• Like

Making sense and animal spirits march 2011 sv

  • 450 views
Uploaded on

John Maynard Keynes was the first to mention Animal Spirits in the 1930's. Now Akerlof and Shiller have published a seminal work with this title. They argue that the macro economy can be described as …

John Maynard Keynes was the first to mention Animal Spirits in the 1930's. Now Akerlof and Shiller have published a seminal work with this title. They argue that the macro economy can be described as behaving in four quadrants. The horizontal axis describes the MOTIVES, from non economic to economic. The vertical axis describes the responses, from irrational to rational. Conventional economic theory supposes that the behaviour of the economy is confined to the ecomic motives and rational responses (top right hand quadrant). However, they argue that in fact much of the economy can only be ascribed to non economic motives and irrational respones (the other 3 quadrants). These animal spirits drive everything and are based on five forces: Confidence; fairness; corruption and bad faith; the illusion of money and STORIES. The world we create depends on the prevailing stories. And the power of language is underestimated. It is a PRIMORDIAL force greater than FIRE - and it has the power to create or to destroy.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
450
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
7
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. BMI-BRSCU
    THE STRATEGIC FORUM
    www.strategicforum.co.za
    THE STRATEGIC FORUM
    A place of assembly
    for strategic conversations
    Towards
    Making sense of the Building Industry:
    Animal spirits and how human psychology drives the economy and
    why it matters for the building industry.
    Dr. Llewellyn B. Lewis
    May 2011
  • 2. BMI-BRSCU
    ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    George A. Akerlof is the Daniel E. Koshland Sr. Distinguished Professor of Economics at the University of California, Berkeley. He was awarded the 2001 Nobel Prize in Economics.
    Robert Shiller is the best-selling Author of Irrational Exuberance and The Subprime Solution (both Princeton). He is the Arthur M. Okun Professor of Economics at Yale University.
  • 3. ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    We are facing the same problem today that we faced in the later years of the Great Depression – business today is inhibited by uncertainty about the future, about the tolerance of an angry public, about a disaffected labour force, and about what further government actions may be coming.
    Animal Spirits are the forces that drives all of this, and to understand animal spirits we have to use methodologies outside of traditional economics, leading us to other social sciences.
    Five psychological factors are of particular importance;
    Confidence;
    Fairness;
    Corruption and bad faith;
    Money illusion; and
    Stories. (Akerlof and Shiller: 2009: ix)
    Animal Spirits drive almost everything. Animal Spirits are more than just confidence as measured by confidence indicators.
    Declining Animal Spirits are the principal reason for the recent severe economic crisis.
    And despite the recent positive economic indicators, we see no clear indication that these spirits are yet revived. (Akerlof and Shiller: 2009: vii)
    • BMI-BRSCU
  • BMI-BRSCU
    ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    How the Macro Economy behaves
    Conventional Economic Theory
    Economic theory incorporating “Animal Spirits”.
    RESPONS
    Irrational Rational
    Economic theory incorporating “Animal Spirits”.
    Economic theory incorporating “Animal Spirits”.
    Non EconomicEconomic
    MOTIVES
  • 4. ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    How the Macro Economy behaves
    • The current model fills only the top right hand box; it answers the question: How does the economy behave if people only have economic motives and if they respond to them rationally?
    • 5. But that leads immediately to three more questions, corresponding to the three blank boxes: How does the economy behave with non-economic motives and rational responses? With economic motives and irrational responses? With non-economic motives and irrational responses?
    • 6. Akerlof & Shiller believe that the answers to the most important questions regarding how the macro economy behaves and what we ought to do when it misbehaves lie largely (though not exclusively) within those three blank boxes)
    • 7. Their description of the economy fits the qualitative as well as the quantitative facts, better than a macro-economics that leaves out irrational behaviour and non-economic motives.
    • 8. Thus, they occasionally use statistics but for the most part, rely on history and on stories. (Akerlof & Shiller: 2009: 168)
  • BMI-BRSCU
    THE ROLE OF BUILDING, CONSTRUCTION AND PROPERTY IN THE ECONOMY: 2010
    www.strategicforum.co.za
    PROPERTY OWNERSHIP
    ENGINE FOR GROWTH
    AND WEALTH CREATION
    R3,8 TRILLION RES PROPERTY
    R1,3 TRILLION NON RES PROPERTY
    LISTED PROPERTY SECTOR
    MARKET CAPITALISATION
    > R100 BILLION
    “Public Investments or joint Private-Public Investments that yielded even moderate real returns (say 5% - 6%) would increase activity, cut unemployment, generate more tax returns and mean lower long-term debt.” (Joe Stiglitz: Freefall: 2010)
    EMPLOYMENT
    IN BUILDING & CONSTRUCTION
    > 1 000 000 PEOPLE
    PRIMARY AND SECONDARY PROPERTY MARKET
    R195 BILLION PA MORTGAGE ADVANCES PA
    R1000 BIO MORTGAGES O/S
    ANNUAL HOUSING
    NEED
    (POP. GROWTH ONLY)
    250 000
    INTEGRATED HOUSING
    URBAN HOUSING
    BACKLOG > 1,5 MILLION
    UNITS IN 2010
    FTHB SUBSIDIES
    (1,9% OF BUDGET = R13,8 BILLION)
    (500 000 HOUSING UNITS)
    INVESTMENT IN AFFORDABLE HOUSING
    (R1,4 TRILLION 2010-2020)
    BUILDING INV.
    R108,5* BILLION
    (20,8% OF GFCF)
    RESIDENTIAL AND
    NON RES BPP AND
    BUILDINGS COMPLETED (BC)
    GOVERNMENT BUDGET
    R7399BILLION
    (30% OF GDP)
    GFCF
    R521,6 BILLION
    (22% OF GDP)
    GDP
    R2663 BILLION
    GOVERNMENT
    INFRASTRUCTURE SPEND
    (R846 BILLION 2010-2020)
    TRANSFER DUTY
    R8- R9 BILLION PA
    CONSTR. INV.
