SA must support local investment

2008-01-10 00:00

The World Economic Forum’s recently published 2007–2008 Global

Competitiveness Report, ranks South Africa 44th out of 131 countries, a drop of eight places since 2006. Together with our country’s poor performance on the Globalisation Index, as described in December’s

Globally Speaking, it would appear that South Africa is heading one way in its ability to compete in our highly globalised world. While the government must take full responsibility for this state of affairs, and stands indicted in the court of economic justice, it appears that it is once again being left to business to create the kind of environment that will improve the global competitiveness of the South African economy. While this may appear an oversimplification, globalisation tends to benefit the world’s multinationals at the expense of smaller, more domestic organisations.

With their global logistics and communication networks, these behemoths skilfully exploit free trade, as well as financial and human capital mobility, in their perennial quest for greater shareholder value. Where does this leave the multitude of homegrown companies that often struggle to compete with much larger opposition? Their survival is important not only to the welfare of our domestic economy, but through their improved competitiveness, to South Africa’s ability to compete within, and become better integrated with, the global environment. This columnist has identified seven major investments that local companies need to make in order to improve their competitiveness at both domestic and global level.

Firstly, business owners and managers need to develop a global viewpoint of their business and must understand the global dynamics of their industries. They need to align global trends with the development and implementation of company strategy and the ongoing search for competitive advantage. Secondly, time needs to be spent inviting criticism from as wide a field of stakeholders as possible, with feedback being used to improve the company, its strategy and competitive position.

Thirdly, resources need to be channelled into securing the company’s leadership pipeline. Continuity of sound leadership, together with the right vision, helps to ensure that the development of the organisation’s culture does not get dissipated. Beyond this is the need to invest in good talent development and management practices that cover the entire spectrum of the company’s human capital. This means that the right people must possess the right capabilities and be deployed in the right places to run the business efficiently and to serve the customer. Because service superiority takes centre stage in the development of global competitiveness, managers must also ensure that all company systems from sales and administration to marketing, production and finance are designed to assist all staff to serve customers better than the opposition can.

Investment number six is the need to integrate executive development with the strategy process, ensuring that those at the helm of the organisation constantly seek to improve their ability, via lifelong learning. Lastly, then is the need to invest in capabilities building. This means being passionate about developing the capabilities of all employees and to help in unlocking their potential.

Governments are finding it increasingly difficult to hide behind political spin because of the plethora of indices that measure the global performance of countries and cities. The re-cently published report by the Independent in the UK concluded that out of 61 cities assessed, London is the cultural and economic performance capital of the world. Johannesburg, South Africa’s only inclusion is ranked 45th. The government appears to be abdicating its responsibilities in building a national competitive psyche to assist our companies and cities to compete more effectively with the world’s best. Business cannot be expected to shoulder this responsibility on is own.

• Paul Dorrian is a management consultant, author and teacher, specialising in strategy, marketing and customer service.

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