The Directors and shareholders of Gendel Advertising & Marketing are committed to the speedy and responsible transformation of the company
into a truly South African ad agency.
Mike Gendel is a founding member of the ACA Transformation Committee, a committee tasked with the transformation of the entire advertising industry. Over the past two years he has made a material contribution to the debate on the Sector Scorecard, specifically in terms of the issue of direct equity ownership.
Therefore, the challenge for Gendel is not to decide whether or not to empower the company, but rather to grapple with the implementation of the transformation process.
The advertising industry Draft Balanced Scorecard is comprised of three base criteria, Direct Empowerment, Human Resource Development and Indirect Empowerment. The split, in terms of weighting, is as follows:
Proposed Weighting of Components of the DTi Balanced Scorecard for the Industry.
Our concern is that there is an unhealthy weighting towards the narrowly defined BEE concept, where corporate assets are being transferred from white to black ownership, while transformation at grass roots level is lagging behind. For us the real satisfaction lies in the empowerment of previously disadvantaged individuals; in other words, empowerment from the bottom up, rather than the further enrichment of the black corporate elite.
In the advertising industry we see very few black employees, women and handicapped people being fast-tracked through the companies. Instead we see the same relatively small pool of black advertising executives moving from agency to agency.
In the matter of learnerships and internships of the AAA School of Advertising, we find that we are exceeding by far the take-up of these learners by the larger agencies. If these agencies have black shareholders, we find these are often remote from the actual business, and the employees are no better off than before the entry of black investors.
This enrichment of the black advertising elite can't be the best solution to broad-based BEE. If one couples this trend with the specific difficulty being experienced by entrepreneurial agencies and large agencies with overseas shareholders, who have clear policies when it comes to ownership of their global brands, then it is clear that the solution could lie elsewhere; specifically, in the areas of Indirect Empowerment and Human Resource Development.
This does not suggest that we are discounting a direct equity investment in our company by black business. Indeed, as at June 2005 we have begun a process which may well result in such an investment within the six months.
As far as procurement from PD firms is concerned, we have already achieved an excellent score: 73% of our total cost-of-sale purchases are from black-influenced companies. This includes not only our media buying (68% of our COS costs) but also smaller specialist companies and individuals.
We take this aspect very seriously, and pursue this policy to the nth degree. For instance, over the past two years, we have hired more black voice-over artists than white; our television production crews reflect a greater than 40% black component, our video editors are split 50:50, our hardware service technicians (who work for themselves) are black, our delivery and shipping services are black-owned or black-influenced, and so on.
Therefore, on many fronts, we are performing well. We can and will improve on these results. In fact, as at June 2005, Gendel Advertising scores 41 on the overall weighted scale on the Draft Balanced Scorecard, out of a possible 100.
