Untitled design

The Many Faces of Leadership in the New World of Business for SMMEs in South Africa

by with No Comment Vannie Pillay

Refresh, Re-set, Restart

In the rapidly evolving business landscape of South Africa, Small, Medium, and Micro Enterprises (SMMEs) play a pivotal role in driving economic growth and creating jobs. As these enterprises navigate through unprecedented challenges and disruptive changes, the concept of leadership is undergoing a profound transformation. Leaders of SMMEs must adapt to new realities that emphasise resilience, agility, inclusivity, and innovation, ensuring their businesses not only survive but thrive in this dynamic environment.

Why is Leadership Transformation Crucial for South African SMMEs?

Despite the historical evolution of leadership concepts, effective leadership remains a challenge for many businesses. Gallup’s report indicates that only 15% of employees globally feel engaged at work, highlighting a significant gap in leadership effectiveness. In South Africa, this gap is particularly crucial for SMMEs, which are often the lifeblood of local economies and communities.

To bridge this gap, leaders must reimagine their roles and responsibilities. 

As Professor Hitendra Wadhwa suggests, leadership is about “bringing out the best in yourself and others in pursuit of a common purpose.” 

This definition is especially relevant for SMMEs, where leaders must balance personal growth with fostering a collective team spirit in often resource-constrained environments.

  1. Transforming the Inner Self

Understanding Your Purpose: For South African SMME leaders, leading with purpose means aligning their business goals with a mission that benefits not just their enterprise but also their communities and the broader society. Purpose-driven leadership can inspire teams by creating a vision that extends beyond financial success, fostering a deeper engagement with employees and stakeholders.

Adopting a Growth Mindset: SMME leaders must cultivate a mindset of continuous growth for both themselves and their teams. This involves staying open to feedback, continually seeking new knowledge, and encouraging a culture of lifelong learning. In the competitive and often unpredictable market landscape of South Africa, fostering a growth mindset helps SMMEs remain agile and innovative.

Self-awareness and Emotional Management: Effective leadership requires deep self-awareness and emotional intelligence. Leaders must be adept at managing their emotions and behaviours, setting an example for their teams, and exercising situational leadership. Developing habits and disciplines that support focused and sustained change is essential for navigating the unique challenges faced by South African SMMEs.

As Carl Jung wisely noted, “Who looks outside, dreams; who looks inside, awakes.”

  1. Cultivating Relationships and Connections

Igniting Team Energy for High Performance: Leaders must be able to inspire their teams by explaining not just what to do, but why it matters. This approach aligns the team’s efforts with the broader purpose and goals of the business, fostering a sense of ownership and motivation.

Nurturing Inclusivity and Diversity: Inclusivity and diversity are not just buzzwords but strategic imperatives for South African SMMEs. Given the country’s rich cultural landscape, leaders must create inclusive environments where diverse perspectives are valued and leveraged. Promoting diversity within the team enhances creativity and problem-solving, which are crucial for innovation and growth.

Fostering Collaboration: The rise of remote work and digital communication has changed how teams collaborate. Leaders must themselves adapt by using technology to facilitate effective communication and foster a sense of connection within their teams. By promoting a more collaborative and horizontal approach, leaders can harness the collective strengths of their teams.

As Michael Jordan aptly put it, “Talent wins games, but teamwork and intelligence win championships.”

  1. Adapting to All Situations

Mastering the Art of Situational Leadership: Effective SMME leaders understand that they cannot rely on a single operational mode. They must be versatile, able to shift between pragmatic and visionary approaches as situations demand. Mastering the art of reading the business environment and responding appropriately is crucial for success in the diverse and often challenging South African market.

Embracing Adaptability and Agility: In South Africa’s rapidly changing business environment, SMME leaders must be agile and adaptable, ready to pivot and make informed decisions amidst uncertainty. Traditional, rigid leadership styles are increasingly inadequate. Agile leaders champion a culture of innovation, seeking opportunities even in the face of adversity.

