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Back To Basics: Can Lean Thinking Offer SA A Route Out Of Recession?

Africa’s eighth lean management summit will highlight simple management systems that can boost efficiency and customer service in both the private and public sectors.

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As costs rise and resources are squeezed in all sectors and industries across a stagnating South African economy, organisations need to find new ways to unlock value. And lean thinking – a back-to-basics management tool – is demonstrating that it is possible to build capability – even in challenging times.

“Lean management can have an enormous impact on the way an organisation functions, and its popularity is growing as people experience how quickly lean can impact customers, staff morale and budget by eliminating waste,” says Professor Norman Faull, founder and Chair of the Lean Institute Africa and Emeritus Professor at the UCT Graduate School of Business (GSB).

Primed to host its eighth biennial Lean Summit Africa at Cape Town’s Vineyard Hotel in October, the Lean Institute Africa (LIA) is hoping to draw public sector players as well as business delegates. Lean management methods, long respected in the private sector, have also shown strong results in bumping up efficiencies in SA’s notoriously challenged public sector, notably in health services and hospitals.

Related: How to Build a Lean and Efficient Business Plan

Faull, who will be speaking at the Lean Summit on the topic of ‘What government needs to get right,’ said that working in the health sector in recent years, lean management systems have been used to cut queues and waiting times dramatically in several hospitals around the country by addressing simple things like punctuality, absenteeism and a shift from batch processing to individual processing.

The Summit will highlight how a simple, disciplined approach to systems and operations has the potential to revolutionise efficiency and customer experience.

Proven within the Japanese automotive industry through the Toyota Way, lean management looks to pare down and re-arrange systems without throwing more resources at the problem or blaming staff, which can be a knee-jerk response in the public sector, says Faull.

To achieve results in the healthcare sector, Faull said that practitioners examined frontline services and introduced simple, visible charts for staff tracking such basics as punctuality and absenteeism on a daily basis.

Seen as a process rather than a solution, the system requires senior management to engage with challenges on a daily basis and to get buy-in from those on the frontline. He likens it to a daily hygiene routine like brushing your teeth and says that such an approach can bring stability and predictability to a system beleaguered by chaos, stress and time pressure.

“Change in any organisation, whether public or private, needs ongoing commitment,” says Mike Rother from the University of Michigan’s College of Engineering who will be the keynote speaker at the Lean Summit. “Don’t look for an answer and think you’re done.”

Rother will be drawing on wisdom from his book Toyota Kata, which has had a profound influence on lean practitioners globally. Through his Improvement Kata and Coaching Kata (a Japanese term that is typically used in martial arts but which can be applied to routine or patterns) he sets forth simple steps towards continuous improvement, adaptability and achievement within an organisation.

Faull adds that the process invites people to be open to constructive criticism. This can be difficult in South Africa, he says, particularly with race playing a role in the South African historical context. “But in the Toyota way, faults are there to be acknowledged and improved upon. In such a culture risks can be taken, and significant changes made.”

Related: 15 Free Online Courses That Are Actually Worth Your Time

It is only by taking such risks and making those changes that organisations can start to build resilience. And in a world of shrinking resources and increased competition, the rewards for those who get it right are worth the effort, says Faull.

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The Lean Summit Africa 2016, Building Capability in Challenging Times, will run from 19 to 21 October at the Vineyard Hotel and Conference Centre, Newlands, Cape Town. To register log onto www.lean.org.za/summit2016.

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Future Proofing Children In The Western Cape

Through entrepreneurial education.

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The education system in South Africa is responsible for preparing children to build successful lives.  They should be prepared for the wide range of possibilities that lie ahead of them. There are many who believe that entrepreneurship is a trait that you are born with and that it can’t be taught.  This is simply not true.

Most schools nowadays teach Business Studies, Business Management or Economics to students. The sad reality though, is that while this subject does indeed focus on the ins and outs of starting and managing a business, it does not teach our ambitious young children and teenagers what it really means to be an entrepreneur. It does not teach them which of their personality traits and characteristics they should be aiming to hone in on. They don’t learn about the experiences and failures of ‘first hand’ entrepreneurs – all our coaches are entrepreneurs themselves and running their own businesses, with some success and some failure – who believe it or not, not all performed actually well at school!  Or how to look for problems as opportunities and that a business can be made from doing this.

