Depending on the view taken, this can provide both a challenge, as well as an opportunity to the large players, and when done correctly, provide a double whammy of benefits.
With the gazetting of the finalised B BBEE Sector Code for the Marketing, Advertising and Communication (MAC) industry recently, large media and marketing firms are faced with both transforming internally, as well as the challenge of partnering with small black-owned firms in a symbiotic way that grows the small business economy.
Enterprise and supplier development provisions in the Code require that 3 – 4% of net profit after tax be allocated to small business development. Added to this, the envisaged changes to the Preferential Procurement Policy Framework Act (PPPFA) will require a small business component of 30% in large government contracts. Sharing the pie with small business will become a non-negotiable.
For many large agencies, this may seem like bad news, or at least, an unwelcome challenge.
According to Bashir Khan, chief executive of enterprise and supplier development advisory and implementation specialists, The Business Lab; large enterprises can find partnerships with newer, smaller players to be something of a ‘grudge purchase’. They may feel that scarce time must be allocated and significant expense incurred in skilling up the smaller partner to meet the rigorous demands of the project at hand; there may be fears that an inexperienced small partner could fail to meet the standards required and so harm the large business’s professional reputation; and the large player is typically reluctant to split revenues.
Khan says: “For some large enterprises it’s something of a challenge to find an SME partner with compatible skills, systems, processes and competencies. While large enterprises run like a well-oiled machine in which every player has a clearly defined role, this is seldom the case with small business, and therein lies the ideal opportunity for the large corporate to meet their obligations towards the MAC Codes.”
As a small black-owned marketing, advertising and communications agency, Media Revolution believes there is another side to this coin. Small business can bring valuable new dimensions, insights and agility to the large business-small business partnership. Small businesses with sound track record of hands-on client engagement need not be novices in the game, and can often add versatility and flexibility to the team dynamic.
Instead of being a ‘grudge move’, partnering with a smaller player can bring the entrepreneurial ‘lean and hungry’ dimension back into marketing operations run at scale. Media Revolution believes the new Codes present an excellent opportunity to inject new energy back into the MAC picture; and that the large companies who move fast to cherry pick the most innovative and agile small business partners stand to benefit enormously.
Our view is echoed by Khan, who notes: “The MAC Codes impress on the industry specific milestone for transformation, and given the lack of transformation of the MAC industry, there is no better time for large industry players to adopt the Codes and provide opportunities for small businesses to participate in the mainstream economy."