There are three characteristic responses to error: to deny it, to externalise it or to embrace it. Every individual has some tendencies toward each, but organisations develop norms reinforcing one or the other tendency until it becomes a dominant characteristic.
- David Korten, former Harvard Business School professor
Exactly one year ago this week, Sanral spokesperson Vusi Mona said something which seemed to come out of nowhere, while being interviewed by Stephen Grootes on his midday radio programme. It took the Gauteng e-toll saga along a whole new turn.
Grootes was not actually asking about e-tolls, but rather getting clarity on a report that had quoted Mona, stating that tolls on the N1/N2 (Western Cape Winelands) were “a given” and that money to ensure the opening of a second Huguenot Tunnel and to rebuild sections of the N1 and N2 would simply have to come from tolls imposed on motorists in the Western Cape.
Mona said the cost of opening a second Huguenot Tunnel was inevitable, but the government simply did not have money to fund it, and therefore Sanral was committed to implementing the proposed N1/N2 Cape Winelands Highway Project.
Grootes then asked him why Sanral’s finances were under so much pressure. Mona dared not admit that revenues from Gauteng e-tolls were falling below target, but instead blurted out something about “unscrupulous” construction firms who had colluded to drive up the prices of many Sanral projects, including the GFIP.
A classic example of externalising the error, to explain financial woes.
David Korten, quoted above, distinguishes between self-deceiving organisations, defeated organisations and learning organisations. It all boils down to how leaders handle error and feedback.
Managers in self-deceiving organisations deny errors and problems, rather than listening to feedback from beneficiaries and critics. In a competitive business world, free market forces quickly punish and exterminate self-deception, no matter how technologically excellent and virtuous the organisation’s products and service may be.
If free market forces are constrained by cartels and anti-competitive behaviour, a self-deceiving organisation can prevail for much longer than it ought, and stakeholders are at risk of becoming victims of a very unhealthy organisational culture, rather than beneficiaries of a healthy, well-managed and accountable institution. Leaders of self-deceiving organisations invest a lot in propaganda, but generally, only the leaders themselves actually believe it.
When one scrutinises the media statements by Sanral Board Members and senior managers since OUTA first started challenging them, the unmistakable signs of self-deception are there.
The second type of organisation – the defeated organisation – differs from the self-deceiving variety, in that their leaders characteristically speak openly and in rich detail about the errors and problems, but they project the cause onto the circumstances and perversities of the larger environment. Like the e-toll errors being due to the inaccurate e-Natis database situation, or low revenues as a result of the schemes critics and public defiance, the buck gets passed on, and on, and on. Typical of defeated government bureaucracies, this behaviour is perpetuated with vast effort and time invested in writing reports and using well-paid pseudo-academic consultants to generate research that tells them what they want to know, or that which will please their political masters. They indulge in what we might term “improperganda”.
Over the past three years, OUTA (and the media) have invited Sanral to engage with its critics, in the spirit of the third type of organisation that Korten defines – and one which Sanral has espoused for years – the learning organisation. Such organisations embrace errors and choose life. They do not split normative policy-making from the practicalities of operational implementation, and do not engage in the self-deceiving rationalisation that is the standard refuge of an embattled government minister, where “the policy is excellent on paper, but the problem is with our lack of capacity to implement it”. A policy that cannot be implemented is a bad policy. Leaders of learning organisations know that, and accordingly, they plan with the people to find the best solutions for the people.
When government institutions become true learning organisations, they recognise that they cannot have one set of ethics at the private level and another at the public level; one set of moral values and principles during elections and another between elections; one standard for the wealthy residents of urban Gauteng and another for poor rural peasants in Eastern Cape and homeless squatters of Lwandle.
When legal problems arise they don’t let the tail wag the dog, by relying on their canny lawyers and legal obfuscation.
With respect to e-tolls, we hoped Sanral would embrace its errors. It has instead vacillated between self-deception and defeat. Far more alarming, however, is its response to the tender collusion and price fixing scandal in the construction industry. Now that the Competitions Tribunal has exposed the unscrupulous collusive behaviour of the construction companies, Sanral’s learning disability has become chronic, because we have not seen evidence of any meaningful action that would befit a true learning organisation.
