RAYMOND PARSONS: CEO initiative is not a magic wand but it may achieve short-term wins
Big business is under the microscope after its pledge to help the government in key delivery areas
16 August 2023 - 05:00
by Raymond Parsons
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In a recent address prominent business person Rob Hersov said he “reserves a special place in hell for appeasing SA business executives”. In a similar vein, economist and former World Bank president David Malpass asserted that “the private sector can’t save SA from government’s mess”.
Unlike several earlier formal business–government collaborations, the latest CEO pledge to assist the government in the crucial failed delivery areas of energy policy, port and rail operations, and crime has elicited highly critical responses.
Why has there been such a strong reaction in some quarters to business again linking arms with the government to address these challenges through new “joint task teams”? After all, such co-operative efforts are backed by ample precedents and have previously either been taken for granted or taken place largely under the radar.
A strong element of disillusionment now seems to permeate the climate of opinion in the face of the critical situation in which SA finds itself. Hence, the latest key CEO commitments are likely to remain firmly under the microscope.
This puts a premium on achieving a few rapid, visible outcomes. Clearly, the process needs some winners soon — that is, successes — to remain credible. Also, unless there is a paradigm shift in the way this kind of business–government collaboration works in future, we may see the start of a new phase of diminishing returns in this regard.
World Bank president David Malpass recently said the private sector can help SA. Picture: REUTERS
So where does the centre of gravity lie? Should business be taking a harder line with the government, washing its hands of closer co-operation with the public sector in tackling widespread delivery failures? Should business distance itself from a government that, to many, is falling short in providing decisive leadership, reducing policy uncertainty and being sufficiently business friendly?
The delivery-related crises seem to be erupting everywhere at once, and are seriously damaging the country’s economic performance. Businesses that remain invested (or would like to invest) in SA appear to have no choice given SA’s mixed economy but to once again assist the government — not only to identify the immediate priorities but also (especially) to help ensure the rapid implementation of the right ones.
Strengthen influence
The latest CEO initiative is no magic wand that will make long-standing, accumulated socioeconomic challenges disappear. But one advantage this time is the focus given to the three above-mentioned immediate priorities. Indeed, business expertise and funding could deliver positive outcomes over the next few months.
Another possible advantage is that the CEOs’ apparent championing of the three “workstreams” could strengthen the private sector’s influence regarding implementation. This in turn may inject more predictability into what the government does next in these crucial spheres, especially if timelines are set and regular progress reports are given.
The reality, though, is that while business can supplement and expedite public sector action it cannot replace it, except in cases in which privatisation may be contemplated. Many layers of bureaucracy still have to be navigated. Yet there is already ample evidence of the degree to which business and civil society are compensating for failures of governance, particularly at the local authority level. Business co-operates with Operation Vulindlela, for instance.
Ultimately, business does not govern the country; it can only help to keep it governable. A country is not a corporate. Even the best efforts may be only a temporary solution — perhaps to buy time — before more permanent solutions are found, but they should not be despised on that account.
SA and business are in for the long haul. The chronic exigencies of reform and transformation remain. A watershed general election is taking place in 2024. While CEOs and individual business people are free to take a personal party-political view, the twin mandates of organised business are to prudently confine itself to policy, not party politics, and to work diligently on the possibility of a business–government reform coalition evolving after the election.
High pragmatism
What needs to be done to deal with SA’s serious unemployment, poverty and inequality challenges will remain at the core of the national agenda in 2024, whether coalition politics features more strongly or the ANC remains the governing party. Whatever the ultimate political configuration, business should prepare its advocacy and lobbying strategies accordingly. And in the process there must be robust debate about the new boundaries between the public and private sectors in SA.
What the 2024 election creates is a chance fuelled by widespread concern and frustration over issues of governance and public administration. We should not allow urgent implementation to become a casualty of ideological fault lines; instead, it should be informed by a high level of pragmatism.
Fresh thinking is needed to build a more productive and united country, with entrepreneurship and transformational leadership among the keys to results-driven policy-making and business planning. Moreover, the demarcation between the public and private spheres must be driven by new practical tools that promote delivery. Flogging a system can no longer achieve goals — reform is the key.
Too many people engage in grand rhetoric about the government’s role in a “developmental state” when what is really needed is an effective and affordable “delivery state”. Any potential collaborative “growth coalition” after the 2024 elections will therefore require the key actors, including labour, to have a common understanding of the serious challenges the country is facing, and the incentives needed for all parties to work together productively.
Such challenges should also prompt organised business to streamline its activities to enlarge its sphere of influence. Leaders of well-organised business associations represent a wide range of interests and are well placed to pursue reforms that have a real effect in the broader economy. All-encompassing business associations or groupings are more likely to press for policies that bring about investment and growth throughout the economy, not those that favour particular sectors at the expense of others.
Business could start by building and strengthening trust between business and the government in the long term; evolving a common cross-cutting business agenda for interacting with the political leadership after the 2024 elections; and expanding the role of sector-based partnerships as key drivers of economic growth.
Yet, while “good economics” will require “good politics” in 2024, collaborative relations between the state and business will need to be reset to create the right kind of bridge between them. Global and local experience suggest that the ideal relationship between government and business is one of “creative tension” — let neither be suspicious of the other but let both be watchful!
