Adrian Gore: Check the data – SA has already improved; better to come.

DAVOS — You wonder how some people find the time to achieve as much in a day as the rest of us need a week for. Discovery Group co-founder and CEO Adrian Gore is one of these supercharged human beings. Apart from building a multinational group that, with its global partners is targeting to improve 100m lives in five years, he still finds time to invest heavily in his homeland. Gore is the driving force behind the creation of a R1.5bn fund to help kickstart South African SMEs – and regularly interacts at a high level in Team SA. He is always a thoughtful interviewee. And even in sleep-deprived Davos, the conversation is always riveting, As you’ll hear from the chat we had this morning. – Alec Hogg

Davos 2019 – this coverage of the global conversation on change is brought to you by BrightRock, the first ever needs matched life insurance that changes as your life changes.

I’m with Adrian Gore in Davos. Adrian you’ve just been part of a panel. Do you do this kind of thing often, appearing on panels on investment in SA?

Actually, no. I think Davos is quite unique. There’s an amazing team spirit amongst all South Africans. This feeling that there’s much greater good. So, this is and I really do believe, quite a unique ability for South Africans to get together – there’s just a really good feeling.

Cyril Ramaphosa getting up early again today, I know you were at the dinner last night. It seems like you guys have an extreme program when you come to WEF. You haven’t been for a while though.

I haven’t, and I’ve heard that this year, is very different. I think the president has given a very coherent message. I think he’s been well received. I always sit and listen to these things, and think if I was a foreign investor what would I be thinking, listening to him? I think he’s given an incredibly calm and reassuring view, even the difficult stuff – he hasn’t strayed from it, whether it’s land, the SOEs etc. I think he’s giving a message that the stuff is being addressed but we kind of collectively came, I think in a fairly well, coordinated way because there’s a genuine sense of potential, I think.

What about the business people from outside of SA that you’re meeting? You’ve got partners all over the world. What are their feelings, if any, about how the country’s progressing?

I think, this is my view and I made the point on the panel, I think that people genuinely frame us too negatively. I deeply believe and I see it, and I anecdotally feel it when I speak to people. But I will tell you, I’ve spoken to a few investors, one particular guy who’s got a very big investment in SA, in actual companies that are operating. So, it’s not a portfolio investment, and a year or two ago I saw him in London after Davos, and he was very much like, ‘I’m very concerned.’ This year, he was very upbeat and feeling that things were much better. So, I think things are… I think the impression must be better but in reality, I would guess, we have to actually show that these things can be managed. We have to show economic growth. We have to show we can get on top of the issues that we know we face. But I think we need to also show that there’s an innate robustness of the country and we have to make that point more clearly.

You shared some amazing data.

Well, if you ask, I think the average individual there’s a belief that all of the difficulty and challenges, whether it’s HIV/Aids in the 90s, to State Capture now. This stuff has derailed our growth, and of course it has. But the average person does not believe our economy has grown. And when you push them – they’ll tell you, it hasn’t grown per capita. When you push and they say it hasn’t grown in Dollar terms. But the reality is, our economy is 30% bigger, in Dollar terms, per capita – with all of the difficulties. So, imagine with policy certainty and good leadership what we can do? Life expectancy is longer. Infant mortality is lower. Poverty is less, although it’s terrible – we’ve got to get to that.

In every single silo we are doing better. Progress is being made, and it doesn’t in any way belittle or ignore the massive challenges of poverty, inequality or joblessness. But it tells you there is potential and I’m a great believer that if you believe that there’s something to lose – you now this from a loss version – people are inspired by potential loss. People know what the country has to lose or the potential we have to do better. So, I really believe changing the narrative is very important.

When you say 30%, that’s over what time period, because we’ve had a rough last ten-years?

Yes, we’ve had a rough last ten-years, but in fact, if you look at the GDP growth rate and you look at its volatility, it did negative in 08, it dipped negative last year for that quarter, but it’s been kind of hovering around 1%. Nowhere where it needs to be but it’s incredibly stodgy. If you look at others, and I’m no expert, but look at Russia or Brazil – they flip up and down, and up and down, and dramatically negative so, my sense is that there is some interesting dynamic in our country where there’s a robustness. That is a paradox because we’re always on trial for being risky. So, it is an interesting attribute of the country.

Adrian, I hope you’ve come across Factfulness Rosling’s book, because that would seem to align with a lot of what you’re talking about. Are there similar data sets that we have in SA that we can, if you like, overlay with the data that he’s put into his book? Because it really has transformed a lot of thinking around the world.

