The True State of Supplier Development in South Africa – Lessons from the ABSA Supplier Development Awards
Each time I read the press or engage with social media, it seems there is another story about how ‘business’ does far too little to benefit the common man, the smaller player or anyone other than their own shareholders. In this country, ‘business’ is most often painted as a selfish, self-serving parasite.
But as we know, in South Africa perception and reality are often at odds.
My goal when conceptualising the ABSA Supplier Development Awards was to explore ways to change this narrative. I am delighted to note that the lessons learned from this exercise have largely debunked the prevailing sentiment that corporates and parastatals in SA don’t invest in tomorrow’s business leaders.
The fact is, it has emerged that many large businesses and corporates have a genuine and sincere desire to make a difference and grow the smaller players in their supply chains. More than that, they are passionate about it and put considerable time, energy and resources into helping others succeed. Now who would have thought that?
Interestingly, it is not just the big guys rolling up their sleeves. Many fairly small businesses are also starting to embrace supplier development as a tool for encouraging a healthy and equitable ecosystem within their own networks.
In fact, while I might be a bit biased as a lifelong champion of small business, some of the most innovative supplier development programmes that were reviewed for the Awards, were from smaller companies and QSEs (businesses with a turnover of between R10- and R50 million).
This is not really surprising. For supplier development to succeed an entrepreneurial mindset is essential – both for understanding the small supplier, but also to cultivate the flexibility needed for innovation. This can be a real barrier in some large corporate organisations which are by nature quite structured. To counter this, a few outstanding companies have created independent supplier development units with a ‘small business mindset’, and others are actively encouraging a new style of entrepreneurial thinking in their ranks.
What also emerged as we reviewed the over 400 applications, is that there is a supplier development continuum. From those who are simply not interested, to a few that are still trying to cheat the system, through the middle road of just ticking boxes and meeting compliance, all the way to a select few who have moved well beyond the scorecard. These pace setters see supplier development as a genuine strategic opportunity, a way to build a stronger ecosystem, and quite simply, as the right thing to do for our collective future as a nation.
The real results shine where companies have made supplier development central to their strategy. Driven by a clear vision and purpose and properly resourced, such CEO-led initiatives tend to deliver super-sized results. As one entrant stated candidly: ‘If I just could get my CEO to buy into this process, everything would change, including our results.’
What is really exciting is how many entrants were willing to share their experiences – from the hard lessons and mistakes, to the successes. Even more heartening was the fact that they are more than open to learn from others. This bodes well for a thriving ecosystem that works together to amplify the impact of supplier development, not just on an individual level but collectively as a whole.
It is my dream that we grab the opportunity that supplier development is offering us with both hands. Now is our chance, as ‘business’, to plant a stake in the ground and make a lasting contribution to redressing the inequality of the past and building a more transformed economy. We must not let it slip away.