Transformation Final Report

re
W&RSeta ILDP Assessment
Name Emmanuel Jula, Oswald Abrahams, Thandi Mbatsane, Melvin
Thaver, Leon Pillay
Company TFG, Woolworths, JD Group, Bidvest, Spar
Assessment Title Transformation in Wholesale & Retail Sector – ALP Final Report
Date 22 January 2016
Facilitator L Claassen
Plagiarism Declaration
I declare that this coursework is entirely my own work and does not include any plagiarised
material. All sources that were consulted to compile this document have been referenced
appropriately.
Full name: Emmanuel Jula; Leon Pillay; Oswald Abrahams; Melvin Thaver;
Thandi Mbatsane
Signature: 1.
2.
3.
4.
5.
Date: 22 January 2016

Transformation in Wholesale & Retail Sector – ALP Final Report
2
TRANSFORMATION
Transformation in Wholesale & Retail
Sector – ALP Final Report
2015
“Change is as unsettling as it is painful. It cannot be any different because change is
movement…At times of momentous developments, when societies reach their high noon,
everything else becomes uncertain except for the golden gate that must be reached – the goal
of freedom.” Former President Nelson Rolihlahla Mandela, 25

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Contents
Glossary..................................................................................................................................... 4
Executive Summary ................................................................................................................... 5
1. Introduction and Research Problem ................................................................................ 7
2. Problem Statement.........................................................................................................10
3. Literature Review ...........................................................................................................11
4 Insights from Industry Leaders.........................................................................................15
5 Insights from Retailers within the South African Retail Landscape...................................17
6. Key Insights from International Immersion......................................................................25
7. Findings..........................................................................................................................27
8. Recommendations .........................................................................................................29
9. Conclusion .....................................................................................................................34
References............................................................................................................................38

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Glossary
HDSA - Historically Disadvantaged South Africans
CEE - Commission of Employment Equity
EAP - Economically Active Population
GDP -Gross Domestic Product
BMF - Black Management Forum
EE - Employment Equity
BBBEE - Broad – Based Black Economic Empowerment
QLFS - Quarterly Labour Force Survey
PWD - People with Disabilities
CEO - Chief Executive Officer

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Executive Summary
Transformation policies in South Africa, such as employment equity (EE) and broad based black
economic empowerment (BBBEE) have become part of the “everyday” political, economic and
social life of all South Africans since the founding of the new democracy in April
1994.Transformation within South African Retail Companies is way too slow with regards to
equitable representation in Top and Senior Management levels. The research aimed at
establishing the levels of Historically Disadvantaged South Africans (HDSA) specifically in these
management levels and to gain an understanding as to what hinders, support, promote or have
a positive impact on transformation.
The terms Employment Equity and Transformation has been used interchangeably in this
research as it was established through unpacking its definition that transformation is
complimented by the ethical implementation of the Employment Equity Act of South Africa. We
have done significant research which covered two aspects, one being individual one to one
interviews with HR personnel within the Industry to establish what are the current challenges and
issues experienced on the “ground” and more so what the possible barriers to transformation are.
Our secondary research led us into delving into various reports, case studies, website articles,
and journals and books which provided us with the desired and applicable literature on the subject
matter.
A thorough examination of the 15th
Annual Commission for Employment Equity Report (CEE) was
conducted and pertinent information relative to the research was mapped out. This was also
mirrored with a few stats published by large Retailers with reference to their workforce
representation in the various levels.
Through our research it has been established that the Wholesale and Retail Sector plays a pivotal
role within the South African Economy and is viewed to be a major employer within the sector.
The statistics revealed by the CEE as well as the research conducted, is in no doubt indicative of
the slow pace of transformation within the country and more specifically within the Wholesale and
Retail Sector.
Through our research, we uncovered that there are fundamental challenges that are faced within
the Wholesale and Retail Organizations with regards to the pace of transformation within the

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sector. These challenges create barriers for swift progress. Companies such as Pick n Pay and
Nedbank had compelling success stories that were explored and key learning’s was extracted.
From the insights gathered from Captains of Industry, learning’s from our International Immersion
and literature researched we have established key findings.
We formulated a few recommendations that could assist in ensuring the desired commitment from
senior management is instilled which will trigger acceleration in transformation. The 3 pillars
identified were:
 Ethical Leadership
 Legislation
 Training and Development
An adapted change management framework was recommended to be used to expedite
change within the organizations which is centered on 3 components, i.e.
 Readiness for Change,
 Process and
 Implementation of change.

