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The school of hard knocks
Posted Mon, 20 Feb 2006

Black Like Me founding member, HERMAN MASHABA, may be a household name in South Africa, but his rise to business prominence was a rocky road. BY CHARLENE SMITH

IN 1984, Herman Mashaba started Black Like Me, a manufacturer of hair and beauty products. This was a first. Until then, black people had been in the industry as owners of hair salons, but not in the industry’s manufacturing sector. Black Like Me went on to become one of the biggest and most successful manufacturers of hair and beauty products in South Africa.

Mashaba asserts that running a big manufacturing concern during apartheid days was not easy. For one thing, the Group Areas Act prohibited black people from living or engaging in any business activity in areas that were for whites only. Running a business in such an area meant breaking the law. Mashaba overcame this obstacle by taking on a white business partner. However, there were many other obstacles that came with that hostile environment.

“I started my business ten years before South Africa became a democratic country. Operating in that hostile, apartheid environment has taught one lessons that can be useful to other business people. I do not regard myself as a business guru. In fact, I dropped out of university and I do not have any formal qualifi cations. But I have been through the school of hard knocks and that has taught me most of what I know about business.”

After 1994, Mashaba says, there was an abundance of business opportunities as democratisation yielded fruits of equitable distribution of opportunity. However, he personally chose to remain on the outside looking in as the opportunities continued to unfold. There were many offers.

“I was approached by many people hoping to interest me in one BEE deal or the other. But until three years ago, I felt I was not ready. When I decided the time was right to enter the BEE arena, I came in with the intention of fulfi lling two critical goals that I had set for myself: Contributing to the development of sustainable black-owned and managed businesses and making money without being apologetic about it.”

Mashaba says he has set himself the task of developing a minimum of ten top black CEOs by 2014 as part of his contribution to the South African business leadership profile.

“My rationale is that I make investments in companies but do not play an executive role. As I make investments, I ensure that there are black people who have equity in these organisations and that they play an effective executive role. I also provide them with the required mentorship and other support systems. The reality is that many black business people and managers fail because they are put in senior executive positions and left to their own devices, without any support. It would be reasonable to say such people are set up for failure.”

While he believes the South African government has taken a bold stance on Black Economic Empowerment, creating valuable opportunities for black people to enter the economic mainstream, these opportunities will not be exploited fully.

“There is a common perception that empowerment deals have come to be the privilege of a few black people. There is a lot of truth in this. Partly, this trajectory came about because there are only a certain number of black business people who have access to the fi nance, the skills pool and the deals themselves.” The answer? “Widen the poo l of black empowerment participants by identifying suitable candidates and taking them into the pool by the hand. Put simply, people would feel comfortable with giving me an empowerment deal because they believe I have the track record, the access to fi nance and the skills to make a success of it. By bringing in a young executive to run the business, I am giving that person an opportunity to become a big player in the marketplace.”

For Mashaba, Black Economic Empowerment is crucial to the success of South Africa as a country that offers equitable opportunity. The challenge lies in the fact that while at a political level, one can come up with policy and legislation to drive things in a chosen direction, this is not the case in business. Issues such as capacity, development of governance, the attitude of the fi nancial markets and other factors can play a major role in turning a good concept into a huge failure.