SPEECH BY FORMER PRESIDENT F W DE KLERK

TO THE INTERNATIONAL ASSOCIATION OF SHOPPING CENTRES,  CAPE TOWN,  5 OCTOBER 2007

Engage Now Conference, Calgary, 30 September 2007

Athens, 24 October 2007

 

 

MANAGING CHANGE – THE VITAL DIFFERENCE

 

I should like to take this opportunity – not of welcoming you to South Africa and Cape Town – but of welcoming you home.

 

According to the latest research the ancestors of all of the people in the world outside of Africa left our continent around 100 000 years ago.  Analysis of DNA through the female and male lines indicates definitively that we all come originally from Africa.  The DNA record also accords with recent archeological finds along the Cape coast that have revealed some of the earliest traces of homo sapiens as well as some of the earliest examples of human art.

 

Just think about that.  Perhaps, 120 000 years ago our common ancestors sat around campfires here and watched the sun set  behind Table Mountain – just as it did last night and just as it will in another 120 000 years.  Remember that 120 000 years is no more than the winking of an eye in geological time.

 

Our species homo sapiens has done really well in the intervening millennia.

 

I am sure that even the most successful shopping centre owners would be happy to announce such results!

 

So what is the secret of our success?

 

After all, we are apparently not really so different from some other advanced species.  They say that the DNA of chimpanzees is about 96% the same as our own.  And yet chimpanzees, despite being one of the most intelligent species, are close to extinction.

 

What magic secret does the other 4% of our genetic make-up hold ?

 

According to Charles Darwin the success of species is not determined by their relative strength or intelligence, but by their ability to adapt to change.   It was in this area that our ancestors did really well.  Not only were they able to adapt to the rapidly changing environments created by a succession of ice ages, they were progressively able to change the environments in which they lived.   In effect, we humans became the only species with the ability to manage change.

 

When our environment became too cold we learned how to change it by using fire; by covering ourselves in animal skins and by building increasingly elaborate shelters.

When our environment failed to produce sufficient food, we learned how to develop our own food resources by cultivating crops and by domesticating animals.

When we were threatened by wild animals and by marauding enemies, we learned how to make weapons and to build palisades and walls for defence.

 

Unlike any other species our ancestors were able to imagine things that did not yet exist and to consciously change their environment accordingly.

 

That is the secret of our phenomenal success – and it has led us to the point now where for most of our lives we live entirely in environments that we ourselves have created – our homes, our cities, our offices – and our shopping centres.

 

Our ability to manage change continues to be the key to success today for individuals, for companies and for countries.  Success still belongs to those who are acutely aware of their environment;   who can imagine something new and better;  and who can transform themselves and their environment to meet new

challenges.

 

This may all be very interesting – you may say – but what has it got to do with shopping centres?  In fact, it has everything to do with shopping centres.

 

Ever since human beings began to live in permanent settlements six to eight thousand years ago they have set aside special areas where their citizens could gather to exchange products.  The market place has been a central facet of virtually all settled communities.  It has played a key role not only in the commercial and economic life of communities but also in their social and political interaction.

 

The Greek agora and the Roman forum were the business, social and political centres of their communities.  These centres also transcends borders and cultures.  Wherever people come together in permanent settlements, we find them – in the villages of medieval Europe, or the Andean towns of the Incas, the souks of the Middle East, or the ancient cities of India and China.   And everywhere in the world they are similar and immediately recognisable.  In all of them you would see farmers selling their vegetables, chickens and meat;  tradesmen displaying their manufactured products;  and money lenders plying their trade.

 

Of course, like everything else, markets have been involved in the never-ending process of change and development.   Open air trading locations gave way to stalls, and stalls to more permanent shops.  Then a thousand years ago in Isfahan some bright innovator thought of covering the street market – and the shopping mall was born.  By the 15th century the Grand Bazaar in Istanbul had 58 streets and 4000 shops under cover.

 

The Oxford Covered Market was established in 1774 and in 1818 the elegant Burlington Arcade was opened in London.  Ten years later the first arcade in the United States was built in Providence, Rhode Island.