I know the book well, and I know Stephen King’s work well. What’s interesting is, around the world people suffer from this concept of declinism. They believe the environment they’re in is always getting worse. They’re concerned things are getting worse. It’s a natural human coding. South African’s recently showed they’re particular bad at that. They suffer more declinism than others so, in fact, the data that I tried to share was in fact, off the same frame as Factfulness. We looked at the same data for SA, and amazingly we’re doing pretty well. People are annoyed to hear it. It’s almost like, no, I don’t believe that. It can’t be. But of course, it is so, I do think we need to change that perception. It’s a very dangerous perception. It’s a very dangerous perception. As I say, when you don’t believe you’ve got something to lose your motivations are different. But we have got something to lose – it’s a great country and we have to build it.

It’s also a challenge around the world. I’ve heard on a number of occasions here, in Davos, that the communication of economic data is very poor. Factfulness goes some part of the way to changing that mindset. How else, though, would you tackle it?

My training is numerate so, I kind of immediately go to the data, I would guess. But I think leadership is fundamental. I think leaders, however they get their points across, whether it’s a visual, whether it’s emotion, or whether it’s a gesture or whether it’s a goal. You know, change people’s perceptions. I’m not sure you can do it just on data but I’m a great believer that positive, vision-based leadership – giving people a goal is a fundamental issue. Something I believe strongly in, as a business leader is setting bold goals. I think when you do that you frame for people what the future looks like.

I’m not sure as country, we’ve done that enough. If you look at Singapore’s success – it was the leadership gave this view of a specific goal it would be… Today it’s an inappropriate term. I think it was a first world region in a third world environment. I forget what it was but it drove an incredible belief in the future. I think we need some kind of ambition that kind of captulates the National Development Plan into something that people can see. The average individual can see and believe in. But it is a multifaceted thing but we’ve done badly at it. Our own leadership doesn’t know the data. Business and civil society aren’t on top of some of the stuff, maybe. It’s not being critical. I think the Factfulness book kind of reveals how misguided people’s thinking is about this.

You’ve been involved now in helping to work together with government, to build the country for a couple of years. How’s your project, your side of the engagement between business and government being going?

Well, the one thing I’ve been involved in is the SME Fund. We’ve actually done a fairly slow job, and not due to government. I chair it. We’ve had a few fits and starts. We’re now moving very quickly. We’re doing a substantial launch in March. Government has been very supportive. Chatting to the president, who’s going to help us out, please. Give me the data I will do it. So, there is, and the president mentioned earlier, you need collaboration between business, government and labour in SA that if you can harness that it really has potential. We see it in Davos, but I’ve seen it back home. You don’t need to come here for this. There is really a good relationship, I believe.

But that SME Fund, has it achieved what you were hoping it would?

I think it will. It’s a fund of R1.5bn. We’ll hopefully be half invested in a few months. So, we’re doing some really interesting stuff. We’ve got a CEO, Ketso Gordhan, who’s doing a really good job. But I believe the ecosystem stuff around that, i.e., trying to almost have a goal – can we build 10 large corporates out of small SMEs? Can business collectively help these, almost diamonds in the rough. Evolve? I think building an ecosystem around the money. It’s a lot of money but compared to what’s been thrown at the sector, it’s not that much. So, I think we’ll do better with using the money to harness an ecosystem, play as well and we’ve got a lot of good ideas in that regard. So, we’ve had a very slow start. There’s been a lot of things we’ve had to do, the board had to come to grips with the mandate but we’re moving now quickly.

Do you have like a dragon’s den decision, on who you back there?

Well, we’ve got an investment committee. We’ve got Michael Jordaan chairing it. We’ve got some really good people. Andre Roux, one of the fathers of private equity and understanding the VC environment. These are really smart guys. I’m actually, a pretty poor dragon. I’m a kind of a believer in building the business, but we’ll see. It’s embryonic, and as I say, give us six-months and you will see some really good things coming out of it.

You mentioned earlier, leadership and communication – do you think Cyril Ramaphosa has those skills and is able to communicate his vision?

I do think so. I think that he’s come across here. He’s got an amazingly calming statesman of humility. I think people worry about grandiose things and they worry about platitudes. He doesn’t do that. To me, he’s very genuine. He’s very, I think, introspective. To me, he doesn’t ever shower from the difficult issues. I think he does do that and I think he does it well. I was in the session yesterday, I don’t know if you were there, in the dialogue session, and he hit the hard stuff very well. I thought he did a great job. Again, I think collectively, it is a role, I would guess, but I think that skill of command with some kind of vision of what the country could be in five-years. I think if he could bring that together – you’d have a very powerful story.