    R174,9 BILLION
    (33,5% OF GDFI)
    * When the UNRECORDED Home Improvement and Affordable Housing is taken into account Building Investment = 30,5% of GFCF
  • 9. BMI-BRSCU
    CURRENT REALITY: BUILDING & CONSTR: 2010
    BUILDING & CONSTRUCTION INVESTMENT
    R334 221 MILLION
    BUILDING INVESTMENT
    R159 277 MILLION
    CONSTRUCTION INVESTMENT
    R174 944 MILL
    CONTRACTOR (50,8%)
    R67 914 MIO
    RESIDENTIAL INVESTMENT
    R12 775 MILLION
    LABOUR (40%)
    R133 688 MIO
    SUBCONTRACTOR (49,2%)
    R65 775 MIO
    NON RESIDENTIAL INVESTMENT
    R64 488 MILLION
    DIRECT TO USER (40%)
    R80 213 MILLION
    MATERIAL (60%)
    R200 533 MIO
    UNRECORDED
    ADDITIONS AND ALT’S INVEST**
    R35 106 MILLION
    INDIRECT VIA DISTRIBUTION
    (60%)
    R120 320 MILLION
    LARGE IND BUILDERS MERCHANT
    (10%)
    R20 053 MILLION
    LARGE CHAIN BLDRS MERCHANT
    (25%)
    R50 133 MILLION
    SPECIALIST SHOP
    (5%)
    R10 027 MILLION
    HYPERMARKET/SUPERMARKET
    (5%)
    R10 027 MILLION
    LOCAL HARDWARE STORE
    (15%)
    R30 080 MILLION
    * 2010 Prices
    ** Residential and Non Residential
    CURRENT REALITY OF BUILDING & CONSTRUCTION: 2010*
    RESIDENTIAL INVESTMENT
    R59 682 MILLION
  • 10. BMI-BRSCU
    THE AGE OF THE UNTHINKABLE
    www.strategicforum.co.za
    If we had to think about the nature of our global financial markets all over again, how would we change what we did and did not do?(Ramo: 2009: 205)
  • 11. BMI-BRSCU
    DEVELOPING PRESCIENCE
    www.strategicforum.co.za
    In the summer of 2007 William Browder’s habit of living on his toes, of looking for any sign that the landscape around him was about to avalanche away, drew his attention to a news item in the papers.
    In New York an auction of debt from leveraged buy-out deals had failed to draw enough bidders and was shut down.
    To most of the investing world this looked simply like a small hiccup in an otherwise well functioning financial system. But Browder recognised it for what it was: a sign that the world had run out of the ability to absorb new debt. It was the end of a Ponzi-like scheme and he knew, the start of an avalanche that might reach a historic, tragic scale.
    Almost immediately he began stockpiling cash, reducing his exposure to stocks as much as he could, and moving his investor’s money into any safe haven he could find. (Ramo: 2009: 56,57)
  • 12. BMI-BRSCU
    DEVELOPING PRESCIENCE
    South Africa's quietly efficient registrar of banks, Errol Kruger, who has announced he will be retiring after eight years in the job, admits that he allows himself a wry smile when local bank executives congratulate themselves on avoiding the worst of the fallout from the global recession.
    Despite projecting themselves as models of restraint and responsibility, the truth is that if they'd had their way they would have indulged in the same shenanigans that got their international counterparts into such trouble.
    SA would have been in it up to the eyeballs. (Moneyweb, 23 April 2011)
    Errol Kruger saw the crash coming early.Back in July 2005, when our Banks were enjoying big profits, Kruger called up the CEO’s of the five major Institutions – ABSA, Nedbank, Standard Bank, FirstRand and Investec – and cautioned he will be “pulling the handbrake” on expansions and acquisitions.
    To him, the economy was showing early signs of overheating . . . And he warned that SA’s financial institutions were at stage 7 of the banking cycle and not stage 4 as they thought.
    “I didn’t want to be a pessimist, But I told them I could see a crisis coming, and they should expect a tougher stance, and increased activities from my office that are appropriate to stage 7 – activities which they might think are extremely bureaucratic.”
  • 13. BMI-BRSCU
    TOTAL MORTGAGE LOANS & RE-ADVANCES: 1979-2009
    The deleveraging by the Banks and the loss of consumer spending power could only mean lost growth:
    mortgage repossessions, business failures, and personal bankruptcies . . .
  • 14. BMI-BRSCU
    THE PROPERTY MARKET AND COMPLEXITY
    The crisis in the financial markets that I had anticipated arrived in force on August 9, 2007.
    It came from an area we hadn’t expected – housing – and the damage it caused was much deeper and much longer lasting than any of us could have imagined. (Paulson: 2010: 61)
    Encouraging high rates of homeownership had long been a cornerstone of US domestic policy – for Democrats and Republicans alike.
    Homeownership it is commonly believed helps family’s build wealth, stabilizes neighbourhoods, creates jobs, and promotes growth. (Paulson: 2010: 64)
    All bubbles involve speculation, excessive borrowing and risk taking, negligence, a lack of transparency, and outright fraud, but few bubbles ever burst as spectacularly as this one would(Paulson: 2010: 65)
  • 15. BMI-BRSCU
    THE PROPERTY MARKET AND COMPLEXITY
    Not imposed by any one guru or institution or government.
    The result of the individual choices of millions of people world-wide.
    Emergent Global Property market
    Local Interaction, local knowledge
    (Source: Based on Roger Lewin. Complexity. Life at the edge of chaos: 1999)
  • 16. BMI-BRSCU
    THE PROPERTY MARKET AND COMPLEXITY
    Not imposed by any one guru or institution or government.
    The result of the individual choices of millions of people world-wide.
    Emergent Global Property market
    Characteristics of WISE CROWDS:
    Diversity of opinion (each person has some private information, even if it is just an eccentric interpretation of the known facts);
    Independence (people’s opinions are not determined by the opinions of those around them);
    Decentralisation (people are able to specialise and draw on local knowledge);
    Aggregation (some mechanism exists for turning private judgements into a collective decision).(James Surowiecki: 2004)
    Local Interaction, local knowledge
    (Source: Based on Roger Lewin. Complexity. Life at the edge of chaos: 1999)
  • 17. BMI-BRSCU
    THE PROPERTY MARKET AND COMPLEXITY
    The current and known world The future, unknown
    IMF
    World
    Bank
    THE
    EDGE OF CHAOS
    CREATIVITY
    INNOVATION
    All Countries
    (Whole World)
    • REINVENTION
    • 18. A Structural Change?
    • 19. Self Organisation
    • 20. Order for Free!