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1. Introduction and Research Problem
On the journey towards transformation, a number of law reform and Affirmative Action (AA)
measures have been initiated in South Africa, aiming to achieve greater social justice and equality
and to redress past unfair discrimination and unearned privilege. (Booysen, 2007). Some of the
first attempts at redressing the wrongs of the past were the Labour Relations Act of 1995, which
took effect in 1996, the Constitution of South Africa of 1996, and the Basic Conditions of
Employment Act of 1997, followed then was the Employment Equity (EE) Act of 1999. In addition
to these acts, the Skills Development Act of 1998 was put in place not only to shift the focus away
from affirmative action appointments but to also promote recruitment, succession planning and
development and training amongst persons in the designated groups. (Department of Labour)
The recent stats released by the Commission for Employment Equity (CEE), reflects the
Economically Active Population (EAP) of South Africa which is made up of, in descending order,
of 76.2 percent Africans, 10.6 percent Coloured, 2.8 percent Indians and 10.3 percent Whites.
(Department of Labour, 2015).
Minister Mildred Oliphant, pointed out in her first Employment Equity and Transformation Indaba
in April 2013, that the country is still found wanting in relation to equitable representation of the
designated groups, in particular women and people with disabilities in the middle-to-upper
occupational levels. (Department of Labour, 2014).
According to (Booysen, 2007) a comparison between the 2001 and 2005 CEE report, it was
evident that there was slow progress in the implementation of the Employment Equity Act at
management levels, and it was further noted that there was a drop in representation in the middle
management level of employment which was a worrying factor in terms of EE since the middle
management level is considered to be the “feeder” to senior and top management levels.
Table 1 below is a clear illustration of the latest statistics of Top, Senior, Middle and Junior
Management levels relative to South Africa’s EAP and bears testimony to the Minsters statement.

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Occupational
Levels
Blacks Coloured Indian White
Top Management 13.6% 4.7% 8.4% 70.0%
Senior Management 20.5% 7.2% 9.9% 59.3%
Middle Management 36.7% 9.5% 9.1% 41.9%
Junior Management 58.5% 5.8% 5.8% 22.7%
Table 1: Workforce Profile at the Top and Senior Management Level by Race. Source:
Commission for Employment Equity Report- CEE15.
It is clear that the current proportions are not replicated in Top and Senior Management Levels
across the Country. Whites are over-represented as they occupy 70% of the Top Management
level, which equates to almost more than seven times their EAP, and 59.3% of the Senior
Management level, which equates to almost more than five times their EAP. (Department of
Labour, 2015).
The good news is that there has been progress. When the Employment Equity Act came into
effect, Whites held 87% of top management positions. The recent report shows a figure of 70%,
the bad news however is that the pace is slow and South Africa has a very long way to go before
the profile at the top of Organizations reflects the demographics of the country. (Nkomo, Rand
Daily Mail - The National Coversation, 2015).
Changes and transformation in the workplace are perceived either as too slow or too fast,
depending through which cultural lens they are looked at. (Booysen, 2007). Booysen maintains
that the significant power shifts that have already taken place are still in process and have not yet
played out fully. Whites as a majority which previously held absolute power, still have the most
economic and management power. According to Booysen, this is not only illustrated in the
numbers above, but also in the change resistant to organizational cultures.
The history of the CEE reports up until 2011, confirms, first that transformation has not yet been
achieved, and further pointed out that the sectors that are least transformed are Retail, Motor
repair services, wholesale, trade and commercial agents and allied services. He further eluded
that these sectors also lack codes of conduct, or charter that map out employment objectives.
(SA Reconcilation Barometer Blog, 2011).

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The pace of transformation is so slow that employment equity reports over the last few years read
like déjà vu. (Nkomo, Rand Daily Mail - The National Coversation, 2015).
1.1 The South African Wholesale and Retail Sector
Since the early 1990s, South Africa’s economic growth has been driven mainly by the tertiary
sector which includes Wholesale and Retail trade, tourism and communication. Among the key
sectors that contribute to the gross domestic product (GDP) and keep the economic engine
running are manufacturing, retail, financial services, communications, mining, agriculture and
tourism. (Media Club South Africa).
Figure 1: South Africa’s key Sectors: Contribution to GDP growth- 2013. Source: Statistics
South Africa.
Figure 1 above reflects the Gross Domestic Product of the various sectors. The Wholesale and
Retail Sector contributed 12.5% in GDP towards the South African Economy and featured in 3rd
place comparatively to the rest of the sectors. Stats SA also reported total Retail Sales for the
fiscal period 2014 of R707 billion, as illustrated in Figure 2 below.

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Figure 2: Retail Trade Sales in South Africa: 2014. Source: Stats SA.
From the above statistics it can be deduced that the Wholesale and Retail Sector contributes
significantly to the South African Economy, hence not only is it regarded as a growth sector of the
economy, but a major employer as well.
2. Problem Statement
Transformation in the Wholesale and Retail Sector of South Africa.
South Africa, as a nation, is faced with a complex task of transformation, social cohesion and the
elimination of all forms of unfair discrimination. This task poses serious challenges to various
sectors within the South African Economy. The Wholesale and Retail Sector amongst other issues
is charged with the responsibility to play a critical role in ensuring equitable access to resources,
opportunities and skills.
Transformation at Top Management and Senior Management Level of the Retail sector is slow or
non-existent. More white males continue to dominate management positions in the South African
economy while the appointment of Africans into those positions is still “moving at a snail’s pace”.
(SA Government News Agency, 2015). This brings to the fore a compelling question to be asked,
as to what are the impediments that are cited as the key challenges, issues and barriers within
the Wholesale and Retail Sector from being transformed with equitable representation in both Top
and Senior Management Levels.

