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| Chief executive’s report continued |
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| Strategic constraints |
The ability of some of our businesses to grow is being constrained by pressure on national infrastructure. The rate of infrastructure delivery and improvement in South Africa is therefore a critical issue. This capacity constraint is usually put into the context of the transport network, but the issue is wider than this. Major implications for national growth will result if such delivery is not addressed.
Bidvest is not an IT company, but we make increasing use of IT platforms, e-procurement and sophisticated management information systems. Limited bandwidth in the South African regulatory environment has not been a constraint for us in the past, but could be in future.
Every industry is becoming a segment of the e-economy. Future earnings at every business in South Africa could soon be sensitive to bandwidth availability.
Official statements on the need to bridge the digital divide indicate that government is alive to the challenge. Hopefully, the issue will receive increasing priority; especially as greater bandwidth availability is a prerequisite if South Africa wishes to position itself as the economic hub of Africa and the preferred Africa base for international business. |
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| National DNA |
| South Africans are becoming accomplished change managers, but when reinvention involves the entire country, the leadership task can be increasingly challenging. However, precedents such as the Malaysian turnaround suggest that huge benefits are possible when the right choices are made. |
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| Business risks |
Organisational culture is a risk factor; especially if hubris threatens to set in. Bidvest needs to maintain a culture of humility notwithstanding our continued success. The single common characteristic of successful Bidvest managers is their practical, no-nonsense attitude to the job. Don’t dictate to your workers, relate to them. Thankfully, our senior people ensure this lesson is absorbed by the up-and-coming generation of leaders.
A risk factor for any large employer is the industrial relations climate. In South Africa we have recently seen a wave of strikes and industrial unrest, often motivated by political considerations not industrial. Despite rising inflation, our companies have been passing on positive wage increases for some time. Furthermore, the workplace conditions at our businesses are often the envy of the industries concerned. Better conditions have proved to be no defence against strike action and more industrial action cannot be ruled out.
Our mitigation strategy is to maintain and strengthen our record as a good employer. The investment in our people and their working conditions continues, as does the effort at all business units to maintain continual two-way communication with our workers and trade unions. |
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| Social responsibility |
Bidvest has been acknowledged by members of the trade union movement as a responsible employer with a strong record as a job saver and job creator.
Recognition of our positive role came at the inaugural Unity Awards, where we were one of only 11 companies to win recognition. The benchmark is not only profit but job creation, skills transfer, economic and social contributions, employment conditions, affirmative action, environmental practice, health and safety standards and corporate governance.
Accolades for socially responsible investment are new in South Africa and we were proud to feature among the first winners. |
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| Challenges |
Building and retaining a national skills-base is a challenge for every developing economy. South Africa is no exception. It is one of the ironies of the new millennium that supposedly “backward” Africa has emerged as a major incubator of talent for developed Europe and North America.
Top performers are desperately needed at home. Highly skilled people build high performance economies. With prosperity and security in place you keep talent in place. The process takes time, a commodity that’s in short supply as talented people also tend to be mobile and impatient. This delay brings added urgency to the task of every government in Africa to not only set the policy framework but accelerate policy implementation. If you don’t start moving as a nation many of your most talented people will start moving as individuals.
Business also faces the talent retention challenge. Growth-minded businesses are learning that you can’t simply train; you must also retain. |
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