 

However, it was after the advent of the family car in the mid- twentieth century that modern shopping centres really began to take off.   For people in cars it was just too difficult to get to shops on crowded main streets – so shopping moved to the suburbs where people lived and where there was plenty of parking.

 

The growth of the shopping centre phenomenon since then has been reflected in the growth of the membership of the International Association of Shopping Centres.  When it was established in 1957 it had only 36 members.  Now the IASC has some 70 000 members in 80 countries all around the world.

 

As with the original market places hundreds of years ago, our shopping centres still represent one of the main focal points of our communities.  Although they have grown immeasurably in size and sophistication, they are still the places where people come together to trade, to exchange ideas and to be entertained.

 

Your sector is continuing to change and evolve rapidly with all the changes brought by globalisation.    Malls are getting bigger.  The Golden Resources Mall in Peking is 600 000 square metres – almost five times as big as Canal Walk in Cape Town.  However, next year it will be dwarfed by the new Mall of Arabia in Dubai – which will cover 929 000 square metres – that is ten million square feet!

 

Like our ancestors, our survival will continue depend on our ability to manage and benefit from change.

 

However, change ain’t what it used to be:

 

During the past century – and particularly since World War II – there has been an exponential acceleration in the pace of change.  Our society probably has changed more during the past ten years than it did in the first ten thousand years of human development.

 

It is interesting to note that the flint hand axes that were made by our ancestors 1.5 million years ago were indistinguishable from the hand axes that they were making half a million years ago – for a million years there was no advance in our techonology.  Today it is impossible for any single individual to keep track of the technological progress that we make in just one year.  And any of these changes might affect our future as dramatically as the hand axe did one and a half million years ago.

 

Change is also unpredictable.  Some of the main developments that have fundamentally transformed the world were entirely unforeseen only fifteen years ago:  think of the internet and the world-wide web; the collapse of the Soviet Union and international communism and AIDS.

 

The change that we are experiencing is also fundamental.  It affects virtually every aspect of our lives.

 

Everywhere the forces of change are in full flood.  They are obliterating the familiar and comfortable landscapes in which we grew up.

 

18 years ago, when I became President, South Africa was confronted with the urgent need to change.

 

The environment in which we found ourselves was disastrous.  We were facing international isolation and a growing downward spiral of conflict and repression.  Our ability to trade and attract foreign investment was severely limited by sanctions – and as a result our economy was in deep trouble.

 

During the subsequent five years we succeeded in changing our environment and in creating new and more positive realities.

 

How did we do it?   I would like to share with you the following lessons which I believe are just as relevant to individuals and companies as they are to countries.

 

The first step is to accept the need for change. 

Resistance to change is deeply ingrained in us.  We fear the unknown and dread the prospect of moving into uncharted waters.   In our case, in South Africa, the whites and other minorities had well grounded reasons to fear change.  We were deeply concerned about:

 

Nevertheless, by the beginning of the ‘eighties it was becoming increasingly clear that we were on the wrong course.  [Expand]   We realised that we were being drawn inexorably into a downward spiral of conflict and isolation.  We spent a great deal of time coming to terms with the realities of our situation and wrestling with the need for fundamental change.

 

The main reason for our acceptance of change, however, was not the pressure that we were experiencing from the international community or rising discontent in South Africa.   We could have remained in power for many years to come.  We could have weathered sanctions and withdrawn into a grim fortress of national isolation.  After all, this is the kind of option that many other embattled states have chosen.

 

For me the key point was simply the realisation that the policies that we had adopted, and that I had supported as a young man, had led to a situation of manifest injustice.  It was this, in the final instance,  that persuaded me and my colleagues that we had to accept the risks of radical change.

 

Having accepted the need to change, the next challenge is to avoid the temptation of pretending to change.  Very often countries, companies and individuals who know they must change, pretend to change.  They think of brilliant new ways of doing the wrong thing better.  Smokers will tell themselves that if they cut down the number of cigarettes they smoke they will be addressing their problem.   Others who are overweight will fool themselves that by taking no sugar in their tea, they are really coming to grips with their problem.  The same thing happens on an international and national scale.  For example, when he launched his perestroika reforms, President Gorbachev continued to insist that there was basically nothing wrong with communism.  It just had to be reformed and implemented in a more open and democratic manner.  In the same way, countries and companies will, for sentimental reasons, cling to industries that are no longer relevant instead of breaking through into entirely new cutting edge technologies.

