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Robin Woolley Page 1 Transformation strategy, a business case No of Employees Time 1700’s Your Customer “who is going to be your customer in the next 5.

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Presentation on theme: "Robin Woolley Page 1 Transformation strategy, a business case No of Employees Time 1700’s Your Customer “who is going to be your customer in the next 5."— Presentation transcript:

1 Robin Woolley Page 1 Transformation strategy, a business case No of Employees Time 1700’s Your Customer “who is going to be your customer in the next 5 – 10 years”. Leading on from this, you need to answer “what action needs to be taken that will help you understand this future customer and what they value?”

2 Robin Woolley Page 2 The roles in the guiding BEE team: – – project manager – – boundary spanner – – gate keeper – – sponsor – – champion. – –functional roles Hearts Minds BEE Strategy Employee dialogue Strategic actions 30 day review BEE team Scorecard BEE Info Transformation strategy, the process

3 Robin Woolley Page 3 7Ps for business model analysis & design PURPOSE Why do we exist? POSITIONINGPRODUCTS PROCESSES PEOPLE PARTNERS PHILOSOPHIES What beliefs guide us? Who is our customer and how do we want to be perceived? Who will help us reach our goals, and how do we manage these relationships? What do we do and how do we do it? Who do we employ and how do we manage them? What do we offer, what is our “difference,” and why does it matter? Source: Tony Manning Your Business Given the purpose and nature of your business, “what actions can you conceive that will enable transformation?” “given who I am, how can I help transformation?”

4 Robin Woolley Page 4 Transformation strategy, the First Principles FOCUS VALUE COSTS COMPETITIVENESS Source: Tony Manning PURPOSE POSITIONINGPRODUCTS PROCESSES PEOPLE PARTNERS PHILOSOPHIES

5 Robin Woolley Page 5 Transformation strategy, an example…… “This is a very simple business. When we complicate it we really mess things up.” Roberto Goizueta, Chairman Coca-Cola Company Roberto Goizueta, Chairman Coca-Cola Company ACCEPTABILITY AFFORDABILITY AVAILABILITY To be the drink of choice Source: Tony Manning

6 Robin Woolley Page 6 Transformation strategy: The Value Plan STEP 1: Define your purpose STEP 2: Agree three key value drivers STEP 3: Agree maximum of three goals for each value driver STEP 4: Agree maximum of three actions for each goal by answering the above questions PURPOSE DRIVER # 2 GOALS DRIVER # 3 DRIVER # 1 ACTIONS x3 X3 GOALS ACTIONS x3 GOALS ACTIONS x3 Source: Tony Manning

7 Robin Woolley Page 7 PURPOSE GOALS ACTIONS x3 X3 GOALS ACTIONS x3 GOALS ACTIONS x3 Social Investment Weight 10% Involving the full organisation Strategic investment Collaboration and Partnerships Exposing your brand to future clients Building future employees / suppliers Scorecard % EBIT, target 1% Health, education, poverty alleviation, community development Black beneficiaries --- Cost to company Capture a paper trail

8 Robin Woolley Page 8 Enterprise Development: weight 10% Supplier support - development Strategic investment – related value offerings Retention strategy Courtship? – joint venturing Collaboration Scorecard: % EBIT target 1% Both non-monetary and monetary investment Capture a paper trail PURPOSE GOALS ACTIONS x3 X3 GOALS ACTIONS x3 GOALS ACTIONS x3

9 Robin Woolley Page 9 Procurement Discretionary / non-discretionary Key suppliers Obviously white BEE credentials Audit White – intent to change White – no intent to change Size: Micro, S,M,L Action Build an explanatory table Resulting category Group large suppliers, they are self regulating Apply different criterion for small and micro enterprises Monitor & hold accountable Find alternative supply Enterprise development targets? Support mechanisms Collect ratings

10 Robin Woolley Page 10 Strategic preferential procurement Risk Spend PURPOSE GOALS ACTIONS x3 X3 GOALS ACTIONS x3 GOALS ACTIONS x3

