knowledge funnel view and introspection on local...

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KNOWLEDGE FUNNEL VIEW AND INTROSPECTION ON LOCAL GOVERNMENT ENVIRONMENT

PROJECTS AND CHALLENGES– EXPLORING THE KEY CONSTRAINTS

A Research Report

presented to

The Graduate School of Business

University of Cape Town

In partial fulfillment of the requirements of the

Masters of Business Administration Degree

by

Bhekuyise Henry Makedama

December 2013

Supervised by: Dr. Steven Nabieu Rogers

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PROJECTS - EXPLORING KEY CHALLENGES AND CONSTRAINTS

MBA Modular 2012-13 research project mkdbhe001 Page ii

Plagiarism Declaration

1. I know that plagiarism is wrong. Plagiarism is to use another’s work and pretend it is

one’s own.

2. I have used convention for citation and referencing. Each contribution to, and

quotation in this essay/report/project from the work(s) of other people has been

attributed, and has been cited and referenced.

3. This essay/report/project is my own work.

4. I have not allowed, and will not allow, anyone to copy my/our work with the intention

of passing it off as his or her own work.

5. I acknowledge that copying someone else’s assignment or essay, or part of it, is

wrong, and declare this is my own work.

_____________________________________

(Signed) Bheki Makedama

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MBA Modular 2012-13 research project mkdbhe001 Page iii

Acknowledgements

I hereby wish to acknowledge people who have been helpful, supportive and understanding

during the difficult moments of my MBA studies, especially in this research project. Firstly, I

would like to thank my wife Nobulumko, who has been motivational and patient over my

dedication to my studies. Secondly, the Eastern Cape Provincial Department of Human

Settlement and staff: the Chief Directors, Directors, Deputy and assistant Directors in the

Programme and Project Management, and Research and Policy Directorates for their valuable

support during the data collection process and data analysis.

A word of appreciation further goes to my supervisor for his guidance and support throughout

the research, not forgetting the GSB coordinators for their guidance and support as well.

Finally, I would like to give my thanks to God, who has been my source of inspiration

through his Word, and for answering my prayers throughout this journey. To HIM be the

glory, for all the great things he has done.

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MBA Modular 2012-13 research project mkdbhe001 Page iv

Abstract

This research project explores how design thinking theory could be used to improve

innovation in human settlements projects with special attention to constraints posed by

legislation such as the Municipal Finance Management Act (MFMA), supply chain

management regulations; housing policy; engineering project management practice in the

design and construction of infrastructure and their associated design standards.

The problem with government is that systems are standardised to optimise time for

implementation of projects within a short period of time. This type of application makes use

of algorithms which do not allow for innovation but continue to use the same conventional

thinking mechanism that was used previously, in resolving the problem. The research found

that financial control systems such as regulations, policies and legislation tend to put too

much effort into mitigating financial risk at the expense of innovation. This research project

seeks to explore how design thinking theory could be used to improve innovation in human

settlement projects with special attention to constraints posed by legislation such as the

Municipal Finance Management Act (MFMA), supply chain management regulations,

housing policy; engineering project management practice in the design and construction of

infrastructure, and their associated design standards.

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MBA Modular 2012-13 research project mkdbhe001 Page v

Table of Contents

Chapter 1: Introduction ................................................................................................................................ 1

1.1 Background ............................................................................................................................................. 1

1.2 Research Problem Statement.................................................................................................................. 3

1.3 Challenges and Constraints in Housing Development in RSA ............................................................... 4

1.4 Research Question .................................................................................................................................. 5

1.5 Research Objectives ................................................................................................................................ 5

1.6 Hypothesis ............................................................................................................................................... 6

1.7 Definition of Concepts ............................................................................................................................ 6

1.8 Research Assumptions ............................................................................................................................ 7

Chapter 2: Literature Review ........................................................................................................................ 8

2.1 Introduction ............................................................................................................................................ 8

2.2 Knowledge Funnel View Theory ............................................................................................................ 8

2.3 Design Thinking and Design of Business .............................................................................................. 14

2.4 The Stance ............................................................................................................................................. 16

2.5 Tools ...................................................................................................................................................... 17

2.5.1 Observation ........................................................................................................................................ 18

2.5.2 Imagination ........................................................................................................................................ 18

2.5.3 Configuration ..................................................................................................................................... 19

2.6 Experiences ........................................................................................................................................... 19

2.7 Validity versus Reliability ..................................................................................................................... 20

2.8 Overcoming Cultural Barriers ............................................................................................................. 22

2.9 Integrative Thinking ............................................................................................................................. 23

2.10 Critics on the Theory on Knowledge Funnel ...................................................................................... 23

2.11 Conclusion ........................................................................................................................................... 24

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Chapter 3: Research Methodology ............................................................................................................... 26

3.1 Theoretical Framework ........................................................................................................................ 26

3.2 Research Approach ............................................................................................................................... 26

3.3 Sampling Technique ............................................................................................................................. 27

3.4 Data Collection...................................................................................................................................... 28

3.5 Data Analysis ........................................................................................................................................ 28

3.6 Limitations ............................................................................................................................................ 29

3.7 Ethical Considerations .......................................................................................................................... 29

Chapter 4: Research Findings ...................................................................................................................... 31

4.1 Research Results ................................................................................................................................... 31

4.1.1 Introduction ....................................................................................................................................... 31

4.1.2 Constraints with National Housing Code Policy ............................................................................... 32

4.1.3 Constraints posed by The National Supply Chain Management Policy ........................................... 34

4.1.4 Constraints posed by Project Management Cycle ............................................................................. 35

4.1.5 Strategically well positioned Institutional Arrangement ................................................................... 37

4.1.6 Alternative Technology in Housing Development ............................................................................ 39

4.1.7 Constraints posed by segregated Town Planning .............................................................................. 40

4.1.8 Challenges with the National Home Builders Registration Council (NHBRC) ................................ 41

4.1.9 Environmental Impact Assessment: Exploring Key Constraints ...................................................... 43

4.1.10 Challenges on Systems and Business Process .................................................................................. 46

4.1.11 Challenges with Stakeholders .......................................................................................................... 47

Chapter 5: Analysis of the Findings ............................................................................................................ 49

5.1 A Need for Radical Policy Review (National Housing Code) ............................................................... 49

5.2 A Need for institutional Capacity Building .......................................................................................... 50

5.3 A Need for a radical Application of innovative Technology ................................................................ 51

5.4 NHBRC Strategies in Recognition of Innovation ................................................................................. 51

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5.5 Need to review professional Services for Planning & environmental Requirements .......................... 52

5.6 A Need to improve Business Systems and SCM Process ........................................................................ 53

Chapter 6: Recommendations ...................................................................................................................... 54

Chapter 7: Conclusion ................................................................................................................................. 56

References ..................................................................................................................................................... 58

Index ............................................................................................................................................................. 60

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Chapter 1: Introduction

1.1 Background

Currently, the world system (business, government and society) faces a future of growing

inequality, joblessness, concerns about environmental sustainability and monetary stability.

These constraints offer numerous opportunities for regeneration through innovation and

entrepreneurship (or entrepreneurship), and managers and leaders are called upon more often

to lead with innovation and entrepreneurship.

Academics that focus on innovation and entrepreneurship have a wealth of theory and

information that is useful for business development and growth in the private sector, although

some of the theories such as the one used in this research have not been widely explored due

to their recent discovery. Because of the systemic problems the world system faces, the

research spaces of innovation and entrepreneurship have seen numerous new methods,

frameworks and heuristics put forward. Among the few perspectives put forward are

integrative thinking business design, design thinking, systems thinking and disclosing new

worlds, and how these theories can be applied in government projects were not much

explored.

This necessitated the research project to explore how design thinking theory could be used

to improve innovation in human settlement projects with special attention to constraints

posed by legislation such as the Municipal Finance Management Act (MFMA), supply chain

management regulations, housing policy; engineering project management practice in the

design and construction of infrastructure, and their associated design standards.

In South Africa, the 1996 Constitution is the supreme law of the state which mandates

three spheres of government to provide services to society, business and government in order

to improve the quality of life in a sustainable manner. The three spheres of government

consisting of national government with a responsibility to enact laws, formulate policies and

administers planning and fiscal allocation of funds; provincial government which administers

and regulates operation of service delivery within the powers and functions devolved by the

constitution and ensures that the local sphere is accountable with regard to funds allocated to

them on a regular prescribed period, on an annual basis; and finally, the local government

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sphere which is mandated to carry out delivery services and account on funds allocated to it

on a monthly, quarterly and annual basis. These three spheres of government are defined by

the Constitution as independent or autonomous, interrelated and interdependent. This means

the notion of co-operative governance between spheres is not an option but a mandate.

The sphere of government operates within prescribed regulatory frameworks with the

constitution being supreme law, government legislation and national policies. The main

purpose of legislation is to ensure effective and efficient use of limited financial resources by

all spheres of government. Key legislation affecting the nature of operations and project

management, inter alia, is the new Municipal Finance Management Act (MFMA 56 of 2003),

The Supply Chain Management Regulations (SCM). Public Finance Management Act

(PFMA 1 of 1999), Intergovernmental Fiscal Relations Act (IFRA), the Construction

Industry Board Act (CIDBA), Engineering Council Act (ECA); and the National

Environmental Management Act no. 107 of 1998.

The Municipal Finance Management Act 56 of 2003 states the following objectives: “to

secure sound and sustainable management of the fiscal and financial affairs of municipalities

and municipal entities by establishing norms and standards and other requirements to ensure

the transparency, accountability and appropriate lines of responsibility in the fiscal and

financial affairs of municipalities and municipal entities; the management of their revenues,

expenditures, assets and liabilities and the handling of their financial dealings; budgetary

and financial planning processes and the co-ordination of those processes with the processes

of organs of state in other spheres of government; borrowing; the handling of financial

problems in municipalities; supply chain management: and other financial matters.” Coupled

with this legislation are the guidelines in the procurement of goods and services called the

Supply Chain Management Policy and Regulation. Against this background the Act was

established in order to minimise the possibility of corrupt activities in local government and

to ensure efficient utility of financial resources.

The challenge in realising these noble objectives from both governance and service

delivery perspectives is the lack of timely delivery, and the lack of space for innovation in

government projects through watertight compliance with legislation.

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Housing development contributes a larger portion of development in local government.

Housing policy also has its own challenges in introducing a series of the red-tape processes

prior to the implementation of projects, and associated norms and standards.

1.2 Research Problem Statement

The problem with government is that systems are standardised to optimise time for the

implementation of projects within a short period of time. This type of application makes use

of algorithms which do not allow for innovation but continue to use the same mechanism

used before in resolving the problem. The challenge with this mode of thinking is that people

continue to apply historical innovations without giving space for creativity and development

of new methods of doing business. The challenge in local government is that of making an

effort to save government monies through effective and efficient measures of utilising funds.

The financial control systems such as regulations, policies and legislation tend to put too

much effort into mitigating financial risk at the expense of innovation. As a result, the

development of new solutions to infrastructure development is compromised.

The government is concerned about the unprecedented increase in corrupt activities and as

such, over regulation through the Municipal Finance Management Act of 2003; the supply

chain management regulations and associated project management principles do not provide

space for government officials to think like designers. Yet the world is faced with problems

of underdevelopment, poverty, climate change, unemployment, and a rapid changing

environment in which the private sector is able to respond more readily, whereas the

government sector is slow to adapt to these changes.

The turnaround time in the delivery of the long-awaited promise of houses to communities

gives rise to social upheavals. In some cases people have been waiting for delivery of houses

for a period of more than 10 years, and in some cases delivered services are of poor quality.

This is attributed in most cases to the inability to develop innovative solutions to the problem

as a result of systems and policies that were developed to assist government in one aspect,

while in another aspect hamper service delivery. Design thinking emphasizes the need for

organisations and people involved in business to think as designers.