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2.1 Objectives and Goals
The objectives and goals of this project are to:
 Understand and define the terms Employment Equity and Transformation.
 Look at the progress of Transformation in South Africa.
 To gather relevant facts, data and statistics from the Commission of Employment Equity
(CEE) reports.
 Interview industry leaders to gain their insights, and challenges around transformation.
 Identify possible recommendations, solutions and focus areas.
2.2 Research Methodology
Significant research was conducted with a combination of both Quantitative and Qualitative
methods, with the primary research being interviews that were conducted with Captains of
Industry charged with the responsibility to ensure transformation is in place within their
Organizations. The secondary research led us into delving into various research reports, website
publications, books and papers around transformation, including key insights, and learning’s
following our international immersion to New York and Toronto last year.
3. Literature Review
The Previous Chapter dealt with the introduction to the research. The significance of the
Wholesale and Retail Sector was highlighted. The problem statement was mapped out as well at
the objectives of this research. This chapter will focus on the literature review which will include
interviews conducted with individuals within the Wholesale and Retail Industry tasked and
responsible for Transformation within their Organizations.
3.1 Employment Equity

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The purpose of the Employment Equity Act, (EE) No 55 of 1998, is an act of parliament under the
new democratic government which seeks to achieve a diverse workforce, broadly representative
of our people to eliminate unfair discrimination and promotion of economic development and
efficiency in the workforce. (Department of Labour , 1998)
3.2 Transformation
Transformation by definition is marked by change. The government of South Africa’s imperative
is to bring about economic change that can meet the needs of all economic citizens in a
sustainable manner. This can only be achieved if the economy is built on the potential of all people
and communities across the length and breadth of the country. (Department of Labour , 1998).
3.3 The Progress of Transformation in South Africa
The concept of transformation has become a symbol of South Africa in transition. South Africa’s
transformation is driven by socioeconomic and political needs the most important of which are
strategic and moral in nature. The moral perspective is concerned with dismantling the legacy of
apartheid by transforming the basic structure, culture and core values of society and ensuring
equitable access to resources, opportunities and skills. The strategic perspective is concerned
with driving economic growth and eradicating poverty. (Sutherland, 2006)
The Commission for Employment Equity (CEE) was established in terms of section 30 of the
Employment Equity Act and the function of the commissioner is to advise the minister on the Code
of good practice and regulations in terms of sections 54 and 55 respectively which has been
issued by the minister. (Commision for Employment Equity, 2015)
3.4 The Commission for Employment Equity (CEE) Report
The Commission for Employment Equity (EE) provides evidence of the progress of employment
equity in South Africa. In its Annual report the Commission’s report presents a trend analysis of
representation of employees at different occupational levels with reference to the economically
active population of the country as an indicator of progress on affirmative action.

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The workforce population is based on the Quarterly Labour Force Survey (QLFS), which is
published by Statistics South Africa on the Economically Active Population (EAP). (Commision
for Employment Equity, 2015). According to the Commission for Employment Equity, the EAP
includes people from 15 to 64 years of age who are either employed or unemployed and who are
seeking employment, and the EAP is meant to assist employers during the analysis of their
workforce to the degree of underrepresentation of the designated groups. The report populated
and published by the CCE, is intended to guide employers by assisting then in the setting of their
numerical goals and targets in order to achieve an equitable and representative workforce.
3.4.1 The National (EAP) Economically Active Population
Population Group Male Female Total
African 41.7% 34.6% 76.2%
Coloured 5.7% 4.9% 10.6%
Indian 1.8% 1.0% 2.8%
White 5.8% 4.5% 10.3%
Total 55.0% 45.0% 100.0%
Table 1: National EAP by Population Group and Gender. Source: Statistics South Africa,
(QLFS 3rd Quarter, 2014)
The data reflected on the EAP of South Africa in table 1, is indicative that the African population
group with a total of 76.2%, combination of both male and female far outweighs all other race
groups. The Coloured population group with 10.6% follows the African population group, then the
Whites with 10.3% and Indians with 2.8%.

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3.4.2 Analysis of Workforce Profile in Top –Senior- Middle and Junior Management
Top
Management
Senior
Management
Middle
Management
Junior
Management
African 13.6% 20.5% 36.7% 58.5%
Coloureds 4.7% 7.2% 9.5% 5.8%
Indians 8.4% 9.9% 9.1% 5.8%
Whites 70.0% 59.3% 41.9% 22.7%
Foreign
Nationals
3.4% 3.1% 2.7% 1.7%
Table 2: Workforce Profile in the Top –Senior- Middle and Junior Management Level by
Race. Source: Commission for Employment Equity Report- CEE15.
According to Table 2, Whites are overrepresented in Top Management and Senior Management
level as they occupy 70% and 59.3% respectively. This equates to almost seven and five times
respectively more that their EAP. Next are Africans occupying 13.6% and 20.5% which is clearly
underrepresented compared to their EAP and Indians at 8.4% and 9.9% respectively. Colored’s
are at 4.7% and 7.2% respectively. (Commision for Employment Equity, 2015).
As reflected in Figure 2 above, the Middle Management level reflects Whites still over-represented
on 41.9% at this level in comparison with their EAP, and Africans on 36.7% gradually making
ground. Indians reflected 9.1% and Colored on 9.5%. The picture in the Junior Management Level
shows a slightly different picture with Africans on 58.5%, which indicates more or less the
representative workforce of the country’s demographics. Whites reflected 22.7% with Indians and
Colored both on 5.8% respectively.
Following the observation made by (Booysen, 2007), whereby it was noted that representation in
the middle management level of employment which was a worrying factor in terms of EE since
the middle management level is considered to be the “feeder” to senior and top management
levels, it is indicative from the data in table 2 that progress in these levels have been made which

