Tuesday, 9 September 2014

COMPANY CULTURE STARTS WITH GOOD HABITS


The general development and future achievements of any business lie in the balance of a healthy, well-established company culture. Generally, the average business owner overlooks the importance of investing in a healthy company’s culture and doesn’t put the required time and effort into it at inception. They subsequently realise the negative impact it has had on their business by which time it’s too late. The irony is fixing something entails spending more money and time, compared to if the investment was made in the first place.
A healthy company culture demonstrates the values that the organisation stands for. Understanding and living by a company’s values increases organisational efficiency and productivity as everyone is aligned and recognises the priority of decision-making and action. One of the common mistakes that people make when searching for a job is to solely pursuit money and opportunity without actually enquiring what the company culture is. If values are not aligned, a relationship struggles to work and grow whether this is in business or in personal relationships.
In 1987, Paul O ‘Neill became the CEO of a listed manufacturing company called Alcoa. In his first official address to the Alcoa staff, O’Neil mentioned that he wanted to discuss the element of safety. He continued the address by introducing safety as a company value, a value which subsequently became a habit and drove the company culture. Despite initial resistance, it soon became evident that the organisational culture hailed from the employees, and not simply from his mouth. As a result, it improved their mind-set, way of thinking and increased the company’s productivity for the company. Paul O’Neill changed the habits and eventually the culture of the organisation; as a result by the time he retired in 2000 the annual net income was five times larger than when he took over. This particular example highlighted the influence of values and revealed how values be lived through good habits thus creating a solid company culture.
We spend close to 60% of our week at work, it’s important to ensure that the individual and organisational values are aligned because it does affect our way of thinking as well as how we carry ourselves as individuals. As an employee the type of culture in an organisation we want to work for should be a top priority when looking for a job. As an employer, the type of culture we create in the company should be a priority if we want to attract top talent and create value.
http://accasouthafricablog.com/2014/08/22/company-culture-starts-with-good-habits/

Thursday, 8 May 2014

GOOD ACCOUNTANCY IN DEMAND

I read somewhere where they say, “Accounting: The One degree with 360 degrees of possibilities.” How true is this, considering the versatility this qualification offers you including a wide variety of choices for future career opportunities? Whilst you spend a great deal of time working with numbers, communication and people skills play a great role within this job and this is just the operational aspect.  The Director role is both strategic and proactive as you spend time examining financial records, the market and making sure that the company is competitive and compliant with their policies and the law as well as good governance and which direction the business should navigate towards.

On the other hand compliance, risk and good business practice is almost inevitable as a business grows and who else is equipped to ensure that? The cost of not having a good accountant is a recipe to fail in your business and South Africa does not need failing businesses with our high unemployment rate. There is no organisation that runs efficiently without a good accountant. This is why skilled accountants have the tools to become entrepreneurs as they are trained to understand businesses in totality. On the other hand all entrepreneurs will need accountants if they do not have the skills themselves.

Here is a reality, a business can’t go anywhere without a good accountant, not even an individual. I once heard Khanyi Dlhomo give advice to entrepreneurs about business. She said “as soon as you start a business, invest in a good accountant and a good lawyer” I couldn’t agree with her more because this profession has become more than just a reactive role in this ever changing market, it has become a needed proactive role.

The skill in this profession is decreasing, but more and more businesses need good accountants as stakeholders need someone they can rely on. This means that there is no supply, but there is a high demand. It’s all good and well to tell me that you have the best product that can change the world and make you successful, the question is how does that transform into something we can call a business and present to funders and investors? Who else can answer that question other than the person you hold accountable to inform you of results, performance and sustainability of your products performance in the market? A good accountant in demand is who.
The reality is that some businesses may go down because of bad accounting, but all businesses will go down if they have no accounting.

This Blog is also posted on the ACCA website. 