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1.3 Challenges and Constraints in Housing Development in RSA

Since 1994, the South African government has had a programme in place to develop

housing for human settlements in order to redress the imbalances of the past, and improve the

quality of life of the poor and previously disadvantaged black South Africans. This

programme requires the services of multi-disciplinary professions, ranging from lawyers,

social scientists, development planners, land surveyors, engineers, architects, quantity

surveyors, contractors, suppliers, politicians and government officials. By implication, the

programme is implemented in phases by different spheres of government in different

government departments through various professionals.

Experience has shown that the turnaround time for the delivery of final product, e.g.,

serviced houses with title of ownership, takes a longer period, in most cases five to ten years.

The second challenge is that delivered houses are not of a good quality standard and as such

government embarks on a programme of rectification which requires demolishing and

rebuilding poorly-constructed houses. Another challenge is the fact that bulk services either

do not exist or there is insufficient capacity to allow the development of houses due to

segregated planning and delays in the delivery of services, thus defeating the purpose.

A significant constraint is that different government spheres and departments have

different roles and functions when dealing with the same project. Even worse is the process

of environmental impact assessment, whose turnaround time is a minimum of nine months.

This is a highly regulated environment which further requires compliance including the

aspect of efficient and effective utilisation of financial resources. The government has been

promising the delivery of houses for 20 years since democracy, and people living in poor

conditions are losing patience, although much has been achieved in this regard.

Townships already developed are highly standardised in order to maximise volumes and

realise cost effectiveness. The designs of these townships are highly standardised and lack

creativity in terms of the structures, roadways and their networks in general, and much of this

can be blamed on project management principles embraced in the municipal finance

management legislation. Driving through these townships and suburban developments

presents a direct contrast in relation to the aesthetic landscape of both. This challenge is a

result of thinking by people involved in the development. What has been seen as a solution

has now become a wicked problem that requires a paradigm shift in design of both the

process and the product. Design thinking and integrated thinking have much to offer to

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provide innovative solutions to the wicked problem: sub-standard housing development, and

an invention of conventional thinking.

1.4 Research Question

How can government improve systems and policy provisions to allow for innovation and

keep on developing innovative ways of housing development and its associated project

management? This research seeks to answer two broad questions: Firstly, how the design

thinking theory can be embraced and applied in local government environment, in this case

human settlements being the area of focus; and how conventional thinking can be combined

with the thinking from the mystery in resolving service delivery challenges.

The research will explore alternative approaches in the development and implementation

of housing projects in local government. It will further explore how government can create

space for innovation whilst maintaining control against irregular and fruitless expenditures as

contemplated in the Municipal Finance Management Act 56 of 2003, and Supply Chain

Management Regulations. What can influence the review of the legislation to allow a space

for innovation and associated expenditures with audit non-compliance.

The research will explore how government can promote regular review of operating

systems and policies in human settlement not to continue using outdated systems, but rather

become pragmatic in providing world-class solutions to local government problems. The

notion of design thinking and how government employees can think like designers in

providing service delivery needs to be explored.

1.5 Research Objectives

The main focus of this research is on innovation and entrepreneurship, and how aspects of

the theory can be used in government environment projects to advance development and

improve service delivery. The research explores how human settlement in its constrained and

highly regulated environment can apply principles and theory of innovation using the

knowledge funnel view in the design and implementation of projects for service delivery. The

use of innovation and entrepreneurship theory of integrative thinking for innovation in human

settlement projects was explored.

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Special attention is paid to design thinking in housing development and its possible

benefits. Design thinking need not be a specialist’s domain, thus enabling every person to use

intuition in contributing to the growth in innovation.

The research further identifies areas in which legislation and policies that seek to control

effective and efficient use of resources can be relaxed to promote innovation that would

require thinking in the mystery and heuristics, instead of depending on existing algorithms

only.

The research further intends exploring how the knowledge funnel view can stimulate new

ways of doing government business in an effective and efficient manner whilst managing the

constraints imposed by a highly regulated local government environment.

1.6 Hypothesis

A conventional, also known as an algorithmic, thinking syndrome dominates the

government sector and this stifles the introduction of new ways of doing business, leading to

possible financial losses and the continued use of inefficient and outdated design systems. By

following project management principles used in government, there is space for innovative

solutions.

1.7 Definition of Concepts

Rogers (1998) defines concept as follows: “Innovation is the process of introducing new

ideas to the firm which result in increased firm performance. Various measures of innovative

activity are discussed and evaluated. All the individual measures discussed can only act as

partial indicators of the extent of innovation.”

Entrepreneurship by definition is, “the capacity and willingness to develop, organize and

manage a business venture along with any of its risks in order to make a profit” (March,

1991). “Entrepreneurial spirit is characterized by innovation and risk-taking, and is an

essential part of a nation's ability to succeed in an ever changing and increasingly competitive

global marketplace.” (Businessdictionary.com)

Design thinking is defined as a way a designer would think, or a discipline that uses the

designer’s sensibility and methods to match people’s needs with what is technologically

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feasible and what a viable business can convert into a customer value and market opportunity

(Martin, 2009). Martin (2009) argues that “Design thinkers believe that it is not only field

specialists that can bring solutions to problems; but rather people themselves can provide

solutions using their own intuition to find solutions.”

The personal knowledge system of a design thinker is distinctive along all three

dimensions: stance tools and experiences (Martin, 2009). This is said to generate a self-

reinforcing spiral that values validity and exploration (Martin, 2009). However, design

thinkers seek to balance validity and reliability and will trade off against reliability in order to

reach a valid answer (Martin, 2009). “They advance knowledge to the next stage in the

funnel-core drive which give them source of pride and happiness and appreciates that validity

is trickier and more uncertain than reliability” (Martin, 2009).

1.8 Research Assumptions

The research assumes that information obtained from the Provincial Department of Human

Settlements in the Eastern Cape is informed by the National Department of Human

Settlements as such, and as a reflection of the state of affairs regarding the research problem

which is be applied across the provinces. It further assumes that the culture that applies in the

Human Settlement Department is a reflection of the government’s way of doing business, and

conclusions and recommendations arrived at, can be applied across government departments

and the three spheres. The researcher is adamant that government does not operate like a

business. However, this assumption is tested and proven through this research with

recommendations regarding a shift from this culture. The research assumes that respondents

from the research are authentic in their deliberations and what they share would not differ if

other officials in the same department were used for the research.

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Chapter 2: Literature Review

2.1 Introduction

Martin (2007) argues that design thinking in business is a competitive advantage for future

business as it enables managers to think abductively, i.e., beyond conventional thinking

which is characterised by deductive and inductive thinking. Deductive and inductive thinking

are thinking based on the disclosive space and assimilating everything we see with what we

know from our previous past mystery (Martin, 2009). Martin (2009) asserts that, “In

deductive thinking we open up our minds into the space beyond the known, and try to deduce

a solution to a problem with the thinking that is different from the way we thought when we

created the problem.” This theory is useful in business or nonprofit organisations when we

want the business to grow in value creation and win competitive advantage. The theory talks

about the knowledge funnel that the world uses in discovering solutions which have three

categories, namely algorithm, heuristic, and mystery (Martin, 2009).

2.2 Knowledge Funnel View Theory

Knowledge funnel (Figure 1) is a term used to define a process model in which thoughts

are translated from mystery down into heuristic and finally into algorithm. In business

innovation, Martin (2009) further argues that there are two schools of thought in business

value creation. One school of thought put forward by theorists asserts that the path to value

creation lies in driving out the old fashion practice of gut feelings and instincts, and replacing

it with rigorous, quantitative analysis. The basis of this model is analytical thinking which

harnesses two familiar forms of logic, namely deductive reasoning and inductive reasoning,

to declare truths and certainties about the world (Martin, 2009).

Martin (2009) defines inductive reasoning as “the process of making a general assumption

based upon observed cases, and the goal of the model is mastery through rigorous,

continuously repeated analytical processes”. “Judgment, biasness, and variation are the

enemies” (Martin, p38, 2010). “If they are vanquished, the theory goes great decisions will be

made and great value will be created” (Martin, p38, 2010). Leavy (2010), in support of

Martin’s theory, argues that most managers make decisions using predominantly two modes

of reasoning – referred to above. “Deductive reasoning uses already accepted premises to

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arrive at, must be guides to future action, while induction tries to arrive at guides to action

through existing empirical evidences” (Leavy, 2010). “Both use existing or historical data to

draw conclusion as a guide to future action” (Leavy, 2010).

The opposing school of thought by Roger Martin (2009) is in many ways a reaction to the

rise of analytical management, is centered on the primacy of creativity and innovation.

Martin (2009) further argues that “no good product is manufactured from analytical

management, and that great products spring from the heart and soul of a great designer,

unencumbered by committees, processes, or analyses.” At the heart of this school is intuitive

thinking, the art of knowing without reasoning. This is the world of originality and invention;

neither analysis nor intuition alone is enough. Martin (2009) asserts that, “In the future, the

most successful businesses will balance analytical mastery and intuitive originality in a

dynamic interplay…” that he calls “design thinking”. “Design thinking enables leaders to

innovate along the path of the knowledge funnel, and the firms that master it can gain long-

term business advantage” (Martin, 2007). Design thinking organisations stand apart in their

desire to engage in the exercise of continuously redesigning their business (Martin, 2009).

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Figure 1

They do so with an eye to creating advances in innovation and efficiency, the combination

that produces the most powerful competitive edge (Martin, 2009). This is not to suggest that

only design-thinking firms pursue innovation (Martin, 2009). As evidence or illustration of

these conclusions or stances, the author argues that McDonald, Procter and Gamble are

typical examples of companies that have moved from intuitive thinking to analytical thinking,

reduced into algorithm.

The typical case study used in Martin (2009) research argument is McDonald’s formative

years of business. The business started as a small food restaurant that offered a barbeque and

a burger drive-in in Los Angeles in the early 1940s. The restaurant attracted a huge number

of customers consisting of families which offered moms a break from the kitchen. But

because of growing demand for McDonald’s food from other customers, the number of

customers was gradually declining. The case study argues that many of the Customers

complained that food was getting cold from kitchen to the car. McDonald’s resolved to

reduce the menu into 25 standardised items. The customers were now to order their food and

Figure 1: Knowledge Funnel sourced from Martin 2009

http://www.google.co.za/imgres?imgurl=http://leadershipnow.com/leadingblog/images/knowledge_funnel.jpg&imgrefurl=http://www.leadershipnow.com/leadingblog/problem_solving/&h=286&w=288&sz=34&tbnid=feO4BW1xev7TaM:&tbnh=94&tbnw=95&zoom=1&usg=__GRMkff5Z3hxBNXi1CuuPMZlBebU=&docid=A91KYsgt9rN2IM&sa=X&ei=TRMFUtbJIobXPcWfgNAM&sqi=2&ved=0CFAQ9QEwCw&dur=3221

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pick-up from the window. The service was turned into quick service restaurant or speedy

service system. The brothers opened four additional outlets, but Ray Croc who was the

supplier of milkshakes bought over McDonald’s and multiplied the outlets across the cities.

He was determined in continuously improving and standardizing the mass- production they

had developed (Martin, p.3, 2009). Ray Kroc did not leave anything to chance, he was

determined to hone and refine the operations until everything was standardised from how

long the food must be cooked; how to hire staff; how to manage a restaurant; how to choose

locations; how to franchise; the temperature at which a burger must be cooked and the time

taken for each burger; to the size for each burger (Martin, p.3, 2009).

McDonald’s continued to advance and codify its operations until the business grew globally

within a period of 10 years. This process of innovation has been termed as a process of

knowledge funnel (Martin, p.4, 2009). The business by two McDonald’s brothers started

from an abductive thinking i.e. thinking without reasoning (thinking in mystery); Then to a

heuristic when the restaurant was opened and finally to an algorithm when Ray Kroc honed

and refined its operation into standardised process and mechanism.