    • 21. Property a preferred Investment!
    Ministry
    Treasury
    Single
    Country
    (Part of World)
    THE GLOBAL PROPERTY ENVIRONMENT
    Scope of change and transformation
    LIMITS TO GROWTH
    PARADIGMS CHALLENGED
    ALTERNATIVE INVESTMENTS
    Banks
    Public
    opinion
    Critical mass of Investors
    (Whole community)
    • DEMISE
    • 22. THE PROPERTY BUBBLE?
    Individual
    Single Investor (Part of community)
    • THE LOCAL PROPERTY MARKET
    Contagious
    Stories
    Paradigm Pioneer
    Paradigm shift
    Bandwagon Flocking Herd behaviour
    Paradigm
    Re-invention
    Early
    adopter
    Late
    Adopter
    Impact of Change and transformation
  • 23. BMI-BRSCU
    THE PROPERTY MARKET AND COMPLEXITY
    • It appears that the limits to growth have been reached and the Industry is once again on the cusp of change and standing on the burning platform.
    • 24. It is a time of discomfort with a real danger of strategic drift. It means gradual demise for the industry or quantum change back to its potential growth rate.
    • 25. It is the time to challenge old mindsets, assumptions and established industry recipes and to expose paradigm blind spots. Only then can reinvention and the required growth be achieved.
  • BMI-BRSCU
    THE SUB PRIME CRISIS
    www.strategicforum.co.za
    The Sub-Prime crisis is the name for what is a historic turning point in our economy and culture. It is at its core, the result of a speculative bubble in the housing market that began to burst in the United States in 2006 and has now caused ruptures across many other countries in the form of financial failure and a global credit crunch. (Shiller, Robert J. 2008 : 1)
  • 26. BMI-BRSCU
    THE SUB PRIME CRISIS
    www.strategicforum.co.za
    According to John Maynard Keynes a Government stimulus package (like Infrastructure spending) results in a multiplier process as each round spends the MPC (Marginal Propensity to Consume). The effect can be calculted and =1/(1-MPC), the so-called Keynesian multiplier. If the MPC is, say 0,5, the Keynesian multiplier is 2. If the MPC is 0,8. the Keynesian multiplier is 5.
    But the multiplier theory also explains that a drop in expenditure could have greatly multiplied effects. If people (or Banks) overreacted in fear of, for example, a stock market crash (or a financial melt-down following the sub-prime crisis), then this would act just like a negative government stimulus. For each round of deleveraging by the Banks, there would be another round by Businesses, Individuals etc, resulting in a much larger decline in economic activity than would be attributable to the initial shock (see Akerlof and Shiller: Animal Spirits: How human psychology drives the economy, and why it matters for global capatalism 2009: 15).
  • 27. BMI-BRSCU
    THE SUB PRIME CRISIS
    www.strategicforum.co.za
    ‘Subprime securitization’ was the latest greatest snake-oil story in a tradition of centuries and eventually blew up, imploding a global financial house of cards, triggering the biggest change in credit culture in a lifetime.
    Locally, we thankfully weren’t directly in the line of fire, but our banks certainly drew similar conclusions and made similar changes, further encouraged by the National Credit Act of 2007 and the enhanced Basel 111 capital requirements.
    These changes have hit our property market and the building industry like a ten-ton truck going into a brick wall, throwing up hurdles for demand while contributing to a backing up of supply, with asset prices adjusting downwards, creating a severe case of indigestion probably taking at least five or more years to digest (with two already in the bag). (Dr CeesBruggemans, Chief Economist FNB, ).
  • 28. BMI-BRSCU
    NEW MORTGAGE LOANS & RE-ADVANCES: TOTAL
    www.strategicforum.co.za
  • 29. BMI-BRSCU
    MORTGAGE INTEREST RATE LOWEST IN 3 DECADES
    www.strategicforum.co.za
  • 30. BMI-BRSCU
    NOMINAL HOUSE PRICE GROWTH
    www.strategicforum.co.za
  • 31. BMI-BRSCU
    RESIDENTIAL LAND VALUES GROWTH
    www.strategicforum.co.za
  • 32. BMI-BRSCU
    AFFORDABILITY OF HOUSING
    www.strategicforum.co.za
    Affordability gradually improving . . .
    HHDI = Household Disposable Income
  • 33. BMI-BRSCU
    PRICE DIFFERENCE OF NEW AND EXISTING HOUSES WIDENING
    www.strategicforum.co.za
    A massive 34% differential !
  • 34. STAKEHOLDER ANALYSIS
    www.strategicforum.co.za
    Building Industry Stakeholder Analysis
    BYSTANDERS ACTORS
    PLAYERS
    Demand creators
    Future oriented
    Proactive
    Innovative
    Entrepreneurial
    Risk Takers
    RESERVES
    Demand Responders
    Current orientation
    Reactive
    Responsive
    Service oriented
    Risk Managers
    INTEREST (STAKE)
    UNAFECTED STAKEHOLDERS
    Low High
    ONLOOKERS
    Demand observers
    Past orientation
    Passive
    Risk Avoiders
    REFEREES
    Demand Facilitators
    Current orientation
    Reactive
    Responsive
    Mediating
    Gatekeepers
    Risk Averse
    Low High
    POWER
  • 35. STAKEHOLDER ANALYSIS
    www.strategicforum.co.za
    Building Industry Stakeholder Analysis
    BYSTANDERS ACTORS
    PLAYERS
    Committed
    In the Know
    RESERVES
    Involved
    Keep Informed
    LEVEL OF INTEREST (STAKE)
    UNAFECTED STAKEHOLDERS
    Low High
    CROWD
    Interested
    Minimal Effort
    REFEREES
    Concerned
    Keep Satisfied
    Low High
    POWER
  • 36. STAKEHOLDER ANALYSIS
    www.strategicforum.co.za
    BMI-BRSCU
    Financial Institutions have INORDINATE Power and Interest.
    They play in all the quadrants of the Stakeholder Matrix and are SIMULTANEOUSLY PLAYERS, RESERVES, REFEREES and CROWD.
    They make the rules of the game and influence every facet of it.