Related: Plan My Wedding Share 5 Fantastic Tips To Win Over The Shark Tank

Recently myself, Jason Newmark (Co-founder and director of Future Proof Western Cape) & lead coach Lana Sinclair, spent 3 days in the Bredasdorp community of the Western Cape, with children between the ages of 9 and 11, from 5 disadvantaged schools attending, under the initiative of NGO organisation, Education Connection and Managing Director, Marius Stolz, introduced the children to the 4-lesson initiative that we at Future Proof have been rolling out around the country.

One of the core focuses of the 4 lessons, is how children can start identifying problems that surround them and the opportunities it can lead to, by starting a business and getting paid to do it.  The second lesson focuses and helps these children to create a one page business model canvas that kids are able to put their ideas down and more importantly something they can implement immediately when they go back to their communities.  On the canvas the children are put into groups, where they discuss and identify which problem/opportunity they are going to implement, and they write it down on the middle of the page.  The page is then divided into 4 quadrants – Customers, Stuff, Tell People and price.

The children are then demonstrated through activities, and real life experiences and knowledge of how to firstly find customers.  This exercise is done by hanging apples in trees (low hanging fruit) in various locations.  Children are then told to try and get as many as possible and then return to the meeting area.

Once all apples have been collected children are then asked: ‘Why did they go for the apples that they did?’  There are usually a whole host of various answers, but the end answer they usually come to is ‘ they went for the quickest and easiest apples’.  The activity learning outcome is then show to them, that they need to think of apples as your customers, you need to always try get to the quickest and easiest customers, not the ones far away or that are hard to get to and you need to be faster than anyone else! And that the first thing you need to start a business is a customer! If you cant find customers first, then you cant run a business. Children are then asked to write down who there ‘apples’ are for their problem and opportunity they are using as their business idea. The kids are then guided through the other 3 quadrants on what ‘stuff’ (inventory) they will need, how they will ‘tell people’ (marketing) and what price they will charge for their business.

Related: 6 Steps To Grow A Funding Ready Start-up

Its incredible the ideas the kids come up with and the little lightbulbs that go off once this lesson is over and they know how to actually start a business. The concepts we show them are taught in Harvard Business school, yet when broken down into their simplest form, children are able to easily understand them – its incredibly inspiring and more importantly effective and these kids now have this tool to use to start a business and how to start looking at problems as opportunities and what to do when they identify them’

All 4 lessons are activity based, where kids are shown to ‘think’ like entrepreneurs, how to start a business, cashflow & mentors/networks.  With these tools, skills and real life experiences given to them from the entrepreneurial coaches that teach these lessons, shows how easy it can be to get these concepts and learnings into children behaviours while they are still young and can learn to fail and succeed from a young age, and more importantly how to maintain the right mindset (lesson 1) to be able to deal with these failures as they go through life.  A stark contrast to teachers teaching Business Studies and economics?  Isn’t this something all children in South Africa need to be learning?

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More South Africans Choosing EB-5 Investment Visa For US Immigration

Demand by South Africans for EB-5 Investment visa grows to 500% over past three years.

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Families from around the world have gained permanent residency in the United States through the EB-5 investor green card program.  With the South African economy entering its first recession since 2009 and the value of the Rand falling 20% in 2018, more and more South Africans are seeking alternate permanent residency in foreign countries.

Industry data reveals that South African demand for this program is the highest it has ever been, with a 486% increase in the number of EB-5 petitions filed by South Africans over the past three years.  This huge growth in demand is the highest among European, Middle East, and African countries.

“Most EB-5 investors are seeking opportunities for their families and children in the US that offer excellent education, career, and quality of life options,” said Bernard Wolfsdorf, former President of the American Immigration Lawyers Association who grew up in Durban and immigrated 40 years ago.

The EB-5 program requires an “at risk” investment of $500,000 into a project that creates 10 full-time jobs for Americans. This provides investors (and their spouses and unmarried children under the age of 21) permanent residence in the US. As a job creation program with an immigration benefit, the EB-5 program has brought in billions of FDI over the past decade and has helped created tens of thousands of jobs for US workers.

However, time may be running out for South Africans to take advantage of the EB-5 visa program at the current investment levels, as proposals to increase the minimum investment amount from $500,000 to $1,350,000 have been pending since January 2017, waiting for final implementation. These changes could occur as early as December 7, 2018, the date that the budget for the US federal government was extended to last week by President Trump.

Related: How I Run An International Business From A Remote Beach Town In The Eastern Cape

Below are 5 things to consider about the EB-5 program.

1. What are the benefits of a green card?

A green card allows one to live, work, and study in the United States permanently. In contrast to other work sponsored green cards, the EB-5 provides the maximum career flexibility immediately upon arrival in the US. Children who receive green cards with their parents are able to apply to universities on the same footing as American citizens, rather than as foreign students. They often qualify for lower in-state tuition at public universities and have an easier time finding a job after graduation. Green card holders become eligible for citizenship 5 years after becoming a permanent resident.