Regarding exploration of new knowledge, the design school theorists argue that a third

form of logic is required, namely abductive reasoning or logic of what might be (Leavy,

2010). Abductive reasoning is a concept used by Charles Sanders Peirce, who argues that no

new idea could be proved deductively or inductively using past data (Leavy, 2010). “New

ideas arose when thinkers observed data that did not fit with the existing models, and had to

try to make sense of them with an inference to the best explanation” (Leavy, 2010). Leavy

(2010) argues that “the power of abductive reasoning disciplined by demand for

technological feasibility and commercial viability is illustrated in the development of

Blackberry”. He further argues that thinking abductively to probe mysteries is part of the

culture at Research in Motion (RIM). Referring to the development of Blackberry, he states

that the company took an initial mystery and converted it to a heuristic – the first primitive

Blackberry, and later drove the heuristic to an algorithm, achieving a massive scale and

efficiency.

The designer of Blackberry at RIM, Mike Lazardis, recognised the need to keep on re-

examining the original mystery, as well as seeking out new ones. Lazardis (cited by Leavy,

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2010) in his interview argues that “in business, no matter how good the process is, you

always have to go back and ask yourself questions whether there is something profoundly

incorrect with the manner in which you see the market and whether you are dealing with

inadequate evidences (Leavy, P10, 2010). Leavy (2010) argues that Motorola is a typical

example of reliability thinking. Motorola lost its approach because it was best at what it was

already doing, and failed to embrace the future, and stopped thinking like a designer (Leavy,

2010).

Although Martin makes a logical argument on design thinking, he has avoided using

analytical thinking to prove his arguments by basing his stance from mathematical facts,

usually an approach used by researchers and academics. He has direct intentions in not

following that style of argument since it is based on the first school of thought in which he is

trying to discourage making it the only basis of proving facts. The tendency in organisations

is that they rely on existing algorithms in solving problems and forget the fact that before

their existence, intuitive and creative thinking brought these systems into existence. The

literature re-affirms that once these algorithms are formulated, naturally, our minds will

assimilate new information with familiar objects and try to resolve problems within this

space. Business organisations that are overly reliant to analytical approaches are deprived of

the benefits of intuitive thinking which can enable growth in business.

Government has difficulties in creating space for thinking and creativity due to time

constraints and institutional arrangements for the support staff. Government, in order to be

efficient and effective, ought to operate like a business. Principles promoted in business such

as corporate governance, value for money and cost effectiveness also apply in government

space hence the interest to explore the use of this concept of design thinking in government.

The first stage of a knowledge funnel is the exploration of the mystery, which takes an

infinite variety of forms (Martin, 2009). Martin (2009) argues that at this stage the mind

delves in the field of enquiry and works the mystery down to a manageable size. There is no

immediate answer to this stage of thinking. However, the author argues that even the most

baffling mysteries, eventually crumble under the force of human intelligence (Martin, 2009).

The next stage of the funnel is a heuristic, a rule of thumb that helps narrow the field of

enquiry and works the mystery down into manageable size (Martin, 2009). Martin (2009)

argues that as an organisation puts its heuristics into operation, studies it more, and thinks

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about it intensely, it can convert from a general rule of thumb to a fixed formula, the

logarithm, which is the last of three stages in the knowledge funnel.

The heuristics are further defined as open-ended prompts to think or act in a particular

way. However, they offer no guarantee that using them produces certain results (Martin,

2009). He argues that they contain vague promise that, all things being equal, using heuristic

in the context it is meant for many or on average, will be better for you than not using it.

Algorithms are certified production processes, and guarantees that in the absence of

intervention, following a sequence of steps they embody will produce a particular result

(Martin, 2009).

Martin further argues that they give performance guarantees that come along with using

them. For housing development, government relies mostly on algorithm. However,

technology innovation is borrowed from business as a ready to apply theory. There are few

instances where government employees invent something to improve service delivery, and

this is the same, even in policy and systems development which are outsourced to

consultants. This assertion will be confirmed by the research. Therefore, a case in point is

whether indeed government can have a role in innovation by devising and spending time and

money in research and development.

For housing development, the Human Settlements Department has a clearly-defined

process of beneficiary administration informed by housing policy; no deviation whatsoever is

allowed outside the policy. The review of this process does not change frequently, even

during the period in which government reviews the National Housing Code policy, policy

review rarely occurs. Although much has been achieved in terms of approval of beneficiaries

with limited risk, this is a typical example of the challenges posed by algorithm. It is evident

that once Government establishes systems, they become content and continue to exhaust the

existing software with no continuous review of the systems and processes. The author argues

that creativity and intuition is overtaken by analytical thinking. The absence of new

developments in an organisation is clear proof that such companies get stuck with past

achievements for a while. One can argue that intuitive thinking has been part of organisations

and it is not in any way different from what organisations are doing at present, and that

analytical thinking and its consequent algorithms will always be dominant in organisations to

maintain efficiency and effective utilisation of resources.

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Theory in use of intuition and creative thinking, although important, tends to incur huge

costs. In terms of time spent on unstructured thinking with no immediate results by

organisations it is therefore an expensive exercise; a balance between the three modes of

thinking is required and a bias towards analytical thinking is not an option but essential for a

sustainable organisation.

2.3 Design Thinking and Design of Business

A fine balance between exploration and exploitation in these stages of the knowledge

funnel is required, according to James March (cited by Martin, 2009), who argues “that

organization may engage primarily in exploration in search of new knowledge i.e. seeking

movement across the knowledge stages and or exploitation meaning the maximization of

payoff from existing knowledge through refinement within a knowledge stage.” It is argued

that both activities create enormous value to the success of business. However, it is difficult

to apply them simultaneously; hence organisations choose to focus on either exploration or

exploitation which is detrimental to the success of business (Martin, 2009). It is argued that

“an organization which dedicates itself to exploration does expire over a short period of time

since it does not generate returns to fund itself” (Martin p.19, 2009).

It is evident from this theory that organisations which spend time on exploitation generate

a lot of value. However, these companies may be superseded by their rivals who will explore

advances on the knowledge funnel and improve from existing mystery, heuristics and

algorithm of a particular product in a competitive environment. Exploitation is characterised

by the administration of business rather than business inventions, and these companies tend to

hone and refine within the current knowledge stage (Martin, 2009). Government, although a

non-profit organisation, is a typical example of an organisation that capitalises on honing and

refining within the knowledge stage of exploitation. The notion of innovation is non-existent

and sometimes acknowledged but there is no funding for such initiatives. The arguments in

this theory are substantiated by a study on McDonald’s and how the company has evolved

from intuitive thinking to heuristic and down to algorithm which started as drive in heuristic

to quick-service restaurant algorithms.

Martin (2009) asserts that: “Design thinking business seeks to balance between

exploration and exploitation by continuously looking back at the knowledge funnel to the

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next salient mystery and driving across the knowledge funnel, in a cycling process”. It is

argued that most companies choose either exploration or exploitation and because of growth

achieved, they become more comfortable with business administration (Martin, 2009). These

companies train their managers to think analytically and tend to predict the future through

past events and fail to think abductively.

In my opinion the author is making a sensible argument because this is how we have been

taught in business school such as the case in financial algorithms used to analyse a business

for investor confidence, and the analysis on past performances is usually the betas of similar

business in the previous five years. Business administration is dominant in most businesses,

especially those who produce a unique product and therefore has less or no competition.

Martin presents his theory of argument followed by typical examples of how some companies

have made successful advances in business. However, he is not explicit in terms of this

balance; how far the business should spend on exploration versus exploitation. This part

appears to be the discretion of each organisation. Once again the argument that analytical

thinking cannot discover or invent new thinking cannot be without a challenge. A study is yet

to be conducted to contrast this argument but not negating the elements of truth in intuitive

thinking which contributes enormously to business inventions. A probable argument could be

that businesses relying on analytical thinking may have used intuitive minds without being

conscious about it in their business advances.

The possibility is that there is a relationship between thinking modes: the ability to think

analytically is closely related to one’s intellectual quotient and could be closely related to

one’s intuitive mind. Therefore, the theme on design thinking, although it has the element of

truth, is not an absolute truth. Science has invented a number of solutions to earth’s

challenges like in the profession of medicine, and analytical thinking has been widely used to

find new solutions to problems hence the theory on integrative thinking by the same author

holds the facts. A South African company, Union Swiss, manufactures bio oil and distributes

it internationally, is aware of this theory, and has a dedicated office for thinking. They do not

have access to telephone lines, and distractions are limited because they commit their time to

thinking innovatively. The directors of the company were trained as chartered accountants,

undoubtedly analytical in their mindset of training. However, surprisingly they recognise the

need to think intuitively and emphasise the importance of this thinking mode in their

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seminars and presentations to MBA students, without following a structured and learnt

processes presented in the theory of knowledge funnel.

The design thinker’s personal knowledge system is distinctive along all three dimensions:

stances, tools and experiences (Martin, 2009). Martin (2009) explains that “this is said to

generate a self-reinforcing spiral that values validity and exploration.”

2.4 The Stance

According to Martin (2009), “A stance is a knowledge domain in which you define how

you see the world around you and how you see yourself in that world”. He explains further

that a design thinker sees the world as a place that welcomes new ideas, rather than a hostile

environment that pushes change. “Design thinkers have a desire to take the complex world

and make sense of it on a human scale meaning which they want their ideas to make a

difference in the world. Their stance optimistically assumes that the world is changing and

they can bring about changes” (Martin, 2009). This is the thrust behind innovation for those

designers whose stance is open-minded and optimistic.

Conversely, others have a stance that the world is unchanging and view themselves as too

small in a giant world (Martin, 2009). This also affects the ability of this mindset to be

innovative and the ability to deal with complexity.

The author argues that the design thinker acknowledges that the world substantially favors

reliability over validity, consistency over innovation (Martin, 2009). They believe that

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refining and honing knowledge within the confines of the current stage in knowledge funnel

is what the world most readily permits and consistently rewards, and exploitation is essential

to a well-performing enterprise (Martin, 2009). In government we unconsciously embrace the

culture of being biased toward the principle of reliability in our operations more than validity.

As a result government often finds itself using outdated systems and methods in business

operations, stifling innovation in the process. Although government wants to embrace notions

of innovation, the practice and culture are reluctant to accept things that are new. Officials

exploit existing systems until consultants have to advise on the use of new technology; and

this is common in the IT Department, Human Resources and the Supply Chain Management

Department. Another factor that contributes to this is the effort necessary to reduce costs by

minimising regular systemic changes. This is in line with Martin’s argument that a designer

thinker’s stance acknowledges that they need not demand validity at all costs. The design

thinker has a stance that is looking for the unknown and embracing the possibility of surprise,

and is comfortable with delving into complexity while not knowing what is on the other side

of the coin (Martin, 2009).

However, design thinkers seek to balance validity and reliability and will trade off against

reliability in order to reach a valid answer (Martin, 2009). “They advance knowledge to the

next stage in the funnel-core drive which gives them source of pride and happiness and

appreciates that validity is trickier and more uncertain than reliability” (Martin, 2009). The

author argues that the design thinker understands that both reliability and validity are

necessary for business to have a sustainable competitive advantage (Martin, 2009). Trial and

error and iterations are what characterise problem solving. For corporate executives, their

initial step to acquire a design thinker’s stance is being mindful of their own stance. “He

challenges us to think about the decision one makes and explicitly ask yourself questions

about assumptions and beliefs behind them” (Martin, 2009). He further argues that one needs

to compare one’s stance with the design thinker’s embrace of complexity and willingness to

be surprised (Martin, 2009).