11 Robin Woolley Page 11 Skills development & Learnerships - weight 20% Strategic investment Workplace skills plan Mentoring Building future owners? Scorecard % payroll – target 3% Includes quantifiable on the job training Black beneficiaries --- Cost to company Capture a paper trail PURPOSE GOALS ACTIONS x3 X3 GOALS ACTIONS x3 GOALS ACTIONS x3

12 Robin Woolley Page 12 Ownership options Ownership options Organic: –Employee share options –Employee owned trusts –Warehousing –Direct shareholding Mixed: –Direct shareholding –Attracting talent Merger / Acquisition:[74 % risks?] –BEE Group –Collectives PURPOSE GOALS ACTIONS x3 X3 GOALS ACTIONS x3 GOALS ACTIONS x3

13 Robin Woolley Page 13 BEE Partner Selection

14 Robin Woolley Page 14 Context of BEE partner selection Develop a clear Strategy Generally looking for political connections –ex-MP, ex-Ministers, ex-DGs etc Define specific role for Partner Manage selection process in-house. [vs dating agency] Sign contracts Create break-up clause.

15 Robin Woolley Page 15 Issues in choosing BEE partner (1) What is the track record of the BEE Partner? –Look at individuals – skills and available? –Look at team –Review previous transactions and understand reasons for success/failure What specific skills are in the BEE Partner? – compatible with your needs? –Are the needs around lobbying or direct operational involvement? –Are there specialist skills - accessible? What is the chemistry between BEE partner and yourself like?

16 Robin Woolley Page 16 Issues in choosing BEE partner (2) What other businesses is BEE partner involved in –Are these businesses compatible with your own? –Do the businesses demonstrate sound business acumen? –Do these businesses require a great deal of attention? –Is BEE partner lead player in its other businesses? –What is the relative value of other businesses compared to yours?

17 Robin Woolley Page 17 Cautionary tales (1) Broad-based BEE consortia –Lead partner does all the work and can be distracted by side issues within the consortium –Questionable value-add –Have a poor history in South Africa BEE partner with multiple minority holdings in a range of companies –Everything is too small –Unlikely to gain sufficient attention. Develop two level approach to managing relationship –Top level manned by most senior executive in BigCo and leader of BEE partner –Role of top level is to act as minders to relationship –Second level manned by the “operational interface” where the work gets done.

18 Robin Woolley Page 18 Cautionary tales Interrogate BEE partner dominated by individual without proper succession planning or professional support –BEEG dependant on individual personalities show weak business model and unsustainable. Treat aggressive targets for new business flows with caution Someone in the organisation must accept responsibility for successful BEE transaction.

19 Robin Woolley Page 19 Takeaway How do we justify the expected value-add by BEE Group? If going into consortia, what specific due diligence have we done on the consortium? Do we believe that the BEE consortium has enough credibility to be an important shareholder? Know your partner

20 Robin Woolley Page 20 The Step by Step Toolkit

21 Robin Woolley Page 21 Step by Step Plan - BEE-TOOLKIT Planning & Strategic Phase: 1.Define your BEE objective. 2.Align your business strategy with your BEE strategy. 2.Reach consensus on: –Which companies / departments have to be included in the BEE-transaction? –Should employees or outside shareholders be involved with the transaction? 3.Develop and implement corporate governance principles to accommodate a BEE shareholder.

22 Robin Woolley Page 22 Step by Step - Toolkit 4.strategy to cover all the elements of the score card. 5.Do realistic valuations of the entities that form part of the BEE transaction. 6.consultation with employees in order to avoid perceptions. 7.Compile a business plan in order to arrange finance. 8.Lodge the BEE transaction with different financial institutions and assist the BEE partners with the application for finance.

23 Robin Woolley Page 23 Step By Step Plan - BEE-TOOLKIT Implementation Phase: 10.Draft appropriate shareholders agreements, employment contracts, trust deeds etc. 11.Start with the implementation of the transaction and the elements on the score card against a set of benchmarks. Appoint a BEE Project Leader. 12. Use the new BEE status in order to increase the market share by way of strategic and media announcements. Monitoring Phase: 13. Update the BEE strategy and score card on a continuous basis. 14. Subject your company to an independent rating?


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