    Building Industry Stakeholder Analysis
    BYSTANDERS ACTORS
    RESERVES
    Architects, Specifiers,
    Manufacturers, Distributors,
    Contractors,
    FINANCIAL INSTITUTIONS
    Deposits, Repayments, Insurance)
    PLAYERS
    Property Entrepreneurs, developers, Public Sector,
    FINANCIAL INSTITUTIONS
    (Mortgage Origination, Approval, Advances, Repossessions, Auctions)
    Lanice Steward, MD of Anne Porter Knight Frank, says it is time that the regular bank reviews gave a more balanced picture of South African residential property.
    "These bank surveys are widely consulted and referred to and are highly influential. Where, it seems to me, they fall down is that they tend to reflect only the price moves on homes for which their bank has issued mortgage bonds.”(Business Day, 8 Feb 2011)
    INTEREST (STAKE)
    UNAFECTED STAKEHOLDERS
    Low High
    CROWD
    Labour,
    Unions,
    Consumer bodies,
    FINANCIAL INSTITUTIONS
    (Property Values, Property reports (HPI), Statistics)
    REFEREES
    Govt Prov-, Local-Authorities, CIDB, NHBRC, SABS, Agrement Board, MBA’S, SARB, State Tender Board,
    FINANCIAL INSTITUTIONS (Valuations, LTV ratios, Mortgage Rate, term, Affordability)
    Low High
    POWER
  • 37. STAKEHOLDER ANALYSIS
    www.strategicforum.co.za
    Building Industry Stakeholder Analysis
    BYSTANDERS ACTORS
    RESERVES
    Architects, Specifiers,
    Manufacturers, Distributors,
    Contractors,
    FINANCIAL INSTITUTIONS
    Deposits, Repayments, Insurance)
    PLAYERS
    Property Entrepreneurs, developers, Public Sector,
    FINANCIAL INSTITUTIONS
    (Mortgage Origination, Approval, Advances, Repossessions, Auctions)
    INTEREST (STAKE)
    UNAFECTED STAKEHOLDERS
    Low High
    CROWD
    Labour,
    Unions,
    Consumer bodies,
    FINANCIAL INSTITUTIONS
    (Property Values, Property reports (HPI), Statistics)
    REFEREES
    Govt Prov-, Local-Authorities, CIDB, NHBRC, SABS, Agrement Board, MBA’S, SARB, State Tender Board,
    FINANCIAL INSTITUTIONS (Valuations, LTV ratios, Mortgage Rate, term, Affordability)
    COMPETING WITH THEIR CUSTOMERS – AND THE BUILDING INDUSTRY?
    Low High
    POWER
    • BMI-BRSCU
  • BMI-BRSCU
    STAKEHOLDER ANALYSIS
    www.strategicforum.co.za
    We understand that homes are expensive these days. That’s why FNB offers you Bank repossessed properties at hugely discounted prices. All prices are negotiable. FNB Homeloans also offers loans up to 100% and there are no transfer duties payable.
    The properties are predominantly situated in what could be described as Middleclass areas. These areas are predominantly areas with an average property price of R300 000 – R650 000.
  • 38. BMI-BRSCU
    STAKEHOLDER ANALYSIS
    www.strategicforum.co.za
    ABSA strategy in Repossession market powered by www.MyRoof.co.za
  • 39. BMI-BRSCU
    STAKEHOLDER ANALYSIS
    www.strategicforum.co.za
    Standard Bank strategy in Repossession market.
  • 40. BMI-BRSCU
    STAKEHOLDER ANALYSIS
    www.strategicforum.co.za
    NEDBANK strategy in Repossession market.
  • 41. BMI-BRSCU
    STRATEGIC RESPONSE
    www.strategicforum.co.za
    There can be no return to high levels of employment and growth without finding a way of harnessing finance’s creative energies to allocate resources and risk so effectively that it spurs and speeds economic growth.
    We must never forget that credit, and the need for securitisation too, is at the heart of a modern financial system. (Gordon Brown: 2010: 109)
    How can we create the conditions that gives us the leverage to influence our environment?
    There is a compelling need for wide collaboration to address common problems.
  • 42. BMI-BRSCU
    TREND IN RESIDENTIAL ACTIVITY: BPP AND BC: 1993-2011 (FEB)
    www.strategicforum.co.za
    The response of Residential BPP to the NCA was immediate and severe and followed later by BC . . .
  • 43. BMI-BRSCU
    TREND IN NON RES ACTIVITY: BPP AND BC: 1993-2011 (FEB)
    www.strategicforum.co.za
  • 44. BMI-BRSCU
    TREND IN TOTAL ACTIVITY: BPP AND BC: 1993-2011 (FEB)
    www.strategicforum.co.za
  • 45. BMI-BRSCU
    CUM YTD % CHANGE: RESIDENTIAL: JAN 1994-FEB 2011
    www.strategicforum.co.za
    Res BC turned at about -21% in early 2011 and will grow STEADILY . . .
    Res BPP has turned at about -35% in early 2010 and is growing quite strongly . . .
  • 46. BMI-BRSCU
    CUM YTD % CHANGE: NON RESIDENTIAL: JAN 1994-FEB 2011
    www.strategicforum.co.za
    Non Res BC follows BPP down but may turn sooner than expected . .
    Non Res BPP TURNED SUDDENLY BECAUSE OF IMPACT OF TWO LARGE SHOPPING CENTRES. . .
  • 47. BMI-BRSCU
    CUM YTD % CHANGE: TOTAL: JAN 1994-FEB 2011
    www.strategicforum.co.za
    Total BC turned at about – 21% and move to positive growth by third quarter 2011 . . .
    Total BPP has turned at - 30% and will breach zero by first quarter 2011 . .
  • 48. BMI-BRSCU
    NET BUILDING ACTIVITY IN THE PIPELINE: 1993-2011 (FEB)
    www.strategicforum.co.za
    Residential BC Trend-break occurred in early 2006.
    Early sign of Change?
    Recovery is STRONGLY on the way. But the road back could be long …
  • 49. BMI-BRSCU
    NET BUILDING ACTIVITY IN THE PIPELINE: 1993-2011 (FEB)
    www.strategicforum.co.za
    Non Residential BC Trend-break occurred been 2007 and 2008.
    Recovery has STRENGTHENED…
  • 50. BMI-BRSCU
    NET BUILDING ACTIVITY IN THE PIPELINE: 1993-2011 (FEB)
    www.strategicforum.co.za
    Total BC Trend-break occurred in mid 2006.