2.5 Tools

(Martin, 2009) contends that, “Tools are another step in the design thinker’s personal

knowledge system which uses observation, imagination and configuration.”. He argues that

“tools are used to organize your thinking and to understand your world”. The tools vary from

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analytical systems to loose rules of thumb that can be learnt and applied to solve different

kinds of problems (Martin, 2009). For housing development tools such as design of

engineering services software can be used by an engineering technician or the engineer to

design services and such skills in using the software can be honed until one becomes an

expert is be able to derive sensitivities in determining the error in designs at a quick glance.

(Martin, 2009) argues that “theories, processes and rules of thumb make it possible to

recognize and categorize problems and apply tools to them that have proved effective in

similar circumstances in the past.”

2.5.1 Observation

Observation is deep, careful, and open-minded and looks for new insights to further enable

advance knowledge, and the ability to see things that others do not see (Martin, 2009). The

author argues further that this requires listening and careful watching in a way that is

responsive to the subject. A typical example of learning by observation is for instance an

ethnographer observing how Chinese young people think about handheld phones and then

asking those questions about their frustrations (Martin, P.161, 2009). “The designer must

deep into the users’ experience before concluding about their experience” (Martin, p.161,

2009). A deep user-centred understanding is an essential tool of the design thinker (Martin,

p.161, 2009). “An understanding that is shallow oriented to reinforce current model causes

knowledge to ossify instead of moving forward” (Martin, p.162, 2009). “Observing

customers about their likes and dislikes in a particular product, probably preferred by

customers and asking deeper questions and insights and listening as they talk about how they

feel and what makes them happy and what frustrates them, enables you to distill deeper

insights into the mystery of your changing customers” (Martin,p.162, 2009). This is found to

be more beneficial than analytical thinking.

2.5.2 Imagination

(Martin, 2009) argues that, “Imagination is what we all have; however, design thinker

should hone this imagination into a powerful tool comprising of inference and test looping.”

This can be achieved when a design thinker moves from one stage of the knowledge funnel to

the next and experiences data that is neither consistent with nor explained by current models

(Martin, 2009). This inference is called abductive reasoning. This inference, according to

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Martin (2009), requires that one tests the breakthrough to the prototype, whether it works

according to expected outcomes or results. Abductive reasoning is said to be under-utilised

and underdeveloped in a business domain in favor of deductive and inductive reasoning

(Martin, 2009). These inferences, testing and retesting proto types yield to a new design of a

product, service or customer experience (Martin, 2009).

2.5.3 Configuration

“This is essentially to translate an idea into an activity system that will produce the desired

business outcome by designing a solution that will bring abductively created insight into

fruition” (Martin, 2009). The bone of contention is how you would see the new solution fit

into the larger scheme of the business.

2.6 Experiences

Martin (2009) argues that “in order to be a better thinker consciously, use your

experiences to deepen your mastery and nurture your originality.” He contends that masters

in their domain are familiar with particular phenomena as results, and they do not have to

interpret every sensation or input from scratch.

Martin (2009) further states that “the non-standard contexts do not need repetition,

structuring and planning but rather require creation of new approach originality which

demands the following:

• Willingness to experiment

• Spontaneity in response to a novel situation.

• Flexibility to change direction as information dictates

• Responsiveness to opportunities as they present themselves even if they were

unexpected”.

Martin (2009) argues that “originality is rooted in experimentation and therefore design

thinker needs to be comfortable with the process of trial and error and iterative prototyping

otherwise you will be tempted to focus on the less risky mode of mastery to the exclusion of

originality.”

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He states “that successful design thinkers at any level in the organization devote time and

practice to mastering the specific tools and skills associated with their role.” They try to

understand how things work within their system and also consciously seek opportunity to try

out new things and test their boundaries (Martin, 2009). Martin (2009) argues that “just as

reliability pushes out validity an overemphasis on mastery can compromise considerations of

originality, suggesting that a design thinker must make continued conscious effort to

counteract this tendency by nurturing originality even in the smallest way possible.”

2.7 Validity versus Reliability

It is argued that reliability and validity are terms that are most often used by researchers

and less by management executives (Leavy, 2010). This is probably true because the design

thinking concept is new in the business fraternity, and managers with recent qualifications

from popular MBA graduate schools could understand these concepts. Even in these graduate

schools it depends on the curriculum. The University of Cape Town adopted an innovation

and entrepreneurship curriculum that covers this theory only in 2013. It is argued that

reliability appears to ensure success for any business that culminates it. However, at its

highest point reliability turns out to be the chief limiter of success. Leavy (2010) argues that

“there is always an inherent trade-off between reliability and validity which leads to one

being overvalued too much than the other.” It is argued that designers favor validity rather

than reliability while corporate executives conversely favor reliability (Leavy, 2010). This is

so because executives are measured against set targets whose objective is to increase

shareholder value and are measured quantitatively. This is contrary to designers’ thinking, as

they are biased towards imagining new, different and better things (Leavy, 2010). “A reliable

process produces predictable results time and again, while a valid process tends to flow from

designers’ deep understanding of both user and context, which leads them to ideas that they

believe in but can’t prove” (Leavy, 2010).

Validity at first appears to be the enemy of reliability. However, when coupled with

reliability, it is the thrust that yields a winning advantage (Martin, 2009). The author further

argues that a balance needs to exist between operating in the current knowledge stage and

moving the current knowledge to the next stage in the knowledge funnel. Without this

balance organisations get stuck in producing the same things over and over again until

competitors outpace that organisation which was once known as an industry leader in that

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particular product. This awareness need not be a challenge in business alone, government

exists in business and society space, and must keep up with the changing business

environment by providing services using the latest technology and operational systems.

“Reliability is achieved by eliminating much subjectivity, judgment and bias as much as

possible and narrowing the scope of the test to what can be measured in a quantitative way”

(Martin, 2009).

Validity is to produce outcomes that meet a desired objective and produces results which

are shown, through the passage of time, to be correct (Martin, 2009). Martin (2009) argues

further that “validity is difficult to achieve with only quantitative measures as quantitative

measures strip away nuance and context.” Algorithms are applied in pursuit of reliable

results whilst solutions derived from the mystery (validity) are appreciated in the corporate

world’s research and development units which is characterised by high risk and are expensive

and lack a formal production line (Martin, 2009). There are neither predetermined resources

nor timeframes and therefore debt finance may not be used as they do not have fixed

schedules for repayment (Martin, 2009). “In today’s world business leaders use algorithm to

decision making associated with sophisticated software technique to run organizations and

come up with reliable and consistent predictable results” (Martin, 2009). Validity can equally

generate long-lasting business value.

Application of reliability in governmental context is predominant simply because we are

guided by regulations and legislations in terms of how much we can spend and the

timeframes associated with that. Validity has limited space of application since it involves a

lot of waste in monetary and time terms. Human settlement’s finance and human resource

departments have software systems that are based on algorithm and produce reliable results in

terms of payroll systems, leave monitoring, and payment of creditors but they lack the softer

flare such as relationships and other important information as to the reasons why certain

creditors were paid late, etc. For such information to exist in the system, an intuitive mind

(mystery) should consider these gaps and contribute to the rebuilding of the algorithm. This

therefore confirms that local government will always need a validity mindset to keep

improving the business operations and rebuilding the algorithms (reliability).

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2.8 Overcoming Cultural Barriers

Leavy (2010) argues that there are two elements that need consideration in an

organisation, and these are process and culture. He argues that two central processes, i.e.,

financial planning and reward systems, tend to be dramatically biased toward maintaining an

existing heuristic or algorithm and there is a need to modify ways to create a better balance.

There is a sharp contrast between the two orientations (validity and reliability) in relation to

employee attitude when approaching constraints. For reliability oriented cultures, constraints

are seen as an enemy while in a validity oriented environment, they are seen as opportunities

(Leavy, 2010). He further argues that the barrier against a reliability oriented culture in

achieving better results is the influence of executives trained in analytical thinking and

reliability oriented key stakeholders, board members and business analysts (Leavy, 2010).

This situation exhibits itself strongly in government institutions where everything is built

around reliability, and reinforced by regulatory.

The chief executive officer has a variety of proven options in creating an effective design

thinking organisation (Leavy, 2010). Mike Lazaridis, CEO of RIM, serves as the

organisation’s chief designer (cited by Leavy, 2010). A.G. Lafley at P&G concentrate on

building design-friendly organisational processes and have left design work to others (Leavy,

2010). This is a possible option for a government institution as a director or manager in

government has a responsibility in ensuring compliance with regulations and is absorbed into

other areas of control (Leavy, 2010). More importantly in business organisations and non-

governmental institutions is the recognition of the need to create a validity oriented culture in

one way or the other (Leavy, 2010). James Hackett of Steelcase imported a design thinking

capability from outside through the acquisition of IDEO (Leavy, 2010). This is how

government is influenced to buy into innovative solutions from consultants and the business

fraternity, although ownership does not belong to government. The disadvantage though, is

that business sector contribution is not an initiative of government, therefore innovation is an

aftermath and it occurs only if business will benefit.

Another challenge is that imported innovation has its license from private companies, and

should government be interested in such product it comes at a high cost. Not all innovation

should come from outside though, it is critical that government has its internal capacity to be

innovative and steer innovation from outside. For reliability oriented cultures it is difficult to

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adapt to changes and adopt new systems and processes because of a natural tendency to resist

change. Bob Urich created a design thinking organisation from within and was able to

achieve his targets (Leavy, 2010). For government, while officials should be taught to

understand the importance of validity oriented cultures, this environment can be enhanced

further by creating a state organisation with a mandate to innovate in its area of responsibility

and expertise.

2.9 Integrative Thinking

Martin (2007) defines integrative thinking as “the metaskill of being able to face two or

more opposing ideas or models and instead of choosing one over the other to generate a

creative resolution of the tension in the form of a better model, which contains elements of

each model but is superior to each or all.” Design thinking is the application of integrative

thinking to the task of resolving the conflict between reliability and validity, between

exploitation and exploration, and between analytical thinking and intuitive thinking (Martin,

2009). Besides using a knowledge funnel view, integrative thinking is another aspect

whereby solutions are derived through abductive reasoning in solving a wicked problem. In

this research a wicked problem is the continuous use of conventional methods in the

development of houses by the Human Settlement Department thus being less efficient in the

use of government financial resources.

2.10 Critics on the Theory on Knowledge Funnel

Literature in academia suggests that the theory on knowledge funnel is not new theory at

all but the approach in terms of the structure is new. This thinking in the mystery and creative

thinking write-ups has been in existence since the 1950s. (Bousbaci, 2008) argues “that the

study of cognitive processes that are manifested in design action has been mostly described

from late 1950s to early 1980s in terms of what is largely accepted today as generation

game.” Simons, Gupta and Buchanan (2011) argue that design thinking has potential to help

modern scientific research and development organisation in improving the speed,

inventiveness and vitality of their output and become an engine of growth. Simons, Gupta

and Buchanan (2011) assert that in our modern-day traditional scientific designs require

modern designs that are original and creative work of clients on projects. Hence the radical

collaboration of teams and sharing of knowledge with a wide spectrum of cross-pollination to

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foster innovation and rapid growth, putting emphasis on the need for intuition, explorative

and empowering methodologies.

The challenge will be to go back and find out how companies said to have adopted design

thinking in their business such as McDonalds and Blackberry are performing in their

businesses. It should be borne in mind though, that design thinking as a concept will not

guarantee success in business. There are a number of elements that produce dynamic results

when applied collectively. Change of leadership may influence performance and change

style of leadership, while the design thinking notion had not yet found its niche in company

culture.

2.11 Conclusion

A review of the literature clearly shows that the knowledge funnel view theory is fairly

new in the business school and public policy arena, and as such has not been adequately

utilised to improve service performance in many governmental institutions, as it does in the

private sector. It also shows that it can be a very useful tool, yet very little is known with

regards to its applicability. It is hoped that the theory will find its feet in future MBA studies,

more than it has in the past. It provides a paradigm shift in the manner in which corporate

executives should lead organisations to be able to stand apart with competitive advantage.

