Budget 2015: Enable our brilliant, focused people – Henley’s Jon Foster-Pedley

Dean of SA’s Henley Business School, Jon Foster-Pedley, takes a lateral approach in assessing the 2015 Budget Speech and the result is fascinating. South Africans, he reckons, are brilliant – and he uses the results of external assessments to support his view. The answer is to open the way for them to participate; let people into the workplace for the vital experiential learning and sit back and watch the magic. Inspirational and deeply thought-provoking. Especially for a political leadership frustrated that their command and control ideas aren’t working. – AH

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The Dean of Henley Business School, Jon-Forster Pedley is with us in the studio. Jon, I’ve just come back from a conversation with Clayton Christiansen from Harvard University – one of the highlights of my weeks/months/year. One of the questions I was asking him was what he’d suggest to South Africa. Of course, he’s not an arrogant human being but he said ‘in disruption theory’ which, of course, he’s the expert in ‘it’s all about the poor people improving themselves, usually at the expense of the rich.  That’s one of the things where you overlay the theory onto the South African situation’, from which we might be able to learn.  It’s an interesting thought.  If you look at the 2015 Budget, I’m not sure there’s too much of that kind of innovative/different thinking.

Clay is such a humble guy.  I met him in London about two years ago and I actually asked him to come to South Africa, so I’m glad you spoke to him.  Maybe we’ll be able to bring him over here in due course.  His ideas on disruption and innovation are really effective.  The idea of creative disruption is that you can’t build the new without destroying something else because you can’t have everything, not everything can live on, for the future.  You want the old to go out of the way because the more efficient and the more energised has to take its place.  In addition, it makes room for young people to come through.  I think he’s absolutely right.  One of the problems with the way we approach education, with funding it – and even the way we approach funding and supporting SMEs – is that we tend to do it from a rather centralist point of view.  “Let’s control, manage, and plan this out for ten years in advance” On the other hand, disruption is essentially chaotic and we actually need chaos in our lives.  There’s a Nietzsche quote: “One must still have chaos in oneself to be able to give birth to a dancing star.”

This is interesting.  The points that you’re making are completely different to what we were hearing from Nhlanhla Nene, our Finance Minister.  It’s almost as though he’s been trying to out-Goliath Goliath, rather than ‘hey, let’s get into the David frame of mind’.

Well, if we’re going to get very Jungian about it, we have both sides in ourselves.  We have the order and we have the creativity.  It’s not as though you need one or the other.  It’s and/both. Imagine you’re swinging a conker – or a ball on a string –  around your head. The faster you swung it, the more creative energy you’ve got; and the tighter you have to hold it at the same time to stop it flying away.  There’s a synergistic combination between creativity and control.  It’s just the type of control.  The issues of trying to build a new economy, diversify an economy, create employment, and stimulate new business are not done from control (from an old school point of view).  You have to do in the moment – in the action.  You have to be in permanent Beta mode – permanent innovation.  However, you also need systems and controls underneath that to support that innovation and give it boundaries.

Are we getting anywhere close to it?

Not yet. Funnily enough, maybe not fully in Budget or in the Government policy.  But elsewhere it’s happening. I was down in Newtown the other day for the market, and saw the street performers. It’s a entirely new Johannesburg down there.  There’s a vibey culture emerging.

Out with the old and in with the new.

What you want to do in creating change is to create a movement – because for every Establishment, there has to be a Movement.  A subversion. Paradoxically, in some way the Establishment needs to create a Movement that’s going to topple it.  As with nuclear fission, somehow keep it contained but still, sparking off.  What you’re not going to do is go all top-down, lay out a ten-year plan and think that’s going to work.  It will never work.

That’s what we’re doing.  The National Development Plan is exactly that.

The National Development Plan has a huge amount of thinking behind it, some extremely talented people, and great authenticity.  I know several of those people and they really motivate and energise.  However, the difficulty is that the plan on its own is not going to be enough.  Somehow, you have to activate the social and creative…

That’s what they say.  How do you that?  How do you get that spark for the South African population to buy in, to change the world?

Fundamentally, if you pay people enough money, they’ll work hard for you. They’ll do more or less as they are told and they’ll use their brains  However, if you want somebody to have initiative, then you can’t just give them more money to be creative.  It’s no good, you coming to me and saying ‘Jon, be creative or else’.  I’d say ‘go away’.  Or say “I just want you to be passionate’.  And say ‘’I’m going to beat you up if you’re not passionate’.  No way.   Passion is voluntary, as is creativity, as well as initiative.  What are the drivers you’ve set in place so that passion, creativity, and initiative will probably emerge? That’s  what we need to manage.

We have the people in this country, Jon.  You know as well as I do that wherever you walk around South Africa, you have shining eyes.  You have a population that really has a hunger for success and a hunger for knowledge in the knowledge business.  Somehow, we’re missing.  Somehow, somewhere we’re missing each other.

Maybe we’re not quite looking right.  As Antoine de St Exupery said ‘that which is most essential is invisible to the eye’.  If you’re looking through the lens of planning and central control only (and I’m not saying that’s bad because it’s really useful), you’re only going to see things like that.  The structural and planned. We see the world as we are, and not as it is.  If we look through the lens of the real South Africa and notice those other emerging things, then it’s a different picture. You’re quite right.  There is that vibeyness.  There are those sparkling eyes.  Our challenge is to find ways to stimulate that while creating enough control and system to channel it, rather than suppress it.

