PART 2 OF A 3-PART SERIES
What would a Framework for including people with disabilities into your supply chain look like in-terms of the latest BBBEE Codes of Good Practice published on the 31st of May 2019?
The Codes, taken together with an emphasis on principles of procurement from people with disabilities, highlighted by the President in his inaugural speech and later the 2019 SONA speech, squarely envisage a three-stage process.
The first two stages emphasised in the BBBEE regulations, are designed to accommodate the compliance requirements necessary to earn 15 points inherent in the New Enterprise and Supplier Development criteria, of the Procurement Element as one of five Elements of the Generic BBBEE Scorecard.
Stage 1: New Enterprise Development
Let’s first get something out of the way. Gone are the days that the BBBEE Commission will allow companies to thoughtlessly and mindlessly invest the 1% of Net Profit After Tax (NPAT) in disconnected strategies.
New Venture Incubators and Hubs which have absolutely nothing to do with the supply chain of the investing business. This may on the surface seem like a senseless thing to do and one no self-respecting CEO would contemplate? However, the reality is that there are many CEO’s of businesses and Shareholders, who are so paranoid about protecting their agencies and trading territory and who see the requirement for New Enterprise Development as a direct threat to their hegemony, that they will instruct the recipients of their investment to take their money and play with it, but to equally ensure that whichever New Enterprises are funded in the process, that they bear no relation and have no link to the business from which the funding is coming. Hence the advent of Internet Café’s, or additional Ice Cream Sellers on Umhlanga Beach. So-called New Enterprises which are so neutral, non-threatening and anti-septic to the actual supply chain of the sources of the developmental funds, as to present no threat.
Proper and effective New Enterprise Development is something else.
It is the investment by a company in a sufficiently connected group of Black Entrepreneurs who are capable of creating businesses which are able in the foreseeable future to become Suppliers within the supply-chain of the businesses providing start-up assistance to those new businesses.
New Enterprise Development is intended to be at the start of a closed loop of development, a system to create and then ensure sustainability of those new entrants, who eventually will become suppliers.
At this first stage, namely that of New Enterprise Development, the opportunity presents itself for the company to do the unthinkable. To Engineer suppliers of the future by being involved in how the supplier evolves from the ground up. To select the players and to nurture their new businesses into existence, in a way which matches the corporate culture, pace and complexity, and always to meet the peculiar expectations which invariably characterise the supplier-customer relationship, if it is to be sustainable and to grow with the company in a symbiotic and mutually beneficial way.
In the selection of these potential Black Entrepreneurs who will originate, grow and nurture these new businesses into existence, a CEO should always initially look within. Inside either her own company, for employee’s who show the kind of entrepreneurial promise required, based on the foundations of knowledge and application within the Industry and Sector at hand and of the culture of doing business inherent in the years of exposure they have had within the organisation itself.
Alternatively, those Black Entrepreneurs should be sought within existing Suppliers. Employees who stand out and are notable because of their articulation, their hunger and their dedication to wanting more than to simply work for someone else for the rest of their lives.
A third option for sourcing Black Entrepreneurs capable of growing New Businesses able to supplement the existing Supply Chain of a business, is to…
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Read the full article by Dr Ivor Blumenthal, CEO, ArkKonsult, as well as a host of other topical management articles written by professionals, consultants and academics in the October/November 2019 edition of BusinessBrief.
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