As Ken Blanchard observes, “The most effective leaders are those who have the flexibility and adaptability to adjust their style to the situation and people they are leading.”

Concluding Thoughts

As South African SMMEs continue to navigate the complexities of the modern business world, their leaders must reimagine their roles and approaches to effectively tackle challenges and seize opportunities. This new era calls for leaders who are adaptable, resilient, inclusive, and purpose-driven. By prioritising their team’s well-being, embracing diversity, fostering collaboration, and creating environments conducive to growth and innovation, leaders can ensure their SMMEs not only survive but thrive. Embracing these qualities will enable leaders to build stronger, more sustainable enterprises that contribute positively to their communities and the broader South African economy.

Thandeka-Ndlovu-Mngomezulu-1

CEO SMME Interview: Thandeka Ndlovu-Mngomezulu

by with No Comment Vannie Pillay

Thandeka Ndlovu-Mngomezulu, the CEO and founder of Total Serve Facilities Management (TSFM), a company specialising in managing and maintaining properties in KwaZulu-Natal, sat down with Vannie Pillay, Founder of Oaktree People Solutions, to share insights into navigating the SME landscape in South Africa.

Q: What does it take to get to and stay at the top of your game?

A: Understanding your purpose is crucial. What is your “why”? For me, I’ve always been guided by my professional and personal purpose. I do this for my family and for the people around me who depend on me. I do this for my employees and the communities that I serve. You cannot move forward or work hard unless you know why you need to do this. My purpose is to create innovative solutions, empower, and build people and our communities.

Q: Tell us your story and what defined your journey and history to where you are today.

A: I come from a family of strong women. My mother was an entrepreneur selling sweats, and I grew up learning and understanding what an entrepreneur is. I am an accountant by profession and worked in corporate for a long time until I decided to make a move into doing something different. The facilities sector was growing, and the demand was disrupted and high. In 2016, I was fortunate, through persistence and perseverance, to land a big contract, and today we employ approximately 460 people. We have since diversified our business and created an Academy focused on training and developing cleaners and skilled artisans to the best of their abilities, adding quality to our business and their lives. Cleaning is not seen as an important job, but through the Academy, we can build functional skills and emphasize the importance of the job.

Q: Talk about the importance of gender representation and visibility in the Start-up/growth and SMME environment in South Africa, Africa, and Globally.

A: I place high value on diversity, and it is a personal commitment for me. I am very vocal and stand firm in my views on fostering diversity. There is not enough focus on the collective. This is a necessity, not a nice-to-have. The philosophy that I live by is that “when you empower women, you empower a village.” When we fail to do so, we fail as a collective. I dislike Women’s Month. I don’t think that we should be celebrating women. For me, the focus creates differentiation rather than emphasizing the truth that we are all one. I don’t like the taglines given to “women in business,” “female founder,” or “100% black-owned women.” Why? Do we say and do this? We should be treated the same. We are all the same, and calling us out differently reinforces the idea that we are different and should be treated differently. Why do we do that? We need to understand that there is no difference and therefore not create the difference by talking about it.

Q: Highlight some of the key challenges facing female founders/CEOs in SA and globally.

A: There is not enough integrity in the process. We cannot pay lip service to it. Women are disadvantaged and not given equal opportunities. We have to work harder and be seen. I see this as a numbers game, a tick-box exercise rather than a focused effort on fairness and equal opportunity.

Q: Specifically talk about access to finance, access to development, and what more you would like to see in support of SMMEs.

A: The public sector, while trying to do a lot, does not achieve outcomes as the leadership changes shift priorities over and over again, creating a stop-start program. We need more investment and actions that match the talk. Action and delivery. The private sector needs to have an SME/supplier graduation program. We need commitment to be on the supplier base and to be given an opportunity. We need a plan of action. We need to change how we do business so that the action is evaluated and measured. As business leaders and entrepreneurs ourselves, we also have to take ownership, be educated, and have extensive knowledge of our businesses. Master your 5-minute pitch and ensure you have benchmarks. Have the business skills and plan and ensure that you are funding-ready.

