CEO Speech Mpumalanga – Workplace Challenge Milestone Workshop
Productivity SA Chief Executive Officer (CEO), Mr Mothunye Mothiba, speech at the Mpumalanga workplace challenge Programme milestone webinar, Friday 11 November 2022
Programme Director, Acting Executive Manager Region 3, Productivity SA Mr Phila Ngcobo
Honourable MEC, Mpumalanga Department of Economic Development and Environmental Affairs, Ms Nompumelelo Hlophe
Director: Skills for the Economy in the Spatial, Industrial, and Economic Transformation Branch, Department of Trade, Industry and Competition (the dtic), Ms Shanaaz Ebrahim
Guest Speaker, University of Mpumalanga, Dr Kanayo Ogujiuba
Acting Chief Economist, Productivity SA, Ms Juliet Mashabela
Strategic Partners, Branch Manager, SEDA, Ms Florence Mathebula
Procurement Manager, Sappi Ngodwana, Ms Tsakani Nyakane
Representatives of Automech and Mackenzo
Acting Executive Manager CIS: Productivity SA, Ms Amelia Naidoo
Representatives from Business, Labour and Academia.
Colleagues from Productivity SA and the dtic.
Members of the media, all invited guests, Ladies and gentlemen.
THOBELA, NDAA, MOLWENI, GOEIEMORE, SANIBONANI, GOOD MORNING
“Management is doing things right; leadership is doing the right things.” “The most important thing in communication is to hear what isn’t being said.” “Unless commitment is made, there are only promises and hopes; but no plans.” “No one learns as much about a subject as one who is forced to teach it.” Peter Drucker
Programme Director, Ladies and Gentlemen, from the onset I would like to thank you for taking time out of your busy schedules and indeed much needed time from your businesses to participate in this Workplace Challenge Programme Milestone webinar.
When reflecting on this day, it dawned on me that, today is the 11th day of the 11th month in 2022 (what a coincidence). “The 315th day of the year (316th in leap years) in the Gregorian calendar; 50 days remain until the end of the year; and Remembrance Day in the Commonwealth Nations, a memorial day observed since the end of the First World War to honour armed forces members who have died in the line of duty.
This reflection confirmed how important the theme for the event is: “Adapting and growing stronger, together”. The theme highlights the need for adapting to new ways of doing business and leveraging on collaboration and partnership for growth.
Programme Director, Ladies and gentlemen, the quote that I started with is from a giant who was well known globally as a productivity and management specialist. If you listen carefully once again to the quote “Management is doing things right; leadership is doing the right things.” “The most important thing in communication is to hear what isn’t being said.” “Unless commitment is made, there are only promises and hopes; but no plans.” “No one learns as much about a subject as one who is forced to teach it, you begin to realise that this quote encapsulates what we have been doing in the implementation of the Workplace Challenge Programme. In essence we have been implementing the key aspects of Goal Alignment through leadership, communication and setting clear goals.
It is during the difficult times, where we still experience the spate of liquidations (with over 1400 companies liquidated so far from September 2021 and millions of jobs lost, workers retrenched, and still many more to come if Sibanye-Stillwater and Hullet-Tongaat follow through on their envisaged retrenchments), that we collectively commit to doing the right things. Although the Manufacturing production rose by 3.7% from a year earlier in July of 2022, below market estimates of a 4% growth, following three consecutive months of downturn, we are still not out of the woods.
Ladies and Gentlemen, South Africa’s continued productivity slowdown damages the productive capacities of capital and workers, thus, impacting economic recovery and employment growth. This state of affairs confirms that we are a country incapable of managing the totality of its resources and competencies to increase the prosperity of its population. The crisis presents us as policy makers and stakeholders with an opportunity to develop a mix of policies and programmes to create an enabling environment for entrepreneurship and sustainable enterprises.
If we address the productivity and competitiveness of our economy and its enterprises, we are guaranteed that we will automatically address our triple challenges of unemployment, poverty and inequality.
To give a bit of a global perspective on the importance of goal alignment, world leaders are currently meeting at the United Nations Climate talks or COP27 that are taking place in Egypt. The fundamental aim of the two-day summit which our President Cyril Ramaphosa is attending, is to bring governments together to accelerate global efforts to confront the climate crisis. That climate change is wreaking havoc globally through changing weather patterns as a result of global emissions is well documented. To cite a few examples, Ethiopia and other countries within the “The Horn of Africa” have been experiencing their worst drought in 40 years. Back home, South Africa saw 400 people lose their lives due to the devastating floods in KwaZulu-Natal in April this year.