A year since we first heard Mona acknowledge the problem of “unscrupulous construction companies” he is now evading media questions by claiming the matter is “sub judice”. Whenever someone uses this ploy and the matter is not before the courts, it is tells journalists exactly what they need to know. There is a cover-up. Someone is now on the spot and is grasping at straws. There is blowing of smoke to create a smokescreen.
Today, one finds the continuation of this behaviour in the Cape Winelands preferred bid consortium (led by Basil Read), whereby Sanral is fighting to not let us see “commercially sensitive” financial information on the same companies that have shamelessly profiteered through price fixing and tender collusion in Gauteng. Fortunately, this matter is being challenged in court by the City of Cape Town and this week, the SCA will hopefully provide clarity over a legal technicality and meaning of the “implied undertaking rule”, so that we can move on and expose the true reasons behind Sanral’s appalling public engagement process on this matter.
The lessons and destruction that emanates from self-deceiving institutions are very much alive and with us today. Eskom is in deep crisis, because over the past decade the board and its political masters did not pay due attention to critical feedback and did not embrace their errors. The past week’s decision to “headshed” four of its top brass may signal the realisation of that they are now internalising their errors, ceasing the denial and blame shifting game, and hopefully they will now set a path moving away from organisational self-deception and inevitable collapse, to one of a true and meaningful learning organisation.
But just as the past Eskom boards and executive allowed the once highly respected institution to slide into oblivion, so too has Sanral been allowed to find itself in a worsening funding crisis. In this regard, when one assesses Sanral’s three revenue streams, the following comes to light:
- Sanral operated tolling schemes;
- Private concessions to construction and operation consortia;
- Treasury allocations, despite the unqualified audits from the auditor general, (which they so loudly claim as their ticket of success), and the question of a failing institution marches loudly to the fore.
Their first stream of owned toll schemes is now threatened by the downgrading of their creditworthiness, threatening its ability to raise long-term bond finance. The second stream, which presupposes a healthy relationship between Sanral and the private construction companies, is under a cloud, because of the tender and price collusion. The noble notion that Sanral was established to harness the ‘efficiencies’ of the private sector, seems to have had the exact opposite effect, by encouraging unjust profiteering, which has robbed the nation of lower capital projects by enriching the pockets of capitalists. The third stream is merely the channelling of taxpayers’ funds to Sanral for the provision of much-needed social infrastructure. The fact that government claims no money is available is a farce that requires introspection, especially with the ongoing and massive wasteful expenditure in many departments from national to local levels, dragging down the prosperity potential of this nation.
Today, the hard questions are being raised by many, to justify the abhorrent need for a tax revolt, one which will be much larger and more damaging for government institutions than the e-toll matter. The e-toll saga has given people a taste of the extent of their own power, and Minister Nene will have Sanral, the Department of Transport and his own treasury department to thank for this situation.
There is no hiding the fact that the Minister of Finance’s biggest and most directly looming threat is that of a citizens’ tax revolt. And there is nothing like the piling up of government’s extractive behaviour, misspending and odious debt to spur society onto a new path. Self-deceiving organisations like Sanral, Eskom, SAA, Sanral and the Post Office give the people not only the will, but the need and courage to stand up and hold those institutions, and their bosses, to account.
But as Tyree Scott once said, “You can’t leave those who created the problem in charge of finding the solution”. It appears that the past and current Sanral Board and Executive have no overt or keen interest or desire to get stuck in, boots and all, to overcome and expose the seething cesspool of odious debt from the GFIP and other road construction costs. There is no doubt that the last few percent of e-Tag compliant freeway road users are now asking why on earth they are still paying for the failed e-toll system.
More worryingly for Sanral, however, is the growing dissention toward the constantly increasing long distance toll route tariffs, especially since the capital costs of many of these projects have long since been settled and the ‘user pays’ argument, which Sanrals loves to espouse, no longer applies. DM
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