Q: What is the next phase in your business, and what will success look like for you?

A: We have developed an academy to train and graduate artisans, allowing them to grow their businesses and at the same time provide high-quality workmanship and services to our clients. It’s a win-win. The value chain creates impact. Our focus is on working on sharpening our service and growing our business through innovative offerings, partnerships, and collaborations.

Q: What advice would you give young women and entrepreneurs wanting to start their businesses?

A:
  • Be ready and level up.
  • Shape yourselves.
  • Research seriously.
  • Consistently work to make things happen.
  • Know your why and build a legacy. Know your purpose. Know why you are doing what you are doing.
  • Work hard on yourself and develop your capabilities. Work hard on your business and work hard for your people.
Bright light green young plant growing out of a stone by the water in autumn forest, peaceful zen buddhism influenced atmosphere, created with Generative AI Technology

Thriving in Turbulence: SME Success and the Resilience Recipe

by with No Comment Vannie Pillay

“I firmly believe that approximately half of the factors distinguishing successful entrepreneurs from their less successful counterparts is sheer perseverance.” – Steve Jobs

In my journey of personal and communal growth, as I contribute to the development of our community of entrepreneurs and comprehend the global landscape for SMEs, the resonance of this quote is profound.

The past year has been marked by dynamic and disruptive changes, accompanied by challenges that urged us to adopt alternative approaches, think and act swiftly, and persist against all odds. It required learning and growth, discipline and excellence, hard work, and the making of tough decisions—all while maintaining balance and calm.

It’s never an easy path; it can feel isolating. Fatigue and despondency may set in, coupled with lingering anxiety about the fear of failure. Every step seems arduous, and the destination appears distant.

Yet, take note…

“Pure perseverance” is the key differentiator for successful entrepreneurs. They possess the determination to stay focused, disciplined, and exhibit courage and strength of character. They never surrender because they believe in themselves and their purpose. The most renowned and accomplished individuals we know were not inherently lucky; they possessed the GRIT and tenacity to pursue their dreams.

Moreover…

Success is not a solo endeavour. The most accomplished leaders achieved success with the guidance of a coach and a team of supporters who directed them on the path to success.

Furthermore…

More challenges and obstacles lie ahead—additional headwinds and tireless days and nights.

But remember this…

If success were effortless and didn’t demand the investment of energy and time, everyone would be successful. And when it seems impossible, recall that “everything is doable” simply because you can do it.

Image1

Great Leadership = Great Talent – “How Leaders create talent in 6 easy steps”

by with No Comment Vannie Pillay

Let’s first understand what role talent plays in achievement.

As leaders, we all want talented people in our team because we know that talented people = business success.

Charles Darwin in his studies claimed that “zeal and hard work is ultimately more important than Talent” while Harvard Psychologist William James in focusing on how people differ in their pursuit of goals concluded that “the human individual lives far within his limits – he possesses powers of various sorts which he habitually fails to use” – if you fail to use that talent then success cannot be achieved – Angela Duckworth

It's not Talent on its own that = achievement but effort x 2 that = achievement

In her study, Angela Duckworth concluded that Talent improves your skills when you invest effort, and achievement is only achieved when you invest effort into the skill that you gain. The fundamental premise of achievement is effort x 2.

Dr Lara Boyd a brain researcher at the University of British Columbia advocates that the skill can only become great when you practice over a period and install the habit of practice to change behavior and achieve success.

From the various studies and research, achievement can only be demonstrated and come alive when that talent or potential is harnessed, and the environment is conducive to fostering the growth of the talent.

As a student of Leadership and Talent for more than 20 years, it always amazes me when leaders think that talent is automatic. We appoint people to their roles because of the relevant experience and then we just expect them to perform with greatness. No consistent and constant feedback, coaching, and clarity of goals and objectives. As leaders the expectation is that emails and meetings now and again with no intentional “installing” of behavior and discipline will get people to do what is expected of them.