The theory seeks to create a balance between analytical thinking and its associated

algorithms, and intuitive thinking and its associated exploratory attributes. Biasness towards

reliability is also necessary to ensure that the business is sustainable (Martin, 2009). The

integrative thinking theory will help in finding solutions to housing development challenges

by identifying wicked problems in the systems and projects. The theory sets the tone on the

need to balance between three modes of thinking: the thinking in the mystery (hunch); the

thinking in the heuristic, and the algorithm or conventional thinking (Martin, 2009).

It appears that the theory is more useful in both business and government environment.

Human settlement is faced with challenges in speeding housing development due to its red-

tape on project management cycle. The use of well-established algorithms deters innovation

and as a consequent, financial resources are wasted on fruitless expenditures associated with

price escalations on material and cost of providing services. Knowledge funnel view theory

encourages innovation and when practiced in government environment can yield to

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significant improvements in operational effectiveness. The theory has given practical

advantages of creating organizations that recognizes the need to continuously move along the

knowledge funnel for betterment of the service or product. Based on the review of the

literature I want to know, how can government improve systems and policy provisions to

allow for innovation and keep on developing innovative ways of housing development and its

associated project management? This research will seek to answer two broad questions:

Firstly, how the design thinking theory can be embraced and applied in local government

environment, in this case human settlement being the area of focus; and how conventional

thinking can be combined with the thinking from the mystery in resolving service delivery

challenges.

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Chapter 3: Research Methodology

This chapter describes the research methodology used. It outlines the activities that were

executed in order to achieve the objectives of the study as presented in Chapter 1. The

description covers the research area, study population, sample and sampling procedures, data

collection approaches and techniques, and data analysis. Ethical issues that were adhered to

when implementing the study were also included in the methodology.

3.1 Theoretical Framework

The theoretical framework to be used in this research has been discussed in the literature

review above. This theoretical framework on design thinking and design of business will be

used to explore how this knowledge funnel view can influence government projects, with

specific attention to human settlements, and unblocking the challenges and constraints in

housing development. Underpinning government operations are policies and legislation

which influence systems and processes thus causing a bias towards reliability. Although these

increase efficiency and optimum utility of resources, innovation is nonetheless constrained.

The research will explore this notion of innovation, with specific emphasis on the

mechanisms through which the theory of knowledge funnel is viewed, and which consist of

the three thinking models: the thinking in the mystery; the heuristic and the algorithmic, or

conventional thinking (Martin, 2009 Attention will be given to challenges in housing

development by the Human Settlement Department and its associated spheres, inter alia the

Provincial Human Settlement Department and local municipal government.

3.2 Research Approach

Considering the purpose of the research, the nature of the research requires that a

qualitative method of research be used. “Qualitative research collects data in the form of

written or spoken language, and analyzes the data by identifying and categorizing themes”

(Terre Blanche, Durrheim and Painter, 2006). “Qualitative methods allow the researcher to

study selected issues in depth, open-ness, and detail as they identify and attempt to

understand the categories of information that emerge from data” (Terre Blanche, Durrheim

and Painter, 2006). Terre Blanche, Durrheim and Painter (2006) argue “that an inductive,

qualitative approach is relevant when the research purpose is to study phenomenon as they

unfold in real-world situations, without manipulation and to study phenomena as interrelated

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wholes rather than split up into discreet predetermined variables”. Since the research focuses

on the knowledge funnel view in government projects and associated constraints, specifically

on human settlement, it will follow exploratory, descriptive and explanatory goals as

contemplated by Terre Blanche, Durrheim and Painter (2006).

3.3 Sampling Technique

Terre Blanche, Durrheim and Painter (2006) define sampling as “the selection of research

participants from an entire population, and involves decisions about which people, settings,

events, behaviors and social processes to observe.” The aim of sampling was a

representativeness of the population about which research aims to draw conclusion (Terre

Blanche, Durrheim and Painter, 2006). Since the study focuses on human settlement as a

government department with powers solely to perform the function of housing development,

a purposive sampling technique will be used in this research.

The research sample selected was the Department of Human Settlement at their head

office and at regional level, the Human Settlements Department in the Nelson Mandela

Metropolitan Municipality, the Department of Economic Development, Environmental

Affairs and Tourism, the Provincial Treasury Department, and engineering consultants and

project managers. The purpose of using different authorities in government is because human

settlements is performed by multiple institutions within government, with local and

provincial government delivering houses to communities on behalf of National Government.

Regional offices serving as delivery agents for the provinces and municipalities also serve as

developers and development agencies, implementing projects on behalf of National

Government. Human Settlement further appoints NHBRC to provide quality assurance for a

period of five years on houses built by registered contractors. NHBRC in turn appoints

professional service providers to monitor the construction of these houses. Target respondents

were directors of the three spheres of government and middle managers including the

Provincial Treasury Department. The research was further conducted in a desktop study on

applicable legislation: the National Housing Act, the Public Finance Management Act, the

Municipal Finance Management Act, and the; Environmental Management Act.

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3.4 Data Collection

Data collection was done in the form of semi-structured interviews with role-players in

housing development. Semi-structured interviews were preferred as opposed to structured

interviews because the population interviewed represented the key personnel of the

organisation’s hierarchy, i.e., the Chief Director responsible for policy, the Research and

Knowledge Management Directorate, Senior Management responsible for research, the

Regional Director responsible for programme and project management, the Chief Director of

the Provincial Treasury Department, and consultants appointed by the NHBRC for quality

monitoring. Data collection took about a week but an interview with each candidate lasted

about 3 hours.

Data was collected in the form of notes as the interviewee responded to questions. The

interview targeted five people who influence policy shift and are responsible for research in

their departments, and who are able to influence leadership in the province. A set of open-

ended questions were developed to establish their experience and perceptions around the

conventional systems versus innovation and constraints involved. Data was collected through

interviews with role-players in housing development. A set of open-ended questions was

developed to establish their experience and perceptions around the conventional systems

versus innovation and constraints involved. Although the theory on knowledge funnel is new,

creativity and intuitive thinking have been part of business since ages ago, hence sharing this

knowledge and exploring its influence in organisations is critical. Besides, interviews with

key personnel in the Provincial Human Settlement Department, supply chain management at

local municipalities provided an overview of the constraints at municipal level. A desktop

study on legislation and policy governing housing was conducted.

3.5 Data Analysis

A qualitative technique was used in this study by identifying the themes in the data and

relationships between these themes as argued by Terre Blanche, Durrheim and Painter

(2006). The strength of this eclectic qualitative approach results in a holistic, interpretative

and synthesised approach to a study of this nature. The analysis employed ensured that it is

relevant to the research paradigm and data, and is responding to the research question (Terre

Blanche, Durrheim and Painter, 2006). Because of the qualitative nature of the research and

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the lack of quantitative information, thematic analysis was used because of identifiable

constraints and congruence of information given by respondents. There were basically 10

themes that were established in this research, each theme requiring unique attention. Findings

were achieved through identifying similarities and coding them to form coherent themes and

sub-themes. The theoretical framework focused on two schools of thought in value creation:

the analytical thinking model, versus intuitive thinking, and whether practice follows the

notion of the knowledge funnel view model adopted by successful business organisations

(Martin, 2010).

3.6 Limitations

The research report to be submitted was subject to changes as the themes transpired in the

data collection process; therefore, the research was open to iteration. The research scope was

limited by the time available for research and interviewees who could not be accessible

within the timeframe of the research; thus, the quality of information was dependent on the

availability of personnel identified as critical in the process. Furthermore, the theoretical

framework on integrated thinking and design of business is fairly new in academia, and

therefore most of the information obtained emanates from writings of design thinking

proponent, Roger Martin. Not all intended respondents were located. However, information

received from respondents was sufficient to guide conclusions. The research was somewhat

broad and certain aspects in this research require further empirical research to re-affirm some

of the assumptions.

3.7 Ethical Considerations

Data collection was done precautionary to avoid unnecessary conflicts with the

respondents and issues of consideration to ensure the rationalisation of the study were

observed accordingly.

Full information about the study was given to all participants. For example, they were

informed that the information gathered would not be used for any other purpose other than

execution of this research study towards achievement of an MBA degree with the research

project earmarking human settlements in the Eastern Cape Department of Human Settlements

in their implementation of innovation. All respondents were made aware of their rights to

participate and to withdraw from the study if they did not feel comfortable at any stage. All

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respondents of the project were identified since there are no confidential matters in this

report. Permission to access the study areas was requested from relevant authorities. All

respondents’ norms, values and beliefs were considered and respected for the entire duration

of the study.

No respondents were discriminated against pertaining to their religious or political

affiliations. No respondents were discriminated against regarding their vulnerability. All

respondents had the right to disclose or to keep their personal and sensitive information

confidential. In cases when personal and sensitive information had been disclosed, the

information would be treated in the strictest confidence. Feedback will be given to the

Department of Human Settlements upon completion of the study.

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Chapter 4: Research Findings

4.1 Research Results

4.1.1 Introduction

The research explored how the knowledge funnel theory and innovation are applied in

housing projects implemented by local government on behalf of the Provincial and National

Departments of Human Settlements. The research introspected challenges and constraints

experienced in housing development from a wide range of issues such as legislation, policies,

institutional arrangements, technology, environmental issues and business model. The

researcher interviewed Senior Management officials at Chief Directorate level and middle

management in the Human Settlement Department in the Eastern Cape. The interviews

further involved the regional office in Cacadu and the Directors in the Nelson Mandela’s

Human Settlements Department in Port Elizabeth.

Government’s provision of housing for the poor and previously disadvantaged is governed

by the Constitution and supporting legislation, under the auspices of the Department of

Human Settlement. The 1996 Constitution enshrines the right of every South African to have

access to adequate housing and supporting infrastructure, and it is incumbent upon

government to make available all reasonable resources to carry out its mandate in this regard.

In terms of the Housing Act, Act No. 107 of 1997 and the White Paper on Housing, the

government introduced a number of programmes to realise its objectives to provide adequate

housing and the necessary basic services such as potable water and sanitation. However, due

to limited funds available from the fiscus, this process is taking longer than anticipated

(Housing Code Policy, 2009: p. 1).

The research under consideration identified innovation in housing projects implemented

by The Department of Human Settlements since 1994, subsequent to the adoption of the

constitution and the establishment of a new democratic government. However, despite these

efforts, the large number of rural people migrating to South African cities during this period

could not be provided with proper and habitable accommodation, and most of these people

now reside in informal settlements. Interviews were conducted with senior national and

provincial government officials to establish the facts around the projects and associated

innovation and whether it was in line with knowledge funnel theory (Martin, 2009). A

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number of constraints were identified in this research which impact negatively in accelerating

development of housing and associated infrastructure. The research has identified themes and

sub-themes influenced by coding respondents from the interviews, and these themes are:

constraints posed by housing policy, supply chain management policy and MFMA

legislation, programmes and project management cycles, institutional arrangements,

fragmented planning legislation, innovative built technology, National Home Builders

Registration Council, constraints posed by environmental impact assessments, stakeholders,

and challenges on systems and business processes.

4.1.2 Constraints with National Housing Code Policy

The research looked into the effect of the national housing code as an overarching policy that

provided housing instruments or implementation tools that could be used in various types of

development. The policy provided that housing development use different housing policies

for development. The instruments referred to in this case apply where they are found suitable

and were dictated by circumstances on the ground. The national housing code as an

overarching policy had various programmes for housing development that included

modernised housing processes, rural housing policy and social housings and emergency

housing and rental housing policies.