Tuesday, 26 June 2012

Mzansi Leg.....ends???? : Part 2


To continue on the first part of this blog (http://thermanus.blogspot.com/2012/06/mzansi-legends-part-1.html) All we need is proper leadership and organizations. How can we build something solid without a good foundation and a vision driven by disciplined leadership? Reuel Khoza the Chairman of Nedbank was criticized a couple of months ago for the manner in which he communicated his opinion to government. It was a valid observation, we need visionary leadership. In his words “Leadership at all levels should demonstrate a commitment to creative freedom"

So I pose a question, post Mandela can we say our SA political leaders are moving in the same direction as our football perhaps? Backwards ? Mbeki like Bafana post 1996 did what he could and I think he did a fair if not good job initially, but the problem is that soccer like our political leaders has been going downhill since 1996. In football post the international ban being lifted from 1992 with regards to the WC (World Cup) we didn't qualify for 1994, but we qualified for the 1998 WC and we qualified for 2002 WC and didn't make out of the group stages for both. We didn't qualify for 2006 and automatically qualified for 2010 because we were hosting but didn't make it out of the group stages. AFCON (African Cup of Nations) post 1992 ban we didn't qualify for 1994, we won it in 1996, we were runners up in the 1998, we came 3rd in 2000, quarter finals 2002, group stages 2004, 2006, 2008. We didn't qualify 2010 and 2012 and we have automatic qualification for 2013 yet again because we are hosting. 

That’s soccer; now let’s look at the trend of our political leaders. Do you see a pattern? We had apartheid till 1991/92 so till then some political leaders were banned (Mandela etc). Then we had our first elections in 1994 and there was proper and fair leadership from then till 1999. Mbeki came in and did what he could post that which I think started well, was not as good as the previous, but was good. Then like soccer it just kept decreasing till 2009 elections (last major tournament). Till our next elections which are our “next major tournaments” we will have the same leaders. Can I ask you this? Our last President and our next President, are they being selected (automatic qualification) because there is nobody else or because they are the best? Is it automatic qualification because we are hosting, or is it qualification because we were the best in our group and we earned our title chances?

As Khaya Dlanga recently tweeted, he feels Motlanthe may be the last true ANC man. That also makes you realise its an end of an era perhaps, they are getting old and phasing out, the future is ours so we need to take charge in all spheres from politically to football to everything.

If we improve the leadership, fix SAFA amongst other things and exclude politics from it, we will start seeing results. The goal posts have moved since the 1996 soccer playing generation and political leaders. They grew up playing and fighting for a stronger purpose and love, and money had little to do with it. When they were growing up they didn't have money, they just had a cause and passion.

We need to create our future legends, but the current and upcoming players and leaders need to learn to balance the different generations in order to be legends and lead our country on and off the field into the future.

Our current and future leaders of the next generation didn't necessarily grow up with any power, however they worked hard for different reasons to get where they are today and I think though some of them grew up with nothing, they have become something, they have enough history, knowledge and appreciation to use the power effectively & responsibly for the benefit of the people.


So until politics leaves football, our legends will never be created again. But since that’s not likely perhaps we have to improve our leaders in political positions and power. Our original leaders generation post the struggle are phasing out, our new future political leaders could be your Khaya Dlanga's, Andile Khumalo's, Given Mkhari's just naming off the top of my head. The entrepreneurs, the businessmen and the content managers with enough integrity and leadership potential to have an idea on how to make it work given the old achievements and mistakes, current circumstances and obstacles to create a brighter future for more than themselves.

Until then I do think Mzansi Legends will phase out in football, politics and other public sections. Politics obviously having a bigger impact on the country and as a whole will influence a lot of them.

I do also think a major contributing factor that has changed is money. Money has become the substitute goal for freedom and expression and there is nothing wrong with that, however Nelson Mandela once quoted "Money won’t create success, the freedom to make it will." My question is "Is money a means to an end, or is money the ends?"