Even if there are structured meetings we learned from Google’s “Aristotle project” that how you conduct those meetings, using the right words has a direct impact on creating talented people and teams.

So how do Leaders unleash talent?

These steps are not separate from being a leader and doing your job.

Leaders who live their authentic selves every day – creating a routine and employing the following habits and disciplines can unleash talent.

How Leaders Create Talent in 6 Easy Steps

The art of winning a battle is preparation and planning. Allocate resources and know the strength of the team. Understand the right time. Speed of attack and the ability to be flexible agile and to change your tactics when needed is crucial to winning. Know beforehand how your competitors, clients, and the context are changing, and be ready to adapt or die.

1.Recruit and appoint the right people

Don’t appoint only on experience on the CV or recommendations, just so you have a person to do the job.  Use experts and or a rigorous process to source and help you appoint great talent.

 Have tools to assess attitude, culture, and skills fit. Invest time and energy to get the right person. It costs you more money and time – through performance management, another recruitment process, and not having the person is more costly than the time spent on the process.

2.Onboarding

A structured onboarding process is critical for integration into the job and culture. I believe that onboarding is a process of indoctrination of employees to ensure that they live the company’s values and work according to company standards. Through onboarding the environment and leadership set the tone for performance.

3.Goals, standards, and expectations are clearly defined and communicated.

An employee can only perform according to what is expected of them. They need to know that upfront so that they can measure themselves against what they do and why they do it. If you don’t tell them clearly, how will they know?

4. Performance and feedback conversations

Conversations are instrumental to shifting performance. Tell them what they are doing well and what needs improvement. If they don’t know they can never improve.

5. Coaching and inspirational leadership

The Coaches and Captains lead the teams to Victory. Players do not do it by themselves. According to a study, coaching has a 221% ROI. (International Society for Performance Improvement)with 51% of companies with a strong coaching culture reporting higher revenue than their industry peer group. (Human Capital Institute)

6. Rewarding great performance and taking corrective action for poor performance

Be consistent and fair with this behavior. When you condone mediocre and poor performance you are telling your people that it is ok to perform poorly. It’s our culture and we tolerate sub-standard performance and not meeting deliverables.

“Train people well enough so they can leave, treat them well enough so they don’t want to.” Richard Branson

Closing Remarks

There are no shortcuts to unlocking individual potential and talent Unlocking people’s potential takes time through habits, rituals, and behaviours, and as leaders that is where our energy should be constantly directed. Its is the life of the leader. Focus on the person, not the work.

The daily habits and rituals you wire into your daily lives build a culture of meritocracy instead of mediocracy. People start performing how they are conditioned to perform. Those who cannot fit into the culture of high-performance leave.

Picture1

Strategy – “The art of war meets the science of the business”

by with No Comment Vannie Pillay

If you know the enemy and know yourself, you need not fear the result of a hundred battles.

 But

 If you know yourself but not the enemy, for every victory gained you will also suffer a defeat

 But

 If you know neither the enemy nor yourself, you will succumb to every battle

San Tsu – “Art of War”

Defeating your Enemy

The term strategy is derived from the Greek word “strategos,” meaning “general”. Its origins can be traced to war with nations fighting for territory and defeating their enemies. One of the most famous Latin works in the area of military strategy, written by “Frontiers” describes strategy as a compilation of  “strategems,” which is literally translated to  “tricks of war.”

San Tsu’s work “The Art of War” has been claimed as one of the best works in military strategy and is used widely today as a source of teachings in modern-day strategy, elegantly capturing  “warfare” in business”

The 3 learnings from San Tsu's “Art of War” that help you shape your strategy and win in business

  1. Know your enemy and know yourself

You need to know your competitive advantage. Know your weaknesses and strengths and that of your competitors and use this information to form your attack strategy and tactical plan to win in the marketplace. The SWOT analysis and business models help you determine this information.

