Marie Glennie describes the BEE market as series of cycles of transformation.
The first cycle being the "quick fix" where companies randomly sought black partners to gain contracts. Newly formed BEE groups entered the market and pursued almost every opportunity available. In a similar vain, white businesses had one goal - find a black partner to fund the deal or secure the contract.
The second cycle was the "numbers game" with each party wanting larger funding, larger contracts and larger percentages of shareholding. This was manifested by large BEE consortiums with many members, such as the members of large groups (pension funds and unions).
The third cycle, according to Glennie, is where we find ourselves now. Empowerment is no longer a marketing tool but necessary for business survival. Vital to the success of this and your business is the leadership and vision to lead effective transformation.
SOME STEPS TO GUIDE YOU
Work out what you want to achieve
Effective transformation involves a sustainable long-term change that goes beyond mere ownership. This is reflected in Government's latest BEE procurement policies where pure BEE shareholding is less relevant. If your BEE strategy is driven by the desire to secure more contracts or a particular sector of business, there will be a tendency for your solution to be short-term with the lure of a "quick fix". Needing to secure work is by no means an ignoble objective. It is however important that you communicate your agenda openly with prospective parties without the disguise of long term black economic empowerment.
Choose your partners carefully
Once you understand what your objective is, it becomes easier to identify the characteristics requisite of your partner. Be that a black face, specific gender, or any other values or synergies that exist. The term partner is chosen carefully, as any successful BEE venture needs to be viewed as a partnership where each partner contributes a measure of the value and receives a fair reward.
Define your role and your rewards
Gaps in expectation between partners are likely to result in both parties being dissatisfied with the relationship. Any disparity in the spoils relative to the roles played will also lead to a breakdown in any long term benefit.
Set measurable goal posts
Many partnerships fail as a result of the gap between actual partner performance and perceived performance. With each party's role clearly defined, set benchmarks and goals for each to achieve which will indicate the proper performance. You also need to devise a mechanism for revising these goals periodically.
Document your partnership
More often than not, parties will agree the principles verbally but will discover differences when these are reduced to writing. A joint venture, partnership, or shareholders agreement will not only facilitate communication between the parties but will also formalise the ground rules for your partnership. It also reinforces both parties commitment to the venture.
KEY POINTS
The third cycle, according to Glennie, is where we find ourselves now. Empowerment is no longer a marketing tool but necessary for business survival. Vital to the success of this and your business is the leadership and vision to lead effective transformation.
SOME STEPS TO GUIDE YOU
Work out what you want to achieve
Effective transformation involves a sustainable long-term change that goes beyond mere ownership. This is reflected in Government's latest BEE procurement policies where pure BEE shareholding is less relevant. If your BEE strategy is driven by the desire to secure more contracts or a particular sector of business, there will be a tendency for your solution to be short-term with the lure of a "quick fix". Needing to secure work is by no means an ignoble objective. It is however important that you communicate your agenda openly with prospective parties without the disguise of long term black economic empowerment.
Choose your partners carefully
Once you understand what your objective is, it becomes easier to identify the characteristics requisite of your partner. Be that a black face, specific gender, or any other values or synergies that exist. The term partner is chosen carefully, as any successful BEE venture needs to be viewed as a partnership where each partner contributes a measure of the value and receives a fair reward.
Define your role and your rewards
Gaps in expectation between partners are likely to result in both parties being dissatisfied with the relationship. Any disparity in the spoils relative to the roles played will also lead to a breakdown in any long term benefit.
Set measurable goal posts
Many partnerships fail as a result of the gap between actual partner performance and perceived performance. With each party's role clearly defined, set benchmarks and goals for each to achieve which will indicate the proper performance. You also need to devise a mechanism for revising these goals periodically.
Document your partnership
More often than not, parties will agree the principles verbally but will discover differences when these are reduced to writing. A joint venture, partnership, or shareholders agreement will not only facilitate communication between the parties but will also formalise the ground rules for your partnership. It also reinforces both parties commitment to the venture.
KEY POINTS
- BEE must be a long-term strategy consisting of a number of building blocks, not a quick fix which will work today, be outdated tomorrow and detrimental to your future.
- Seek your partner carefully - someone with whom there will be long-term benefit for both parties.
- Communicate effectively and openly
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