THE ULTIMATE SOLUTION is FUNDAMENTAL TRANSFORMATION!

THE ULTIMATE SOLUTION is FUNDAMENTAL TRANSFORMATION!

In the Mid 1930’s the African Broadcasting Company was dissolved and the South African Broadcasting Corporation (SABC) was established by an Act of Parliament as a state Broadcaster to advance amongst other things, government political agenda until the mid 1990’s. As s state broadcaster, the SABC was created with a monopoly on the provision of broadcasting services that emphasized racial and ethnic division under the Nationalist Party government from the mid 1940’s.
In the mid 1990’s, the IBA Act ended the broadcasting system monopoly, opening up radio and television markets to competition. It transformed the state broadcaster into a public broadcaster and made possible the introduction of community radio for the first time. The new democratic government led by the African National Congress (ANC) freed airwaves by restructuring the state Broadcasting dispensation that met the needs of all South Africans, offering a choice of services and content ownership.

The early 1990’s saw a major restructuring of the SABC as a National Broadcaster. The Corporations radio and television portfolios were completely revamped and started to explore satellite transmission, and opening the airwaves to other Broadcasters. It was during these difficult times that the SABC had to make tough decisions in order to move itself out of a serious financial crisis. However, the challenges faced by the SABC in the mid 90’s compared with the current ones are incomparable and insignificant yet the organization took serious decisions which were essentially informed by the Mickensey Report to lift the organization out of its then financial predicament.

In order to survive and become sustainable, the SABC management was left with no choice but to embark on large scale retrenchments, and restructuring the business model in its entirety in order to create and develop effective business practices. How history has repeated itself is incredulously unbelievable. The current SABC is in fact in a worst situation than it was in the mid 90’s yet measures taken to address the current situation are inconclusive and less substantive than they were more than 10 years ago. At the moment, there are Major Risks facing the Public Broadcaster, and these are: Content and Sport Right Costs, Severe Liquidity problems, Bloated Headcount, Governance and Compliance deviations, all leading to financial and operational deficiencies, which until recently, thanks to the Government Guarantee of R1, 473 billion, challenged the Corporation’s status as a going concern.

My argument here is simple: Unless the organization embarks on an immediate fundamental transformation based on an efficient, effective competitive business operating model, the Government Guarantee and all other short term interventionist initiatives will come to naught. The Government Guarantees deals with the symptoms not the root cause of the SABC problems which have been institutionalized over decades. The migration of the global broadcasting remit from analogue to digital provides a unique opportunity for the public broadcaster to review and reassert itself to become a digital Broadcasting leader. The key question to ask now is how this change would unfold. This is what the fundamental transformation would practically mean and would be based on a ten pillar plan.

A.
Content Acquisition and Distribution

The raison’detre for the entire public broadcaster is to provide and deliver informative, educative and entertaining content and programming. There have been terrible mistakes committed in the past and we now have an opportunity of developing a new framework of how content in partnership with production houses, small and big can be secured to ensure mutual sustainability of either party. The Public Services Broadcasting draft Bill begins on one side to deal with these challenges facing the SABC but this will require further refinement to ensure collective responsibility by other players is obtained and guaranteed.

B.
Funding

There has been a great deal of confusion as to what this entails. To me this means that Funding must be stratified into Public and Commercial funding streams. The commercial funding streams comprise three main areas of Airtime Sales, Consumer Products and Content Sales. Under each one of these three areas there are a number of revenue opportunities represented by the converged New Media, Radio and Television. The Public Funding is represented by TV Licenses, Broadcast Levies, Foundations, CSI and other philanthropic contributions. If properly done, these initiatives will ensure Commercial and Public funding viability, leading to sustainability, competitiveness and efficiencies. Furthermore, the Corporation can enter global bond market securitization to raise massive funding for strategic projects. This will require meticulous integrated planning and high- level strategic thinking.

C.
Governance and Compliance

The recent Audit General findings have necessitated that management and staff to be alert and vigilant with respect to complying with governance protocol in line with the founding Acts and SABC policies. These regulatory and compliance mechanism are represented by the PFMA, Delegation of Authority Framework (DAF), Broadcasting Act, Companies Act and the Treasury Best Practice framework.

The corporation will also require an effective pragmatic, workable and result oriented Risk Management regime to sensitize itself well in advance before any calamity occurs at varied levels and structures of the business.

D.
Staff Headcount

This is the corporations Achilles Heel. The surplus person power in senior, middle, junior management as well as in staff numbers across the board is the main reason the organization state of financial health has been affected. The SABC Management has to its own credit implemented various laudable austerity measures to curtail costs and many other forms of inefficiencies but this is obviously not sufficient. The corporation requires a comprehensive, well structured, well thought-out plan to bring about headcount reduction. May I add that the SABC corporate plan envisages a profit before tax by 2012, but this is practically not possible without a well coordinated, collective plan by labour, staff and management. As stated before, the financial health can be realized if the Public Broadcaster takes into account a streamlined workforce and an improved content acquisition strategy which creates savings on costs.

E.
New Operating Model

Essentially the Public Broadcaster has not transformed itself since the advent of the new dispensation in the country. One thing that we have failed as a country to do, certainly in the SABC, is to provide a new crop of technocrats and highly skilled experts in all technical areas of the business. Like any other SOE, the SABC did not provide structured nurturing of talent and skills from the historically deprived individuals.