2. “The general who wins the battle makes many calculations in his temple before the battle is fought.

The art of winning a battle is preparation and planning. Allocate resources and know the strength of the team. Understand the right time. Speed of attack and the ability to be flexible agile and to change your tactics when needed is crucial to winning. Know beforehand how your competitors, clients, and the context are changing, and be ready to adapt or die.

3. “The consummate leader cultivates the moral law, and strictly adheres to method and discipline; thus it is in his power to control success.”

Develop your character as a leader as intelligence is not enough. Align the team on the right path and enroll their emotion so that they follow you to war. Leaders need discipline and intentional focus to create success and know that they have the power to succeed or fail.

The Two Worlds Collide

As I read and learn more about how businesses win in this highly changing and competitive landscape, I would say that the art of military warfare in business has evolved. Today understanding your changing business context and the value you bring to your customers is more important than knowing and just beating your competitor.

We have shifted into a boundary-less world where the customer is evolving, demanding, and needing something new and different.

The art of war meeting the science of consumer behavior
“Today your strategy must focus on creating value for your customer and solving their problems”

Think about Samsung and Apple.

A strategy story that demonstrates this exceptionally well.

Samsung and Apple not only defeated Nokia on the frontline by understanding its competitors, preparing and planning, and leading their people but importantly they understood that the customer needs changed and technology was evolving.  They changed their products and services to add value to the customer beating Nokia on the battlefield.

4 learnings from the science of business that help you win in business

Instead of focusing on defeating your enemy focus on winning your customer.

  1. Focus on the value you bring to the consumer
  2. How do you communicate that value to the consumer and make an emotional connection?
  3. How you have given your customers an experience they will never forget
  4. How you constantly re-invent yourself as there is no more just competing with your competitors but being ahead of yourself to see what the future brings and how your consumer demands are changing.

 

Closing

Don’t just focus on your competition and look at how you can win the battle. Focus on you, your value, and capabilities making it relevant in this new boundary-less world we live in.

“ We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.” – Jeff Bezos

MJ

Building High-Performance Teams

by with No Comment Vannie Pillay

It was 2012 and I was part of a large organization that was embarking on a turnaround focused on building a high-performance organisation (HP). Like most companies post the global financial crisis the company needed to create and implement a winning strategy to not only survive but thrive.

We facilitated focus groups as part of the research methodology to establish current engagement levels. We asked the group targeted questions and 1 of the questions were:

Do you like your job?

 In one particular group, I met Leon, (not his real name) a regional manager who was a participant. More than 70% of the participants in the group responded “No” to the question. Leon enthusiastically answered, “I love my job”. He did not say like, he said “love.”

I asked Leon why he loved his job. He said two (2) things.

  • I know what I need to do, and I know how important my work is in adding value to the performance of our region
  • My manager is always available, helping us solve problems and coaching us to do new things he listens.

I met Leon one year later in another focus group as part of a three-year program. This time Leon said “no” to the same question. When I asked Leon why?

When we compared Leon’s and the region’s performance last year versus this year, we found that the region which was high-performing at that time was now a poor-performing business. Leon’s performance also shifted to a below-average performer.

After data analysis and correlation studies, our findings indicated two (2) things:

  • Engaged employees optimize their performance and contribute to high-performance teams.
  • “Leaders create an environment that creates high-performance teams that create business success”

 These findings are affirmed by many other academics and research studies.  Gallup Global Survey (2023) indicates that engaged employees contribute:

He said “We had a lot of changes in the last year. We have a new manager. I feel confused and overworked and don’t know what I am doing. My manager is always stressed and unhappy with the work we do.”

A story of a high-performance organization on a turnaround.

