Leon Liedeman, CEO and founder of GrowCom Group of Companies.
Tony: I would like to discuss the topic of inclusivity and how you plan to tackle it. To kick it off, in your opinion, besides unemployment, which we know is a huge problem, what are the three main stumbling blocks?
Leon: I see them as opportunities. Actually, South Africa is now, whether we want to admit it or not, where South Africa and the Afrikaners were in 1933 with the Great Depression.
Research and centuries of experience have shown that there is a positive correlation between a society’s degree of openness and tolerance for the entrepreneur, independent and creative mindedness, and it’s economic success. ”We need to get South Africa to become a growing nation again. The question is how?
In the 70s, we used to export jams to Japan. The Japanese flattened cans, made dinky toys, exported them to South Africa and made good money. More than 60 years later and we still haven’t improved our manufacturing ability. This is mainly due to a lack of innovation. We need to create the ability to innovate by starting to improve our education system.
Secondly, research has shown that South Africa is one of the countries with the lowest entrepreneurial activity in the world., it has actually regressed since 2008. Steve Biko said that we need to pump some life into the lifeless soul of the black man. If blacks want to be permanently incorporated into the economy of South Africa, they have to build businesses for themselves, according to Chief Lediga in 2007. We have to create a culture of entrepreneurship, which starts with the family. My best lesson in life was when my father was retrenched in late 1994, ****after 18 years. He started a spaza shop and we, as children, learnt by example. I used to pick up five cent and 10 cent pieces in the road in 2014, so that I can make a phone call to get an appointment with the CEO of an insurance company in JHB. I’ve slept in police stations, I walked, I rode with buses and taxis but, technically, today I’m the majority shareholder of a forming insurance company and a bank. And it all started with my father being retrenched.
Thirdly, the challenges with behaviour of Big Money and between them and Government. Government sings the tune of Big Money too often. The Demise of SPES BONA BANK, PRO SANO Medical schemes and the collapse of CTPA-KPO) into SADTU were the biggest political/economic disaster. The recommendations of The Taylor report in 2002: “financial services is dominated by 4 or 5 groups….. encouragement should be given to smaller mutual societies to develop into real competitors in the market.” White capital co-opting black people to drive their Neo agendas and some in government who act as gatekeepers to retain economic control. This has blocked transformation. In my opinion, most innovations that have had a significant impact on the world are the result of an unfair race in which one idea takes off whilst others run with their legs tied.”
If we fix these three pillars, then we will fly.
Tony: So part of how you aim to achieve this is that you started GrowCom. How did this come about?
Leon: It all started in about September 2012. I wanted to start an organisation to change the financial services industry and called it GrowCom, which stands for the growing community. The model hasn’t changed at all. GrowCom will create a circular economic model where you use financial services to set up businesses. You then add accountants, lawyers and business support services to help build small businesses in 200 communities.
It takes about 15% of a nation to create an economic revolution. GrowCom will, roughly if I’ve done my analysis cover about 20% . However, the core of this is education. Rosabeth Moss Kantor wrote about the three C’s, Competence, Confidence and Connections. You get those three right and like all successful organisations, you have a solid foundation. Help the little man when no one wanted to, this was and still is the drive in me.
Now Further to this, everybody in GrowCom, becomes a partner. For every R100 net profit we make, R40 goes to GrowCom, R35 to the client/members and R25 to a beneficiary organization of the members choice. Our model is basically a self-funding model, using that money to set up other businesses and build a fully inclusive economy. Initially, 70% of our business will be in the Western and “Old” Cape province from where we will expand.
Tony: You talk about getting communities involved, as one of your main strategies. How do you envisage getting the communities involved?
Leon: I capitalised on my UWC networks from 76-1980. We work together in churches, sport mainly rugby as we mostly come from the same educational background capitalising on our relationships. I crisscrossed the country over the past 7 years before COVID. But, getting the communities involved was the hardest part because our people were so used under apartheid, believing ****there is only certain parts of the population that can start a business?
The aim is to have 40 cells across the country and to develop each cell as a FSP under a cell captive insurer, with the money circulating in that community. Once we uplift those families in each community and town, we will actually uplift the whole society in South Africa. For me, it’s a crusade.
Tony: Where are you in this process of achieving this vision?
Leon: Our Training Academy has Inseta accreditation and we intend to have, with the Service’s Seta, another 25 qualifications soon. Bank Seta will then follow as well as the tourism sector, because I don’t see it as very different, followed by sport because I’ve got a passion for the sport. We are recruiting 5000, mostly graduates and young people who do not want to work in the corporate environment anymore. For every 125 young people you need to have at least about 10 managers. Then further to this we will be supported by lawyers, accountants and business consultants totaling 7000 people across SA.
So we will end up with a national business consultancy, estate agency and legal organisation. Almost alike to how the Afrikaners did it early in the previous century. We will soon have the biggest sales and sales support system in South Africa. Product wise, we already have two funeral products and, within the next year, a further 25 insurance and other products.
Tony: Now, who needs to get involved with this and how do they do this?
Leon: As Jim Carroll the futurist who worked for Boeing amongst others said, it’s all about partnerships, and I believe in partnerships to get there faster. There are smaller insurance companies that are battling. So, why must anyone set up a new license? If our passion is to develop people and develop the sales forces then we should help them grow their business in a partnership. Also smaller brokers, irrespective of colour. Asking the more experienced to mentor younger brokers. Many of them haven’t got succession plans and their children are moving overseas. They can mentor these younger brokers to later buy out the brokerages. We used to say during the 1980’s riots “Each one teach One”****
This is how we can, as you asked in the beginning, solve the massive unemployment and the inclusivity problem in this country.