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will in time supplement the Senior Management Level provided the ethical implementation of
transformation takes place.
It has been noted that there has been a steady decrease in the number of black leaders who are
heading 40 of South Africa’s top companies over the past three years with black people
representing just 10% of these CEOs, as contained in the 2015 Jack Hammer Executive Report.
(Skade, 2015). According to Skade, he maintained that while some companies were making
strides in transforming the composition of their executive teams, the new report suggests that the
executive transformation landscape is unlikely to change much over the next 10 to 15 years.
4 Insights from Industry Leaders
One of the research objectives was to gain understanding as to what hinders, support, promote
the impact on transformation within the Wholesale and Retail Industry; hence the need to gain
insights from Captains of industry was imperative.
Each member of our team was tasked to interview a minimum of 5 individuals within the
Wholesale and Retail industries. Our objective was to have a sample of 25 interviews conducted,
however 4 interviewees could not avail themselves thus only 21 individuals was interviewed. The
interviewees were across various positions and levels, ranging from Head of Transformation,
Business Executives, HR Managers and Senior Managers.
A one to one interview process was followed using a structured Interview questionnaire which
contained five themes, and included sub questions. A sample of this questionnaire is found as
Appendix 1.
 Theme 1 – Leading role of HR on transformation and planning in the organization.
 Theme 2 – Structure and meetings for transformation management.
 Theme 3 – Employee /Staff involvement.
 Theme 4 – Implementation of transformation.
 Theme 5 – General Information.
The interview process was used as an opportunity to gain insights from them on the subject at
hand and to try and establish what the possible barriers could be.

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A total of only 21 managers across all levels, from Middle Manager up to senior manager level,
availed themselves to be interviewed and their responses were extrapolated, and the feedback
was analyzed. This entailed categorizing the data as per the respective 5 themes and the
responses were assessed in order to ascertain if there were common patterns or similarities. A
summary of the respondent’s views, insights and feedback is captured below in Table 3.
Following the one to one interviews with personnel from the various positions, and across different
retailers, it can it can be deduced that majority of their insights and viewpoints leans towards a
few elements, namely;
 Leadership – Change Management
 Training
 Communication
 Culture
 Recruitment – Space Creation
Number Comment – Insights – Views
1
Transformation is a business imperative and their organization is working hard at it,
however there is still a lot more to be done to address imbalances.
2 As a Leadership Unit we are obligated to address same, but legacy issues still exist
within the system, even though plans are intact.
3 Communication and being vocal to the entire staff base is key critical and must be more
aggressively pursued across the workforce.
4 Heads of Departments who is responsible and accountable for Transformation got to
lead by example.
5 Efforts in training are in place, but constant follow through must prevail.
6
The committees that are formulation need to be more vocal and push back at
management to accelerate transformation within the Organization.
7 Culture needs to change from the Top, and objectives must be aligned top down and
measured monthly.
8 Leaders must be held accountable and non-achievement of specific EE targets must
impact on annual bonuses.
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Planning is one thing but sticking to the plan is another. Discipline and Transparency
needs to be at the core of Transformation truths from the Hierarchy.

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10 Transformation must be an ongoing process and NOT an annual event.
11 Staff at every level needs to be communicated to as to the progress of Transformation
within the Organization.
12 Weighting on the BBBEE scorecard should be amended with more weighting being
placed on EE.
13 Training- up skilling and fast tracking of Black Management must gain speed.
14 Changes in Culture and transformation in the workplace is too slow.
15 Role Coaching – Mentorship and EE candidate recruitment. Space Creation.
16 Equity Targets are not always met due to lack of skill.
17 Our inability to attract black talent with our value proposition.
18 We face budget constraints from an expense point of view
19 Internal EE representatives “weak”- need more training.
20 Filling positions in Junior management levels for the sake of achieving EE numbers.
There is no plan to enhance development of candidate and succession planning.
21 Companies need to look at training their staff as in “investment” rather than an
“expense”
22 Ensure Change management process is followed.
23 Transparency and more aggressive approach on career development with focus on
retention and development of future leadership.
24 Attract, develop and retain good talent.
Table 3: Summary of Insights- Views and Comments from HR Personnel- Source: One to
One Personnel Interviews.
5 Insights from Retailers within the South African Retail Landscape
Our research led us into looking at a few reputable branded retailers, such as:
 Pick n Pay
 Woolworths
 The Foschini Group
 Mr. Price
 Clicks