The floods were a result of climate change. As you know, Mpumalanga is home to coal-fired plants which leads to high levels of greenhouse gases in the provinces. South Africa is said to be the world’s 13th biggest source of greenhouse gases and it is documented that half of its emissions coming from coal-fired electricity generation. I can assure you Mpumalanga is one of the provinces at the top of the list in terms of greenhouse emissions.
To be able to counter the effects and reduce damage by climate requires leadership. At the core of leadership is the ability to listen to all and be able to come up with a conducive plan that factors all aspects into the equation. The principles that are applied in the implementation of the Workplace Challenge Programme will be of significance in tackling the climate crisis. So, the importance of the implementation of productivity enhancing programmes like the Workplace Challenge Programme can never be overemphasised.
I am humbled by your participation in this webinar as it is a confirmation of your declaration and to the agreement we made as strategic partners to enhance our productivity (which is a driver of long-term competitiveness and sustained growth) and performance improvement through the Economic Reconstruction and Recovery Plan enhancing.
As our erstwhile statesman and the first president of South Africa‘s democratic dispensation, Nelson Mandela once said “We must use time wisely and forever realise that the time is always ripe to do right.” I can assure you that your presence in this workshop is highly valued and it is not time wasted. It is the Right Time to do the Right Things, the Right Way.
Ladies and Gentlemen, the Workplace Challenge Milestone Workshop affords us as stakeholders and strategic partners in the economy and labour market an opportunity to reflect on the journey we have travelled since 2019 (over the MTSF 2019 – 2024) and towards 2030 to give full effect to the National Development Plan. This reflection should be premised on the commitments we made to South Africans in 2012 when we adopted the NDP that, we should create an enabling environment for entrepreneurship and sustainable enterprises, which should create over 11 million jobs 90% of which by SMEs.
It is for this reason that as we host this milestone workshop, we call upon the leadership (both political and administrative) of the Mpumalanga Economic cluster departments at provincial level, three district municipalities, which are further subdivided into 17 local municipalities to work with us to improve the competitiveness and sustainability of their economies and enterprises, particularly SMEs (both formal and informal) operating in the priority productive sectors.
Whilst it is the second smallest of South Africa’s provinces, Mpumalanga is rich in coal reserves and home to South Africa’s major coal-fired power stations. eMalahleni is the biggest coal producer in Africa and is also the site of the country’s second oil-from-coal plant after Sasolburg. Thus, all hands should be on deck to improve the improve the competitiveness and sustainability of Gauteng enterprises.
Commentators and pundits alike have lamented that “South Africa urgently needs to find a way to develop a more inclusive social order that brings social partners (labour, government and business) together as a basis for long-term economic development and growth”. There is a strong call for social partners to rise above their sectional interests and put in place a social compact that is for the greater good of the country with national interests put forward.
The clarion call for a social compact has been emphasised by our President, Honourable Matamela Cyril Ramaphosa, who impressed it upon us that, to address the immediate crisis and to create conditions for long-lasting stability and development, we should work together. The President says the country needs a number of impactful interventions, including attracting more investment and enhancing the capability of the state. He says the economy has not been growing at the pace that could enable us to make a meaningful dent in unemployment, poverty and inequality and to turn our economy around and create the millions of jobs needed is something that cannot be achieved by government alone. A comprehensive programme will require the mobilisation of all social actors.
Over the last few months, a team led by the Ministers of Employment and Labour (which is Productivity SA ‘s lead department), Trade, Industry and Competition, and Finance have been meeting with social partners to map out the priorities that must be reflected in the new social compact. The team identifies priority actions to achieve higher levels of investment and growth, increase employment, unleash the dynamism of the private sector, protect the rights of workers, expand support for the unemployed and tackle extreme poverty.
The proposed compact builds on many of the key tenets of the Economic Reconstruction and Recovery Plan such as job creation, accelerating structural reform and growth enhancing measures, the expansion of mass public employment and social protection, and driving economic inclusion through greater entrepreneurial activity. As Productivity SA (with the mandate to promote employment growth and productivity) we play a strategic role in the economy and labour market, and are a critical player in the social compact, particularly as it relates to enhancing the productivity and competitiveness of South Africa.
Programme Director, Ladies and Gentlemen today is about productivity improvement and by extension the improvement of the performances of our enterprises. Productivity improvement is the most effective way of ensuring long-term competitiveness, long-term business success, economic growth and, consequently, tackling the challenges of unemployment, poverty, inequality, and exclusion. Productivity leads to growth, which leads to income levels and improved well-being. The more productive the economy, the more its enterprises become competitive and sustainable as well as grow to preserve existing jobs and create new jobs.
