BEE deals are complex, emotional and a learning curve for both parties. There are serious considerations and stages that both sides must go through in order to achieve success says Vuyo Jack, CEO of Empowerdex.
BEE should be entered INTO with the same careful considerations as entering into a marriage: you have to know yourself and your abilities, as well as your partner and his or her abilities. This was the message of Vuyo Jack, CEO of Empowerdex at the AgriBEE event recently held at the Cape Town International Convention Centre. There’s no legal imperative for private sector companies to institute BEE, hence legal action won’t be taken against those not complying. It is, however, a business imperative and companies will find that compliance is necessary for gaining or maintaining market access. Failure to comply could ultimately reduces the value of a business. Even so, BEE should never be the sole consideration for a business, nor should it be at the expense of a business. Beneficiaries and empowerment groups are warned not to rush into partnerships and they should continuously evaluate themselves against competitors, as falling behind could lead to a downward spiral that could be disastrous.
BEE tenets: trust, integrity and substance
Like a marriage, BEE partnerships have a huge impact on both parties’ lives. You should first build a relationship and get to know your partner. Only once you are satisfied that the relationship is worth your time, trust, investment and commitment, should you sign a contract. he contract should be straightforward so that both parties understand their role and what is expected from them. Experience shows that the more complicated the BEE deal, the more complications. BEE is not an event, but a process involving obstacles. Companies with instant BEE results are probably just showcasing. Such companies must remember that BEE is vital for economic transformation and showcasing will eventually only be to the detriment of a company.
BEE initiatives must be built on integrity and every thought, word and deed should be aligned. Economic substance is more important than the most impressive BEE deal on paper. What matters most is how the deal affects the poor’s pockets. A legal basis is obviously important to protect economic substance, but without substance there’s no value. BEE deals can cause fear and concern, but one can’t expect success when a deal has been entered into in fear. This implies that one doesn’t have faith in the project or in one’s partners. An obsession with ownership is another problem. Insisting on companies or land changing hands could lead to nothing more than a session of musical chairs. Ownership issues can also stall the progress of BEE. A fanatical attitude towards BEE can also be a liability. Relationships can become strained because of unrealistic expectations and wanting to reap the benefits from day one.
The psychology of the process
Beneficiaries and those who practise empowerment go through various stages. With those practising empowerment, there’s the first stage of denial, where a person thinks BEE won’t affect them and that they don’t have any obligation to participate in the process. The shock comes when the person is suddenly excluded from certain subsidies, markets or advantages associated with companies that practise BEE. The next stage is the angry stage because the person realises there’s no escape from having to participate in BEE. The anger eventually relents and suddenly the person will do anything to comply, instead of developing a true spirit of wanting to help or uplift others. Next, the person might become depressed, feeling that they’ve done everything they can, but nothing is good enough, but this stage makes way for acceptance. The person starts to understand why BEE is important – not only for their own future, but for that of South Africa. He is now ready for a more mature attempt at BEE.
The first stage a beneficiary goes through is characterised by a childlike innocence. hey think their whole life is sorted out and blindly signs a contract without considering what their contributions or responsibilities are. D uring the next stage, the contract usually backfires, because the beneficiary didn’t fulfil their part of the deal. Beneficiaries may experience disbelief and hurt and feel that they have been taken advantage of. After a while, they realise that they have to get their hands dirty if they want to make it in the mainstream economy. The next stage is characterised by knowledge. The person knows that they have to become involved and can’t afford to have others make decisions for them. They also realise that they have to be focused if they want to make a success of a project and can’t be involved in several projects. he next stage is about action – the beneficiary starts to apply their knowledge and become actively involved. The last stage is when the beneficiary has learnt to have realistic expectations and is no longer dependent on others. – Glenneis Erasmus Contact Empowerdex on (011) 883 8548. |
