1、 How transformative CEOs lead in South Africa By Alexis Bour and Dawie Scholtz Boston Consulting Group partners with leaders in business and society to tackle their most important challenges and capture their greatest opportunities.BCG was the pioneer in business strategy when it was founded in 1963

2、.Today,we work closely with clients to embrace a transformational approach aimed at benefiting all stakeholdersempowering organizations to grow,build sustainable competitive advantage,and drive positive societal impact.Our diverse,global teams bring deep industry and functional expertise and a range

3、 of perspectives that question the status quo and spark change.BCG delivers solutions through leading-edge management consulting,technology and design,and corporate and digital ventures.We work in a uniquely collaborative model across the firm and throughout all levels of the client organization,fue

4、led by the goal of helping our clients thrive and enabling them to make the world a better place.Contents 01|Introduction 02|Opportunity in Challenging Times 04|Challenges to Business Transformation in the South African Context 06|How South African leaders can drive business transformations effectiv

5、ely 08|Characteristics of the SA business transformation leader 10|Conclusion 11|About the Authors 1 Introduction South African companies are navigating an unprecedented time of economic and social complexity.The ongoing economic recovery from the Covid-19 pandemic,with its far-reaching consequences

6、 for companies and the way they work,has layered on further adversity.Difficult economic conditions,including the return of higher inflation present significant challenges to CEOs aiming to grow companies and provide returns to shareholders whilst simultaneously acting as good corporate citizens who

7、 tackle head-on environmental and social challenges.In South Africa,the combination of economic strain and changing expectations of the role of business in society creates an urgent need for companies to transform the way in which they do business.But business transformations are difficultin a BCG s

8、urvey of 750 global transformation journeys,only about 30%of large-scale transformation efforts succeeded.Based on our experience,several considerations factor in to achieving a successful large-scale transformation including holistic management of the change journey,consistent leadership alignment

9、and employee-centric change management.Among them,consistent leadership alignment taking the right action stands out as a critical enabler for large-scale change.Transformations are often associated with changes in the most senior personnel in companies,including CEOs,with many recent new CEOs appoi

10、nted to carry out specific change mandates.To understand the leadership characteristics required to carry out significant change efforts,BCG engaged with numerous CEOs and corporate leaders from some of South Africas largest companies.2 Opportunity in Challenging Times any companies are using the cu

11、rrent atmosphere to fundamentally rethink old assumptions on everything from existing business models to ways of working.There is a renewed focus on more holistic,longer-term change driven by other structural changes such as digitization and ESG(environmental,social and governance).Digital and AI pr

12、ojects,for example,are now essential for maintaining and building competitive advantage.Companies that use digital levers successfully can expect a variety of improvements,including,on average,profit margin increases of 12%to 20%,speed to market that is 40%to 50%faster,workforce productivity that is

13、 20%to 30%higher,and up to 60%fewer IT errors and rework.Programmes to address ESG,particularly the environmental impact of operations,are increasingly required both by regulators and by shareholders.M 3 Companies that are the top performers on ESG topics have been rewarded with valuation multiplier

14、s 3%to 19%higher than median performers and have been better able to attract and retain top talent.The higher instability and complexity companies experience sets out an imperative for companies to transform their business models along a range of different dimensions,be it improved customer interact

15、ion models,more resilient supply chains or improved use of company and customer data.Companies who have viewed the challenging conditions as an opportunity to outperform competitors,learn from the changing circumstances and double down on transformational efforts outperformed their peers by 64%in th

16、e second quarter of 2021 on year-on-year revenue growth.Another example is companies that have embraced advanced supply chains which leverage new technologies with human capabilities to power efficiency and resilience.These companies have seen improved financial performance including 4%to 6%increase

17、s in revenue,reductions of between 10%and 20%in distributions and 15%to 30%reductions in working capital.These examples show that challenging conditions should not be seen as exercises in damage mitigation,but as powerful competitive opportunities.4 Challenges to Business Transformation in the South

18、 African Context e identified four key elements in the South African context that affect any change effort and must be addressed at the outset of any transformation.These are culture,skills shortages,data limitations and labour relations W 5 Culture CEOs with experience outside of South Africa noted

19、 that South African corporate culture was more diplomatic,less direct,and less transparent,making traditional accountability mechanisms less effective than they had seen in other places.Additionally,CEOs reported difficulty in generating buy-in and follow-through on change efforts.Change efforts are

