Ted Black and Andrew Black
25 August 2008
analysis
Johannesburg — ON HIS 90th birthday, Nelson Mandela said: "There are many people in SA who are rich and who can share their riches with those who have not been able to conquer poverty."
We all understand why he said that, but "wealth redistribution" is the wrong focus for the nation. More than enough of it has taken place since 1994 -- legally and illegally.
Over the past 60 years, developed countries have given billions of dollars to help developing ones escape poverty, disease and provide hope. Despite an extraordinary level of financial support, relatively few countries, mainly Far Eastern, have emerged with viable economies. Many others, especially in Africa, have sunk deeper into debt with ever more of their people falling into poverty. Success stories are rare.
Various unstoppable forces contribute to the failure, not least political and economic beliefs and systems coupled to greed. However, as the late Peter Drucker pointed out many years ago, "Capitalism has been proved a false god because it leads inevitably to class war among rigidly defined classes. Socialism has been proved false because it has shown it cannot abolish these classes."
Does this mean the best wish for SA is to have an avaricious, privileged, multiracial elite perched on the lid of a simmering cauldron of unmet expectations? Rather go for a message of hope with the right goal in mind. Again, Drucker defined it clearly for us. "The task is not to make the poor wealthy, but productive," he said.
Of all the forces that work against success, one key factor is the inability to get things done. Moreover, the same assumptions that drive the "big-fix solutions" in business underpin most government social and economic programmes.
A gaggle of experts develops large-scale recommendations for change and presents them. They usually involve big projects -- change in legislation, introduction of new technology, large-scale training and the inevitable restructuring. Human and capital resources are duly committed to these activities.
AS SENSIBLE and informed as the programmes are, their success needs tremendous can-do capacity at national and local government level. This capability is rare and hardly ever developed. Human resource departments can't do it and neither can business schools -- both are like marriage counsellors. They can help, but in the end it is the task of husband and wife to make the marriage work.
It is the same with management development -- it can't be done in a classroom. It has to take place on the job.
This capacity gap -- the one between knowing and doing -- scuppers social and economic progress in developing countries as much as it hampers productivity improvement in businesses.
As Drucker dryly observed: "The wonder of modern institutions is not that they work so badly, but that anything works at all."
However, his sarcasm was deliberately provocative. It pointed to a fundamental truth. There is always a deep reservoir of potential waiting to be tapped.
In the private sector, productivity is higher because of competition but there is still massive opportunity to improve. The power of our major corporations to fix prices allows huge levels of costly incompetence to exist. As to governments worldwide, the potential to improve is boundless.
It means the answer to the poverty problem is not about redistribution of wealth. The poor do not create poverty nor does unemployment sustain it -- the system that surrounds them with its institutions and policies does.
Economists for the poor like Peru's Hernando de Soto, Nobel Prize winner Muhammad Yunus, founder of Grameen Bank, and the late Norman Reynolds in this country, have repeatedly proved that the poor have vast amounts of unused abilities and skills.
In recent years, development professionals working with government officials at local levels in Africa have started tapping into them by using Rapid Results initiatives to building can-do abilities.
The first step is to make the ego-free admission that the way we do things now is not working. It frees you to tackle things in a new way. The projects usually last no more than 100 days but they are not quick-fixes implying rough and ready short-term solutions.
For instance, in Madagascar, more than 40 Rapid Results teams lifted the percentage of regular users of family planning services in one region from 12,5% to 17,5% of women of childbearing age within nine months.
This defied expert predictions and created a performance breakthrough in a culturally sensitive area that had resisted change for decades. Moreover, they accomplished it within budget and existing resources. Today, more than 100 family planning clinics are under way in all 22 regions of the country. A cadre of trained rapid-results coaches from the health ministry supports them.
The new confidence that the projects unleashed triggered more initiatives to tackle other priorities such as maternal risk during pregnancy and birth. Because of these successes, the president of Madagascar has introduced the approach into various parts of the public-service delivery system in the country.
IN SIERRA Leone, the Rapid Results approach proved that the newly elected local councils were ready to manage their own development agendas. To sustain peace after many tragic years of civil strife, decentralisation of responsibility and authority was critical. However, central government was reluctant to release funds to local councils -- "How can we be sure they have the capacity to manage funds in a responsible way?"
Nineteen Rapid Results initiatives silenced the critics. Each local council converted one of its campaign promises into a 100-day goal and delivered on it. Three years later, the councils, supported by trained coaches, still use the approach to organise development projects. For instance, after testing only 1000 people in two years, the National AIDs Secretariat tested 15700 Freetown residents for HIV/AIDS in voluntary counselling and testing centres in 100 days with no additional resources.
In Kenya, coaches trained as part of a World Bank capacity- building initiative are now the core team supporting the "Results for Kenya" public sector reform programme. The government recently won a UN award for it.
A separate initiative emerged after a six-year stalemate between the government and industry on the fortification of staple foods to fight malnutrition. A 100-day project to form a public/private partnership broke through the logjam to fortify 15% of the country's cooking oil with Vitamin A. By the end of the project, the rapid results team had successfully designed and implemented a certification system and placed an official government logo on the three leading cooking oil brands.
The momentum and confidence created by this initial success generated additional efforts. The partnership is moving on to fortify flour products with iron, zinc and folic acid.
IN SA a few years ago Sasol sponsored a small, pilot project in Zamdela Township in Sasolburg. Its aim was to help young people to start their own businesses and to improve the results of existing businesses.
The participants, 20 men and women, were chosen carefully. Eight started street trading and the rest pursued opportunities in the community at large. Six businesses already existed but the rest were start-ups. They included selling cellphone airtime, cabinetmaking, dressmaking, catering, sign writing and photographic and electrical services.
The usual training brief was ignored. Instead, the programme was designed for on-the-job practice and coaching, not theory. A four-day classroom session -- the only training in a nine-month programme -- ended with a 10-day breakthrough project.
Many important lessons were learned during those 10 days, including the fact that nothing drives performance better than a clear, easily-measurable task. The entry ticket was R100 in cash -- not easy for many of them to bring.
Organised into small teams, their goal was at least to double the money per person in 10 days. The winning team would have most sales-in-cash banked, with progress measured by the minute.
None failed, and many discovered elements of lean thinking.
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