The transformation pillar of the Good business journey embraces the dti’s broad-based black economic empowerment (BBBEE) scorecard framework, including: equity ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development. BBBEE is overlaid on the Woolworths strategy to ensure meaningful and sustainable empowerment endeavours. To enable the implementation of BBBEE, Woolworths took an integrated and multi-pronged approach to shifting the organisational culture, mainly driven by change leadership initiatives.

The Woolworths black economic empowerment (BEE)/transformation programme was awarded “Top Empowered Company in Retail and Property” at the Metropolitan Oliver Empowerment Awards in 2009. The awards celebrate companies and individuals driving BBBEE in every sphere of South African life.

Some of the critical milestones in the BEE transformation journey:

• we have clear sight of the BBBEE components that are tracking well and those lagging behind against our annual targets;
• the BEE employee share ownership scheme continues to empower individual employees participating in the scheme through bi-annual dividend payouts;
• there is a continuous organisational culture shift aimed at embedding BEE as a way of working across the business;
• business units BEE reviews are held, ensuring the necessary elevation of BEE as a leadership accountability issue;
• Woolworths has the necessary BEE specialist knowledge residing in the BEE office to inform strategy and support BEE implementation across the business. There has been a lot of effort put into designing tools, processes and systems integration to enable BEE implementation, measurement and tracking. Furthermore, extra capacity has been built in the form of BEE Champions;
• Employment Equity Act compliance has improved significantly since the beginning of the Director General review process late in 2007 and the partnership with the Department of Labour is at satisfactory levels; and
• one of the Woolworths Trust flagship projects, the EduPlant programme has reached higher levels of self-sustainability with the introduction and recognition of mentoring schools.

There is growing empowerment of:

• black employees, women and people with disabilities through the BEE employee share ownership scheme, focused recruitment, succession planning, promotions, development and retention mechanisms;
• black and female unemployed communities through learning and job creation opportunities;
• black owned and small enterprises through supplier support, coaching and development and opportunities to join the Woolworths supply chain; and
• communities through sustainable food security and nutrition initiatives in schools across the country, as well support for orphaned and vulnerable children.

The identified challenges along the journey:

• keeping focus on transformation efforts and investment during tough trading times;
• shifting the organisational culture continues to be a challenge in realising some of our transformation intentions; and
• improving transformation of the Woolworths supplier base.

Woolworths has set a target to become a level 4 BEE contributor (dti codes) by 2012. Work has continued in close collaboration with employees, franchise partners, suppliers, business partners and government to meet the targets.

BEE employee share ownership scheme

The BEE employee share ownership scheme was established in July 2007 to accelerate transformation initiatives by spreading equity ownership more broadly across Woolworths, transferring a 10% holding to Woolworths employees. The scheme also provides a retention incentive to employees. A board of trustees, with a majority of employee representatives, has been established and there have been regular dividend payouts. The full benefits of the scheme become due in 2015.

management control

Woolworths continues to focus on representivity of black non-executive directors and senior executives through succession planning and talent management processes.

employment equity

Employment equity and diversity is critical for the transformation of Woolworths. This is embedded and aligned to the business strategy, succession planning, talent management processes and employee engagement. Woolworths has a leader-led employment equity strategy and human resource practitioners who play an enabling role.

As follow-up to the Department of Labour DG review process, there has been extensive work done to ensure integrated and sustainable Employment Equity (EE) Act compliance across the business. Some of the highlights in this area are:

• the diversity committees in all business units are now well established and meeting, on average, on a monthly basis. The mandate of these committees has been well defined through ongoing training of diversity committee members;
• divisional director accountability for EE compliance has improved. This was reinforced at the BEE reviews and was key to the effectiveness of the business unit diversity committees;
• Let’s Talk! methodology is adopted as an engagement methodology at all diversity committee meetings to ensure compliance with the EE Act. Some of the major benefits of the Let’s Talk! methodology are effective engagement, escalation of EE issues, driving accountability and ensuring a two-way feedback process; and
• the continuous improvement of Integrated Performance Management (IPM) has now seen BEE and/or transformation cascading from being just a board goal to next levels, through operating plans, down to individual employees’ performance goals. Individual goals coupled with an effective tracking and measurement capability contributes in embedding BEE as a way of working that is integral to business strategy.

skills development training

Learning and development continued to be a key enabler for the development of a black talent pipeline for key roles in the business. Woolworths initiated the process to accredit the learning interventions with the relevant Skills Education Training Authority (SETA).

preferential procurement and enterprise development

Woolworths is committed to supporting existing suppliers to improve their empowerment credentials and introducing small, medium, black-owned and black women-owned suppliers to the business.

Woolworths has supported its black-owned franchisees as preferential business partners as part of the enterprise development (ED) strategy.

Woolworths ED strategic aims are to address the challenges facing small black-owned businesses by assisting these businesses in moving from being survivalist to being sustainable. Key to this is providing these enterprises with business opportunities.

Furthermore, in line with the Woolworths strategy of building long-term relationships with its suppliers and partners, we focus our ED efforts on emerging organisations in our greater supply chain. Our assistance takes the form of financial assistance through:

• loans;
• shorter payment terms; and
• grants (limited).

This is combined with assisting in the development of business skills through training, coaching and mentoring.

We recognise that in order to be able to make a meaningful contribution, we will need to partner with many other organisations. Partnerships have been established with organisations that provide financial and developmental assistance, as well as organisations that can assist with providing business skills training and coaching.

In the current year we have assisted 25 black-owned companies supplying products and services to various business units.

We see our ED strategy as an investment in the future of our business supply chain, the wider economy and the society in which we operate.

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