20、 perceived as overwhelming,superfluous,or unsustainable.Certain CEOs experienced strong pushback from members of their teams that had discomfort with ambiguity.ExCo members or middle managers were not comfortable to execute on directionally accurate estimations and plans;but rather wanted detailed,p

21、erfect plans before proceeding to execution.Skills shortages finding the right talent to drive transformations can be challenging.Digital skills,for example,are scarce in the region and,80%of respondents believed a lack of digital skills is likely to hamper Sub-Saharan Africas expected economic grow

22、th.Data limitations CEOs reported a consistent frustration with dark or weak data,where internal reporting is imperfect,incomplete,incorrect,or not fully able to account for business activity in a manner that enables logical,transparent analysis of the business.Successful transformations have requir

23、ed a significant period of work to ensure accurate and usable internal reporting that enables deep transparency on business activities.Labour relations relations between labour and business leadership can be an obstacle to the implementation of business transformation plans.According to the Departme

24、nt of Employment and Labours latest strike monitoring report,workers lost R266 million in wages because of strike activities in 2020,with more than a million working days lost in 2021.The threat of labour action thus may hamper business transformation efforts that are not supported by employees.6 Ho

25、w South African leaders can drive business transformations effectively iven these obstacles how can businesses transform themselves to be better performing,be more resilient and be a force for good in the development of South Africa?Our conversations with CEOs revealed two core levers that can be im

26、plemented.Businesses can firstly ensure they have a clear and comprehensive strategy and credible plan to set-up and deliver the needed change.Secondly,the leadership driving the change needs to exhibit certain key traits that lend themselves to successful business transformations in South Africa.G

27、7 Build a clear and comprehensive strategy and credible plan for change CEOs need a bold vision that they both believe in and can provide the change needed to grow the company and address the issues that led to need for change.Engaging in detailed scenario thinking before setting up change efforts t

28、o avoid consequential decisions with blind spots based on old and potentially invalid assumptions is key.Additionally,buy-in across the leadership team is needed with one South African company employing a tactic of taking portions of the organisation off-site to receive training,induction and inspir

29、ation for an ongoing and long-term digital transformation that would have far-reaching implications for the companys business model.Culture challenges must be addressed with mindset change towards increased agility.Several CEOs also noted that emotional attachment to old ways of thinking and working

30、 was a challenge.This required deep engagement,and listening,from CEOs to ensure members of the team were brought along on the transformation journey Engage in pro-active change management and engagement Successful transformations require a core team to manage the transformation,its progress,and any

31、 stumbling blocks.CEOs need to empower their leadership teams and create the forums for leaders to be confident to report back on progress made against targeted activities and targets in transparent and truthful manner.Ensuring there is significant capacity to provide transparency on progress is cri

32、tical,as it allows effective leadership decision-making.For larger transformations this may involve appointing a Chief Transformation Officer.Importantly,the bulk of the executional work of the transformation should remain within the business itself,with the Transformation Management team playing a

33、supporting and reporting role.Additionally employing a cascading change management approach where the CEO directly aligns their leadership team with the expectation that each leader cascade the message and content relevant to their area down the organisation,with their own teams following suit to ca

34、scade the message throughout the organisation can be successfully tool to manage engagement.Ensure execution mechanisms are focused and nimble As the bulk of the execution of the transformation sits within the business,it can be useful to employ hit squads,of small teams of high performers put toget

35、her to attack specific problems.These teams are usually given a tight timeline,with a clear mandate,occasionally with external support,to address the most challenging aspects of the transformation programme.To ensure attention is consistently focused on the most important,value-adding activities,imp

36、lementing exercises with the leadership teams to decide whether existing activities should be stopped,continued as-is or amplified should be implemented.Additionally,these exercises allow the leadership teams to reassess and evaluate the progress being made on the transformation and determine whethe

37、r any activities needed to be added.8 Characteristics of the SA business transformation leader here are traits that are recognised globally as key for CEOs to embody to enact a successful transformation.Our conversations revealed additional traits particular to South African CEOs to meet the nuances

38、 of operating under the complex socio-economic backdrop the country faces.The heterogeneous makeup of the average South African companys employee base and the demands of transformation and social investment requires that the CEO be understanding of the obstacles employees face in their lives and at