It looks as though we currently have a bit too much control, and not enough chaos.

Chaos has a bad rap.  Somehow, chaos alone is a bad thing but if it’s in tandem with sufficient intelligent control, you’re okay.  Going back to the point (if I may) about the talent in South Africa, we at Henley are in the knowledge business.  One of the interesting things about us (and I don’t want to pitch Henley) is we’re triple-accredited, which means that internationally, we are audited by different bodies overseas – American, U.S., and EU.

It means that our standards are immutable and they’re continually challenged and audited. We can’t lower our standards in what we do, nor would we, ever.   In addition, our examination and assessment is done offshore, so the Germans, French, Italians, and Chinese are all examined blind by the same people.  Our MBA student for example, are now 71 percent black and 42 percent women.   We are blind-assessed, blind-examined by the same people, and our guys are writing in their second or third language.  In South Africa we got between 95 percent and 98 percent pass rate in our last exams, so we’re beating the British and the Germans in a  blind assessment.

We have extraordinary intelligence in South Africa.  What we need to do somehow, is think about how we educate them because a classic university education is not going to work.  Classic education focuses on knowledge for some deferred, future application.  A future career. Our people have to educate in Beta mode in the here and now.  They have to work in Beta mode.  They have to learn, work, and live all at the same time and somehow, lift ourselves up. This leans us towards a much higher emphasis on experiential/action learning, on qualitative insights and practices of education rather than the classic planned and academic model only.

Experiential learning means get into the workforce, learn in the University of Life (or as the retailers used to say – the University of Newtown) and we’re not opening those doors with tight labour legislation.  Companies don’t want to hire.  People don’t get jobs.  They don’t get that experiential opportunity.

I think that’s a very good point because labour legislation is something that is obviously, highly contested from both points of view.  Of course, we want to save jobs and create employment but in the long term of course, if we don’t have mobility of labour and we don’t allow talented people to rise up and develop better organisations, we’re not going to create a better society.  We have to think differently about this.   What’s best for the greater South Africa?  The answer is that we must massively educate people and we take them for what they are now to the next level.  We do that relentlessly – forward.

It’s an interesting point.  Getting back to Clay Christiansen again: if you can’t get into the market (and from what you’ve said our people in South Africa across all racial groups) are really, smart.

They are seriously smart and I’m not saying that because it’s PC.

Well, your numbers show it.

I have continual evidence of it and it’s a very privileged place to be in.

Actually, the status quo is being well serviced by the fact that the labour market is regulated to the degree that it is.  If you wanted to disrupt, using Christiansen’s approach, just open up.  Let people come in at lower salaries, but once they’re in they the poor will disrupt the rich. That’s kind of what he was saying and it seemed to overlay quite well on the really.  If you had a population that was perhaps not that smart, then you would take that chance.  Why not?

You make a powerful point.  At the same time, we have a special context.  The rules of relativity aren’t absolute or dogmatic.   How do we create that transition and sustain people’s employment too – sustain wellbeing.   We’re in a transitional economy, which means we have to do things differently.  However, in the long-term, you’re clearly right.  We have to loosen labour’s reins and employ it so that the talented people can get the jobs, so that those smiled people from all parts of South African society  can do that so that they build better organisations.  They can create better employment.  They can become more competitive internationally.   It’s only through international competitiveness and deep skills that we’re going to stand in the world and create the sort of transnational, confident Africa that we can’t imagine yet, but that is coming.

We have to have this perspective and it takes trust.  Of course, if you’re in Government quite often, what happens is you have the press on your back.   You have everyone else on your back.  Everyone wants to criticize, so it’s sort of, parental projection.  Everyone wants to criticise the government.  If you don’t watch out, you become extremely inhibited and risk-averse.  How do you help Government move away from where it feel like it’s been trapped into risk-averse was – to liberate it to do the sort of work It really needs to do for the benefit of our entire community.

How do you do that?  Hop open a man’s eyes to use Peter Browns’ saying ‘rather than poke them out with a stick?

One of the things I think is critically important is to understand that If you want to build a good business, you can’t just watch profits.  Focus on profits is all very interesting but before you do profits, if you want creativity and applied intelligence, you have to manage Purpose. What’s the meaning?  It’s the same in a nation, surely.  We have to manage purpose and meaning.

We have to create something to which people want to aspire – who will then, using their voluntarist energies, want to commit to and want to put those discretionary mental and physical capabilities into, to build this nation.  You need that and in addition, you need a very clear sense of ethics.  We’re always worrying about corruption and more and more of that’s happening, apparently; at the same time if we use those other eyes, we can see that many extremely ethical people are coming through, people who are educated, who have a vested interest in not assisting and helping corruption.

Once you’ve really worked to get to your skills you’re not going to allow somebody to give the job to somebody who can’t do it.  It’s bad for society.  It’s bad for your children and it’s bad for your sense of worth.  We need to educate on those sorts of levels.

Fascinating insights on Budget 2015 from Jon Foster-Pedley who’s the Dean of Henley Business School.

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