ABSA won the best company to work for in 2023 in a LinkedIn survey. The survey looks at how employees experience their organization, and how they feel about HR practices and processes. (https://businesstech.co.za/news/business/702363/the-25-best-companies-to-work-for-in-south-africa/)

The reputational sentiment measures how customers feel about the company. ABSA had the highest rating with 27.7%. (https://www.pwc.co.za/en/publications/major-banks-analysis.html)

Looking at how banks performed in South Africa in 2023, Absa was rated first for “Growth” and first for “Operational efficiencies.” (https://businesstech.co.za/news/banking/701565/the-biggest-banks-in-south-africa-in-2023/)

This case study indicates a correlation between the positive sentiment of how employees feel about the organization, with high customer sentiment, and high financial performance.

The World has Changed

The dynamic nature of change, artificial intelligence, and shifts in the way we live and do business has accelerated the move out of the “service and employee experience economy” into what is now termed a “Boundary-less Economy” – a highly disruptive and dynamic environment requiring new skills, and new ways of work. The economic, social, political, and technological challenges mean that leaders and employees alike are battling to cope with the change, experiencing overwhelm, exhaustion, and emotional pressures, with Gallup and PWC studies indicating that two-thirds of employees are feeling burnt out at some point or the other.

(Gallup global survey 2023)

The global survey indicates that 77% of employees are disengaged with only 23% of employees engaged. Gallup estimates that low engagement costs the global economy US$8.8 trillion and accounts for 9% of global GDP.

With low engagement levels and the change into a boundary-less organisation there is clear evidence that “employee performance optimisation” on its own is not enough.

Studies and the new way of work have shown that

“Structured and high-performance teams create business success”

As leaders and businesses, we need the answer to the question

“How do leaders and businesses create High-Performance teams to create high-performance businesses?”

To answer the question I will use Google’s “Project Aristotle” case study

Google’s “Project Aristotle”

In 2012 after the global financial crisis, Google like most companies embarked on its program of growth and transformation.  The objective of” Project Aristotle” was to create high-performance teams. In normal Google style, they were ahead of the time and understood that “employee optimization alone was not enough. Using data, research studies, and algorithms, they implemented the research project to understand what factors created these high-performance teams. During their research, they accessed research and studies from the last decade by various socialists and psychologists. What they found is that the “who did not matter”. There were no “patterns found in Personality types, backgrounds, education, and experience impacting high-performance teams.

After four years of research and analysis of data they found the following:

Psychological safety was the most important lever and the number one (1) contributor to a high-performance team. Edmonson, (1999) describes it as a “team member’s sense of confidence that the team will not feel embarrassed, reject or punish someone for speaking up”. The team members had turns to talk which they termed “conversation turn-taking” and had high “social acuity” in detecting how people were feeling.

In addition, members felt that they could depend on each other, they had structure and clarity in their roles and outcomes expected. As importantly they had meaning in their work and understood the impact and value their work contributed to the greater goals.

The building blocks to building a high-performance team

How do you take the levers from “Project Aristotle” and build a high -performance team?

1.Re-imagine Leadership

(https://www.simplypsychology.org/what-is-transformational-leadership.html)

Changing leadership behavior is the key building block to building a high-performance team

“Transformational leadership” in my mind integrates all the critical behaviours that are needed to build great teams and business success.

Leaders through “inspirational motivation” need to focus on adopting and sharing a clear vision and communicate the winning aspiration ensuring that employees know where the business is going, what their role is, and how it will get there.

“Intellectual stimulation“ allows creativity and innovation in achieving and working towards goals that are specific, measurable, and clear.

“Individualized consideration” is creating a system of conversations for mentoring, feedback, and engaging hearts and minds. “Authentic leadership” moves a leader to a space of “Idealized influence” – the ability to be honest, authentic, and living the values to create trust to create belief.

2.Communication and Conversations

A system of communication, engagement, and conversations sets an organization up for success. “Communication is leadership” and through this instrument, employees feel included, are given feedback, and experience “psychology safety”. These conversations and communication channels must be set up and implemented.

