SAMED regards transformation as an economic and social imperative and is pursuing meaningful and sustainable changes within the medtech industry. Led by our Transformation Committee, SAMED is hosting transformation forums – the latest being held on 28 April 2021 – to equip members with insights from leaders and case studies drawn from the medtech sector and other industries.
Mr Seydou Kane, Managing Director of Eaton Energy Africa, shared Eaton’s successful transformation journey which has seen this USA multinational company becoming a level 1 B-BBEE contributor.
“Transformation is an on-going process. If you want to maintain a level 1 rating, or at the highest level that you have determined for your company, then you must keep working on it.”
Achieving level 1 status comes at a financial cost, however, the cost is outweighed by the return on investments and companies need to determine what level (and the associated costs) are required for them to be competitive in their own market.
To get to this result, Eaton followed a business strategy of creating shared value that enables companies to help solve social issues while benefiting their bottom line. Eaton’s activities entailed:
- Procuring from enterprises owned or managed by black South Africans.
- Taking time to find, partner and grow the right companies. Multinationals like Eaton struggle to source products and services from black-owned and black women-owned businesses while meeting necessary specifications and quality standards.
- Investing extensively in training and development of its female leadership and initiating a graduate programme that has so far taken in more than 50 learners. Businesses that are not able to attract and keep learners, will also be unable to claim learnership points.
- Staying mindful that the process of implementing B-BBEE and transforming the company cannot happen without challenges, so it is essential to remain vigilant and not feel overwhelmed. Remaining informed of the latest BEE and transformation trends, policies and interpretations.
Within the medtech sector, Peter Mehlape, CEO of Medtronic Africa, spoke about Medtronic’s aspirations to become a level 3 B-BBEE contributor by the end of 2021. In 2018, Medtronic was at level 8 and improved its standing to level 4 in 2020. The transformation journey is key to the company’s commercial strategy and the resultant social benefits are as important to Medtronic.
“If you look at our score card, you can see there is still some runway for us to make improvements. It is our ambition to get to level 3 this year.”
As a multinational, Medtronic claimed majority of its points from enterprise, supplier and skills development, rather than from the ownership bracket. The skills development element focuses on employee and healthcare professional training (including fellowships) and bursaries.
Collaboration with the Youth Employment Service (YES) has been instrumental in Medtronic reaching Level 4, as without YES, the company would have been only reached level 6.
Annually the Medtronic graduate programme gets an intake of 20 graduates, approximately 70% of whom remain employed. This success increases the interest of graduates that are trained by Medtronic to stay within the medtech sector – a valuable pool that Mehlape believes can grow exponentially if other companies were investing in training graduates.
The management control pillar has provided on-going returns too. With over 60% of Medtronic employees being female, a keen focus for Mehlape was on growing and empowering women to take on leadership roles.
In terms of enterprise and supplier development, each supplier was duly considered with the view to building long-term, meaningful relationships. Medtronic maximises on supplier development points by identifying existing suppliers to support. This is enhanced through preferred procurement policies for black women-owned businesses.
Mehlape reiterated that transformation cannot be a human resources (HR) or finance initiative. It is a team effort that involves senior management.
“It has been a pleasure to go through this journey,” said Mehlape, “but it has to be driven from the top.”
Equally, transformation needs to be communicated through the organisation to ensure that all levels of the organisation buy into the journey. Mehlape held such sessions with senior management and hosted presentations by the Department of Trade Industry and Competition (the dtic).
Mehlape also hosts CEO breakfasts where other company leaders present to his employees on their challenges and inspire with stories of success.
“Transformation is do-able,” Mehlape encouraged, “see it as an opportunity. When I look outside of medtech I see all these companies going after opportunities and making their industries better and better. I want that for our sector.”
Mr Bruno Olierhoek, Managing Director for Nestlé East and Southern Africa, says that he was grateful to work for a company whose purpose is strongly aligned with transformation. Nestlé’s purpose is to unlock the power of food and enhance quality of life.
“For a company to stay successful over the long term, we need to create value not only for our shareholders,” says Olierhoek, “but create value for our societies as well.”
For Nestlé, the approach entails helping rural communities and local producers grow. That way, they can provide sustainable, quality raw materials for Nestlé’s products. Olierhoek’s view of B-BBEE is that it is an opportunity and not a burden or a compliance requirement.
“We saw B-BBEE as an opportunity to transform faster and do good in our communities,” says Olierhoek on Nestlé’s progress from non-compliance in 2017 to a level 3 contributor in 2020.
This status provided a competitive advantage in the fast-moving consumer goods (FMCG) industry.
Olierhoek shared several valuable tips with SAMED members:
Adopt the right frame of mind: B-BBEE is not a compliance issue – it’s a license to trade. Nestlé thus articulated B-BBEE as part of the company’s global agenda on inclusion, diversity and belonging, to reposition transformation from being an HR initiative to becoming a more acceptable business strategy.
A multinational like Medtronic, Nestlé achieved B-BBEE level 3 without ownership points and instead worked with the YES programme, appointed female employees to leadership positions and undertook extensive supplier and enterprise development activities. It trained 200 unemployed youth a year and absorbed the majority of them.
- New, more robust governance structures can support more appropriate processes and systems. One such is a powerful succession planning programme with two black women ready for every management position. Last year, 83% of executive appointments have been black females, and the black female candidate pool is constantly growing through targeted recruitment policies. The company takes pride in placing over 30 disabled learners.
- Equally, tools for accurate record of training facilitate training audits.
- Detailed procurement processes help ensure sourcing from right suppliers – like small suppliers with B-BBEE certificates which feature prominently within its preferential procurement.
“You can see B-BBEE as a huge complexity or see that this brings diversity and many points of view, that if harnessed will lead to incredible innovations and new ways of doing things and it will become a strength.”
Olierhoek concluded that the aspiration is for Nestlé East and Southern Africa to be an example for Nestlé worldwide.