The cause of the international success of many South African companies lies in our economic history, which has produced a high level of pragmatism, an ability to move at speed and a willingness to understand different cultures and markets.
For a country of our size, South Africa has produced a surprising number of world-class companies. There must be something in our economic history that has given us the kind of innovative, pragmatic capacity to do this. In fact, if the country were a prize-winning bull, we could say that it had sired a list of prizewinners – including South African-based companies like Sasol and Bidvest, as well as South African-linked companies that originated here, like Anglo American and SABMiller.
After South Africa's democratising in 1994, local companies could legitimately expand their operations and seek to compete with many other nations in the race to be global players. Several major players took the opportunity and our list of corporate champions grew accordingly.
I travel widely and meet with the South African diaspora, including many individuals who are in CEO or other senior positions. They explain that specific South African attributes are highly valued. Among them are our “can-do” attitude and our ability to handle change. They also speak of our realism, forged in a multicultural history, which has given a broad view of the world, leading to this “can-do, get-the-job-done” approach.
In my view the companies that have been successful internationally (and many haven't quite succeeded) built their capacities in the “frontier mentality” of South Africa's economic history. Johannesburg remains the hub of our economy and it is still quintessentially a mining town with a mining camp's mindset. Perhaps this kind of pragmatism, the capacity to take risk, the urge to get things done quickly and the willingness to overcome almost any barrier, are the foundations from which we have produced these globally competitive companies.
This capacity is observable in mining, retail, financial services and telecommunications. It will, if retained, be an ongoing and important driver of our long-term potential.
SAB Miller is a great case study of a business that has wrestled itself to pre-eminence. One would have expected, that after years of South African dominance, it would have become lethargic, inward looking and an unlikely candidate to achieve the extraordinary results that it has.
Strong managerial leadership and good governance by Meyer Kahn, Graham MacKay and Norman Adami - and other visionary leaders - as well as its local origins, have been leveraged by using visible (financial and technical) and intangible (leadership and human resources) assets. These have been used to create the largest and most global of South African companies. Even though it no longer has its main listing in South Africa, SABMiller's character and DNA are rooted in our history.
What about Bidvest, which must be rated as one of South Africa's greatest corporate success stories? Brian Joffe and his team have taken a small distribution business and in 20 years expanded it into an extraordinarily successful array of businesses with a portfolio that spans the globe.
Bidvest's approach - with its strong financial disciplines - is extremely unusual in today's global economy. The constant drive for excellence, innovation and first-class financial performance is a hallmark of the Bidvest story.
Entering a new market and a new country requires an understanding not only of the regulatory and legislative framework, but, most importantly, it requires an understanding of the culture of a country - of how people, in fact, operate in that country. In Africa, as elsewhere in the world, there's no simple pattern and cultures vary widely. Kenyans think, behave, and buy and sell differently from Ghanaians or Nigerians or Malawians. It's the South African willing curiosity about this that has led to our successes.
Of course, we have also brought our logistical and infrastructure skills. We are fairly used to operating with lean infrastructure; we understand cash management and debt collection; we utilise the “roll-up-sleeves and hands-on” approach that's needed as opposed to sitting in an ivory tower. It's getting out there and doing the business personally that is part of the South African style.
Thomas Friedman has told us that the world is flat. It's not flat, it is in fact quite bumpy, but if you come from a good South African heritage, part of your legacy is this ability to quickly get on with the job in an entrepreneurial and dynamic way. The bumps are there to be navigated.
It remains to be seen whether we can continue to build this capacity. South Africa certainly has the inherent business strength to do so, not only in core businesses but also in professional services, where we are ranked very highly. Our stock market is renowned for its strength and is supported by world-class financial services.
The question is whether we are hungry enough? On the one hand, South Africa is very well located. We are in a great time zone, we have a good infrastructure for a middle income economy, English language skills, a strong private sector and so on. On the other hand we are in a modest neighbourhood.
I often wonder if our national appetite for business would shoot up if Nigeria and Zimbabwe swopped positions and we had 150 million energetic and entrepreneurial people on our doorstep?
There is still so much to gain in the years that lie ahead as South African individuals and companies explore these remarkable times. Dramatic change is our bread and butter and doors are opening for us to find the places and spaces to do great business. asa
Author: Professor Nick Binedell, BCom, MBA, PHD is the Dean at University of Pretoria's Gordon Institute of Business Science.