How to show leadership

I have often stated that organisational success is only possible if four critical factors in the strategic framework are in harmony and aligned: purpose, vision, strategy and leadership. The state is no exception to this requirement. I have also cautioned that context is the first and most critical constraint or limiting factor to defining and achieving the strategic objectives.

No sustainable strategic planning is possible without paying particular attention to the limiting confines of context. Ignoring it always imposes a serious sustainability risk. Insightful leaders always keep a very keen eye on the changing domestic and global dynamics that might impact negatively on their strategic plans and objectives. This is the ability that differentiates insightful leaders from the rest and can transform them into great leaders.

It is important to recall that Nelson Mandela held a very firm belief that reconciliation and nation building were fundamental conditions for sustaining the peace and order required to assure the transformation and transition we needed as a nation. On his visit to Davos in 1992 he came to understand, in a dramatic way, that the support of the international community and investors was critical to power the economy and sustain the transition he sought. He seized the moment and made a fundamental strategic shift that was necessary to secure this support. We still venerate him for this visionary leadership.

On August 15 1985 PW Botha faced the international television audience and made what is now known as the Rubicon speech. The world had been led to believe that he was going to release Mandela and introduce other reforms that would pave the way for a smooth transition to democracy. But he surprised many in his Cabinet by taking a hard-line position. He was too consumed by the perceived power of the military to understand that the international capital market possessed a far more effective and devastating power that it can exert.

He failed spectacularly to recognise that there was an increasing momentum to the global geopolitical shift that ultimately led to the disintegration of the Soviet Union and the fall of the Berlin Wall. He also failed to understand that international opposition to the apartheid state was growing at a pace that would make its survival almost impossible. The decision of the foreign banks to refuse to roll over South Africa’s loans, and provide new credit, was indeed the tipping point.

It was clear that his position was influenced by a small but very influential clique within the military. He failed to comprehend the context and seize the moment and his failing health provided an opportunity for his deputy, FW de Klerk, to take over the leadership as head of state. De Klerk was quick to realise the implications of the new and emerging global and decided that change was urgently needed. It certainly dawned on him that economic stagnation and increasing violence would destroy the country unless serious engagement with the ANC was initiated. And this would only start with the release of Mandela and the unbanning of all political parties.

The prevailing context for South Africa in 2015 is decidedly very precarious. We are currently suffering the harshest drought in decades. Indications are that importing maize and other basic food items will be very costly given the rand/dollar exchange. Domestic debt levels are very high in a sluggish economy and prospects of increasing inflation. Traditionally, December always exposes households to unaffordable debt commitments and very stressful levels in January when schools reopen. The recent credit rating downgrade will certainly increase our borrowing costs and push up inflation and trigger interest rate increases by the Reserve Bank. The scenario for the poor is very bleak indeed.

What is needed at such times is market stability and positive actions by the government to improve the investment climate. It is in this context that the desperate action by the president to summarily dismiss the finance minister is baffling. Clearly this decision was a result of desperate pressure by a particular group that stands to benefit by the absence of Nhlanhla Nene. It was an act of woefully pathetic miscalculation that paid no attention to the aforementioned context. The anticipated benefit is meaningless when compared to the damage that has been done on the already sluggish economy. The market fallout was predictable but the ultimate sufferers will be the poor in the coming months. This unfortunate episode has unleashed a self-imposed crisis.

If indeed there was a plan to deploy Nene to the Brics bank, and as it has since transpired, this decision was discussed with the ANC top brass six weeks previously, then there should have been a better way of managing and communicating the transition. No amount of urgency can justify the desperate manner in which his purported deployment was managed. Bringing back Pravin Gordhan only confirms the perception that indeed this was a desperate decision. It also confirms the prevailing belief by leading thought leaders that there is a harmful lack of strategic depth and competency in the Presidency and the ANC itself.