In closing I do think we have our future leaders here now, Given Mkhari also once said "Lack of leadership is not the absence of people in leadership positions"

Until there is proper leadership, development and change in mind-set, we will be assured that Mzansi LEG...will....END....

Mzansi Leg.....ends???? : Part 1

Last year sometime I was watching the show hosted by Phumlani Msibi called "Mzansi Legends" and I really enjoyed how it took me back into memory lane when I played one pal (street soccer) and we would actually pretended we were Dr 16V Khumalo, Ace Khuse, Madida, or even some of the older legends like Jomo, Dladla, Chippa or Ace Ntsoelengoe who were the generation before that. 

Remember that Sasol ad?

I will never forget some of the football I used to watch as a laaitjie, piano shoe shine is what I remembered as we watched seriously entertaining football. Tjovitjo as we whistled while Dr would stand on top of the ball to entertain the fans because Chiefs was 2 nil up. They didn't always go forward or shoot from outside the box, but we were entertained as they played our football and believe it or not they got results. Back then they wanted to dribble the ball into the box like Barca does now and it worked for us.

I loved the concept of the show, Mzansi Legends, and I thought it was a brilliant way to commemorate and appreciate our legends that didn’t necessarily get the lime light and recognition like your Maradona or Pele, yet could be argued to be on the same standard of skill if not better by certain people who actually saw them play. Much as I liked the concept, the first thought that ran through my mind was "How sustainable is this show?"

Fact is for a show you need interested viewers, to get interested viewers you need material, to keep viewers interested, the material has to be great. Now let’s look at that. They had material, but what happens post 1996 in terms of SA football players? What drove me to write this blog is because of the consistent recent poor form of our national squad Bafana Bafana...

If you google the word legend, you will read descriptions like “story of.., history, supernatural being" and we associate it with some great person from the past. That being said I started asking myself a question, between 1996 and now, did any of our talent play and work hard enough on their career to come close to being called a legend? Will this show have material when they are done with Dr and Co.’s era? But seriously do we have anyone to keep this show going after the legends of 1996?

Jabu Pule was such a talent, but clearly so was Mr Jack Daniels. The man went as far as changing his name to Jabu Mahlangu (surname of late father) to perhaps get rid of the bad luck amongst other things which I won’t get into, not realizing that dropping the bottle and picking up the discipline is also a requirement to maintain and improve talent. “Talent alone won't make you successful.” And that is clearly demonstrated by current form of Bafana Bafana, which has not been up to standard since 1996 and has been getting worse. What picture does it paint for SA football? So I personally feel the greats are gone, we have lost over 15 years where we could have been building. Or were we finding our feet post democracy?

All we need is proper leadership and organizations. How can we build something solid without a good foundation and a vision driven by disciplined leadership? Reuel Khoza the Chairman of Nedbank was criticized a couple of months ago for the manner in which he communicated his opinion to government. It was a valid observation, we need visionary leadership. In his words “Leadership at all levels should demonstrate a commitment to creative freedom"

Tuesday, 5 June 2012

Wasting taxpayer’s money is not going to fly…


You know it really bothers me how our government wastes money and can’t use it properly or efficiently. It’s bad enough with corruption and luxurious spending, the tax payer doesn't see what happens with most of the money. They claim there is no money to build houses, maintain national roads or perhaps subsidize education. Yet they have enough money to bail out certain companies where some of the MP's could have direct interest.


Take this for example companies like SAA have recently come back again to the government to borrow money to bail them out, yet they still have expensive tickets compared to your Kulula's, 1Time, subsidiary Mango and yet their service is dropping quicker than their profit lines.


So to quickly sum it up we basically have a company that has also been accused and possibly penalized for price fixing, their service is dropping, they are not the cheapest in the market and yet we (taxpayer/government) keep bailing them out and lending them money.


The carrier previously also sued its former CEO for spending R27.4-million on a staff retention scheme and another R30-million on a golf sponsorship deal he authorised with Argentinian golfer Angel Cabrera. 


