The Four Types of Businesses in South Africa when it comes to B-BBEE

It’s a sweltering day in October of 2016 and I’m navigating through an industrial cluster north-west of the outskirts of Pretoria. I arrive at the factory premises of a leading toilet paper manufacturer for a meeting around our B-BBEE software. I’m welcomed by my host, Vimla, the newly appointed Transformation Manager. She ushers me through the bustling plant and upstairs towards a large boardroom overlooking the factory floor. Walking into the room I’m introduced to the management team comprising of about sixteen executives. I can’t help but notice they are all white males, barring one coloured lady sitting at the edge of the table. Since working in B-BBEE, it’s become a professional slant of mine to observe the composition of leadership teams.



The atmosphere in the room is rather subdued, however I break the ice with some pleasantries and get a few half smiles and murmurs in return. In my usual jovial manner, I begin my presentation, showing as much of my pearly white teeth as I can. But, my energy is unrequited. The executive team sits before me stone-faced and arms crossed. I begin with my slides, while thinking to myself, “tough crowd, did these guys just get a retrenchment notice…?”. Despite the abrasive body language, I survive the opening question and answer round, and continue to the software demonstration.

Standing by the screen in front of the audience I announce: “this is it, the BEEtoolkit landing page. Isn’t it fantastic!” and belt out some of the features and the benefits that will simplify their transformation journey. My exuberance seems to bounce off the walls as the audience still sits  dead flat.

So, I do something I have never done before.

I stop, and in absolute silence, make distinct eye contact with each person across the room. I walk back towards my laptop and slam it shut saying, “can we take a few steps back from my presentation please. I’d like to find out from the team what your thoughts or feelings are about B-BBEE in general?”

The room remains quiet and now all heads turn downwards toward the table as the audience before me tries hard not to make eye contact. Continuing, I say, “this is a safe space and there is no right or wrong answer. Let’s just express our feeling towards B-BBEE?”

Suddenly, one of the executives blurts out from the corner of the room, “This B-BBEE is just Jacob Zuma’s nonsense!”, and that’s my censored version in order to get this piece published.

Another executive jumps to his feet and exclaims, “why do we need all this B-BBEE crap after Nelson Mandela took us to the Truth and Reconciliation commission in 1996! Where’s the reconciliation now!”




At that moment, I recognised the meeting had changed, and so had my role. I quickly realised that this was no longer a B-BBEE management software meeting, the gathering was now a platform for this management team to air their earnest views on B-BBEE. Views perhaps never voiced prior, and my new role was now educator and councilor to bravely address their interpretations and tackle any distortions or miseducation.

The meeting was now a legal hearing where Broad Based Black Economic Empowerment stood summoned. The executives before me were ready to give testimony for the prosecution and I found myself as the attorney for the defendant. In this trial of law, I opened the floor and invited each executive in the room to express their opinion on B-BBEE. One by one they did. For some it was easy; for others it was like pulling teeth.

Not all the views were negative. In fact, the majority of the team was indifferent to B-BBEE and saw it as tick box exercise to attain their desired score. A few were positive about transformation and saw the inherent benefits for all South Africans regardless of their race.

After everyone had expressed their perspectives, the air cleared and everyone opened up like a heavy burden had been lifted. There was some form of catharsis, the faces before me warmed and the hands that were crossed relaxed.


Vimla shouts towards me from the back of the room, “it’s your turn now!” and all eyes turn towards me. Here is my closing argument.

“Well, we cannot expect democracy alone to redress the structural inequalities of the pre-1994 era. The only way for South Africa to progress at a macro level and scale is with much greater inclusion of black people, who are the majority of humans here, into the economy at a greater level. We desperately need more black people to simply join us in the economy as we simply have too few people active in the economy in proportion to the people the economy supports. For example, we cannot continue to have a situation where we have about seven million tax-payers carrying 56-million people. On the other side, we cannot continue to have more than eighteen million people on monthly social grant support.

B-BBEE may have suffered some form of “Zumafication” but transformation has nothing to do with Jacob. B-BBEE seeks to incentivise large organisations such as yourselves, to pull more black people into the economy, so the entire economy will grow for the benefit of all citizens and all races. The legislation is not perfect and is clearly a work in progress. But if you understand how it works and its intent, you will realise it’s a beautiful body of work that has the potential to advance us all. White males and white females included.  

I mean, just imagine if just another one million more people could afford toilet paper in South Africa?”

The team chuckles.

“And imagine if your workforce and your management team was a little more diverse, perhaps there are other sanitary products you could develop to reach millions more black consumers today? There might be massive opportunities for your business in local markets you don’t even know exist. Who knows?”

I learned a lot that day. The cliché is true, that we don’t see the world as it is, we see life through the lenses that cover our eyes. Sometimes these lenses can be blurry and we don’t even realise it. Perceptions are indeed reality and we need to be very careful as to what we embrace as truth. It might just be our emotions leading us astray… 

Through the insights that day and after further observation I realised there are four predominant paradigms in South African business when it comes to B-BBEE. Here are my observations about the four main ways in which companies interpret and relate to transformation.





The Four Types of business in South Africa as they relate to Transformation

This model assumes the primary goal of the business is to generate revenue. As such the model is based on how the leadership of commercial enterprises view or are impacted by B-BBEE.   




Quadrant 1: The Bystanders

These businesses don’t need B-BBEE compliance to generate revenue, and don’t care about it. Their feelings towards B-BBEE are neutral. These types of businesses are disconnected from the process of transformation and view B-BBEE as the prerogative of “other organisations” and not their own. They operate as if B-BBEE does not exist and persist in this cocoon, as long as their business has no economic imperative to transform.



Quadrant 2: The Angry

These businesses need B-BBEE compliance to generate revenue within their industry, but the business is negative towards B-BBEE. The compliance pressure typically comes from their clients or competitors via a loss of revenue or the threat of a loss of revenue if they don’t comply and boy, does this make them mad! These types of business either don’t understand B-BBEE or have rejected its premise outright. These institutions commonly view B-BBEE as advancing other people at their expense. They often view the entire framework with suspicion and they feel threatened. For these types of businesses B-BBEE compliance is an agonizing burden they endure just for the sake of revenue and approach their scorecard as a tick box exercise.  



Quadrant 3: Advocates

These types of businesses do not require B-BBEE compliance to generate revenue, but they believe in and support it. The financial standing of these entities is independent of their B-BBEE status. Nonetheless, this grouping of businesses cares about B-BBEE and chooses to comply. They have embraced the tenets of transformation and view it as necessary for the greater good. These organisations comply from a good corporate citizenship perspective. They do their best to achieve and maintain some level of compliance, with the view that there is greater positive socio-economic impact in the country from their contribution.    



Quadrant 4: The Passionate

These types of businesses rely on their B-BBEE compliance to generate revenue. They also believe B-BBEE will advance South Africa. These businesses are typically the most fervid about B-BBEE and their scorecard is part of their core business strategy. Such organisations are very often beneficiaries of the transformation framework. They are proactive about their annual B-BBEE journey and view their scorecard as much more than a tick box exercise, they very often desire tangible socio-economic impact through their compliance.     

This model is certainly not an exact science, but it is based on my observations of hundreds of different businesses over a few years.

Where would you classify your business?    




Author –  Winston Nolan, 10 July 2020