FutureWorld Press Release – SA business takes its eyes off the competitiveness ball

Wednesday, August 31, 2005

MEDIA STATEMENT
For immediate publication

SA business takes its eyes off the competitiveness ball

What keeps executives awake at night?

What keeps South African executives staring at the ceiling all night? The answer, according to a new global survey by FutureWorld International, is Black Economic Empowerment and AIDS.

The survey highlights warning signs for SA business, says FutureWorld CEO Wolfgang Grulke. “In every other region of the world executives are focussing on increased competition, especially from China and Asia. But SA executives appear to be more inwardly focused, on BEE and the consequences of AIDS.”

While these are real business issues, says Grulke, they do little for customer service or global competitiveness.

“Based on these results, I would argue that many companies in SA are currently being out-thought and out-competed by the rest of the planet. Your competitors can see where your focus is – and it’s not on them.”

FutureWorld, a global business and technology think-tank based in Gibraltar, surveyed more than 500 business executives around the world for its survey.

Grulke said the trend was worrying for SA business and was not good news for SA Inc’s future competitiveness in a tough, interconnected world. The recent arrival of Barclays confirmed that South African businesses could not simply ignore what was happening on the broader global business stage.

Anton Musgrave, FutureWorld’s senior partner in SA and CEO of Cambium Capital, had some guidelines for SA business:

“We simply have to keep the balance of our leadership focus right – BEE is crucial if we are to deliver on SA’s economic imperatives, but if we lose our business edge and critical client focus then all the potential benefits of BEE will come to nothing.

“Ultimately, in an open economy with more global companies entering our space, we have to remain fearful competitors to them. Government and commerce have to address this issue so that the best long term result can be achieved for all South Africans. We simply cannot afford to take our eye off the business ball – ultimately it’s all about sustainability, not only in a South African sense, but also in the context of a global playing field!”

FutureWorld programme leader Neil Jacobsohn urged SA businesses to invest profits from the current consumer boom into preparing for a new onslaught of smart competition.

“This is not the time to get complacent, even though the good times look set to continue for a while longer. It makes great sense to invest the fruits of today into planning for a harsher tomorrow.”

Grulke warned that the coming years would be tough for SA-based businesses. “Continued and increasing economic growth is essential for SA to meet its social objectives. It is essential for SA companies to continue to have a passionate drive for growth and innovation – while doing all the regulated stuff as well.”

The global executive survey completed by more than 500 executives world-wide focused on ‘What keeps executives awake at night’ and showed the following trends:

• The top issues today are mostly concerned with the realities of the environment in which businesses currently find themselves doing business. Low-cost competition (sometimes described as “irrational” competition) from China and Asia is an overwhelming concern. In the longer term there is a heightened concern that this will turn from low-cost competition into low-cost plus full-service competition.
• The top strategic concerns (everywhere but in SA) are continued business growth, differentiation, relevance and innovation.
• South Africa emerges as having some unique concerns:
• Today, most executive focus and time are spent on BEE and AIDS – both critical issues but nonetheless both inwardly focused.
• In the longer term the focus switches to the unknown economic impacts of ‘regulated diversity’ and AIDS
• Corporate governance and compliance issues are consistently centre-stage as are concerns about further corporate melt-downs.
• Perhaps surprisingly, outsourcing and off-shoring are not mentioned that often, but are likely expressed in low-cost concerns about China and the rest of Asia.
• Attracting and retaining top people, skills and talent is the top internal concern. In the longer-term the need to develop relationship and personal networking skills emerges as key priority, for individuals and business. For business it is the need to create new organisational models that the ‘bright young things’ of the future will want to work within.
• Today, there are strong concerns about stress, health and insufficient family time, but it is fascinating that longer term (the two to five year view) these concerns disappear completely off the radar.
• One respondent said: “The more things change, the more they stay the same”. That appears to be a statement of desperate hope against hope that the future will not be that different. But alas – the future certainly is not what it once was!

ISSUED BY: FutureWorld

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