Sean Archer’s informative article on skills was unusual in that it looked at education in relation to our needs, as opposed to our wants, and so found more in-depth shortcomings than those generally aired (“Making skills acquisition work for everyone”,Mail & Guardian, January 13).
This article builds on Archer’s insights by looking at business education and training and relating it to our specific needs in terms of economic growth and job creation.
Our economic situation is shocking and the agricultural, mining, manufacturing and hospitality sectors are all in decline. But in this sluggish economy the growth of companies, though difficult, is certainly not impossible. Unless we can turn around three of the four sectors in decline during the next five years, we will continue our downward slide to become nothing more than a supplier of commodities — and new job prospects will be zero.
Many changes must be made to reverse the decline, most of which are within the government’s remit. But those changes alone will be insufficient. We are part of the global economy and we must be capable of competing successfully in that economy. But we cannot successfully compete with the best if we do not know how the best compete.
We do not have enough companies that are capable of competing and winning against their international counterparts. This was made painfully clear in a Financial Mail article, “American pie in the sky”, published on October 19 2007 — that is, before the financial crash and during a period of global growth. It described how eight of our top companies failed to compete successfully in the United States. The chief executive officers interviewed claimed they had thought that “what worked here would work there”. But the reasons they gave for their failure were all circumstantial: nothing was their fault and no chief executive appeared to have learned anything from his experiences.
Focus on training good managers
Our economic situation forces a narrow focus on our training needs. It is too late to start at the beginning by concentrating on training people to become managers, because they will not be capable of materially affecting our economy during the next five years. We have to focus specifically on training good managers to match, then surpass, their international counterparts. If we do this properly, it could show results well within the five-year time frame. And yet, less than 1% of existing business education and training is directed towards meeting this need.
The skills education and training authorities (Setas) have little, if anything, to offer. They use outcomes-based “unit standards” that are in no way linked to what our companies need to know to be able to meet, and beat, international competition. Their modus operandi is that of the three blind mice. The anonymous creators of the unit standards produce content that is a wish list describing what the student should be capable of doing when training is completed. The “course developer” creates what is regarded as the content necessary to achieve the specified outcomes. Finally, the completed course material passes to whoever is going to present it to the students.
These are the three blind mice, all linked by the common denominator of having no requirement to have hands-on, practical experience of the subject. Therefore the Setas have no role in training good managers to become great managers.
The further education and training (FET) colleges, which the government says must become the centrepiece of skills training, have a dubious record. Their throughput rates (essentially pass rates) are extremely low — 4% in some programmes, which in plain English means 4% of students were able to move up two grades. So, like the Setas, the colleges are ineffective for our needs.
For their part, business schools the world over have the same basic problem. They are unable to attract adequate numbers of full-time lecturers who have much “real-world” business experience. Lecturers with global business experience are rare.
There are two types of business academics — the practical and the academic. Practical academics who are fortunate enough to live in demanding, competitive economies have a wide range of globally successful companies they have closely studied for many years. They have analysed how these companies became successful, what they are doing today to remain successful and what they are likely to be doing tomorrow. They publish their findings in the international-management book market, thus making the content both readable and accessible.
Academic academics who do not live in a demanding, competitive economy have little opportunity to study successful global companies, because there are too few to allow meaningful analysis. They regurgitate the ideas of others and do not use material written by the practical academics because they cannot relate to it. They have a poor record of publication in the international-management book market. There are no prizes for guessing in which situation we find ourselves.
People skills at the bottom
Business schools should be cutting edge: they should show us the way ahead and the very best the world has to offer. They should be the prime promoters of all we need to train good managers to become global managers. Alas, this is not the case. The Association of South African Business Schools publishes a list, in order of priority, of the subjects taught to MBA students. It has “strategy” at the top and “people skills” at the bottom.
Who, or maybe what, do they imagine implements strategy? Robots? Aliens from outer space? No, people implement strategy, people get things done, people innovate and create. Toyota has long claimed that its people provide its competitive edge, so is it any wonder why some of our top companies have failed to compete in the world’s largest economy?
This failure to value people is encouraged by labour laws and associated regulations. The biggest single difference between the management patterns of South African companies and their international counterparts is that we have much lower levels of people-management skills. Not surprisingly, we also have a much wider gap between management and the workforce.
We complain about a lack of skills, but we do not manage the skills we already have in ways that can achieve their maximum output. We rarely set out to create people-inclusive organisations. We do not have the creation of high levels of people commitment on our radar screens, yet it has been the most important and valuable people and company development practice over 50 years.
The Asia Pacific region has long been the best example in the world of high levels of growth and job creation. The region has taken large slices of product sectors that were exclusively held by Western companies. Although the region has beaten us in many aspects of business, we have continually ignored the obvious: that the West is no longer the sole repository of management excellence. No organisation teaches how Eastern managers think and operate. Given our low levels of growth and productivity, we are ignoring much that could be highly valuable to us.
Cathedral of knowledge
This is neither the only nor the worst aspect of our deeply entrenched parochialism. We have also missed the creation of international management that led to the melding of the best of previously national or regional systems. Well proven in the tough arena of global competition, international management is the most complete and valuable “cathedral of knowledge” that exists today. The Setas and the FETs have ignored it completely. Our business schools give it a passing nod, but it is not in their programmes. Most of what the Asia Pacific region has to show us is contained within international management content.
We also ignore the rapidly changing nature of how companies and people are managed. Much has moved through 180°, making the new the opposite of the old and no longer compatible with it. This has also escaped the creators of our business education and training programmes.
International management contains a living, changing, always-evolving body of knowledge. It is not static, as are the unit standards.
Change takes place too rapidly to allow us to follow the old concept that claims we can “teach them the basics now and they can learn the new stuff later”. This is no longer possible because the two are diametrically opposed. We cannot integrate the new into the old “command and control” system. Neither can we do so in a company in which hierarchical conformance is seen as being a better way to operate than situational conformance.
Markets change faster than hierarchies and if the rate of change outside your organisation is faster than the rate of change inside it, you are already in decline.
Our business education and training systems lack integration and have no common focus linked to our needs. The imposed Seta system is outdated and inadequate. Overall, we have incorporated little, if anything, of the best the world has to show us. This is not a route to winning in the global market.
Dr Malcolm Birkin is the author of Building the Integrated Company and a consultant in business development and growth.