    Recovery is GRADUAL…
  • 51. BMI-BRSCU
    % DIFFERENCE IN CUM Y/Y BPP : ACTUAL 2010 VS 2009: DEC
    www.strategicforum.co.za
  • 52. BMI-BRSCU
    % DIFFERENCE IN CUM Y/Y BPP : ACTUAL 2011 VS 2010: FEB
    www.strategicforum.co.za
  • 53. BMI-BRSCU
    % DIFFERENCE IN CUM Y/Y BC : ACTUAL 2010 VS 2009: DEC
    www.strategicforum.co.za
  • 54. BMI-BRSCU
    % DIFFERENCE IN CUM Y/Y BC : ACTUAL 2011 VS 2010: FEB
    www.strategicforum.co.za
  • 55. BMI-BRSCU
    BUILDING COST OF NEW HOUSES DECLINING
    www.strategicforum.co.za
  • 56. BMI-BRSCU
    BUILDING MATERIAL COSTS INREASING
    www.strategicforum.co.za
  • 57. BMI-BRSCU
    BUILDING MATERIAL COSTS INREASING
    www.strategicforum.co.za
  • 58. BMI-BRSCU
    GFCF RESIDENTIAL BUILDING: Q1 1993 – Q4 2010: R MIO
    www.strategicforum.co.za
  • 59. BMI-BRSCU
    GFCF NON RESIDENTIAL BUILDING: Q1 1993 – Q4 2010: R MIO
    www.strategicforum.co.za
  • 60. BMI-BRSCU
    GFCF TOTAL BUILDING: Q1 1993 – Q4 2010: R MIO
    www.strategicforum.co.za
  • 61. BMI-BRSCU
    GFCF CONSTRUCTION: Q1 1993 – Q4 2010: R MIO
    www.strategicforum.co.za
  • 62. BMI-BRSCU
    THE GREAT RESET
    www.strategicforum.co.za
    Available on Amazon.com
    “This economic crisis doesn’t represent the cycle, it represents a reset. It’s an emotional, raw, social, economic reset.” (General Electric CEO Jeffrey Immelt)
    “People who understand that, will prosper; those who don’t will be left behind.”
  • 63. BMI-BRSCU
    THE GREAT RESET IN AMERICA
    www.strategicforum.co.za
    • The bubble was so big in the 1920s, that after it popped during the Great Depression, it would take 22 years for non-residential construction investment to regain its precrash peak and 24 years for real spending on residential construction to recover to its pre-crisis highs.
  • BMI-BRSCU
    THE GREAT RESET IN THE UK
    “We tend to think of the sweep of destiny as stretching across many months and years – as if each minute leads inevitably to the next, before culminating in one of those decisive moments we call history.
    But sometimes the defining moments of history appear suddenly and without warning.”(Gordon Brown: 3: 2010)
    “The World has never been faced with such a complex global economic challenge – such fast financial reversals, such great banking threats, and such pronounced economic instabilities – as it faced in 2008.” (Gordon Brown: 3: 2010)
  • 64. BMI-BRSCU
    THE GREAT RESET IN THE UK
    In July 2008 Treasury Secretary Hank Paulson was having to negotiate with Congress for support for Fannie Mae and Freddie Mac (which together owned or guaranteed $5 Trillion worth of homeloans).
    In Britain’s housing market the Council of Mortgage Lenders announced on July 18 that lending had declined by 32% from June 2007.
    These figures made my blood run cold. I knew what they meant: people and business stuck without credit and possibly a bad recession(Gordon Brown: 35: 2010)
    In South Africa the decline from 2007-2008 was 33% followed by a decline of 29% in 2009!
  • 65. BMI-BRSCU
    THE GREAT RESET IN THE UK
    . . . The years 1929-32 are known forever as the Great Depression and the years 2008-9 will be known as the Great Recession. (Gordon Brown: 129: 2010)
    The removal of credit was happening very suddenly, and I realised I had not been thinking out of the box enough.
    I had expected to push and nudge the system back to order, but it was not happening.(Gordon Brown: 35: 2010)
    The information I had been looking at in the past weeks (October 2008) was as stark as it was serious:
    we were facing a situation that risked becoming worse than 1929.
    No one trusted anyone in the banking system, and people were predicting not a recession but a depression.
    People were panicking, asking which would be the next bank to collapse. The financial system was looking over an abyss.(Gordon Brown: 59: 2010)
  • 66. BMI-BRSCU
    THE GREAT RESET FOR SOUTH AFRICA
    www.strategicforum.co.za
    Jean-Marie Talbot, the president of Master Builders South Africa (MBSA), which represents more than 4000 contractors, predicts further job losses in the industry next year because of the unusually difficult trading conditions.
    He said the building industry was facing a multi-faceted problem caused by several factors, with the credit crunch, municipal infrastructural blockages that reduced the number of developments taking place and a lack of skills in various municipalities all playing a crucial role.
    MBSA believes the situation is so serious it has decided to convene an urgent building industry crisis summit early next year to address the crisis.
    “Without pre-empting the outcome… it is clear that the government – as a major supplier of work and with its stated capital expenditure budgets – will have to be engaged as a matter of urgency.
    “The departments of human settlements, public works, finance and labour are key partners in the process. We are constantly reminded about extensive capital budgets, but now we need action,” he said.
    ?
