large, which have no bearing or impact on
the actual supply chain within an organisation.
So, unless these ‘Business Incubators’ move quickly and redirect
their efforts to the small business arena within the supply chain of
organisations, by April 2015, these organisations are going to have to
look at alternative methods in which to spend their 2% of Net profit
required for 100% compliance within the Enterprise and Supplier
Development element of the Revised Codes.
Avocado Vision is strongly positioned to benefit from the new ESD
element. Over the past five years, we have devised a particularly good
operating model which focuses on building small businesses, which
have subsequently developed into core suppliers within our supply
chain. In essence, it is a case study with a basic model that can be
replicated with formidable effect in many sectors.
The framework is simple; Avocado Vision’s business is training.
Like many organisations today, we have an expansion strategy into
emerging markets. Our specific ‘model’ involves establishing 75 to 100
‘duplicate’ small businesses or community training agencies which are
geographically based to effectively deliver training on behalf of Avocado
Vision. Each of these community training agencies have the same
output requirements which, are benchmarked against Avocado Vision’s
“We are now at the point, five years on, where building small businesses into our
supply chain has become part and parcel of our core business.”
Believe me, over the past few years we have definitely had our work
cut out for us. We have had to learn how to recruit, select, train, enable
and manage the folk who take ownership of these community training
agencies, to ensure they become effective and efficient suppliers. The
input and processes which have been devised to build and maximise
the operating model has been iterative, painful and yes, expensive. The
workload, heart and effort that went into conceptualising and tweaking
such a model, as well as the ongoing support and mentoring required;
coupled with the inevitable teething problems of new business, should
not be underestimated. It is definitely a journey of endurance and not
one for the faint hearted.
We are now at the point, five years on, where building small businesses
into our supply chain has become part and parcel of our core
business. The Avocado model is akin to a franchising one – for the
purpose of this article we will call it ‘micro-franchising’. This is when
an organisation supplies the work – from either a retail lead generation
perspective, or like us, a large national project delivery perspective.
Basically; systems, brand, processes and quality assurance are
defined, trained and managed by the organisation. The work is then
sold, distributed and delivered by the ‘micro-franchise’.
The support and training of an organisation equips a ‘micro-franchise’
to be sustainable. On a national platform, a well recruited
‘micro-franchise’ has a strong and motivated local presence.
Customers benefit from a lighfooted local who can operate with ease,
flexiblility and in a cost effective manner, due to them providing services
within their community. The outcome of a successful ESD initiative is a
win-win situation, whereby the small business sector thrives, increased
job creation with more people participating in the economy, which, of
course is the essence of Transformation.
On reflection, Avocado Vision, when embarking on this journey, had to
a have a complete change in mindset, as we believed we were purely a
training company, using an Enterprise Development model to support
our field delivery. However, five years on, the journey continues as
we realign our mindset and focus more closely on those systems and
processes we have created to support our model.
The Avocado model lends itself most successfully within industries that
depend on national distribution of products from a sales perspective or
production from a supplier perspective. Organisations should examine
their value chain and identify where multiple small businesses, all doing
the same work, could contribute. For example: Could they nurture
chickens? Sell a product? Collect data? Man promotions? Erect Point
of Sale zones? Grow pumpkins? If you are able to identify a gap in
your supply chain, you have the means to contribute effectively to the
growth of the small business sector, with the advantage of meaningfully
contributing towards your own ESD spend.
It really goes without saying, that the spinoff of investing money within
your own value chain, makes great business sense. I cannot think of a
reason why any organisation would not want to!
There is no steadfast formula to ESD.
Like anything, this model is not fool proof. It is a journey of
endurance; there are no quick fixes or short-cuts.
Preparation is imperative to any good outcome. There is
no generic formula or guarantee of success. It may be
necessary to improvise, to incorporate strategic partners,
or aligning ones focus to overcome the inherent obstacles
which need to be overcome.
Important factors to examine – Consider your long-term
requirements. Ensure you have a benchmark in place
to measure progress. Allocate a committed team with
identified roles. Allocate ample time to roll-out initiative.
Avocado Vision makes use of the above model in deploying our ESD program. It is critical that we select and mentor the
indiviuals that have a good fit with our objectives and that we continually support, monitor, motivate and evaluate the output
from the program against the goals we’ve set for our own business, as well as those set for our micro-franchises.