The policy provided that beneficiaries should be South African citizens who had not

benefited before under the housing scheme, probably as a result of relocation. In other words,

if you received a subsidy 10 years ago whilst you were in Cape Town and you happen to

relocate for Johannesburg, you are not entitled to a subsidy. This requirement alone provides

limitations with regards to maneuverability of people due to changes in people’s economic

opportunities.

A young person receiving a subsidy for a house in his/her early 20s, could find opportunities

away from his/her home town where a subsidy was allocated, thus, giving him/her no option

but to settle in an informal settlement in the new city in which he/she has found employment.

The qualifying criteria of 18 years in the policy poses problems such as escalating crime as a

result of premature independence of children, abandonment of education, and low morals,

etc. This is the reality we found on the ground with houses having been evacuated and closed

or illegally occupied due to the migration of people seeking greener pastures. It is also

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unreasonable to expect government to provide a double subsidy to a person considering the

backlog experienced in South Africa. However, the policy can creatively accommodate these

challenges by putting restrictions in selling the house if you are less than 35 years old or if

your income does not allow you to buy a house of your own. The policy could accommodate

re-allocation of a subsidy when a person moves to a new town/city and reclaim the previous

house for a new occupant.

Nationally centralised housing subsidy approvals have caused significant backlogs in

municipalities causing delays in fund transfers, resulting in reduction of delivery of houses

and a lack of sense of urgency in cases of housing projects resulting in disasters such as fire

or floods. This has caused a stir in communities and a loss of the trust relationship in

government’s social contract with South African communities. Consequently, widespread

social havoc, protests and unrest were demonstrated against government. There are other

contributing factors besides subsidy approvals such a land ownerships, etc. but a major

problem is caused by lack of synergy between beneficiary administration and the initiation of

a project. Government leadership announces project initiation but the realisation of such a

project will take years due to the defined processes that dictate policy.

Policy dictates are sometimes not suitable for the circumstances on the ground. The

national housing code provides conditions suitable for urban development. Therefore, rural

settlement is being coerced to formalise their settlements before the formal project is realized.

There is a reluctance to provide housing in rural settlements due to the fact that most of these

areas are not serviced and have not been approved for human habitation. However, in some

parts of the country such as KwaZulu Natal, major housing developments are taking place in

rural areas.

It appears that a political will also contributes to development of each respective provincial

government. The argument that I want to pursue is that it appears that the policy review

which only takes effect every five years is causing constraints on the ground, meaning that

there is a need for mid-term reviews of policy to enable changing circumstances on the

ground. This has an effect on the ability of government to be flexible and allow an evolving

policy shift caused by changing circumstances on the ground. During my interaction with

officials it was apparent that instruments such as the social Housing policy, people’s housing

policy, and rural housing, etc do get reviewed on an annual and bi-annual basis.

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4.1.3 Constraints posed by The National Supply Chain Management Policy

The Republic of South Africa is a leading country in Africa in terms of developmental

local government that was established since 1994, and in line with that SA is the leading

country in Africa in terms of economic strength, political influence and stability. The supply

chain management policy, in line with the Constitution, seeks to provide efficient and

effective utilisation of limited financial resources by optimising the use of allocated budgets

for maximum benefit. There is fixed amount of subsidy for each beneficiary and it is broken

down into development phases. For ease of accountability the department developed norms

and standards for housing structures and this includes standard designs, standard systems and

procedures, and standard land size for each plot, etc.

For the procurement of services, the supply chain management policy requires that all

procurement of services must be tendered through a competitive bid process. This means that

the department or its representative must develop specifications and a design for a particular

product. In most cases there are standard details for each type of product and expected

infrastructure-related products. Any deviation from these sets of standards and procedures is

tantamount to be categorized as unauthorized, irregular and fruitless expenditure. The policy

does not have room for innovation or creativity; everything is regulated. Whilst this

regulatory environment is necessary for use of public funds, it is also paramount that

government provides space for innovation by opening up opportunities to welcome new

technology. The policy allows for deviations but these deviations from normal procurement

procedures require special approval by the chief executive officer, subject to minimum

requirements, and setting out and justifying the reasons for such deviations.

The caution here is to ensure that the exception does not become the norm. Machiaveli

(1514) stated, “It should be borne in mind there is nothing more difficult to arrange, more

doubtful of success and more dangerous to carry through than initiating changes in a state's

constitution. The innovator makes enemies of those who prospered under the old order and

only lukewarm support is forthcoming from those who would prosper under the new.” The

approach in the procurement of services for housing development is a vicious cycle in that it

is repetitive and services are also standardised. There is no room for deviations and this is

none other than conventional methods of application as everything that this unit does is

standardised. It can be deduced from the information shared that government is biased

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toward algorithmic thinking for more productivity, and is less conscious of the power behind

thinking in the mystery but thinking in the heuristic is slightly provided. Martin (2009)

alludes to the fact that there is a need for every organisation to think along the three mental

models to improve its service/product offering.

The national housing policy provides that municipalities act as developing agents on

behalf of the National Department of Human Settlements, and are therefore subjected their

own supply chain management policy which is the same across municipalities. Therefore, the

response from an interview with Nelson Mandela Metropolitan Municipality on their

experiences in housing development and constraints posed by supply chain management

policy on innovation in designs and construction would be similar to those of other

municipalities. The supply chain management policy and over-regulation of local government

space by National Treasury and other departments have turned into a wicked problem

(Martin, 2007) that this research must try and solve through integrated thinking. The policy

further constrains the use of innovative technology without going through a public tender.

However, there is lieu to test and prove alternative technology to housing development. But

adoption of these technologies into national housing norms and standards has been proving

very difficult, and reference is made to Moladi Technology invented and tested in Port

Elizabeth 10 years ago.

4.1.4 Constraints posed by Project Management Cycle

The Human Settlement Department in the Eastern Cape has established six regional

offices which serve as delivery vehicles in 45 municipalities across the province. However,

the supply chain management services are centralised in the province. These regional offices

provide construction monitoring to contractors and consultants; facilitation of beneficiary

administration and project approvals; liaison between municipalities, stakeholders and the

provincial office; and overall project management of housing projects. In other cases,

municipalities are developers and the regional office monitors their performance in terms of

service level agreements. The Nelson Mandela Metropolitan and Buffalo City municipalities

have the support of the National Housing Development Agency which assists in the

implementation of projects. All policies and legislation of government affect the

implementation of project hereunder discussion.

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Project management is categorised into three phases. Stage 1 consists of a feasibility study

on a range of issues: availability of land; feasibility on engineering servicing; beneficiary

administration; township planning; environmental impact; and a survey for general planning

development. If all of these issues prove to be feasible, a stage 2 phase, which consists of the

same milestone but with actual and physical planning, comes into play as well as survey and

environmental impact assessments. The period for this stage takes about three to five years

including physical construction of engineering services. These services are offered by a

multi-disciplinary group of consultants and sector government departments. The

environmental process takes between a year and two, and is located to the Department of

Economic and Environmental Affairs, nationally and provincially. Planning services are

located in the provincial departments of local government and traditional affairs. The

committees approving the general plan are located in this department and the turnaround time

takes a minimum of six months to more than a year in most cases. The physical construction

of services takes between one or two years, depending on the scope of works.

It is evident from the above that the value chain leading to housing development is an

onerous process which results in impatience exhibited by beneficiaries through country-wide

service delivery strikes. It can be deduced from the above process that government takes

about five to ten years to deliver on its promises. The algorithm in the implementation of

projects requires serious review to reduce the turnaround time. The department requires

innovative ideas to streamline the stages of construction and parties involved, and this will

impact on the institutional arrangement of human settlement.

The stages of implementation have remained the same for the past 20 years. Efforts have

been made to improve the quality of workmanship in housing but the thought that it is

possible to reduce the project management cycle has not been considered. Project

management approach is purely conventional and mediocre in the local government sphere

and the need for rejuvenating and remodeling the approach is long overdue. The negative

impact on this is failure to adhere to the three elements of project management which, namely

time, cost and quality. As projects get delayed in the value chain, the cost of material and

labor is escalating to the extent that all project’s subsidy quantum conceived during project

initiation increases during the project construction phase due to a delay exceeding a year or

more.

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4.1.5 Strategically well positioned Institutional Arrangement

The research further explored whether capacity is provided for research and development

which would include innovation. The department acknowledges the need for research and

development as an internal capacity. The respondents provided a strategic framework plan on

technological innovation and knowledge management. According to respondents, current

research and development embraces both technological innovation with dedicated officials

who are familiar with research and policy and research, and specialist dedicated to a softer

flare of research.

The research can confirm from the above organogram that Human Settlement recognizes

the importance of innovation and research by ensuring that it received attention at leadership

level. The department has another directorate focusing on programme and project

management. Technological innovation and knowledge management are set to be placed in

this directorate in the future. The respondents indicate with no uncertainty that the directorate

for research and development need not forfeit its responsibility on research in its entirety,

considering the fact that programme management focuses on the implementation of projects.

Moreover, should current incumbents who have capacity (PhD) in research leave the post of

leading the directorate, the unit will not be able to sustain the momentum. It is believed that

Dept. of Human Settlement: MEC

Research & Dev: Chief Dir.

Programe & Project Management: Chief

Dir.

Finance & SCM: Chief Dir

Dept. of Human Settlement: HOD

Human Resources &Dev: Chief Dir.

HUMAN SETTLEMENTS DEPT.

ORGANOGRAM

Legal

Services: Chief Dir.

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research and development by virtue of its role will always require research experience and

education for its leadership.

During this research it was apparent that post-2008 Human Settlements has recognised and

appreciated the importance of innovation and research while, according to respondents, the

department operates at minimum capacity and they assert that that capacity is insufficient.

The research is unable to ascertain this considering the limitations of the research.

Implementation of researched information was enquired to check whether the directorate is

recognised by government leadership. Recently, research outcome indicates the rejection of

innovative technology by communities, and there were recommendations to this effect.

However, innovative technology research has not been tried and tested as a research study on

behavior of certain technologies. It is clear that the department has not been investing much

research but relied on other provinces regarding its success.

The challenge though is the fact that innovation has not been embraced as part of culture

in the organisation. It is considered a competency of specialty. However, respondents assert

that leadership such as the MEC promotes innovation and values the importance of research

in the organisation.

The respondents were asked whether innovation is promoted in the organisation. Their

response was that it is promoted but there is room for improvement, especially with regards

to rewarding performance and innovation. There is an annual event at which awards are given

for best performance and contribution to knowledge by staff members, contractors,

businesses, provinces, etc.

Knowledge management aims at keeping the institutional knowledge and data on record.

The Premier’s office has a well-established research and development with knowledge

management unit. The approach of the province is that all departments should establish their

own knowledge management and research directorates, hence the establishment at the Human

Settlements Department. It is also confirmed that the National Department of Human

Settlements has a well-established research and knowledge management unit which has

contributed considerably to the implementation of innovative technology by other provinces

such as Gauteng Province.

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To assess whether the department invests in innovation in terms of providing financial

capacity, respondents expressed difficulty in getting the resources they need due to stringent

allocations by the Provincial Treasury Department. This poses challenges to resource the

directorate with human capital. It is noteworthy that there is a sharp contrast between

business and government in terms of investment in research and development. Government

relies mostly on using researched products and services rather than developing its own

product or service.

Finally, the institutional arrangement in Human Settlements is strategically positioned in

that it has a chief director reporting directly to the head of the department. The Chief Director

together with the head of the department report to the political head – the MEC, and therefore

has a direct influence to changes that which the MEC may deem appropriate.

4.1.6 Alternative Technology in Housing Development

Alternative building technology (ABT) has only recently been recognised by government,

while the Department of Human Settlement has leaned towards more conventional methods

of construction in its norms and standards.

The Eastern Cape Province has been reluctant to adopt full-scale alternative technology.