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The primary focus was to examine their current work profile stats specifically on the various levels
of management. A dashboard view of the stats is attached as Appendix YYY, which shows a very
interesting picture. The charts below reveal the composition of the equitable representation of the
work force by race in the various levels of management in across the 4 retailers, Mr. Price, The
Foschini Group (TFG) Woolworths and Clicks.
The illustrations below show the workforce representation in the Top, Senior, Middle and Junior
Management levels across all 4 Retailers. It was noted that all 4 Retailers show huge disparities
with top, senior and middle management as this level is dominated by Whites. The stats below
include females but exclude foreign nationals.
Figure 3: Workforce Profile- Top Management Level- (Mr. Price, TFG, Woollies, Clicks)-
Source: Annual Financial Reports-2014
Mr.Price TFG Woollies Clicks
Whites 289 489 642 345
African 36 81 274 112
Coloured 30 275 474 104
Indian 130 78 163 79
0
200
400
600
800
Top Management
Whites
African
Coloured
Indian
Whites 33 9 2 12
African 0 0 2 0
Coloured 1 0 2 1
Indian 1 1 0 4
0
10
20
30
40
Senior Management
Whites
African
Coloured
Indian

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Figure 4: Workforce Profile- Senior Management Level- (Mr. Price, TFG, Woollies, Clicks)-
Source: Annual Financial Reports-2014.
Figure 5: Workforce Profile- Middle Management Level- (Mr. Price, TFG, Woollies, Clicks)-
Whites 289 489 642 345
African 36 81 274 112
Coloured 30 275 474 104
Indian 130 78 163 79
0
100
200
300
400
500
600
700
Middle Management
Whites
African
Coloured
Indian

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Figure 6: Workforce Profile- Junior Management Level- (Mr. Price, TFG, Woollies, Clicks)-
It can be concluded that only the Junior Management level shows a well-nourished EAP
representation and it is only at this level that the Whites do not dominate. According to (Booysen,
2007) , the middle management is considered to be the “feeder” to senior and top management,
but the current Middle Management representations of Whites far out weight the other race groups
in these 4 major retailers. The observation raised by Booysen on stats of 2005, has been trending
on the same lines in this level. This shows that transformation is indeed an issue in these retail
chains.
5.1 Pick n Pay – A Compelling Story
Pick n Pay was the only retailer to be recognized for excellence in employment equity in the
private sector and has won top honors at the Department of Labour at the Commission for
Employment Equity’s inaugural Employment Equity Awards, which was presented in October,
2015 at Gallagher Estate. (Cape Messenger, 2015)
Whites 570 506 414 532
African 1520 1247 1293 693
Coloured 669 1218 1080 591
Indian 405 213 252 170
0
200
400
600
800
1000
1200
1400
1600
Junior Management
Whites
African
Coloured
Indian

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Deputy President, Cyril Ramaphosa recognized Pick n Pay for excelling and advancing the true
spirit of transformation and the Employment Equity Act, by promoting equal opportunity, diversity
and fair treatment in their employment practices. (Cape Messenger, 2015) . This award was
received after an extensive audit by the Department of Labour of all levels of Pick n Pay’s business
that included an analysis of the company’s investment in training and the extent to which
leadership structures allow for employment equity.
The research further examined the approach that Pick n Pay took in order to be successfully along
the Transformation and employment equity domain. Our findings revealed that, their people
strategy carried the ethos of “Empowering Our People”. According to Pick n Pay’s sustainable
living report of 2013, Pick n Pay maintained that empowering their people was an integral part of
how they did business. (Pick n Pay, 2013). Their report also points out that their focus areas on
their people are:
 Equity and Empowerment.
 Training and Skills Development.
 Health and Wellness.
 Culture, Values and Commitment.
Employees who are satisfied with their work are less likely to leave, and in an industry where staff
turnover is high, Pick n Pay maintains it is a competitive advantage to be an employer of choice.

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Figure 3: Pick n Pay: Skilled Work Force and Employment Equity Stats: Source: Pick n Pay
Sustainable Living Report-2013.
It is also noteworthy to mention that Pick n Pay invested a total of 241.9million in training between
2011 and 2013 and this is reflected in Figure 3 above. Top Management was at 40% black (target
of 40% maintained) and Senior Management levels at 61% falling behind by 4% against their
target of 65%. (Pick n Pay, 2013)
Middle Management level far exceeded their target of 70% with an actual achievement of 84%.
This is an exponential growth and it is indicative that a “revolution” in terms of transformation has
begun. The middle management level is a “feeder” into the Senior Management Level and it is
pleasing to see that Pick n Pay as made significant strides herein which gives them the benefit to
leverage of this talent pool in terms of succession planning and transition into the next level.
Junior Management Level reflects and impressive 99% against their target of 80%. Clearly for an
Organization that’s ranked in 2nd
position amongst the big 5 retailers, have “sparked” a massive
wave of change to achieve such plausible numbers.
Pick n Pay’s strategy to promote from within and fast track external candidates from designated
group have enabled them to make a significant progress on their Transformation Agenda. Pick n
Pay also maintains that diversity drives innovation, respect and a learning culture, and as a large
employer in South Africa, they are fully committed to transformation and they will continue to
galvanize their EE and Transformation Objectives. Their core belief was that Diversity drives
responsibility and a learning culture.
5.1.1 Key Insights from Pick n Pay’s Transformation Strategy
Pick n Pay’s transformation strategy was underpinned with a clear transformation management
structure which was aligned to their key focus areas, namely:
 Equity and Empowerment.
 Training and skills development.
 Health and Wellness.
 Employment Equity Forums was formed.
 Diversity Management Training program was implemented.