  • 67. BMI-BRSCU
    THE GREAT RESET FOR SOUTH AFRICA
    www.strategicforum.co.za
    • The recovery will be gradual
    • 68. The Building Industry can Change fundamentally
    • 69. New consumption patterns will be less centred around houses and cars
    • 70. Home ownership under threat
    • 71. Rental preferred to ownership
    • 72. Housing Units will be smaller
    • 73. But could favour rental and new forms of living, eg Townhouses and High Rise Flats, walkable neighbourhoods
    • 74. More job mobility requiring flexibility
    • 75. Transition to the Knowledge Economy – could affect Industrial and Warehousing developments
    • 76. People working at home and desk sharing – affecting Office development
    • 77. Infrastructure Investment crucial in new forms of public transport,
    • 78. Traffic congestion and gridlock forcing new working and living models
    • 79. A radically altered and much denser economic landscape organized around megaregions
    • 80. New types of inner cities with people walking to work
    • 81. Spatial fix involves Integrated, Sustainable developments where people live work and play
    • The STRATEGIC FORUM ScenariosFOR THE BUILDING INDUSTRY: 2010-2020
    BMI-BRSCU
    THE STRATEGIC FORUM SCENARIOS
    www.strategicforum.co.za
    HIGH ROAD
    COLUMBUS SCENARIO
    Property a PREFERRED Investment
    Home Ownership PREFERRED
    BUOYANT GROWTH
    Backlogs eliminated by 2015
    UPPER MIDDLE ROAD
    APOLLO SCENARIO
    Property a GOOD Investment
    Home Ownership DESIRED
    AVERAGE GROWTH
    Erosion of Backlogs
    LOWER MIDDLE ROAD
    SOYUZ SCENARIO
    Property an AVERAGE Investment
    Home Ownership QUESTIONED
    LOW GROWTH
    Keeping pace with Population
    LOW ROAD
    CHALLENGER SCENARIO
    Property a POOR Investment
    Home Ownership AVOIDED
    NEGATIVE GROWTH
    Increasing BACKLOGS
    Trends in the Building Industry are inextricably
    responsive to, and influenced by INVESTMENT CLIMATE, INVESTOR CONFIDENCE and PROPERTY DELIVERY.
    BOUYANT GROWTH
    > 5 % PA
    GDFI > 25 %
    OF GDP
    SUBSIDIES
    3 - 5 % OF BUDGET
    AVERAGE GROWTH
    2 - 5 % PA
    GDFI 20 - 25 %
    OF GDP
    SUBSIDIES
    2 - 3 % OF BUDGET
    LOW GROWTH
    0 - 2 % PA
    GDFI 15 - 20 %
    OF GDP
    SUBSIDIES
    1 - 2 % OF BUDGET
    NEGATIVE GROWTH
    < 0 % PA
    GDFI < 15 %
    OF GDP
    SUBSIDIES
    < 1 % OF BUDGET
    Investor Confidence
    NO CONFIDENCE LOW AVERAGE HIGH CONFIDENCE
    Risk Avoidance Risk Aversion Risk Tolerance Risk Taking
    Property delivery
    Investment Climate
    PROPERTY A POOR INVESTMENT / AVERAGE / GOOD / A PREFERRED INVESTMENT
    Paradigm Regression Paradigm Paralysis Paradigm Shift Paradigm Reinvention
  • 82. ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    The MFA CLIBI has moved sideways for four quarters, still reflecting widespread pessimism in the South African building industry … this is the first time that it has moved sideways for more than two quarters, an unprecedented occurrence … a recovery-in-waiting?
    ?
  • 83. ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    If this is what we mean by confidence, then we see immediately why, if it varies over time, it should play a major role in the business cycle. Why?
    In good times, people trust. They make decisions spontaneously. They know instinctively that they will be successful. They suspend their suspicions.
    Asset values will be high and perhaps also increasing. As long as people remain trusting, their impulsiveness will not be evident.
    But then, when the confidence disappears, the tide goes out. The nakedness of their decisions stand revealed.
    When people are confident, they go out and buy; when they are unconfident they withdraw, and they sell.
    Economic history is full of such cycles of confidence followed by withdrawal (Akerlof and Shiller: 2009: 12,13)
    A confident prediction is one that projects the future to be rosy; an unconfident prediction projects the future as bleak.
    But if we look up confidence in the dictionary, we see that it is more than a prediction. The dictionary says that it means “trust” or “full belief”.
    The word comes from the Latin “fido”, meaning “I trust”.
    The confidence crisis that we are in at the moment is also called a “credit crisis”.The word “credit” derives from the Latin “credo”, meaning“I believe”.(Akerlof and Shiller: 2009: 12)
    • BMI-BRSCU
  • ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    The real problem is the conventional wisdom that underlies so much of current economic theory. So many members of the macro economics and finance profession have gone so far in the direction of rational expectations and efficient markets, that they fail to consider the most important dynamics underlying economic crises. Failing to incorporate animal spirits into the model, can blind us to the real sources of trouble.(Akerlof & Shiller : 2009 : 167)
    What has happened in the current financial crisis, corresponds to what causes most of our economic ups and downs: over-confidence followed by under-confidence. The story in this case was that the price of housing had never declined (that is only a story, and it is actually untrue) and therefore, that it would just continue to go up and up. There was nothing to lose. This is the story of our time; it is the story of the business cycle that began in 2001. (Akerlof & Shiller, 2009 : 170)
    The theory of animal spirits provides an answer to a conundrum:
    1. Why did most of us utterly fail to foresee the current economic crisis?
    2. How can we understand this crisis, when it seems to have come out of the blue with no cause?
    3. Why have the measures to forestall it falling short, while the economic authorities publically express surprise at their ineffectiveness?
    We need to answer these questions if we are to feel any confidence in economic policy in the (future). (Akerlof and Shiller: 2009: 167)
    • BMI-BRSCU
  • ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    For some reason in the late 1990s and early 2000s, the idea that homes and apartments were spectacular investments, gained a stronghold on the public imagination in the United States and many other countries as well.
    Not only did prices escalate, but there was palpable excitement about real estate investments; one could see the animal spirits in action everywhere.
    It was the biggest home price boom in U.S. history. It extended over nearly a decade, beginning in the late 1990s.
    Prices nearly doubled before the bust began in 2006. While it lasted, this spectacular boom mirrored in other countries as well, helped drive the entire world economy and its stock markets.
    In its wake, it has left the biggest real estate crisis since the 1930s. The so-called sub-prime crisis, as well as a global financial crisis, the full dimensions of which still have to be grasped. (Akerlof and Shiller: 2009: 149)
    • BMI-BRSCU
  • BMI-BRSCU
    ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    JOHANNESBURG - The Consumer Protection Act which comes into effect on April 1 2011, has raised several concerns, among them the lack of protection for landlords who feel the new legislation will offer them little recourse in the way of defaulting tenants.
    The Act provides ample protection to investors and homeowners in their dealings with unscrupulous estate agents. However, some landlords feel the legislation leaves them in the lurch.
    Who will build Rental housing?
    Abandon all hope in property. (?)