There has been a lack of community buy-in due to the mostly rural nature of the province and

lower levels of cultural change. The respondents assert that they have allowed other

provinces to lead in the adoption of alternative technology but only to apply it on a small

scale. However, in the Eastern Cape there are alternative technologies that have been

developed by the business sector, namely contractors and Engineers, especially in Port

Elizabeth. However, it is been 10 years since these technologies have been trying to find

inroads into the housing market, but without success. The alternative building technology

system that used form-work and concrete for walls instead of bricks and blocks is a typical

example which has been tried and tested. Another contributor to the continued use of bricks

and mortar technology are the NHBRC and its inspectors who by then were not willing to

certify the houses unless they were built to certain standards approved by the NHBRC.

Respondents argued that both national and provincial governments do not make an effort

to innovate built technologies; this is left to contractors and engineers to bring in tried and

tested technologies. However, efforts are being made to explore a shift away from

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conventional methods. The CSIR conducted a study on the efficacy of alternative technology

in housing, as commissioned by the Department of Science and Technology. In this research

effort to establish relations between the aforementioned department and Human Settlement in

terms of research needs and outcomes, has been tried but time could not allow verification of

such facts.

There is acknowledgement of the fact that there are answers beyond conventional methods

of construction, and this promotes the thinking in the heuristics and the mystery.

Nevertheless, it was established that the respondents in the research had no knowledge about

this theory. The theory on intuitive thinking is backed by a number of scholars.

4.1.7 Constraints posed by segregated Town Planning

For thinking in the exploration, the researcher was advised of bottlenecks imposed by

planning legislation in the country, and it appears that this is nothing less than the

exploitation of existing utilities and resources. South African cities and urban human

settlements were influenced by apartheid segregated planning and township establishment.

The old regime had established different planning laws that would apply according to race

and location and which would categorise people according to whether they are in the

homelands or in areas demarcated as part of South Africa. This required the establishment of

town planning laws for different parts of the country to facilitate township establishments,

and such townships were established based on racial groups. Hence settlement patterns for

black communities are characterised by long-distance travelling to city centres across South

Africa. All these issues require innovative thinking to redress the imbalances of the past and

to minimise travel cost per capita income.

After incorporating these homelands into South Africa in 1994, the new government had

to embrace all these legislations in facilitating approval for development. The Department of

Local Government and Traditional Affairs is the custodian of this town planning activity, and

as such all general plans for township establishment are facilitated by a board consisting of

town planners and surveyors, either in the employ of the department or are independent

consultants. For the Eastern Cape, there are three types of legislation giving effect to

township establishment: Ciskei, Transkei, and parts that were demarcated under South Africa.

It has become the responsibility of officials to apply these legislations. The seating of the

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planning committee to adopt a general plan is difficult, and sometimes this committee is

unable to sit due to poor or a lack of facilitation from internal staff members. This has caused

certain zoning applications to be prolonged beyond 10 years. Without proper planning there

is no housing development. This research could not ignore these challenges and how they

impact on innovation and creativity in housing development in South Africa, the innovation

required in both systemic and administration issue in development, and the policies and

legislation in the actual implementation of housing, including planning.

4.1.8 Challenges with the National Home Builders Registration Council (NHBRC)

The Department of Human Settlement established companies as special vehicles to

facilitate a specific role in the interest of development. The NHBRC was established in terms

of the Housing Consumers Protection Measures Act, 1998 to regulate the building industry

and protect home buyers from shoddy workmanship. The National Home Builders

Registration Council (NHBRC) – which is a Section 21, non-profit organisation – states that

it has a vision to be “a world class organisation that ensures home builders deliver sustainable

quality homes” (NHBRC, 2013). The way it had set out to do this was to establish a

registration process for all home builders and contractors working in the domestic market,

covered by the NHBRC’s defects warranty scheme for all new homes built by their registered

members (NHBRC, 2013). The NHBRC requires that no development of a structural nature

(limited to buildings) will be pursued by a contractor unless it is registered with the NBHRC.

The NBHRC provides a guarantee that should any defects be detected within a period of five

years, such defects will be rectified, the cost of which would be covered by the defects

warranty scheme.

The Department of Human Settlements is a custodian of the NHBRC but it should not

interfere in the NHBRC’s autonomous status in terms of regulating the building industry.

Human Settlements has realised the loss that has been incurred in low-cost housing

development for the past 15 years and as such has commissioned the services of the NHBRC

in monitoring and regulating construction in all government funded housing projects. It

requires that contractors involved in the construction of low-cost housing should be registered

with the NHBRC. The organisation has made a substantial contribution in improving the

quality of housing for South African communities and private developments. It has produced

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manuals used by inspectors for monitoring house construction, together with SANS and

national building regulations.

The flip side of these regulations and manuals is that they hamper creativity and intuition

in housing development. The NHBRC will not allow innovative ideas to be applied in

housing development on a random basis. The NHBRC is seen by the respondents to be

stringent when it comes to regulating housing development and is opposed to alternate

building technology. However, the NHBRC does acknowledge the need to embrace

innovation by referring all innovative technologies to Agrément SA who is a certifying

authority for all innovative building technology on behalf of Public Works.

The NHBRC appears to accept building concepts categorised as “rational designs” made

to fitness of purpose under prevailing circumstances on the ground as long they are certified

by a professionally registered designer, whether it is an engineer or an architect. Supervision

of such construction should be certified by the relevant incumbent. The purpose of rational

designs is to ensure “fitness-for-purpose” ofthe elements covered by the design. Rational

designs are required inrespect of housing systems or components, which comprise materials

and/or elements whose properties, characteristics and behavior may be known or unknown. In

both cases, a competent person (as defined under the Engineering Profession of South Africa

Act, Act 114 of 1990) is required to produce the rational design.

“The rational design would includea detailed structural analysis and detail design of

critical members and connection design details” (NHBRC, 2013).

”The NHBRC’s technical division reviews the rational designs and once it demonstrates

compliance with the national building regulations a letter of approval is issued to the system

owner. The performance of alternative systemsis reviewed annually and the lettersof

approval renewed, provided that the NHBRC has not received any reports of system failure”

(NHBRC, 2013).

The research also examined the inspectorate appointed by the NHBRC in housing projects

who indicated that they do not have the experience of alternative built technology since their

involvement in housing projects would not allow anything outside the standards set by the

NHBRC. Therefore, it can be deduced that it is difficult to apply alternative building

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technology by ordinary contractors and developers. Any innovative idea must go through a

rigorous process of approvals and marketing, and this should happen through Agrément SA.

The NHBRC has commissioned the CSIR to secure space for Agrément SA to conduct

research through testing and trying these alternative building technologies on behalf of the

NHBRC and Public Works.

“The National Housing Act also introduced people’s housing process projects, or PHPs

projects which are approved in terms of the National Housing Code: Housing Subsidy

Scheme, and which are exempt from the Act if they use their own labor to build a home”

(NHBRC, 2013). Therefore, such developments do not require NHBRC registration when

people are building houses for themselves. The people’s housing process is an instrument

which allows people to build their own houses according to their own designs. This is the

only instrument that is flexible enough to allow innovative ideas in housing development.

However, the consequence is poorly built houses which will further require rectification by

government.

It can be seen from the above that applying the theory of design thinking is a quagmire in

local government space considering the intricacies involved, hence there is prolonged use of

bricks and mortar low-cost housing (conventional construction methods). The bone of

contention is to apply integrative thinking (heuristic) in order to find solutions to the problem.

Government and its organisations recognise the need to embrace new thinking and allow

advances in research and knowledge. However, the commitment to apply effective and

efficient utilisation of limited financial resources is a drawback in achieving cost savings

through innovative technology. It is argued by some technology innovators that funds spent

on conventional methods could be halved if alternative building technologies are embraced in

large scale projects.

4.1.9 Environmental Impact Assessment: Exploring Key Constraints

The respondents at regional offices in Human Settlements were interviewed with the aim

of tapping their experience in terms of National Environmental Management Act

requirements in order to establish whether it is possible to unblock some of the constraints

through design thinking and exploration.

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This legislation was enacted to ensure that government subscribes to a globally shared

ethos of sustainable development as enshrined in the 2014 millennium development goals.

Environmental sustainability is a buzzword in our dispensation and as such NEMA has

developed regulations that guide developments with the purpose of seeking to protect the

environment while it supports economic growth and development of people, in this case

social housing. However, this function is the responsibility of the Department of Tourism and

Environmental Affairs. “South Africa’s commitment to long-term sustainable development

trajectory that is economically, socially and environmentally sustainable requires scientific

technological and innovation capabilities, supported by strategic public investments and

strategic partnerships. The department, in collaboration with all key stakeholders, will

galvanise action towards the implementation of the strategy through the harmonised planning

of programmes and execution” (Environmental Affairs, 2013).

The regulations demand that subject to the nature of development an environmental

impact assessment should be conducted and application for approval be submitted to the

Department of Tourism and Environmental Affairs. The department has categorised projects

according to the extent of the negative impact they may have on an environment. Regulators

within the department will determine which projects are of a lower sensitivity level – which

will be approved on a provincial level, and those of a higher sensitivity level – which will be

approved on national level. For developments related to improving existing development and

which will not encroach upon the natural environment, the regulations require that an

application for exemption be requested, and upon inspection and approval the exemption be

granted. This process takes a turnaround time of about three months. But for a full

environmental impact assessment (EIA), this application is submitted to the national office.

This process takes a minimum period of nine months. All housing projects fall in this

category of full EIA because of bulk infrastructure services linked to housing development.

In cases where housing development will feed into existing bulk infrastructure services,

the EIA process is not required for bulk services, but is required for internal services such as

roads, water reticulation, sewerage network, electricity networks, etc. Environmental

requirements and the approach in facilitating development are a wicked problem that

government must solve. For major developments, this process can take up to five years, such

as the case with the N2 national road between Durban and East London. “To ensure that land

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and infrastructure development takes place in an environmentally responsible and sustainable

manner, the department will ensure that there are adequate instruments to improve efficiency

and effectiveness of environmental impact assessment system across the country”

(Environmental Affairs, 2013). Most major developments are not without challenge by so-

called environmental activists’ organisations and academics that attract media publicity.

For housing development, environmental impact assessment is central to development but

in terms of the Environmental Management Act this service is the responsibility of the

MEC/Minister of Environmental Affairs. In my view, there is a need to integrate this and

other responsibilities, such as Municipal Town planning within the Department of Human

Settlement through the secondment of dedicated staff from the DEADET (Department of

Environmental Affairs and Tourism) to expedite human settlement development as it is one

of the critical functions of service delivery to communities. But this cannot occur if

government does not apply integrative thinking as part of its organisational culture.

The analytical thinking and use of established algorithms approach in government is

dominant and stagnate development as various role-players are located in different

government departments and spheres of government. An integrated approach in rendering

expert inputs is required to cap the process in the value chain. An IT automated system of

lodging, reporting, and receiving updates where environmental assessment practitioners

(EAPs) and clients (municipalities/sector departments) will be able to interact and access

information without physical visits, and correspondence could become easier if innovative

ideas and intuition is encouraged in government.

Often municipalities and other developers are left out of the process as reliance is placed on

EAPs, whereas on the other side EAPs have other business interests to pursue which divert

their attention from making regular follow-ups to the department. A period of nine months

for the Department of Environmental Affairs to approve an EIA is too long considering the

fact that these reports are prepared by professionals in environmental science. It appears the

department does not rethink its turnaround cycle times over the EIA process, and this has

contributed significantly to under-development. The routine process would improve if

business processes in government appreciate the theory of business design and design

thinking (Martin, 2010).

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4.1.10 Challenges on Systems and Business Process

An effort was made to establish the embedded culture within the organisation and the

flexibility of support service to the core business of the organisation which is the provision of

human settlement as a key service delivery output. The Department of Human Settlement has

dedicated the human resource and development directorate, and finance and supply chain

management services whose responsibility it is to support the core business of government. If

the systems, processes and policies do not provide space for human development and growth

and space for accelerated delivery of services, development will be impeded.