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 The 7 elements of the BBBEE Scorecard formed part of their Senior Managements Key
Performance Indicators. (KPI).
On the backdrop of the success story of Pick n Pay, attached as Appendix-B is a dashboard view
of the workforce profile following our research on Mr. Price, The Foschini Group, Woolworths and
Clicks at the end of this research document. It is discerning to note that the Top and Senior
Management is dominated by Whites, and the similar picture features in the Middle Management
Level. A “swell” in the junior management level is noted.
Pick n Pay have seemed to have a winning formula and a recipe for success, and with their
compelling story, the other Organizations can draw insight from their strategy and can leapfrog
by shifting the needle on transformation.
5.2 Nedbank Turnaround – The Tom Boardman Story (Case Study)
An Organization that had a good case study on Transformation within the finance sector was the
Nedbank turnaround strategy. Tom Boardman took office at Nedbank as the CEO in the late 2003.
As part of his journey amongst other issues, Tom saw Transformation not just as a numbers
game, where it looks like it’s all about employment equity targets and black economic
empowerment. (Boardman, 2004)
Boardman (2004) maintained that the “checklist mindset can diminish the socio-economic
actualities of what transformation is really about”. Transformation is about human rights, equality,
justice and dignity. At the height of Tom’s journey towards transformation, he together with his
Executive team developed and communicated 10 point Nedbank’s Transformation truths.
5.2.1 Nedbank’s Transformation truths.
 It is the right thing to do Transformation
is a business and moral imperative.
 Transformation will have short‐term cost
with long- term benefit.
 Transformation affects every single area
of our business
 Transformation targets will be embedded
in our strategies and business plans
through on-going consultation.

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 It is the responsibility of every person to
make it happen.
 We will pro‐actively grow and develop our
own talent pool.
 Trust and transparency is required.
Everyone should be heard
 We will focus strongly on the support and
empowerment of blacks, with particular
emphasis on Africans, all women and all
people with disabilities.
 Transformation at Nedbank must be
unifying, fair and transparent.
 Transformation is non‐negotiable.
Table 4: Nedbank’s Transformation truths. Source: The Tom Boardman Story
Nedbank had crystal clear objectives driven and led by the CEO of the company, and as such
have made huge strides in their transformation evolution.
5.3 Nedbank’s Success Story
Nedbank has made great progress inception in 2006, with a level 2 BBBEE status having been
maintained since 2009 for the fifth consecutive year as can be seen from Figure 4 below.

25
Figure 4: Nedbank’s BBBEE Score Performance -2006 to 2013. Source: Nedbank’s
Transformation Report.
Further to this their representations in Senior Management levels in 2012 was at 33%, and moved
up by 2% to 35% in 2013. Middle Management levels for the same period were at 54% and 56%
respectively. Junior Management levels were reported at an astonishing 81% in 2012 and 84% in
2013. (Nedbank Group Limited, 2013). It is also indicative that Nedbank’s strategy is amplifying
their talent pipeline which gives impetus to their workforce profile. Nedbank was also the recipient
of a few prestigious in line with their progress made with transformation. These awards were:
 The BBQ Transformation Award of the year-2013 for promoting sustainable black
business through the recognition of leadership and achievement.
 The Transformation Champion of the Year-2013- The award reflects Nedbank’s Level 2
Broad-Based Black Economic Empowerment status as the most transformed company on
the JSE.
 Nedbank wins Sunday Times Top 100 Companies award - Nedbank was declared the
winner of the 2013 Sunday Times Top 100 Company Corporate Social Investment (CSI).
6. Key Insights from International Immersion
The Transformers as part of our International Immersion visited Toronto, we attended a session
facilitated by Trevor Wilson who is the Author and Global Human Equity Strategist for his
Organization, TWI Inc. since 1995. During his workshop on Human Equity, key focus areas such
as diversity, inclusion and human equity surfaced, underpinned with the concept of the Equity
Continuum. (Wilson, The Human Equity Advantage, 2013). The Equity Continuum consists of
various levels, ranging from 0 to 5. As per figure 5 below, each level depicted where an
Organization was in terms of being an Inclusive and Equitable Organization.