    That is a rather brutal summary of the outlook for residential, commercial and industrial property described by First National's property guru John Loos and veteran property analyst Erwin Rode (pictured) at a symposium in Johannesburg. (David Carte writing on Moneyweb, 30 March 2011)
  • 84. BMI-BRSCU
    ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    Adding to Consumer uncertainty and HOPELESSNESS?
  • 85. BMI-BRSCU
    ANIMAL SPIRITS AND CONFIDENCE
    www.strategicforum.co.za
    Do overseas Investors have a different, longer-term view of prospects for Property inSA??
  • 86. BMI-BRSCU
    THE STRATEGIC FORUM SCENARIOS
    www.strategicforum.co.za
    Conditions for High Road Scenario
    Investor Confidence:
    • High confidence;
    • 87. Risk taking propensity
    • 88. GDP growth > 6% pa;
    • 89. CPI in 3-6% range;
    • 90. Real Interest Rates < 5%;
    Investment Climate:
    • Property a preferred investment;
    • 91. FTHB Subsidies increased to 2,5-5% of Budget;
    • 92. The non residential market grows in tandem with residential;
    • 93. Home improvement and non residential refurbishment markets grow at > 10% pa;
    • 94. Private Sector Investment as a percentage of Total Investment in Building 50-60%;
    Property Delivery:
    • Building growth 2010-2020 at > 6,5% pa;
    • 95. The R1,5 Trillion Affordable Housing programme successfully implemented;
    • 96. Backlogs eliminated by 2020;
    • 97. Construction growth 2108-2020 at > 7,5% pa;
    • 98. The R846 Billion Government Infrastructure programme is successfully implemented
    “ This is the ideal time to borrow and invest heavily in public infrastructure that has been badly neglected over the past 30 years . . . Not only to roads and bridges but also to airports and air traffic control systems, urban transit, high-speed rail, schools and university facilities, national laboratories, national parks, smart electric grids, broadband networks, green generating plants and health information networks.
    This forward looking approach is best defined not as deficit spending fuelling consumption but as an investment for the future with fiscal consolidation achieved in a way that supports jobs and growth” (Gordon Brown: 148: 2010)
  • 99. BMI-BRSCU
    THE STRATEGIC FORUM SCENARIOS
    www.strategicforum.co.za
    “Over the next three years government will spend R846 billion on public infrastructure.
    On transport, we will maintain and expand our road network.
    We will ensure that our rail network is reliable, competitive and better integrated with our sea ports.” (President Jacob Zuma: State of the Nation Address: 2010)
    Conditions for High Road Scenario
    Investor Confidence:
    • High confidence;
    • 100. Risk taking propensity
    • 101. GDP growth > 6% pa;
    • 102. CPI in 3-6% range;
    • 103. Real Interest Rates < 5%;
    Investment Climate:
    • Property a preferred investment;
    • 104. FTHB Subsidies increased to 2,5-5% of Budget;
    • 105. The non residential market grows in tandem with residential;
    • 106. Home improvement and non residential refurbishment markets grow at > 10% pa;
    • 107. Private Sector Investment as a percentage of Total Investment in Building 50-60%;
    Property Delivery:
    • Building growth 2010-2020 at > 6,5% pa;
    • 108. The R1,5 Trillion Affordable Housing programme successfully implemented;
    • 109. Backlogs eliminated by 2020;
    • 110. Construction growth 2108-2020 at > 7,5% pa;
    • 111. The R846 Billion Government Infrastructure programme is successfully implemented
    “Economic Development Minister Ebrahim Patel put the total annual expenditure on infrastructure over the next four years at R250bn a year, translating into R1-trillion for the period — an 18% increase on the state’s previous infrastructure spending estimate of about R846bn for the three years to 2013.” (Business Day: 16 February 2011)
  • 112. BMI-BRSCU
    LOOKING TO THE FUTURE
    WELL FOUNDED HOPE
    Stage 5
    Recovery and Renewal
    What can we do to restore growth when one part of the Industry wants to save (and not spend) and the other wants to stop spending (and save)?
    ?
    Stage 3
    Denial of Risk and Peril
    Stage 4
    Grasping for Salvation
    Stage 2
    Undisciplined Pursuit of More
    What will it take?
    Stage 1
    Hubris born
    Of success
    (Source: Based on Collins: How the Mighty Fall: 2009)
  • 113. BMI-BRSCU
    LOOKING TO THE FUTURE
    www.strategicforum.co.za
    Can the Building Industry TRANSFORM and REINVENTitself – can it recover?
  • 114. BMI-BRSCU
    LOOKING TO THE FUTURE
    www.strategicforum.co.za
    It will FUNDAMENTALLY depend on the strategy of the FINANCIAL INSTITUTIONS.
  • 115. BMI-BRSCU
    LOOKING TO THE FUTURE
    www.strategicforum.co.za
    It could take a decade to get back to the 2006 level!
    R305 Billion decline in only 3 years!
  • 116. BMI-BRSCU
    TOTAL INVESTMENT IN BUILDING BY SECTOR: 2000-2020
    www.strategicforum.co.za
  • 117. BMI-BRSCU
    TOTAL INVESTMENT IN BUILDING BY SECTOR: 2002-2020
    www.strategicforum.co.za
    The difference between “high road” and “lower middle road” could be R350 Billion and 700 000 jobs over the 10 years to 2020.
  • 118. BMI-BRSCU
    THE STRATEGIC FORUM SCENARIOS
    www.mindofafox.com
    Credit and
    Capital markets
    OPEN
    10%
    40%
    High Road
    Lower Middle
    Road
    DECLINE
    GROWTH
    Low Road
    Upper Middle
    Road
    30%
    20%
    Credit and
    Capital markets
    CLOSED
  • 119. BMI-BRSCU
    SHORT-TERM OUTLOOK BY SECTOR & SEGMENT: 2010-2015: R MIO
    www.strategicforum.co.za
  • 120. BMI-BRSCU
    THE STRATEGIC FORUM SCENARIOS
    www.strategicforum.co.za
    The Major GAMEBREAKING POTENTIAL lie in the following areas:
    • An igniting vision of nation-building through home-ownership, property as a preferred investment and building as an engine for growth and wealth-creation;
    • 121. Interest Rates falling further by 1-2 percentage points;
    • 122. The Banks relaxing their stringent lending criteria and promoting Home Ownership as an Engine for Growth and Wealth Creation;
    • 123. Return of Investor Confidence, Banks first and then Consumers;
    • 124. Reinvented Investment Climate.(Source: BMI-BRSCU)
  • BMI-BRSCU
    THE STRATEGIC FORUM SCENARIOS
    www.strategicforum.co.za
    “We are pleased with the performance of our financial sector.