So now we have reckless spending, service dropping, but they need more money.
What do the people want? I think service at an affordable price would be something the people would appreciate.
And how do you get that? Economics has taught us that competition creates that. So here is a very general idea.  


The money the government uses to subsidize such big companies like SAA is actually the tax payer’s money to run the country. Yet as I stated earlier the government claim they don't have the funds to 'subsidize our roads and want to increase tolls, they can’t subsidize and improve our public transport so most people still use their cars. Which are the same cars that are damaging the roads that the government can’t maintain without us being taxed more? They cause traffic and parking itself has become a costly problem to companies and individuals because we all drive to work. It is a bit of a vicious circle that comes back to how our government uses some of the tax payer’s money to benefit the tax payer.


Now as an idea what if the government lends SAA the money, however because SAA can’t always physically cover the interest at times cash wise and its high, why don't they just compensate or rebate SA residents somehow for the tickets to fly domestically? This will increase sales for SAA, make them more competitive price wise and perhaps prompt them to push their service up as they are now cheaper which means they need numbers. 


That would benefit the SA resident because with their tax money they get cheaper flights and a better service. 


So let’s do a quick scenario. Ceteris paribus SAA has about 20 domestic routes per day and 20 flights per day between Johannesburg and Cape Town. Their B737-800's can seat up to 210 passengers. But let’s assume on average 120 people per flight because this is only for residents. So that’s 2400 tickets per day let’s say.


Currently SAA has a R1,3 billion subordinated loan already from the government, and the R1,6 billion “going concern” guarantee it [SAA] obtained to underpin its cash requirements after the auditor-general raised concern last year about its ability to generate sufficient cash to fund operations. . Now they are asking for about R6m again to fund operational costs. I’m also going to assume for the sake of the argument that the guarantee money was also transferred to SAA directly to freeze with the bank. That is about R2.9 billion capital of the tax payer’s money. That's a lot of interest per annum to subsidize tickets. 


Let’s assume the lending is at the current repo rate which is currently 5.5%. Without compounding the interest the interest accrued in a year will be R159.8 million just on interest not compounded.


Now assuming 2400 tickets per day to SA residents, and assuming 360 days per annum we have 864,000 tickets per annum. That would make it a "rebate" or discount of about R185 per ticket. Don t forget we are assuming the interest is not compounded which it can easily be compounded and we assume the repo rate stays at its low of 5.5%. So these assumptions are conservative as the rebate can be higher than R185 per ticket.


Depending on the numbers this makes the price a little more competitive. As we know in economics the higher the price, the less the quantities for obvious reasons. This is because the higher price margin makes up for the lower quantities sold come gross profit calculation. However they no long have that high margin to compensate them for the lower quantities, which means they must now up their service because Kulula, OneTime etc is available at the same if not cheaper price. Quality has to improve to increase ticket sales because the price has come down, the consumer, the tax payer benefits.


Now obviously there is the down side to this because only a certain percentage of the country benefits because not everybody flies and mostly the poor are the ones that need that saving somewhere else of R185. They will unfortunately have a less of a chance of benefiting from this. 


But without sounding harsh or selfish, majority of the taxes are paid by the people who can afford to fly in the first place as they are in that higher tax bracket. Maybe the idea of subsidizing elsewhere where the bigger population can benefit? This was just a general idea of the people getting something back since the government can’t manage funds and budget affectively.

Who knows maybe subsidizing the Gautrain tickets should be considered or perhaps get even more efficient public transport should be the next options since they all ask for government funding.


Besides the administration and management of such a system, it’s just a thought, just an idea on how we can try be innovative with tax payers money in a way that can benefit some if not most of them. I think the government and all companies should be thinking outside the box and try different things even though there is a possibility of failure because if you're not failing every now and again, it's a sign you're not doing anything very innovative. What I am saying may not be logical, but innovation is not the product of logical thought, although the result is tied to logical structure.

Your thoughts?