CEO Isaac Shongwe opines BEE has been bad for black entrepreneurship

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CEO Isaac Shongwe opines BEE has been bad for black entrepreneurship

Jan 2, 2024 | Strategy & Leadership

Isaac Shongwe, the founder of Letsema Consulting and former CEO of Barloworld Logistics, is dyslexic. He has hard to work really hard to overcome the learning disorder that made it difficult for him to write well and read complicated words. He had to develop a system where he breaks down words into two or three simpler parts in order to understand and write them. Growing up as a child with this condition turned Isaac into a stutterer which attracted laugher from bullies. Frustrated by the ridicule, he would lash out and fight.

‘Over time I came to understand that aggravating a situation does not solve anything,’ Isaac says. ‘The experience taught me to handle conflict in both personal and professional situations. I often get up and walk away from unhealthy situations. It is pointless to engage those who have ill intentions or to develop relationships that are not beneficial. Because of growing up with dyslexia, I also learnt to prepare thoroughly for any engagement so as to have a seamless delivery. I repeatedly go over all salient points before any meeting.’

BEE and Entrepreneurship

While his involvement in Barloworld had a lot to do with the Black Economic Empowerment (BEE) policy, Isaac thinks BEE has been very bad for black entrepreneurship.

‘Many people do not like it when I say that but it is the truth. You cannot legislate behaviour and BEE is a distributive model where we say that because of the sins of the past, companies need to give out 25% of their businesses. We are not creating mechanisms and systems that build black businesses. It has been 28 years since independence and you will struggle to identify a black business that was built from scratch to be a colossal enterprise.’

‘There are a handful of people who have made a lot of money but have not built a thing. This is why at Letsema I have an obsession to build something from scratch that will outlive me. Sadly, it is easier to cite big black companies that have failed rather than those that have succeeded. There are some BEE billionaires who own stakes in companies that are at their core quite white. The executive leadership of these companies come from the old order and the black owners are not actively trying to cultivate black excellence. Whilst we may criticise countries like Nigeria for ills like corruption, the big companies like banks, telecommunication entities and schools are owned by Nigerians who built them from the ground up.’

Strategist

A strategist par excellence, Isaac opines that strategies need not be complicated and must be well thought out. He was a very good striker in the UK and in the US and captained the teams most teams he played for. His involvement in soccer teams informs his views on strategy – you need to go into the game of business with a plan if you want to win. This includes being open to identifying gaps and exploit them accordingly.

In this regard, Isaac admires businesses like Capitec where the founders identified a need and thought about what solutions they could develop to address it. They mobilised resources and established the right distribution channels to provide a financial institution for the millions of black South Africans without bank accounts. They studied how to make it easier and twenty years later they are overtaking institutions that are decades older.

‘I think the Afrikaaner businessmen have pivoted better than their English counterparts,’ Isaac compares. ‘Curro is another example where a couple of Afrikaaner educators identified the need to provide black children with quality private education. They are proof that you do not need the complicated matrices and fancy Powerpoint presentations you get from consulting firms to have a successful strategy.’

This article is a brief extract from the book THE CEO X FACTOR – Secrets for Success from South Africa’s Top Money Makers – available here https://www.takealot.com/the-ceo-x-factor/PLID92980382

 

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