We must change our business model for a new dawn

The Pretoria News, 15 May 2019

THE elections are over; the analysts have picked over the entrails of the campaigns and the new Members of Parliament are packing for Cape Town. The president and his speech writers are preparing for his state of the nation address that will chart his party’s vision for us for the next five years.

There are huge expectations on all of them, but especially upon President-elect Cyril Ramaphosa; some of them he placed on his own shoulders on the campaign hustings, the others are a reality that were borne out in the results; the number of people who didn’t bother to register to vote – and the equal number of those who did register but still didn’t make the trip to the voting station.

They’ve given up hope in the system – a very large number of them are young first-time voters. It’s a sad indictment on a society that’s only 25 years old, but understandable when you consider our official unemployment rate and the rising tide of school leavers who enter the job market with little or no hope of finding a job.

Ramaphosa has to continue the journey he began only last February of rebuilding this country after the ravages of almost a decade of state capture, aided and abetted by corporate collusion, and restart the narrative of Nelson Mandela’s deferred dream of a better life for all.

Business has a huge role to play in achieving this and – given its complicity in state capture – an even bigger moral responsibility too. Businesses have to grow, to build the communities in which they operate, but they can’t do that on the old profit-based model, because we have seen to our cost what happens then.

The old business model was predicated on building businesses that build profits creating, theoretically, an endless tide of goodwill. It’s a totally flawed premise – for a start we live in a finite world, we don’t have endless resources, in fact as the UN’s recent species extinction report shows we date not squander that which we still have. A business model that only concerns itself with profits, based on endless growth, isn’t just delusional, it’s often criminal. Overseas those are called Ponzi schemes, here we would call them Steinhoff.

South Africa needs a new business model especially now, as we step ever deeper into the New Dawn that thankfully was not a false dawn. There are very real limits to classical capitalism, profits aren’t enough, instead we need to create businesses that create prosperity. But what is prosperity? It’s not a neo-liberal abstract, but a very real gritty concept that you can measure in the quality of life that we enjoy, the quality of services, the quality of jobs we have, the quality of shelter. It’s certainly not about money, because with the obscenely high Gini co-efficient that has come to define South Africa, it just means our bosses who already have obscenely high pay packets, will just earn more.

The Gini co-efficient only measures money, redressing this doesn’t mean giving everyone more money, that just ends up with everyone ending up with nothing, redressing the imbalance can only be achieved through creating prosperity. This means ensuring that things work in this country; sustainably and ethically for everyone’s benefit, it means ensuring there is work for everyone, it means working in harmony with the environment – a timely reminder of which we saw with the plastic detritus that flooded Durban harbour after the recent storm. We are already on the list of
the world’s worst plastic polluters, our new coal fired power stations could soon get us a dishonourable mention in dispatches for the worst carbon polluters too – when they eventually come on line.

We need to have an environmental policy at all levels; government, corporate and community, and we need to enforce it, not because it’s the right thing to do, but because if we don’t there’ll be nothing left to enforce. The same goes for education, of our own staff and their children, developing our suppliers, changing the way we do business and transforming the economy. It’s no longer enough just to do things to tick boxes because a government policy says we have to, we have to do it because it is part and parcel of our business strategy, our vision and our mission to create businesses that include, not exclude – and we still have to make profits, but sustainably and ethically.

That’s how we will change the quality of life for the people of this country, create jobs, reduce the desperation that has so many of us clawing each other’s eyes out, figuratively at the moment, because of the desperation that has become our daily default. We have to raise societies out of poverty, we have to raise this country out of poverty, we can only do that by changing the system which by definition is incredibly difficult because there is no much at stake, so much tied to the old classical model of capitalism and the cycles of continuous profit.

But, thanks to the indefatigable work of our investigative journalists and the commissions of inquiry that Ramaphosa set up afterwards, we know the full price of that. We will never raise our communities out of poverty when there is a naked – and increasingly obscene – worship of wealth. The problem is that in most cases that wealth was made not through the creation of value but from profiteering and rent seeking, through collusion and capture. The only way to change that is to change the way we choose our heroes.

We should not venerate those with such a commitment to amassing conspicuous personal wealth but instead learn to revere those with a conspicuous commitment to public welfare. By changing our heroes, we can inspire the next generation of business leaders to break the shackles of poverty, build businesses that build nations – not just for now but for the generations to come.

That must be our challenge as Ramaphosa prepares his road map to fix this country and take us a lot closer to the dream of a better life for all.

Jon Foster-Pedley is dean and director of Henley Business School Africa.