One other key reason for today’s workshop is to report back on the progress of Workplace Challenge Programmes and interventions throughout Mpumalanga. Productivity SA and some of the interventions Productivity SA has made in Mpumalanga are as follows:
1. SEDA Mpumalanga
The relationship started in 2017 with the implementation of
• Productivity Awareness,
• Kaizen programmes.
• Art of Pitching and Productivity Awareness
Districts that have been serviced are
• Hlanzeni
• Emalahleni
• Gert Sibande
• Nkomazi
The co-funding that has been received from SEDA Mpumalanga is valued at R600 000
2. SAPPI Ngodwana
During 2021/22 a Productivity Improvement Programme was valued at R250 000.
The Programme was focused on three areas:
1. Productivity Awareness 21 Companies
2. Kaizen training 10 Companies
3. Kaizen Implementation 10 companies
Second agreement was signed during 2022/23 concentrating on Kaizen Implementation. The programme was valued at R216 000. The implementation started in June 2022 to close-out during November 2022. 6 companies benefitted on this programme.
3. University of Mpumalanga
University of Mpumalanga has a SMME Development Unit. Productivity SA has participated in two Business Forums during 2020 and 2021 where it presented:
• IMD Report and Productivity Statistics
• Impact of Covid on SMME’s
• Productivity Awareness
• Lean Principles
There is an event planned for 2022/23 the date still to be confirmed
4. Support for enterprises within SEZs/IDZs/Industrial Parks
• SEZ CEO’s Forum
o The WPC introductory briefing at the SEZ CEO’s Forum has been set for 22 November 2022.
o CIS Head office still following up Mpumalanga SEZ
5. Mpumalanga Economic and Growth Agency (MEGA)
o Requested opportunity to provide introductory briefing to executives on 26 September 2022. Still awaiting response and following up.
o Provided brief to Industrial Park Manager of Ekandustria Industrial Park on 17 October 2022. Planned a Productivity Awareness Workshop for existing tenants at Ekandustria Industrial Park on 9 November 2022.
I must add with a fair amount of pride and sense of achievement that since 2017, in Mpumalanga, Productivity SA has signed 86 Kaizen contracts, 7 two-year Workplace Challenge Programme and then ten 1-year Workplace Challenge Programme contracts.
Some of the key benefits of implementing the Workplace Challenge Programme include:
• Improving the management decision making (effectiveness) and getting better results from the workforce through involvement and consultation – The change management process about effectiveness and improves workers morale.
• Improving process efficiency and flexibility – resulting in fewer errors or less disruption, good service delivery within a shorter time, and lower costs.
• Improving the Product/Service efficiency – with a process that gives more output for the same inputs, resulting in higher customer satisfaction and quality of service delivery benefits.
As we work towards facilitating economic growth, it is important to note SMMEs are still facing numerous challenges and issues which include but not limited to legislative compliance, economic constraints, and access to finance for their survival and growth. Most are relatively stagnant, employing mostly unskilled/semi-skilled workers, struggle to transform their informal operations into established businesses. They also struggle to break free from a restrictive owner mindset and assume a more strategic role largely because they often lack sufficient performance management systems, operating models, and management structures with well-defined roles and responsibilities, key performance indicators (KPIs), and designated decision-making.
It is evident that the SMMEs require focused Enterprise Development and Support Ecosystem and Programmes to create an enabling environment conducive for entrepreneurship and sustainable enterprises that create and deliver value (generate wealth and profits for owners, contribution to GDP growth, preserve existing jobs and create productive employment and decent work, and improve the incomes and wellbeing of workers, as well as contribute to social wellbeing). Our innovative solution to transitioning our SMMEs from informality to the formal economy should include productivity, which is a key factor for competitiveness and sustainable growth, targeting those in the priority productive sectors, which intervention will also assist in resolving the high levels of informality, the consequence of which are high levels of unemployment, poverty, and inequality.
SMEs are an integral characteristic of emerging and developing countries’ economies, accounting for about a third of low- and middle-income countries’ economic activity, employing about 2 billion workers (IMF, 2020). However, most are comprised of unproductive firms providing low-paying jobs (La Porta & Schleifer, 2014). The low productivity growth of informal SMEs also lead to low-income generation, exacerbates informality and inequality, and poor growth performance, the consequence of which is generational and deep poverty, and inequality. To this end, I would like to urge all of us to adapt and grow stronger as we work towards tackling the country socio economic challenges. I thank you all