More red carpet, less red tape

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Eliyahu Goldratt, father of the Theory of Constraints.

Last week I attended a breakfast meeting where I had an interesting chat with Western Cape provincial economic and tourism department officials. They explained their Red Tape to Red Carpet initiative, which I found intriguing.

It tries to resolve issues for businesses across the Western Cape to make sure that it is seamless to operate in the province. The unit ensures that there is no red tape that may make it difficult to conduct business with the Western Cape government.

I would like to explore this concept, which one can call “Red Tape to Red Carpet Thinking” within companies and in politics.

In the BEE space this type of thinking would help accelerate the pace of transformation in South Africa. From the established business side it is very difficult for black suppliers to crack the nod from big companies.

There is much red tape that needs to be overcome, such as the many forms small businesses have to fill in to be part of the procurement databases.

Of course, being on the database does not mean you will be marketed across the business; what it means is that when you potentially get business you don’t have to go through the rigorous registration process.

For companies to succeed in getting business from the big companies they have to constantly be in their face and make sure they are known.

The challenge to big companies is going to come next year when the BBBEE procurement targets move to 70 percent of Total Measured Procurement Spend and a 20 percent target for buying from small companies. Companies’ scores are going to drop heavily because of these progressive targets.

The major excuse given for the poor BBBEE procurement is that it is difficult to find small companies, especially those that can deliver value for money with their services. So the “Red Tape to Red Carpet” thinking is needed by the big companies if they are to do well on the BBBEE scorecard. Small businesses are also in need of this type of thinking in order to be sustainable.

I remember in the days when one of my companies was at the explosive growth phase it was difficult to keep up and client service suffered as result. A change of thinking had to happen, which enabled one to look at the customer beyond the sale one was making. But the key question was how to make sure of repeat business.

This is where the Red Tape to Red Carpet type of thinking came in, where you invest in the relationship with customers in a way that the relationship capital is constantly increased over time.

So for small businesses to succeed they must eliminate all the red tape that makes it difficult for them to get business, attract and retain their top-performing employees and keep their suppliers.

Success is assured by asking yourself: How do I create a red carpet environment in my business? You know a business is going down when most of the clients, employees and suppliers fall off the red carpet and you have an introduction of red tape with many forms and rules that do not add any value to the bottom line.

Dr Eliyahu Goldratt, father of the Theory of Constraints, defined a constraint as anything that limits a system from achieving higher performance versus its goal. Moving from Red Carpet to Red Tape is introducing constraints that will limit the performance of any business.

When an entrepreneurial small company becomes more corporatised towards being a big company there is always a risk that it might not do as well financially as before due lots of red tape. So a fine balance needs to be struck to optimise performance.

In politics the reversal of moving from Red Carpet to Zero using Red Tape seems to be the norm. We have examples like Jackie Selebi, who was once a seemingly invincible top cop, ending up in prison. We have Julius Malema, who was striding on the Red Carpet for a number of years, but everyone is now holding their breath to see whether his strides will either let him go on a magic carpet ride or whether he is fast on his way down to zero.

In conclusion, I would really like to see the Red Tape to Red Carpet thinking take place within civil servants’ minds to improve service delivery in education, health, safety and in business without any regard for political ideologies. - Vuyo Jack