Adrian, we only see each other in exotic locations. Last time was on the North-Bank of the Thames where you were announcing partnerships with Apple and your other major partners from around the world. It was interesting for me to see how the British government now seems to be engaging with you, with your UK operation, Vitality in preventative care because they have a National Health System in the UK. How do you see that developing and is there relevance for SA, with its ambitions of National Health?

Well, I think we’ve found really open doors in the NHS, in the health department in the UK. I think that we have shown a leadership ability around non-communicable diseases with the ability in behaviour change. The truth, I think, in SA is the challenges are different. We’ve got a National Health Insurance imperative so, it’s just getting those basics to work is very difficult. So there is that open door but it’s a different set of priorities. The UK has been incredibly in the work that we’ve done around changing behaviour and what that could mean. And you heard from the Secretary of Health, having a very aligned vision to that. I think it’s more… I don’t believe it’s necessarily a different approach. I think it’s different priorities.

You know, the issue of universal coverage in SA and getting the public system up and running – those debates have to happen. So, we’re in a very good spot, a very good space. I spend a lot of time here, in Davos on non-communicable diseases. It’s one of the biggest things facing the world so, we’re in a very important space. We launched that pledge of a 100 million people healthier. I’m in the WHO – they’d like to do more with us. So, there is a real movement we could create and I’ve been actually clear that this has come out of SA, I hope you remember that in Davos – I kinda believe we’ve gotta get out there. That we’re a country that can make a difference.

As far as your relationship internationally is going, your partnership with Ping An for instance. It is very different to what the other multinationals have wanted to do in China, i.e., they’re not that keen on partnerships. Has that given you the advantage?

I think in our space the ability to build an institution off the ground in China is close to zero. I think we had incredibly good luck with a partner on the scale of Ping An. They are the biggest and most powerful insurer, I think globally today, just coming out of China. I think we were very fortunate to get this 25% investment in Ping An Health. It has rocketed in growth in the last three-years and that rate of growth, despite the slowdown in China, has just accelerated. So, I don’t think we could be in a better position than we are. If we can maintain our value-add to that that company can grow really well. I have no regrets at all. I think the strategy is spot-on.

And the partnership with Apple? I believe Tim Cook, the CEO, is here, although he’s keeping an incredibly low profile. I don’t know if he’s had meetings with his partners like Discovery.

No, we’ve done a lot of work with Apple and some more stuff that we’re trying to get around this idea of using the watch and linking insurance to behaviour change. It’s embryonic. It’s some exciting stuff – I hope it will come out. But the whole issue of wearables and linking that to financial services is a wide-open space, because these things, I believe, are not about email and WhatsApp they’re about health, at the end of the day. These wearables are going to be like tracking your vital signs. This monitoring your heart. That too, I think, will grow and our ability to lead in that space and to make a difference is huge. And Apple is obviously, in this space, and I would say the real gorilla. So, I think it’s a powerful relationship and we need to leverage it.

And they take you seriously, how big a purchaser are you of the Apple watches?

I’ll share the numbers off-hand. We’ve purchased a couple 100k of them. It’s not insignificant but our programs have fed other devices as well, whether it’s Garmin and Fitbit and others, and they do take us very seriously. I think that, to their credit, they see us as having… We brought this idea to them of this concept of pricing actuarial risk linked to funding the watch. I remember making the presentation in Cupertino, like ‘this guy’s an idiot – what’s he talking about?’ But they are extremely smart. These are people that when they hear these actuarial terms, they quite quickly see the logic in it. So, I think it’s got real potential. We’re all pioneering.

It’s -17 and we’re standing outside, but I’ve got one last question. What are you going to take back home from your visit here this year?

I think what I’ve seen, and I haven’t been here for a couple of years, there’s been a shift from just financial services and geopolitical stuff, but it’s still critical towards making the world a better place. I spend quite a bit of time on purpose, on shared value with Michael Porter and his group. It’s just, I think, corporations are seeing more and more the purpose and doing good, the Larry Fink shareholder letter that companies must have purpose. All of the stuff is moving in the right direction. The world is in a difficult spot. We’re seeing real risk. I think, economies are slowing down a bit but there’s a sense of doing good and purpose inbuilt and everything. So, there is some optimism – that’s kind of what I’m taking back and I think the Discovery purpose, and making that coherent more important.

Davos 2019 – this coverage of the global conversation on change is brought to you by BrightRock, the first ever needs matched life insurance that changes as your life changes.