On Monday 5 March 2018 the CEO of Tiger Brands, Lawrence MacDougall, spent an hour insisting its subsidiary, Enterprise, was not responsible for the listeriosis outbreak that claimed 180 lives. Yet by 15:00, the business’s market capitalisation had fallen by R5.7-billion and the share price by 7.9% to R391.47.
People’s feelings about a company govern the extent to which they’ll “forgive” its transgressions. The Facebook post of a man from Kimberley cataloguing Tiger Brands’ sins — which included bread price-fixing and carcinogens in Tastic rice — was typical of a growing public outcry against the accounting and operational “irregularities” that big businesses like Steinhoff are seen as getting away with. Last year, Tiger Brands’ black woman ownership was at 4.56%, prompting a post by a black mother to fellow black mothers:
“We can’t achieve Radical Economic Transformation without you as a consumer and it starts with you loving only the brands that love you.”
The CEO of Tiger Brands refrained from apologising for legal reasons. It’s probably just as well: the bottom line linked to Tiger Brands’ social capital faces a terrible prognosis because this crisis is proxy for an instance of retribution many black people feel never happened, but should have: for the role they believe was played by “white monopoly capital” under apartheid. Those black people eat and trade in the inexpensive processed protein product that’s now killing them and their township street “kota” businesses.
Had Tiger Brands been broadly perceived as reciprocating its customer loyalty by substantively and visibly developing those township enterprises, its share price would have a better prognosis (instead of being exposed to a possible lawsuit).
What they saw in place of this support — of an apology — was power on the defensive; this, from a business that purportedly knew about the pathogenic bacteria a month before the product recall. Now, the tribalistic psychology behind why business hegemonically empowers people and enterprises from the same race as its existing people is being projected as racism over everything Tiger Brands says about the importance of its consumers’ health. Those consumers have no memory of the brand caring for them beyond memories they themselves made as its unloved customers.
The captains of industry tend to associate with men like themselves and cover one another’s insecurities by not introducing “different” people into those spaces — “others” whose unexpected competencies would call into question the legitimacy of those hierarchies and groups. The members of these groups mutually reward one another’s cultural “sameness” by systemically extracting wealth from those not in those groups, for redistribution amongst those within that group. Those inside these old boys’ clubs then use that wealth to back an appearance of accomplishment that exceeds more than what they’ve truly pulled off. They’re using attributes they never worked for (skin colour) to distinguish those they’ll reward from those they’ll exploit in exchange for having more power behind that skin colour. Then they only work with those who look like themselves to hide from having to face the black embodiments of their scam.
Anyone from within these groups who considers fighting for justice and organisational sustainability by bringing “the other” in has to first overcome the fear of being punished by his colleagues. But on 5 March, the owners of Tiger Brands were given 5.7-billion reasons to rethink.
For Tiger Brands now exists, in part, at the mercy of black stakeholders. They’re about to show whether they believe they consumed a product whose price-point and availability in townships represented their exclusion from privilege. Are they sick to their stomachs with the status quo because Listeria Monocytogenes is the corpo-realisation of South African business’s dirty little secret — that it treats black people like (and so feeds them) dirt?
Author and motivational speaker Simon Sinek says, “People don’t buy what you do; they buy why you do it. And what you do simply proves what you believe.”
Listeriosis may have been the final proof black stakeholders needed.
Is transformation the answer? Yes, but the danger with box-tick B-BBEE is when a business starts with its “what” (making lots of money that members of the old boys’ club can wrap their inadequacies up in) instead of a good “why” (serving the societies they do business among through shared value while making big profits), it’s doomed to lose both. Any accounting report that says otherwise is lying about how such businesses accomplished this pro-hegemony “what” without resorting to an anti-everyone-outside-the-group “how”.
This means all “white monopoly capital” share prices (not just of the baloney monopoly on polony) are exposed to the same risk. These businesses’ operational, reputational and managerial “deep-cleans” call for transformation.
The correlation between the unsustainability of enterprise development through hegemonic tribalism, and operational compromises that lead to whole industries suffering like South Africa’s processed meat industry, is why BEE Novation tweeted, “Don’t compromise: serve enterprise development that doesn’t kill your whole industry.”
The business’s MD, Lee du Preez, explained that when businesses participate in proper Enterprise Development (an element on the BEE scorecard) of supply chains in compliance with BEE, instead of the rules of the old boys’ club, they tend to straighten out the rest of their governance requirements too.
Don’t compromise: your enterprise will soon worship you for unpacking its need for a transformation strategy. DM