In times of crisis: choosing battles carefully

While many South Africans were left wondering why certain ministers in President Cyril Ramaphosa’s first round of new Cabinet appointments retained their seats, albeit in different portfolios, what we need to bear in mind is that leaders have to choose their battles carefully, and Ramaphosa practised this here. Certain appointments were non-negotiable; others were the outcome of realpolitik.

Three non-negotiable ministers, who have to get South Africa back on track, are Minister Nhlanhla Nene (Finance), Minister Pravin Gordhan (Public Enterprises) and Minister Zweli Mkhize (Cooperative Governance and Traditional Affairs). They are non-negotiable because it was clear to all that South Africa was looking over the edge of an economic precipice and, while I have always said that politics might get you into power, it is economics that keeps you there.

Ramaphosa’s presidency is going to succeed or fail in the short-term, based on the speed at which the country’s economics and finances can be stabilised, the systemic risk we face from public enterprises being mitigated, and the parlous state of local government and problems of service delivery being confronted and turned around.

The problem is that we are still at a level in our democracy where, to date, our country has not been able to agree on the path to get there. And so, right now, we are hovering at an economic crossroads. While some people remain positive about Ramaphosa, others are in a ‘wait and see’ holding pattern. They are waiting to see what radical economic transformation and land expropriation without compensation really means and how it unfolds; and they are waiting to see skills development take place and jobs being created, especially for the youth, instead of endless talking.

However, regardless of political affiliation or ideology on economic development and social emancipation, the majority of people in South Africa want to achieve the same objectives: stability, strong economic growth, social equality and ensuring that our young people are given the best opportunities to succeed.

Therefore, Ramaphosa’s government has its hands full with trying to navigate a tightrope between the expectations of an increasingly frustrated populace, the rating agencies, which have the power to determine what our borrowing costs and foreign exchange rates are going to be, and investors who see all kinds of potential in the changeover but who still think, let’s wait and see.

What he does in subsequent Cabinet changes will be telling, but what he could not compromise on at the start of his presidency was to appoint the best ministers for the job to manage the financial, economic and governance crisis in Finance, Public Enterprises and Cooperative Governance and Traditional Affairs. The three are vital to South Africa’s economic and social wellbeing and, hence, they are inseparable. The national government cannot do its work without the full support of a functioning, capable, ethical finance ministry, efficient, transparent parastatals and accountable, well-run provincial governments, municipalities and traditional leadership communities. This does not diminish the importance of all the other ministries but these key areas had to be addressed in the context of Ramaphosa’s crisis leadership.

Two interesting leadership perspectives to consider in this regard are Fred Fiedler’s Contingency Theory and Hersey-Blanchard’s Situational Leadership Theory.

Fred Fiedler was one of the leading researchers in industrial and organisational psychology of the 20th century, which remains relevant today. His Contingency Theory in his 1958 work on Leader Attitudes and Group Effectiveness states that effective leadership depends not only on the style of leading but on the control over a situation and the leader’s personality or psychological disposition. How the leader is perceived and whether the leader can actually exert control over the group determines how effective the leader-led relationship will be.

Paul Hersey and Ken Blanchard, whose Hersey-Blanchard Situational Leadership Theory from the 1970s and early 1980s, posits that leadership depends upon each individual situation and no single leadership style can be considered the best because each type of task requires a different leadership style. They say that a good leader adapts their leadership approach to the goals or objectives to be accomplished, including choosing the right person for the job at the right time.

The right person must be wise, well informed, experienced, excel at goal setting and execution and have a heightened capacity to assume responsibility. Minister Gordhan exemplifies this and he is exercising the ‘control over the situation’ in the Contingency Theory by cleaning out the state-owned enterprises where required, and board members in place who have the experience, ability and ethical commitment to do what has been entrusted to them and take the necessary actions required. Here, he is also practising situational leadership: sorting out the governance as quickly as possible in order to stabilise the state-owned enterprises and to then start rebuilding capacity and morale.

Looking at Minister Nene’s portfolio, he demonstrates considerable leadership skills, the right temperament and experience to do the job, take the actions required and inspire confidence. However, certain key factors that are currently outside of his control, such as how the National Treasury resolves which actions to follow with all the municipalities and government departments that are not paying what they owe. In an update on local government debt, for example, as at December 31 2017, municipalities owed Eskom R16.2bn and water boards R7.3bn.
How is the National Treasury going to resolve this? Perhaps it will be given more authority to exercise the necessary control in the face of the escalating number of towns and cities on the verge of financial failure or that have already failed.

Overall, there is no doubt that both Gordhan and Nene have the situational and contingency credentials and character to make the tough decisions required to put our economy and state-owned enterprises back on a path of economic sustainability.

Minister Mkhize has been far less vocal and visible than Gordhan and Nene but my reading of this is that it is consistent with his character and his role as the former Treasury General of the ANC to be the diplomat who is quietly working behind the scenes to exercise change and control. At this stage, the central government does not have the carte blanche to dictate to the local government, but something big has to be done fast, as the signs and symptoms of decline and decay are already caked in dust in too many places.

When NASA went through a major period of disaster, decline and decay in the late 1980s and 1990s, the symptoms included: no long-term planning, no innovation, scapegoating, resistance to change, staff turnover, low morale, fragmented pluralism, the loss of credibility, non-prioritised cuts and organisational conflict.

These are the same symptoms, plus a few more, afflicting our state-owned enterprises, government departments, municipalities and metros, which are not deriving the productivity that is required. The capable people are drowned or scapegoated in this context. All three ministers need highly capable people who can help them sort out the ‘willing and able’ from the ‘unwilling and unable’ and put development plans in place to address the ‘unwilling and able’, and the ‘willing and unable’.

All three ministers need to radically change the way things are done, including addressing which opportunities for training and development in government are being offered to young people. Minister Gordhan has spoken about the need to employ young graduates in the state in meaningful ways, and to redefine national service for all young people in order for them to gain experience and opportunity.

It is all about moving beyond the crossroads, taking charge of our own destiny, facing the facts of the decline and decay in all areas of governance in our country, and tackling the key issues through wise, bold leadership. The economic issue and the land issue are not going to go away, and unless we address them, we risk causing unintended consequences, which are not in anybody’s best interests. This includes giving a messianic-like status to leaders who, whether in politics or business, exploit crisis situations for their own self-interest. The danger is they too easily become untouchable and when situations change, they are beyond our reach. As citizens, we must always hold our leaders to account and our leaders, in turn, whoever they are, must always hold themselves to account. They must do the right thing: it is the first thing they must do and it is the last thing they must do.

This article appeared in Leadership, Edition 392, May 2018. It is reproduced with their permission.