26
Figure 5: The Equity Continuum- Source: Trevor Wilson. Diversity at Work: The Business
Case for Equity (Toronto: John Wiley & Sons Canada, Ltd., 1996).
(Wilson, The Evolution of the Equity Continuum, 2013) Rated Organizations on each level as
follows:
 Level – 0: Denial. Organizations at Level 0 are those who have “not” changed and their
Leaders believe they are at level 5. These Organizations are in a state of bliss and denial
about any issues related to being inclusive and equitable.
 Level – 1: Compliance. Level 1 Organization seeks compliance as a way to meet its legal
or other obligations and thus avoid the negative consequences on noncompliance. Level
1 Organizations generally stop if the laws or legislations fall away.
 Level -2: Moving Beyond Compliance. These Organizations believe in the value of going
beyond compliance. These Organizations aims to support various disadvantaged groups.
 Level -3: The Business Case. These Organizations understands that diversity initiatives
can impact on desirable bottom line outcomes such as efficiency, retention of best talent
and improved employment engagement.
 Level -4: Integrated. These are Organizations that have evolved beyond diversity into a
relatively new area called Inclusion. They focus on creating a work environment where
each person is recognized and developed.

27
 Level -5: Inclusive and Equitable Organizations. These are Organizations that focus on
the gifts and unique abilities of each individual. These Organizations practice talent
differentiation through a diversity lens. They practice human equity by maximizing on all
the intangible assets that bring people to the world of work.
(Wilson, The Human Equity Advantage, 2013) Maintained, that Organizations who moved from
level 0 to 1 used legislations as a vehicle to do so. The move to level 2 was through Corporate
Social Responsibility, and then Diversity resulted in a move to level 3, and an inclusive culture
transitioned into level 4. Once an organization reaches level 4 they use their human equity to
move to level 5.
Looking at the two success stories of transformed companies in South Africa, both Pick n Pay
and Nedbank focused on being an inclusive and equitable organization, underpinned with
elements of diversity, training and development, empowered staff force, transparency, moving
beyond compliance and ultimately striving to be an employer of choice which resonates with the
Equity Continuum framework.
7. Findings
The research has led into establishing the following:
 The Wholesale and Retail Sector is a key sector towards the economic engine of our
Country. Sales reported for fiscal year 2014 amounted to 707 billion. This sector is also
seen as a major sector for employment, furthermore the Wholesale and Retail Sector is
least transformed.
 Employment Equity is clearly an enabler and a “vehicle” for transformation.
 The rate of Transformation in South Africa and specifically in the Wholesale and Retail
sector is slow as can be seen from the Commission for Employment Equity Statistics.
White men dominate the Top and Senior Management Levels. This was revealed amongst
4 major retailers in this research. (Mr. Price, The Foschini Group, Woolworths and Clicks.)

28
 Interviews conducted with Capitan’s of industries shares insights that Leadership, Training
and Development, Communication, Culture and Recruitment are key elements to be
focused on in order to accelerate transformation within the sector.
 Success stories from Pick n Pay and Nedbank backed up with stats proves that
transformation is possible and it is the right thing to do. The success stories of both these
organizations cements the fact that leadership, culture and commitment with open and
transparent communication is the recipe for success with a total fixation of staff training
and empowerment.
Despite all the pieces of legislations set out by the South African Government since 1994,
transformation in Retail Organization has not yielded the desired rate of success. On the backdrop
of the success stories in Pick n Pay as well as Nedbank, it was evidenced through the research
that their leaders effected change and lead from the front. There was total buy in and clear
objectives set and action enabled from their level all the way down to the “ground”. The outcomes
of their visionary leadership built culture and have been underscored with great success.
It can be summarized following the interviews conducted with Captains of industries and research
that some of the key barriers on transformation are:
 Ethical Leadership.
 Training, Development, Mentorship.
 Organization Culture.
 Change Management Process.
(Kotter, 1995) , maintain transformation failures to eight errors and communicates the opposite
for each of these errors as a model to guide successful transformation and refer to it as “Eight
steps to transforming your organization”.

29
Transformation failures to eight errors Eight steps to transforming your
organization
 Not establishing a great sense of
urgency.
 Establish a sense of urgency.
 Not creating a powerful enough
guiding coalition.
 Create a guiding coalition.
 Lacking vision.  Develop a vision and strategy.
 Under communicating the vision by a
factor of ten.
 Communicate the change vision
 Not removing obstacles to the new
vision.
 Empowering employees for broad
base action
 Not systematically planning for and
creating short-term wins.
 Generating short term wins
 Declaring the victory too soon, and,  Consolidating wins and producing
more change.
 Not anchoring changes in the
corporation’s culture.
 Anchoring new approaches in the
culture.
Table 5: Kotter’s 8 step Change Model – Source: Harvard Business Review- Why
Transformation Efforts fail.
8. Recommendations
In view of the findings, we recommend that Leadership step up to the call for transformation which
is a business and a moral imperative. Leaders of the Wholesale and Retail sector need to emulate
the actions of the leaders from Pick n Pay and Nedbank. We list the following 3 Key areas with
the identified pillars being (a) Ethical Leadership, (b) Legislation and (c) Training and
Development as high priority recommendation with detail below.

