We hear so much about growth and how well the economy is doing. We also hear that job creation is not happening fast enough. I believe that if we are going to change this we need to be more honest with ourselves about our economic performance. Over the past 30 years SA has lost two-thirds of its share of global trade.
This happened because other emerging markets grew their economies faster than we did. We had an opportunity, between 1997 and 2003 when our currency lost two-thirds of its value, to reclaim lost ground with skyrocketing exports. But this did not happen and we have never reversed the loss of global share. Yet current performance measurements do not reflect this. Indeed, our measurements would be useful and appropriate if we were the only runner in the race. We are not; we are part of the global market.
However, stating that we lost out to more successful countries is only a part of the story, because countries don't compete: companies do. The root problem is our lack of internationally competitive companies.
The reasons for this are complex. We have large groups that are averse to taking risks - which precludes entry into the global arena. We also have many cosy cartels.
There is another reason. That is our inability or unwillingness to teach or use the best of international management practices that could transform our companies into growth-orientated operations. Traditionally, SA companies grew by acquisition and adopted a non-innovative, non-risk-taking attitude that bears little resemblance to the growth-orientated model that has powered the global economy over the past 20 years.
What exactly have we missed? We have ignored the "international evolutionary progression" that brought the development and growth of management, people and HR. We have also ignored "evidence-based management", which has researched these developments, so proving their success.
Globally, the move from control to commitment has been the biggest single step forwards. This move has bridged the gap between the old command-and-control system and the new, commitment-based, people-inclusive system.
Yet despite this being a practical system backed by irrefutable evidence, the concept has not found a home in SA. We cannot achieve higher growth and job creation rates unless we use systems that are the only sure route to international competitiveness.
Ironically, there is an interest in SA in creating strategic HR. This is HR that has been upgraded from being a cost centre supplying a service, to a full strategic partner with potential to add to the bottom line. But we have missed the evolutionary progression where strategic HR was developed from the successes of commitment management linked to high performance work systems. Both created dramatic bottom-line improvements, and strategic HR evolved to continue the process, but we have ignored these foundations in seeking to build strategic HR.
The national qualifications framework is not aligned to growth and very little of what is taught in our business schools, certainly to MBA students, contains much, if anything, from globally successful examples.
The business schools should be spearheading the teaching of the very best of international management practices. This is not happening, presumably because our lecturers lack not only business experience, but international experience as well.
Strategic HR leads to the next evolutionary step of "management devolution" where companies pass managerial responsibility and authority down the line to allow problems and opportunities to be handled where the action is, by those who understand them best.
We tend to think of China's main advantage being its huge, low-cost labour force, but the best of Chinese companies have been using management devolution practices for some time.
- Malcolm Birkin is the author of Building the Integrated Company and director of Sandton Consulting Group International