 

For years we white South Africans also fooled ourselves that we could ‘reform’ apartheid and thereby avoid the traumatic decisions and risks that real change always involves.  It was only when we accepted that we would have to take extremely uncomfortable decisions and risks that real change could begin.

 

Once you have accepted the need to change you must articulate a clear and achievable vision of where you want to go.

 

On 2 February 1990 I presented a new vision to the South African Parliament of a peaceful and democratic solution to our problems.  I set goals that included a new and fully democratic constitution; the removal of any form of discrimination and domination; equality before an independent judiciary; the protection of minorities as well as of individual rights; freedom of religion; and universal franchise.

 

By 1994 – to the astonishment of the world – we had turned our vision into reality.

 

A vision gives direction and purpose to our actions and provides a way of measuring our progress.  Without a vision, we have no idea of where we are going or of how far we have come.  And if we don’t know where we are going it doesn’t really matter how we get there!.

 

Change management  requires special  communication skills.

We live in a world of perceptions – and perceptions are created as much by how we communicate as by what we do.  For us it was very important to convince the media and the world of our vision.  It was also essential to encourage our own supporters and reassure them that we were on the right path.   Most people can deal with change and are even prepared to make essential sacrifices – but they cannot deal with uncertainty.

 

Timing is crucially important.

It is stupid to be vociferously right at the wrong time or to move so far ahead in the right direction that your followers can no longer hear or see you.  History, markets and events move at their own pace – sometimes agonisingly slowly, at other times with frightening speed.  A leader must watch the tides and currents and must position himself accordingly.

 

I was often criticised before I became President for not racing out ahead of the pack in the pursuit of reform.  Had I done so I would have alienated key players and important constituencies.  I would not have become leader of my Party 1989; I would not have been able to do the things that I did when I was President; and I certainly wouldn’t have been invited to speak to you today.

 

Strong leadership is essential

History awards no prizes to people who have the right answers.  It is often quite easy to see what needs to be done.  The art is in being able to do it successfully.  History recognises only those who have the ability to translate their vision of what is right into reality.

 

A leader must have a weather eye open for changes in political and economic tides and currents.   He must also be ready to ride the wave of history when it breaks.   After I became President my hand was greatly strengthened by the historic events that were occurring in Eastern Europe and the Soviet Union.  The collapse of international communism helped to allay fears of Soviet expansionism and of the influence of the South African Communist Party within the ANC Alliance.  The stage was ready for the speech that I made on 2 February 1990.

 

If you want to manage change you must be prepared to take calculated risks.

There were many points during the transformation process when we had to take calculated risks.  Among these were our decisions

 

We realised that these decisions would unleash a chain of events with far-reaching and unpredictable consequences.  At times it was rather like paddling a canoe into a long stretch of dangerous rapids.  You may start the process and determine the initial direction.  However, after that the canoe is seized by enormous and often uncontrollable forces.   All that you can do is to maintain your balance, avoid the rocks and steer as best you can – and right the canoe if it capsizes.   It is a time for cool heads and firm, decisive action.

 

Finally, one must accept that the process of change never ends.  There is no point at which you can say that you have ‘solved’ any problem in a rapidly changing environment.  As soon as you have achieved your objectives, you must begin to address the next challenges that change will inevitably throw down.

 

This is very much the case in South Africa now.  We have achieved most of the primary objectives that we set ourselves in 1990:

 

Nevertheless, we dare not rest on our laurels.  Our main challenges now will be to ensure that

 

Effective change management has worked for us.  It has brought us from the very negative environment of 1989 – from the brink of disaster – to the positive environment of 2007.  Change management has worked for mankind.  100 000 years ago we were comprised small bands eking out a miserable existence as hunter gatherers.  Today we bestride the world.  We have created civilisations and technologies beyond the dreams of our ancestors.

 

Our success as individuals, companies, countries and as a species will continue to be defined by

our ability to change,

our ability to imagine better worlds,  and

our ability to turn our vision into reality.

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