30
a. Ethical Leadership
 Transformation is NOT just a numbers game. The “checklist” mindset can diminish the
socio-economic actualities of what transformation is really about.
 “The culture of an organization or any group of individual is a reflection of the values,
beliefs and behaviors of leaders of the group”. – Richard Barrett.
 Ethical Leadership requires a personnel journey toward Integrity and public
commitment to a common good.
 There must be punitive measure put in place whereby CEO of Industries is penalized
with non-remuneration of bonuses if the Employment Equity is not implemented
effectively and delivery on targeted levels.
 Develop a documented communication strategy that will be a used as a medium to
communicate progress on Transformation within the Organization.
b. Legislation
 The Sector needs a Transformation Charter to be implemented and published.
 The Commission for Employment Equity MUST become a permanent “body” so that
Ownership, Accountability and Urgency prevails.
 Employee Equity targets should be set by the Department of Labour for designated
Employers using their workforce as a measure relative to the EAP of the Country
opposed to Companies setting their own EE targets. This will put more urgency and
commitment on Leaders. The annual CEE reports, when released will perhaps NO
longer be déjà vu.
 Non achievement of EE targets must attract hefty fines in ratio to annual turnover.
Ethical
Leadership
Legistlation
Training and
Development

31
 Department of Labour must govern reporting method where employers must reveal
their EE targets versus Actuals achieved. Where targets NOT achieved, there must
be an explanation of a mitigation and remedial plan. (Name and Shame Leaders).
 The Department of Labour must NOT be a “toothless” body; the time has come to be
ruthless on Designated Employers.
c. Training and Development
 Appropriate mentorship and job shadowing interventions MUST be “alive” in business
with accountability placed on HR Executive Management which must form part of
his/her KPI.
 Succession planning and career path must form part of every employee with the aim
to up skill and build capacity for employees of previously disadvantaged groups.
 Department of Labour representatives should visit place of work at least every quarter
and test to check if applicable training interventions are in place to accelerate the pace
of transformation.
On the premise of the above recommendations, leadership needs to have a paradigm shift and
break away from the legacy issues of the past. This can only be done through ensuring effective
change management transpires emanating from them and cascaded throughout the organization.

32
In order to ignite and appropriate change management process, the adapted Change
Management Framework, of Oakland and Tanner is used to contextualize this. The change
management framework has two interacting cycles, initiated by external change, such as
legislation, and BBBEE scorecard etc. as the change driver. “Readiness for Change” as the first
cycle corresponds with Kotter’s model and prescribes the “need for change” as the first step to
focus the respective stakeholders for desired change. Clear and consistent “Leadership and
Direction” turns the need into expectations, followed by “Planning” to focus people’s minds on the
strategic objective. The organizational “Process” links the first cycle and “Implementing Change”
as the second cycle. Processes drive the way the “Organization and Resources” work (the
structure, roles, competencies and resources deployed. Ongoing performance measures and
collaboration then supports the organizations “Systems and Controls”. This is where the
“Behaviour” comes in where all the elements of the Organizational change framework drives
“behavior”. (Culture- Ownership- Ethical Leadership). Returning to “Process” closes the “figure of
8”. (The 8-Step Change Model – John Kotter)
On the premise of the adapted Oakland and Tanner’s Change Management model below,
management and leadership of organization should use this change management framework as
a guide to adopt the change process, as the need for change on transformation is mission critical
and must be pursued with urgency.

33
Fig. 6 Adapted change model framework: source Oakland & Tanners Change Management

34
9. Conclusion
This research has shown that despite all the pieces of legislations set out by the South African
Government since 1994, transformation in Retail Organizations has not yet yielded the desired
rate of success. The representation in Top and Senior Management levels is not in line with the
Economically Active Population (EAP). Whites dominate these levels, and the current statistics of
a few major retailers show that their middle management level which is considered to be the
“feeder” into top and senior management levels is also poorly represented by the Country’s EAP.
This research proposes that Leaders of organization need to take charge and emulate the leaders
of Pick n Pay and Nedbank as their leadership and change management strategy showed efficacy
in transformation, thereby yielding successful results and been recognized for with prestigious
awards for embracing employment equity.
The research further proposes that Leaders need to adopt a changed management process which
is guided by an adapted change management framework as a frame of reference which will
enable leaders to inculcate an inclusive and equitable organization, underpinned with elements
of ethical leadership, diversity, training and development empowered staff force, transparency,
and a culture of doing the “right thing” and moving beyond compliance thereby being an agent
and ensuring ethical leadership is a personal journey towards Integrity and public commitment to
a common good.

35
APPENDIX -A
A-1 Mr Price
Figure A-1: MR Price Work Profile on Occupational Levels. Source: MR Price Annual-
Report -2014
A-2 The Foschini Group
Figure A- 2: The Foschini Group Work Profile on Occupational Levels. Source: TFG
Annual Report -2014.

36
A-3Woolworths
Figure A- 3: Woolworths Work Profile on Occupational Levels. Source: Woolworths
Annual Report -2014.
A-4 Clicks
Figure A-4: Clicks Work Profile on Occupational Levels. Source: Clicks Annual Report -
2014.

37
A5 - Pick n Pay
Figure A-5: Pick n Pay’s Work Profile on Occupational Levels- 5 Year Review. Source:
Pick n Pay Annual Report -2014.

38
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