2. Who is my immigration attorney?

Not all US immigration attorneys specialise in preparing EB-5 green card applications.  It is important to work with an experienced attorney who can guide you through each step of the EB-5 process.  Investors should also work with an immigration attorney who only represents their interests – not the interests of the EB-5 project.  This ensures there is no conflict of interest.

3. What project should I invest in?

Most EB-5 investments are in real estate development projects, but there are many different projects on the market to choose. Investors must conduct thorough due diligence on the project and should consult their financial advisors before choosing an EB-5 investment. Investors must feel confident that the US company will be able to execute its business plan and create the jobs needed to support EB-5 petitions. Additionally, the U.S. company should have a clear exit   strategy in place to ensure that EB-5 investors are repaid their capital investment at the appropriate time.

4. What do I need to prepare?

Investors must document the lawful source of their $500,000 investment.  An immigration attorney will help strategise the required documentation. This usually includes tax returns, bank statements, employment records, and property records. Investors should consult an experienced international tax advisor to discuss how US green card status can affect tax liability, and determine the appropriate tax strategy.

Related: Opening An International Business In SA – Renny Letswalo Shares Her Story

5. When do I have to move to the US?

Based on current processing times, it takes approximately two and a half years for an EB-5 applicant to receive a green card.  Once a green card is issued, lawful permanent residents are expected to make the US their primary residence, but they retain the ability to travel freely outside of the US, and special travel documents can be obtained if longer absences are required.

As South Africa has become a reasonably-sized market for EB-5 investment, more “Regional Centres” will be marketing their EB-5 investment projects in the coming year, further increasing the number of immigrant investors from South Africa.

Attorney Robert Blanco will be in South Africa from November 13-19. If you would like to schedule a no-cost consultation to discuss the EB-5 visa option, please contact him at rblanco@wolfsdorf.com.

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Old Mutual Committed To Empowering South African Entrepreneurs

South African small and medium-sized enterprises (SMEs) looking to take their venture to the next level will get a chance to network with big business – such as the likes of Old Mutual – at Global Entrepreneurship Week, currently running from 12 – 16 November 2018 at the Enterprise Room in Rosebank, Johannesburg.

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Global Entrepreneurship Week is an annual celebration of the innovators and job creators, who launch start-ups that bring ideas to life, drive economic growth and social inclusivity.

According to the Banking Association of South Africa, SMEs have been identified as productive drivers of inclusive economic growth and development in South Africa, as well as globally. Some researchers have estimated that the local SME sector makes up 91% of formalised businesses. The sector also provides employment to an estimated 60% of the labour force and accounts for around 34% of Gross Domestic Product (GDP) in total economic output.

Old Mutual has been actively working to empower SMEs for more than a decade through structured programmes and vehicles designed to provide both the financial – and non-financial – support that is critical for success. This focus on creating both business and societal value means that the company continues to invest in creating opportunities for all South Africans.

The company’s innovative Enterprise and Supplier Development Fund works to create opportunities for small businesses to become integrated into Old Mutual’s supply chain, creating sustainable partnerships of mutual benefit. In addition, Old Mutual’s Masisizane Fund offers SMEs operating in the manufacturing, franchising and agricultural arenas a mix of grants, loans and technical support, to enable them to gain vital market access and create jobs.

Collectively, these two small business empowerment funds have approved over R750-million in funding to small businesses across the country, having already disbursed close to R600-million, while creating more than 8330 job opportunities in the process.

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

Old Mutual recognises that funding alone is not the key catalyst for growth where SME development is concerned, which is why it also offers a range of non-financial support option to SMEs both pre and post investment. This includes SME training in financial education, as well as business support in the form of technical mentorship, financial management tools and advice, as well as bespoke accounting services.

Old Mutual will be hosting a special session at Global Entrepreneurship Week on Wednesday 14 November 2018 titled “Doing Business with Old Mutual” at which SMEs looking to connect with the company can get more information on its unique empowerment and development programmes.

Entrepreneurs can get more information on Old Mutual’s small business empowerment programmes here:

Enterprise and Supplier Development Programme:

Supplierdevelopment@oldmutual.com or 011 217 1000

Masisizane Fund:

Via the Old Mutual Website at www.oldmutual.co.za/masisizane

Email: MasisizaneEnquiries@oldmutual.com or call 011 217 1000

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