3.Environment

This refers to visible and intangibles in the organisation and creates a great place to work. Leaders need to integrate systems, processes, and mechanisms that make teams want to be there. They can laugh, have fun, and work hard. They know what’s happening, why it’s happening, and when it’s happening. They have a plan. Conversations, data, systems, processes, and management reports create a beautifully oiled machine, making it a great place to work.

How do you make this real and part of Leadership and Organisational Life?

5 key actions that will help you create install transformational leadership and build high-performance teams.

1.Strategy on a page

Know your winning aspiration, which markets you will play in, how you will win, and the capability and systems you need to win. Share this with your teams, so that they know the “why” and how they contribute to the business success. The meaning and impact are created with a clear journey map.

2.Goals

“What gets measured gets done”.  The how to “win” in the marketplace ensures you wire in targets and measurements to know how you are doing and what you need to do. This creates structure and clarity for teams, creating trust and commitment.

3.Conversations

A series of conversations structured into groups and teams takes your employees with you. There are 5 type of conversations that engages the teams. Goal, feedback, performance, coaching and mentoring, and career conversations. The teams always know where they fit in and how they are doing.

4.Self-transformation

All the change cannot be achieved without a change in behaviour by leaders. Leaders’ behaviour can only change through practice installing habits and discipline. It’s the practice that stores the learning in the “long-term memory.”

(Robin Sharma, 5am Club)

Re-imagining leadership takes getting rid of old habits and installing new behaviours through discipline and habits. The structured approach guarantees change. Like going on a diet needs a plan, discipline, and persistence so does changing leadership behaviours. Use the habit installation protocol, practice consistently and you will change your leadership behaviour.

5.Management systems

Management reports and systems wire in and tie it all together. It serves as the compass and indicator of performance.

Closing

“If everyone is moving forward together, then success takes care of itself.” – Henry Ford”

We know that great leadership builds great teams. We know what the levers are, we know what the building blocks are. Finally, we learned what will make this real in your world.  Imagine this – your entire team is on a boat and half is rowing in one direction and the other half in another direction. Will success be achieved?

image001 (1)

The Power and Impact of SMEs

by with No Comment Vannie Pillay

SMEs are our silent heroes, heroes who contribute about 50% to 60% of the employment in this country – the 2.6 million SMEs that quietly go about their business every day, employing countless people, supplying products and services, and generating essential economic activity.

We know that SMEs are the engines providing economic stimulus.

In South Africa, beset by record unemployment, stagnating growth, and flip-flopping economic policy, SMEs are nothing short of essential to our future.

A report by the International Finance Corporation (IFC) estimates that micro, small, and medium enterprises (MSMEs) constitute more than 90% of all formal business in the country, and in addition to employing 50-60% of the workforce, contribute 39% of GDP.

Creating a sustainable SME sector is not only good for business it is instrumental to job creation, and to creating an equitable and sustainable economy.

Looking deeper at the power and impact that SMEs create

  1. SMEs are crucial to alleviating the unemployment rates and responding to our 11 million jobs by 2030 – contributing to job creation, alleviating unemployment and poverty and with that all the social ills that plague us.
  2. They build communities – Looking at the archetype of the entrepreneur – your local hair and nail specialists, friendly grocer, baker, and teacher. Women and youth who come from underprivileged backgrounds pursue their dreams. These stories and people build communities. They serve communities and give back to communities.
  3. Entrepreneurship brings more citizens into an economically active populationensuring financial inclusion – what this does, is it broadens the tax base, increases skills development, takes people off the streets, and positively impacts crime.
  4. Drivers of innovation – They show agility and innovation – Sweepsouth and Yebofresh are great examples of this.

The Direct Focus on Diversity and Women

South Africa moved up one place from 2020 to rank 37th on the 2021 Master Card Index of Women Entrepreneurs. South Africa moved up two places on the Women Business Owner benchmark to rank 44th, with 21.9% of all women-owned businesses in 2021.

Prof Meyer from the University of Johannesburg, says “Women are stepping up to own their own businesses. “Women entrepreneurs are considered a reservoir of entrepreneurial talent”.

