By RON WEISSENBERG
July 2017 – a pivotal month in Grahamstown. In the face of hosting a slightly subdued, yet very successful National Arts Festival, the Municipality admitted bankruptcy amid urgent moves to invoke specific Constitutional administration for the local authority. A Transformation Summit was held and potholes were filled, courtesy of emergency funding from the provincial government. Some commentators sadly compared these initiatives to re-arranging the deckchairs on the Titanic.
Sad too was hearing of the liquidation of Stuttafords. Founded in 1858 as a South African counterpart to Harrods, Stuttafords became the embodiment of departmental store elegance and style, offering exclusivity and a characteristic shopping experience. Much will probably be written about their demise, but a few things stand out. Their management seemed unable to adapt the business to the global shift to online retailing and despite having an enduring brand, did not fully understand changes in consumer spending or the market they served.
And locally, citizens seemed to finally appreciate the difference between municipal services they pay for and municipal services which are free. In the case of Makana, the services they pay for tend to cost a lot less than those they get for free.
All enterprises, whether in the public or private sector rely on fundamentals for their existence. Perhaps the most important of these is that expenses cannot exceed income. With financial reserves or loan facilities they may be able to deal with a budget deficit for a limited period, but ultimately there is no escaping the reality; what doesn’t exist cannot be spent or given away.
Enterprises in decline can be stabilised and even returned to a balanced budget or surplus. It requires sound leadership, hard work, commitment and an enabling box of tools to carry out the repairs.
One effective tool is a type of ‘reverse engineering’ which starts by setting a positive outcome, followed by revisiting a time and space when the enterprise was in a sustainable position. Then, list the attributes of individual components making up the whole.
The last part is quite serious – it requires the role-players to reflect on each component and to honestly appraise whether it has changed for the worse, better or still serves the organisation. Einstein defined insanity as ‘doing the same things over and over again and expecting different results’. This is where leadership is critical because innovation and remedial work begins not in the minds of the people, but in the hearts of those responsible for change.
In reversing the decline in Makana, we could start by identifying a time of growth and committing to the idea of a municipality under strong direction, attracting businesses and enterprises and developing a sustainable environment for job creation and community abundance. It is up to the future leadership of Makana to develop their own list of milestones and past successes, but here is an example of a reverse engineering exercise which could be undertaken by the national government to begin to address the grim economic conditions currently facing South Africans.
Our imaginary journey begins more than a generation back with an international investor on a road trip from Rhodesia to the Witwatersrand area of the then Transvaal. She seeks a site to invest in a labour intensive manufacturing operation. Like most investors, her criteria are simple; stability, a business friendly environment, predictable legislation, respect for property rights and security of tenure. South Africa, the world’s leading producer of gold and largest economy in Africa offers most of these. Rhodesia, despite being known as the breadbasket of Southern Africa is in the midst of a civil war. Both countries have currencies which are stronger than the US Dollar.
Heading south from Salisbury, our tourist travels past Fort Victoria before clearing the Beit Bridge border post. She stops for lunch in Messina and continues through Louis Trichardt, Pietersburg, Potgietersrus, Naboomspruit, Nylstroom and Warmbaths. Skirting the fringe of the Republic of Bophuthatswana, on to Pretoria on the R101 and passing Verwoerdburg. Thirty minutes later she arrives at Jan Smuts Airport, part of the Kempton Park Municipality in the near East Rand.
We revisit the exact road trip in latter day South Africa travelling From Zimbabwe to the Gauteng Province. Despite a generation of democracy, the Zimbabwean economy is in ruins and hyper-inflation has destroyed the value of their currency. With a declining mining and manufacturing base, South Africa is in position number 7 as a gold producer and now trails Nigeria and Egypt in African economy size, with the local currency worth 7 US cents.
Heading south from Harare, our international investor travels past Masvingo before clearing the Beit Bridge border post. She stops for lunch in Musina and continues through Makhado, Polokwane, Mokopane, Mookgophong, Modimolle and Bela-Bela. Skirting the southern fringe of Limpopo province, on to Tshwane on the N1 and passing Centurion. Thirty minutes later she arrives at OR Tambo Airport – part of the Ekurhuleni Metro in Gauteng.
These identical journeys relate to an era of profound change.
They echo a hurtful and hopeful past, notorious names, as well as the identities of at least two great South African statesmen. They reflect the good, the just and also decisions taken by people committed to short-term appearances and populism rather than sustainability and long-term solutions. The only constant is the needs of the hypothetical investor.
Similar to countless enterprises undergoing operational and financial challenges, Makana must do things differently, better and more appropriately. They owe at least this to a community eager for decisive action and implementation; the natural by-product of honest dialogue and good leadership.
- Ron Weissenberg is an international citizen and Grahamstown resident who started his first business at age 7. He is a Certified Director (SA) and mentors people and their enterprises. MAKING IDEAS WORK is a biweekly column in Grocott’s Mail.
FIXING OUR TOWN