The Broadcasting dictate is migrating to digitization and new skills are required to manage this transformation. Likewise, the SABC must review its current model and fundamentally transform to become a 21st digital broadcaster. This is a project that has been delayed for the past two years it cannot be deferred further than this. Furthermore, the new operating model will:

• Reduce cost structure of the organization ie: overheads in support functions remove duplication of funds and implement a shared service approach.
• Recruit best industry talent to deliver capacity and quality output.
• Foster a coherent integrated strategy of planning and execution process between Channels Content and Sales.
F.
SABC Strategic Focus

The defined positioning of the organization must consistently support Public Service delivery. Commercial viability and public value should not be seen as mutually exclusive, rather as a competitive advantage over competitors.

G.
Re-state SABC Brand

The Brand as represented by the Board, Executive Management and staff has been hemorrhaged severely. The time is now opportune to rebuild, restore and reposition the mother brand as a dynamic, powerful communicator of values and aspirations of about 24 million listeners and viewers on a daily basis in the country. The brand value and equity of the SABC is worth several billions of rands. That is how powerful and important this is.



H.
Financial Controls, Systems and Process:

The Financial health of any corporation is based on sound and good accounting practices. These principles are such that the information produced at any given point can be relied on as credible and have integrity. Financial systems and processes define how the business is organized and managed to achieve specific strategic goals. The SABC has once again gone through a qualified annual financial report. This practice can to a large extent be controlled if the business is essentially supported by impeccable accounting systems and controls. Simply put, this means the financial accounting systems and processes must take into account the complexities and intricacies of a sophisticated large-scale media business, like the SABC. Robust financial analysis and constant financial reviews should be the basis upon which the business is guided by world class, high quality financial leadership.

I.
Production and Technical Facilities:

SABC has invested a large amount of money in the purchase of digi-trucks (Outside Broadcasting Vehicles). This is an area in which utmost vigilance should be applied. The return on investments on these assets is critical. The utilization and resource deployment of these assets must not only bring about the effective delivery of the public mandate, but must also be exploited to its fullest potential to realize constant returns s and acceptable levels of profit.

The effects of maintaining duplicated costs on production facilities are a huge burden on the organization. The corporations’ production costs are quadrupled across Channels, Sports, News and Technology Units and pose a serious drain on the coffers of this institution. There has to be a single centralized command structure to control and manage the needs of the organization in a cost effective and efficient manner.

J.
Public Service Broadcasting Network (PSBN)

Taking Government to the people. The fundamental challenge in the SABC must also reflect how the Public Broadcaster communicates and disseminates information to the general public to ensure understanding of service delivery is entrenched and appreciated. In other words, the SABC must provide the three spheres of Government (National, Provincial and Local) including NGO’s and Traditional Leadership with a platform to communicate directly to their conventions via pre-planned and pre-arranged SABC Public Service Television Network (PSTN) that will cover all aspects of community projects development towards efficient communication for proper service delivery.

This is an opportunity for SABC to address the past public and private contentions regarding their status and standing within communities they serve. This move is also going to be a catalyst when it rolls out immediate and future plans towards regional broadcasting both Radio and Television. Each Provincial and local government will cover all production costs.










Conclusion

In closing, may I just add that the 10 point plan is not only exhaustive but also touches extensively on key fundamental pillars of the corporation which form part of the foundation that will ultimately bring about effective and real transformation. Connected to this 10 point plan are other ancillary projects which require active management as well as an iron grip control over the process of change.

Last but not least, it is my duty to warn the incoming Board and the new Executive team that the process of transformation will be completely achieved if the SABC relocates and move its business out of the Auckland Park Precinct. The Head office costs are a serious cash burner. Both the Radio and The Television infrastructure was created to serve Apartheid broadcasting ideals. It happened when the broadcaster was the only provider of broadcasting services. The building structure was designed for analogue purposes and does not serve the future needs of a 21st century digital broadcasting entity. The maintenance costs run into several million of rands annually. The upgrade of the current infrastructure will be an unnecessary financial burden and must be obviated as much as possible. SABC requires total not cosmetic transformation and every aspect of the business that contributes to this achievement must be supported for therein lies the hidden secret of ultimately transforming the public broadcaster becoming a respectable, competitive and relevant public institution.

Finally, the appointment of the new board and the permanent CEO provides this organization with an opportunity to take a quantum leap and push this organization to an era of competitiveness and broadcasting excellence. Much has been done in the past 19 months when I was appointed as the Interim CEO. The organization is now more stable and focused due to both management and the interim Board’s contribution. We have gone past the stormy seas and the real hard work must now begin in earnest.

The SABC comprises both women and men who are hard working, honest and passionate and will work beyond the call of duty to see this organization moving forward.

To all the SABCers, I would like to thank them for their support and commitment during those difficult times and I know we have all grown stronger and sturdier in our character and approach to business. Lastly, I want to thank the SABC for having given me this great opportunity of leading one of the great institutions in the country. Thank you to my family and friends.


LONG LIVE SABC!
Lehlohonolo Gab Mampone
(The views expressed in this article are strictly personal not representing the Corporation’s formal position)