There is a growing body of research that suggests that women make better entrepreneurs than men. Studies from the Centre for Entrepreneurs, and McKinsey research amongst others have shown for a long time that investment should be in women entrepreneurs to ensure growth in the economy. The data research and case studies speak truth to the power of women.

Yet the environment is still not conducive to the growth of women. It is still very much a patriarchal society with that still strongly felt in boardrooms and business relationships.

We need to focus on bridging the gaps. Legislation and policy alone cannot create change. The awareness that females can create greater impact indicates that there needs to be more commitment to making the change in embracing women and giving them equal opportunities in business.

Despite all the power and impact of SMEs, the sector has stagnated and constantly faces challenges being hit by COVID-19, load-shedding, regulatory changes and challenges, trading conditions, and consumer demands.

The challenges facing all businesses in South Africa are well documented. Still, SMEs face a host of additional obstacles that see around 70% of them fail in the first year, compared with a global average of 20%.

A range of surveys conducted on the sector found that competition from large firms, inadequate equipment or technology, lack of skills, crime and theft, difficulty finding customers, cost of labor, and local economic conditions were all barriers to starting up and growing businesses. The one thing that almost all of them recorded was the lack of funding.

The funding gap is estimated to be about R294 billion.

It’s estimated that three-quarters of MSMEs are rejected when applying for credit, and only 2% of fledgling businesses are granted bank loans. Many companies that are too large for micro-finance but too small to access funding through traditional institutional channels find themselves in the so-called “missing middle”.

Reasons found in some studies – 1)businesses are reluctant to take on more debt in uncertainty. 2) The systems are not agile enough to reach the far-outlying areas. 3) Traditional credit systems are prejudiced with many banks calling for collateral for loans that they do not have.

There are alternative cash funders but not enough to make up for the deficit.

“If everyone is moving forward together, then success takes care of itself” Henry Ford

We know that there are pockets of excellence, initiative, and programs making progress and they must be commended and given accolades for their work.

But that being said we can see it is not enough. The segmented approach will not be sustainable. We need a community with a cohesive approach to building the SME sector and realizing its growth. The key is to ensure that key stakeholders and leaders answer the critical questions that hinder growth, offer solutions, and are held accountable through a program of impact and reporting. It cannot be a tick-box exercise but an action that creates impact.

After knowing all of this, as responsible citizens, entrepreneurs, and businesses, we cannot sit back and wait or do nothing.

More than ever, what is now needed is a cohesive, consistent, and impactful program of action. We need to use our leadership voice and direct our energy towards the growth of the SME sector. We need to create a community, a movement to bring stakeholders together for solutions, impact, and growth.

Edward Hale said that `’coming together is a beginning. keeping together is progress. Working together is success”

1

3 Insights to Help You Create An Employee Experience to Increase Productivity and Build a High-Performance Culture

by with No Comment Vannie Pillay

77% of employees surveyed by Deloitte said they are experiencing burnout, making it an endemic problem for virtually every company, but yet 80% of leaders say their employees are thriving.

 

Here are 3 insights to help you create an employee experience to increase productivity and build a high-performance culture,

 

  • Inclusion, respect, and belonging – Adapt your leadership style to ensure your are inclusive.

 

  • Ongoing Crucial conversations, not performance reviews once a year. Make these conversation part of your role in leading people. 
  • Goal setting conversations
  • Feedback conversations
  • Check-in conversations.
  • Career and development conversations
  • Poor performance and corrective conversations

 

  • Give meaning and purpose to the work – Coined in the Deloitte Insights Global Human Capital Trend Report in 2019, human experience is about giving meaning to and personalizing an employee’s work. People want to know the “why” so that they can understand how what they do fits into the bigger picture

 

By integrating these insights into your organization’s approach, you can cultivate an environment that not only drives productivity but also inspires employees to continually strive for excellence.

Follow me on LinkedIn, or check out my website on www.oaktreepeople.co.za.