• Parsons, a former deputy CEO of Business Unity SA, is a professor at the North-West University Business School.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
RAYMOND PARSONS: CEO initiative is not a magic wand but it may achieve short-term wins
Big business is under the microscope after its pledge to help the government in key delivery areas
In a recent address prominent business person Rob Hersov said he “reserves a special place in hell for appeasing SA business executives”. In a similar vein, economist and former World Bank president David Malpass asserted that “the private sector can’t save SA from government’s mess”.
Unlike several earlier formal business–government collaborations, the latest CEO pledge to assist the government in the crucial failed delivery areas of energy policy, port and rail operations, and crime has elicited highly critical responses.
Why has there been such a strong reaction in some quarters to business again linking arms with the government to address these challenges through new “joint task teams”? After all, such co-operative efforts are backed by ample precedents and have previously either been taken for granted or taken place largely under the radar.
A strong element of disillusionment now seems to permeate the climate of opinion in the face of the critical situation in which SA finds itself. Hence, the latest key CEO commitments are likely to remain firmly under the microscope.
This puts a premium on achieving a few rapid, visible outcomes. Clearly, the process needs some winners soon — that is, successes — to remain credible. Also, unless there is a paradigm shift in the way this kind of business–government collaboration works in future, we may see the start of a new phase of diminishing returns in this regard.
So where does the centre of gravity lie? Should business be taking a harder line with the government, washing its hands of closer co-operation with the public sector in tackling widespread delivery failures? Should business distance itself from a government that, to many, is falling short in providing decisive leadership, reducing policy uncertainty and being sufficiently business friendly?
The delivery-related crises seem to be erupting everywhere at once, and are seriously damaging the country’s economic performance. Businesses that remain invested (or would like to invest) in SA appear to have no choice given SA’s mixed economy but to once again assist the government — not only to identify the immediate priorities but also (especially) to help ensure the rapid implementation of the right ones.
Strengthen influence
The latest CEO initiative is no magic wand that will make long-standing, accumulated socioeconomic challenges disappear. But one advantage this time is the focus given to the three above-mentioned immediate priorities. Indeed, business expertise and funding could deliver positive outcomes over the next few months.
Another possible advantage is that the CEOs’ apparent championing of the three “workstreams” could strengthen the private sector’s influence regarding implementation. This in turn may inject more predictability into what the government does next in these crucial spheres, especially if timelines are set and regular progress reports are given.
The reality, though, is that while business can supplement and expedite public sector action it cannot replace it, except in cases in which privatisation may be contemplated. Many layers of bureaucracy still have to be navigated. Yet there is already ample evidence of the degree to which business and civil society are compensating for failures of governance, particularly at the local authority level. Business co-operates with Operation Vulindlela, for instance.
Ultimately, business does not govern the country; it can only help to keep it governable. A country is not a corporate. Even the best efforts may be only a temporary solution — perhaps to buy time — before more permanent solutions are found, but they should not be despised on that account.
SA and business are in for the long haul. The chronic exigencies of reform and transformation remain. A watershed general election is taking place in 2024. While CEOs and individual business people are free to take a personal party-political view, the twin mandates of organised business are to prudently confine itself to policy, not party politics, and to work diligently on the possibility of a business–government reform coalition evolving after the election.
High pragmatism
What needs to be done to deal with SA’s serious unemployment, poverty and inequality challenges will remain at the core of the national agenda in 2024, whether coalition politics features more strongly or the ANC remains the governing party. Whatever the ultimate political configuration, business should prepare its advocacy and lobbying strategies accordingly. And in the process there must be robust debate about the new boundaries between the public and private sectors in SA.
What the 2024 election creates is a chance fuelled by widespread concern and frustration over issues of governance and public administration. We should not allow urgent implementation to become a casualty of ideological fault lines; instead, it should be informed by a high level of pragmatism.
Fresh thinking is needed to build a more productive and united country, with entrepreneurship and transformational leadership among the keys to results-driven policy-making and business planning. Moreover, the demarcation between the public and private spheres must be driven by new practical tools that promote delivery. Flogging a system can no longer achieve goals — reform is the key.
Too many people engage in grand rhetoric about the government’s role in a “developmental state” when what is really needed is an effective and affordable “delivery state”. Any potential collaborative “growth coalition” after the 2024 elections will therefore require the key actors, including labour, to have a common understanding of the serious challenges the country is facing, and the incentives needed for all parties to work together productively.
Such challenges should also prompt organised business to streamline its activities to enlarge its sphere of influence. Leaders of well-organised business associations represent a wide range of interests and are well placed to pursue reforms that have a real effect in the broader economy. All-encompassing business associations or groupings are more likely to press for policies that bring about investment and growth throughout the economy, not those that favour particular sectors at the expense of others.
Business could start by building and strengthening trust between business and the government in the long term; evolving a common cross-cutting business agenda for interacting with the political leadership after the 2024 elections; and expanding the role of sector-based partnerships as key drivers of economic growth.
Yet, while “good economics” will require “good politics” in 2024, collaborative relations between the state and business will need to be reset to create the right kind of bridge between them. Global and local experience suggest that the ideal relationship between government and business is one of “creative tension” — let neither be suspicious of the other but let both be watchful!
• Parsons, a former deputy CEO of Business Unity SA, is a professor at the North-West University Business School.
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