Wednesday, March 7, 2012

Decisions, decisions!

When I presented the results of my PhD to the mining industry, a senior manager from one of the mining houses pooh-poohed my results. I had got the price of one of the reagents really wrong - they bought X for less than a third of the price I had estimated. So I said "That's wonderful - it makes my process really economic!" From then on, that manager was steadfastly against my process, and when it became the standard in the industry, his mining house was the last to adopt it.

Our paths crossed several times during my mining industry career. No matter how good my idea, he remained negative. It would not have mattered so much except that he became more and more senior. "Good chap, old A! Never makes a mistake!" I tracked his decisions over several years, and it was true. His record was faultless. He said "No!" to every decision that came his way. Never did anything to upset his pristine record. Advanced remorselessly up the corporate ladder. Reached the top and retired in a blaze of glory. Never been heard of since.

Over the last couple of days I have been attending an event called the African Economic Forum. I met up with the leader of one of our major engineering companies. He was complaining about the lack of decision-making in Government. I had made a remark about analysis paralysis, the apparent need to study a problem when the root causes were already overt and obvious. He said it was worse than that. Even when the problem was clearly identified, the fix agreed, and the money to carry out the fix had been made available, the decision to move ahead remained stalled.

The reason, he felt, was the fear of positive action. You might be making a mistake. You could end up being blamed. If you didn't decide, you wouldn't make the mistake (whatever it might have been) and you wouldn't be at risk. He cited the case of a sewerage works that had failed. The decision-maker in the local town told him not to worry - the money was in the budget. That fact that the cash had been carried over from the previous budget, and that water-born disease was now rife in the community, was of no concern to the decision-maker - or should that be decision-non-maker?

The problem is exacerbated by the number of decisions thrust upon the poor dnm. Government is busy churning out regulation after regulation. Keeping up with the regulations is a full time job for the poor dnm. The possibility of making mistakes increases exponentially. Can you blame the poor chap for needing to find another way of funding his early retirement? Sooner or later he is going to make a mistake, and when that happens he could be out of his job.

I did some work with an international think-tank a few years ago. The members of the think- tank had just finished a major study of the differences between India and China. Why had China managed to take off economically, while India hopped along the development runway, up to speed one moment and hitting the brakes the next? They concluded that it was related to the quantity of red tape marking the way forward. China had a few, clear regulations. India surged forward whenever it had a government that scrapped half the regulations, and ground to a halt when the red tape mountain clogged the wheels. All regulations created opportunities for corruption. While central government might strive to simplify things, local government, used to greasy palms in every direction, soon gummed up the works. Such simple concepts made the difference between 8% annual GDP growth and 2%.

This has to have lessons for South Africa. The inability to take decisions, and live with the consequences, is crippling our economy. It was government policy, spelled out in a white paper, that before the end of 1999 it would decide about the next big power station. It didn't take that decision until 2006, but which time it was inevitable that we would run out of power. We have run out of power, to the extent that we are closing down smelters, lifeblood of our minerals beneficiation programme, and losing hundreds of jobs as a result.

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