39、work.We noted the following characteristics as key in the South African context:T 9 Storytelling:We found that successful transformations in South Africa had a strong overarching narrative that established the need for change in terms that connected the day-to-day work of the organisation with the n

40、eed for change.Constructing and communicating a convincing,hopeful,exciting narrative is a critical ingredient for success.Listening:Several new CEOs had success using time upfront to simply listen and learn from the organisation.This creates a strong connection to the organisation and ensures that

41、people are heard in the design of a change programme.It has been successful in fostering acceptance to change.Bravery:Most of the more experienced CEOs that have shared experiences from previous transformations shared a consistent regret in thinking back:They often wish they had been more ambitious

42、and stuck to their ambitions more resolutely.Many relate stories of having paired down expectations in the face of challenges which in hindsight could have been(and were)overcome without compromising the original ambition-level.It seems to require a strong-willed CEO willing to set ambitious targets

43、 and to hold the line on those ambitions,despite early challenges and failures.Truth-Telling:All interviewed CEOs relayed a persistent frustration in lack of transparency of data,and lack of clarity on the true nature of business performance,especially where performance was challenging.Telling harsh

44、 truths,creating total clarity and transparency,and creating an environment of total openness appears to have been a critical success factor on previous transformation journeys in South Africa.Comfort with Ambiguity:CEOs had relayed challenges in dealing with false certainty.They had consistently fe

45、lt the pressure to provide clear leadership,and clarity,in situations that were highly ambiguous.Successful transformations appear to have required CEOs to at some point acknowledge ambiguity,acknowledge uncertainty and lead through it,as opposed to projecting false certainty.Teaching:Many CEOs had

46、relayed challenges regarding capacity and capabilities in their teams.In the most successful transformations,the CEO took an active role in shaping or even participating in a capacity-building programme that would enable the leaders in the organisation to drive and execute the transformation.10 Conc

47、lusion There is a significant opportunity now for businesses to capitalise on the uncertainty and adversity in the market by undergoing a holistic transformation.However,particularly in the South African context,there are challenges that must be acknowledged and addressed.But by ensuring a comprehen

48、sive strategy and set-up are in place at the outset of the transformation and by ensuring leadership embodies certain traits,a transformations success is more likely.11 About the Authors Alexis Bour is a Managing Director and Partner in BCGs Johannesburg office.You may contact him by email at .Dawie

49、 Scholtz is a principal in the BCGs Johannesburg office.You may contact him by email at .To learn more about our work on business transformations please visit our dedicated business transformations site at https:/ Acknowledgements The authors would like to thank the following individuals who provide

50、d insights into their businesss transformations for their contribution to this report:Bongani Nqwababa Former joint Chief Executive Officer at Sasol Iain Williamson Chief Executive Officer at Old Mutual Kgomotso Lekola Chief Executive Officer at BT Industrial Mteto Nyati Former Chief Executive Offic

51、er at Altron Richard Brasher Chief Executive Officer at Pick N Pay Rod Poole Chief Change and business transformation officer at Standard Bank Group Stuart MacKenzie Chief Executive Officer at Ethos Private Equity Boston Consulting Group partners with leaders in business and society to tackle their

52、most important challenges and capture their greatest opportunities.BCG was the pioneer in business strategy when it was founded in 1963.Today,we help clients with total transformationinspiring complex change,enabling organizations to grow,building competitive advantage,and driving bottom-line impact

53、.To succeed,organizations must blend digital and human capabilities.Our diverse,global teams bring deep industry and functional expertise and a range of perspectives to spark change.BCG delivers solutions through leading-edge management consulting along with technology and design,corporate and digit

54、al venturesand business purpose.We work in a uniquely collaborative model across the firm and through-out all levels of the client organization,generating results that allow our clients to thrive.Boston Consulting Group 2022.All rights reserved.For information or permission to reprint,please contact

55、 BCG at .To find the latest BCG content and register to receive e-alerts on this topic or others,please visit .Follow Boston Consulting Group on Facebook and Twitter.12 For information or permission to reprint,please contact BCG at .To find the latest BCG content and register to receive e-alerts on this topic or others,please visit .Follow Boston Consulting Group on Facebook and Twitter.Boston Consulting Group 2022.All rights reserved.6/22 13