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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

delivery principles.

“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.

Transformer Newton
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