Comments by Mteto Nyati in Business Times about empowerment at Eskom make for an interesting study because of what they teach us about communication and institutional change (“To save Eskom, empowerment must go”, October 30). Communication is a key tool when an institution is undergoing change, as Eskom is.
Underpinning the sensitivity of Nyati’s ill-timed statements, Eskom has since distanced itself, diplomatically, from his comments. Eskom chair Mpho Makwana said the board placed “a high premium on our role as a catalyst for transformation and empowerment”.
Eskom is undergoing major reforms, including the splitting of the company into generation, transmission and distribution units. Some of the reforms have dragged on for a long time — longer than necessary in some cases. The reason for the delays explains the sensitivity of the reforms to the politics of the country, especially the governing party’s.
Because of its institutional size, its dominance of the energy sector and the fact that it is one of the largest employers in the country, Eskom’s reform is highly contested. There are too many eyes keen to see what’s cooking. They range from its funders (who are keenly waiting for details of the Treasury’s plan to take up to 66% of the utility’s debt), its myriad suppliers (both honest and crooked) who want to know if they will continue to get the juice, to politicians (Gauteng premier Panyaza Lesufi among them) whose interests in the utility vary.
Lesufi, for example, wants the utility to cancel Soweto residents’ debt of about R5bn. That’s no small change for a company that survives by the grace of the taxpayer. Eskom CEO André de Ruyter can attest that driving change at Eskom is tough. The reason is simply that change makes enemies, including what business thought leader John Kotter has referred to as “skilled filibusterers” who can keep change bogged down for as long as possible.
In Eskom’s case, the beneficiaries of the looting that nearly collapsed the company, including some of the utility’s employees, have not gone down, or out, without a fight. Second, there is a sizable community within and on the edges of the governing party that will feel threatened by what Nyati is proposing.
In the midst of all this, in comes Nyati, deciding for reasons best known to him to throw a grenade into the fishing pond instead of using a rod. Nyati said, among other things, that internal corruption at Eskom was largely on the back of “empowerment policies that promote local small businesses”.
Referring to the procurement of equipment, he decried the use of local middlemen, adding: “We need to make sure we are connecting directly with the people who have the knowledge that will get us out of this crisis as soon as possible”.
In looking at Nyati’s comments I’m going to use Harold Lasswell’s definition of communication. The late American political scientist and communication theorist defined communication as: “Who says what, in which channel, to whom, with what effect.”
We know who said what and what channel he used. The two remaining critical questions are: which of the myriad Eskom stakeholders was Nyati speaking to, and what was he trying to achieve (the effect)?
From Eskom’s response to Nyati’s interview we now know the views he expressed about empowerment at Eskom are not shared by what Makwana has called the utility’s leadership collective. So was Nyati testing the waters? Or was it a case of loose lips? The latter would be a significant misstep by someone who ran a listed company and should know of the assertion in financial markets that “loose lips sink markets”.
Eskom’s response tells us also that Nyati’s statement did arouse a number of stakeholders who would have leaned on Eskom to distance itself from him. We may not know the answers to these questions, but one thing is for certain: Nyati’s comments have united both the honest and crooked beneficiaries of Eskom’s empowerment policies. This will definitely make the job of the new board in driving reform of the utility that much harder.
The sad thing is that the ideas Nyati put forward warrant consideration by Eskom and the utility’s political principals. That’s because the successful fixing of Eskom, or rather the guarantee of a reliable and sufficient supply of energy to power the country’s economy, is arguably the biggest BEE project SA has ever undertaken.
That’s because Eskom’s failure to provide reliable and sufficient energy is the single biggest blockage to faster economic growth, which in turn means faster (potentially) job creation and therefore a reduction in poverty. South Africans shouldn’t allow either crooks or loose lips to sink that empowerment project.
• Sikhakhane, a former spokesperson for the finance minister, National Treasury and SA Reserve Bank, is editor of The Conversation Africa. He writes in his personal capacity.
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