    It has proven to be remarkably resilient in the face of the recent financial crisis and the global economic meltdown.” (President Jacob Zuma: SONA: Feb 2011)
    The Major GAMEBREAKING POTENTIAL lie in the following areas:
    • An igniting vision of nation-building through home-ownership, property as a preferred investment and building as an engine for growth and wealth-creation;
    • 125. Interest Rates falling further by 1-2 percentage points;
    • 126. The Banks relaxing their stringent lending criteria and promoting Home Ownership as an Engine for Growth and Wealth Creation;
    • 127. Return of Investor Confidence, Banks first and then Consumers;
    • 128. Reinvented Investment Climate.(Source: BMI-BRSCU)
    “The raft of reforms from Basel that other banks are now grudgingly having to implement have been practised (reluctantly) by our banks for years.
    "Our banking system is ahead of the game," says Banking Registrar, Errol Kruger.
    Indeed, it is ranked sixth out of 133 for "financial soundness", way above banks in the US which are ranked 108, or the UK at 126.(Moneyweb, 23 April 2011)
  • 129. BMI-BRSCU
    THE STRATEGIC FORUM SCENARIOS
    www.strategicforum.co.za
    In order to achieve the VISION FOR THE BUILDING INDUSTRY SYSTEM a collaborative culture is required based on trust and cross boundary networking and dynamic Public, Private Sector Partnerships that can deliver on Infrastructure, Housing, Health, Education, Safety and Security et al and make South Africa a Winning Nation and a World model of Nation Building and Reconciliation.(Source: BMI-BRSCU)
  • 130. BMI-BRSCU
    HOTSPOT SCENARIO FOR THE BUILDING INDUSTRY
    www.strategicforum.co.za
    Building: The Engine for Growth and Wealth Creation.
    Modeling cooperative behaviour
    REINVENTION
    Skills Training and Development
    PRIVATE
    SECTOR
    The Private Sector accounts for 77% of Building activity and the Public Sector 23%.
    In Construction the Public Sector accounts for 56% of activity and the Private Sector 44%. (BMI-BRSCU estimates: 2011)
    Public Sector
    Labour
    Leadership,
    Lobbying,
    Advocacy
    Enterprise Development,
    BEE
    Research has indicated that we can create jobs in six priority areas. These are infrastructure
    development, agriculture, mining and beneficiation, manufacturing, the green economy and tourism.
    We cannot create these jobs alone. We have to work with business, labour and the community
    constituencies. (Pres Jacob Zuma: SONA: 2011)
    Management Training and Development
    Cross functional Networking
    Productive capacity
    Alliances,
    Joint Ventures
    The GOLDEN Triangle
    The Hot Spot Scenario: mapping emergence
    (Based on Gratton: 2007: 145)
  • 131. BMI-BRSCU
    THE ROLE OF PUBLIC AND PRIVATE SECTOR IN BUILDING INDUSTRY: 2010
    www.strategicforum.co.za
  • 132. BMI-BRSCU
    THE ROLE OF PUBLIC AND PRIVATE SECTOR IN BLDNG & CONSTR: 2010
    www.strategicforum.co.za
  • 133. BMI-BRSCU
    HOTSPOT SCENARIO FOR THE BUILDING INDUSTRY
    www.strategicforum.co.za
    ENVIRONMENT
    EMPLOYMENT
    NATIONAL ISSUES
    INVESTMENT
    PROPERTY
    GROWTH
    WEALTH
    Overarching vision aligned with National Issues, adapted and customised by the organisation for their own vision and values.
    TOMORROW’S
    ECONOMY
    ORGANISATION’S ROLE
    MARKETING
    LOGISTICS
    MANUFACTURING
    BUILDING INDUSTRY
    AN ENGINE OF GROWTH
    ENVIRONMENTAL
    SUSTAINABILITY
    MISSION
    Developing and growing competitive awareness, knowledge and support of END USERS and maintaining consistent standards in the environmentally friendly production of PRODUCTS for good value and performance in building.
    VISION
    Building is the engine for growth and wealth creation through Property Ownership and THE ORGANISATION is the preferred Partner for good as the green BUILDING solution of choice.
    YESTERDAY’S ECONOMY
    BROAD FOCUS ON CONTRIBUTION TO NATIONAL ISSUES
    BORROW
    BUY
    BURN
    SOCIAL
    SUSTAINABILITY
    REINVENTION
    Doing well while doing good.
    VALUES
    The Organisation has an igniting vision, a culture, or mind set of co-operation, collaboration and cross-boundary networking; and a production capability to facilitate delivery of fit for purpose products and solutions and based on the unashamedly ethicalvalues and code of conduct of:
    NARROW FOCUS ON COMPANY
    ECONOMIC
    SUSTAINABILITY
  • 139. HOTSPOT SCENARIO FOR THE BUILDING INDUSTRY
    www.strategicforum.co.za
    “. . . the Board is there to understand the big picture, to understand the relationship of the business with the society, particularly with the environmental issues, particularly with the political issues, but to think in 30 year terms, not to think in three-year terms.” (Bobby Godsell in Gleason: 2011: 149)
    “I see myself as a person with vision in our industry about building things and innovating things and that is not a CEO function necessarily” (Adrian Gore in Gleason: 2011; 164)
  • 140. HOTSPOT SCENARIO FOR THE BUILDING INDUSTRY
    www.strategicforum.co.za
    “A mission statement in a corporate sense is a definition of purpose: it circumscribes and defines what you do. In a personal sense a mission statement, as opposed to goals, is not what you want to have, it’s not even what you want to do, it’s who you want to be, and that takes some thinking.” (Mark Lamberti in Gleason: 2011: 149)
  • 141. BMI-BRSCU
    THE STRATEGIC FORUM
    www.strategicforum.co.za
    THE STRATEGIC FORUM
    A place of assembly
    for strategic conversations
    Towards
    Building: The Engine for Growth and Wealth Creation
    Dr. Llewellyn B. Lewis
    May 2011