The policy on recognition of good performance leads the process to the award of the best

employee of the year which is accompanied by a certificate of excellent performance and a

token of appreciation. However, no documentation of such an event is done. The respondents

argue that it would change the culture in the organisation and outside if it received media

attention such as newsletters or an interview with the person in order to share his or her

experience and knowledge. In other words, exceptional contribution is rewarded over and

above the performance bonuses rewarded based on the performance of individuals and the

organisation. The respondents highlighted a challenge regarding the criteria being followed in

selecting the best performer as in some cases repetition of same candidate can be observed.

The budgetary limitations by Treasury do not give sufficient space that is conducive to

building internal capacity in research, development and innovation. It was evident that the

allocation from Treasury is not negotiable; it is rather a top to down approach in terms of the

amount allocated for each directorate.

The research established that there are also systemic challenges that affect the operational

effectiveness of the organisation. Although the supply chain management IT system is

helpful in curbing corruption, its turnaround time to process an order, or a travel request for

an official, takes a minimum of 24 hours. This requires that people must plan their trips in

advance, and no emergency bookings or purchases are accommodated in the system. This

stalls transactions of serious business trips which could otherwise have accelerated service

delivery. This question arises as a result of interrogating the interviewee further on the

existing culture in the organisation, and whether it promotes change, and this response

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illustrates unequivocally that change is difficult in government, and even if there are solutions

out there people cling to the old ways of doing business.

4.1.11 Challenges with Stakeholders

Government should at all times provide an opportunity for stakeholder’s participation in

service delivery. The Department of Human Settlements is not immune to this responsibility

in ensuring that housing projects are implemented with maximum participation of

beneficiaries. The implementation plan is such that project managers, usually consulting

engineers, are expected to establish a steering committee which should comprise people who

are eligible to be beneficiaries in the project. Government should implement projects across

the province with each locality or village settlement, characterised by its own stereotypes,

traditions and social norms.

Housing development is not a new concept to communities as they are used to building

houses on their own. Moreover, the skill for building these houses will be sourced locally as

part of job creation. The communities are more familiar and comfortable with the

conventional bricks and mortar types of development. The stakeholders have powers to

choose the type of house to be developed on their behalf, and no payment can be made unless

the steering committee through the chairperson is happy with the development. Application

and adoption of innovative technology is not without challenges in societies with long-upheld

norms and standards for building houses. The beneficiaries are expected to sign

acknowledgement receipts of the houses once completed, and this is called a happy letter as

an expression that the beneficiary is satisfied with the quality of workmanship in the house.

Bearing in mind that for a beneficiary to own a house restores their pride and dignity, it is

paramount that the house upholds the well-established facts around building norms and

standards (the theory of inductive and deductive reasoning dominates in society).

Integrative thinking has been in practice to solve wicked problems whether consciously or

unconsciously. Thinking abductively has been applied in business more often than in

government and society. In society people are accustomed in designing the house of their

own choices, especially in a rural environment, indicating that intuition and creativity are

more prevalent in those areas. Business has been successful in providing innovative solutions

to material performance and durability. However, there is a challenge in accepting these

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technologies by communities despite having been tried and tested in terms of authentic

designs and development. While design thinking may find application in business and

government, societal buy-in is another quagmire. The Department of Human Settlement

conducted a study on the rejection of innovative technology by communities.

Another dimension in rejecting alternative technology by society is the effect it will have

on semi-skilled people in terms of job creation. Technologies such as those proposing to erect

concrete walls through form-work do away with the use of bricklayers but make use of

manual labor for mixing concrete which is cheaper since they use unskilled labor. The use of

automated concrete mixers significantly reduces job creation and entrepreneurship by

SMMEs. Stakeholders such as local suppliers of materials also suffer the blow brought about

by some of these new technologies.

These are some of the challenges that reinforce the problem of thinking and maintaining

the same culture and norms in government projects. It is evident from the above that

government has a host of dynamics to manage a shift from societal norms and standards. The

business fraternity has a number of strides to embark upon to get a buy-in in the product or

service invented. This is also an illustration of the embeddedness of algorithmic thought

process in society. Government should embark on shifting the mindset of society through

advocacy for the adoption of alternative technologies by society. This can be achieved

through a number of strategies such as political and management support, piloting projects

and marketing and advertising.

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Chapter 5: Analysis of the Findings

The discussion above enabled the research to deduce six themes and sub-themes for

analysis. These themes will further lead to recommendations in identifying what needs to be

done to improve the state of affairs in Human Settlement. It is further observed that the

research was too broad to arrive at substantive conclusions and as such sub-research topics

can be developed for further analysis. The researcher has developed the following six themes:

A need for a radical review of housing code policy.

A need for institutional capacity building and strengthening.

A need for a radical application of innovative technology, coupled with marketing and

advertising for community buy-in.

A need to improve business systems and supply chain management processes.

NHBRC strategies in recognition of innovation must be strengthened.

A need to review professional services for planning and environmental requirements.

5.1 A Need for Radical Policy Review (National Housing Code)

The findings are that the national housing code policies appear to be too restrictive and

inflexible in varying extenuating circumstances. The policy is reviewed on a five-year term

which is in line with national government’s term of office for political office bearers. The

policy encourages early school dropouts and premature independency of young adults, thus

contributing to unemployment and crime. The policy would be best if it only provides

housing subsidies for economically active young adults beyond university age (say 25 years

and older), subject to research findings on a suitable age for housing subsidy. The subsidy

quantum is rigid, the qualification criteria of beneficiary earnings are a maximum of R3500 –

since 1996, and has never increased as the value of money depreciates. Thus, the policy does

not accommodate people above this threshold but who cannot afford to pay for a mortgage

bond. The policy does not accommodate movements of people from one city to another

should economic circumstances dictate. The beneficiary administration is centralised and

lengthy thus prolonging the turnaround time in the value chain.

In practice, these policy dictates are a cause of bottlenecks, and are thus an indication of a

less rigorous commitment to change the policy to suit prevailing circumstances. The research

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finding is that government has been using an established algorithmic system for a long time

and the five-year term appears to be the only period in which the policy can be reviewed. The

culture of reviewing the policy more often and applying innovative ideas to policy shift are

non-existent. An ideal situation would be a culture where review of the policy is done on an

annual basis. A situation where officials and people and their experiences are able to

influence a policy shift regularly should be encouraged. The knowledge funnel theory as

applied in some business ventures seems to be far from being applied by government, and

knowledge about the theory is not known in government circles.

5.2 A Need for institutional Capacity Building

The findings are that the department has strategically positioned itself to respond to the

need for the acquisition and attainment of new knowledge. Research and innovation are

institutionalised but it is evident that capacity limitations, such as human resource capacity,

are limited to one official per expert area. There is a need to beef up this directorate with

capable staff in research and development. Knowledge management and innovation has been

institutionalised and this is an indication that the department values the importance of

searching for new knowledge.

It is found that due to budgetary constraints, Provincial Treasury restricts the allocation of

budgets based on historical figures and limited consultative processes of checks and balances.

Chief Directors must find a way to influence funding and resourcing of the organisational

structure. The directorate focuses its energy on research in the social flare of development,

and policy and knowledge management. Innovation is their sole mandate and no culture of

moving along a knowledge funnel in relation to thinking has been embraced by the entire

department. There is a need to inculcate the culture of learning and intuition in the

department and across the hierarchy of the organisational structure. The organisation seems

to be biased toward the algorithmic thinking.

However, because of national recognition of innovative technology, the leaders in the

institution have full support. Staff members in this directorate have the passion and

enthusiasm towards research and innovation, and have sufficient capacity both academically

and experience-wise in this field. The recognition of excellence of staff members and

contractors confirms that the Department of Human Settlement promotes and rewards

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innovation, but more has to be done to improve the current set-up. The current set-up does

not indicate the criteria for nominations and there is no documented evidence of the selection

process. The reward for innovation does not get documented for showcasing to encourage the

culture in the organisation.

5.3 A Need for a radical Application of innovative Technology

The findings in this research suggest a very slow implementation of innovative technology

in government projects, and that government is biased toward the use of established

algorithms. The government has delayed application of innovative built technology for the

past 20 years of democracy, characterised by conventional construction methods of bricks

and mortar. Housing development has not been sufficiently fast-tracked due to the

rectification programme which is earmarked to rebuild defective houses, an indication of a

failed conventional method in the construction of houses.

Alternative building technology (ABT) is being implemented as a pilot project on a small

scale in the Eastern Cape Province. The department’s approach is a staggered application and

taking lessons learnt in other provinces. This is an ideal approach but it’s not accelerating

progress in the organisation, as much of the funds have been lost due to a lack of momentum.

Government and community are stuck with conventional methods and less attention is given

to the full-scale application of innovation. It is observed that the cost of construction for an

ABT house could reduce the cost by 50% for some of the proven and durable technologies,

and these savings can be used to improve either the size of the house or build other amenities.

Despite the reluctance for full application of ABT in government projects, the business sector

has improved the materials used for building dramatically. It can be concluded that from the

knowledge funnel theory point of view, or other innovative theories, government is far

behind in managing its resources as business.

5.4 NHBRC Strategies in Recognition of Innovation

The research has established that Human Settlements commissioned its parastatal – the

NHBRC – for quality monitoring and this has become an impediment to alternative design.

The guidelines do not accommodate deviations from the designs unless prior submission has

been made by professionally registered engineers and architects. These rational designs made

fit-for-purpose are acceptable, subject to the approval of Agrément SA, and that such

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deviations have been tried and tested in the research laboratory at the CSIR. The NHBRC

operates at exploitation mode in terms of design thinking theory. The organisation’s core

mandate is quality assurance hence its attention is to minimise the risk to the banks and house

owners from the defective work of contractors.

The notion of innovation increases the risk and it is evident that this is not their core mandate.

Martin (2009) argues that “reliability is achieved by eliminating much subjectivity, judgment

and bias as much as possible and narrowing the scope of the test to what can be measured in a

quantitative way.” It can be concluded that this organisation is operating along the notion of

reliability rather than validity, and that recognition of the importance of validity can be seen

in its arrangement with the CSIR to house Agrément SA who is an agent of Public Works. It

is apparent that Human Settlement does not value innovation through the arrangements seen

in its organisations.

5.5 Need to review professional Services for Planning & environmental Requirements

The findings are that the current legislation is fragmented and an effort to consolidate land

use management legislation will improve township establishment processes. The planning

authority is currently seated in the Department of Local Government and Traditional Affairs.

The challenges in coordinating approval of planning by this department suggest undue

placement of this responsibility. Planning approval would be best located in Human

Settlement as most planning requests pertain to the development of houses.

The placement of professional services from different departments, as is the case

currently, reflects a fragmented approach which contributes to delays in the value chain.

Despite the fact that the Environmental Affairs Department is the custodian of EIAs, it can

improve the turnaround time if the department could second dedicated professionals to

approve EIAs to the Department of Human Settlement.

The planning applications of both these professional services are subject to the approval of

tribunal committees. The researcher is of the view that integrative thinking theory can be

used to solve this wicked problem in order to bring about a better business model that will be

placed under a single department. The scope of this research is limited, and further study on

the best business model in collaboration with other government departments is recommended.

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5.6 A Need to improve Business Systems and SCM Process

The research findings confirm that government business software systems are not user-

friendly since requisitions take a cycle of 24 hours to process orders. It was confirmed that

there is no systemic provision for urgent requests in emergency situations. For instance,

unexpected official travel trips cannot be accommodated and this impedes optimum service

delivery. For a provincial department to still operate under these circumstances confirms the

rigid nature of systems in place, which is a reflection of resistance to change. In fact, one can

conclude that there is absolutely a non-existence of a culture of innovation in these support

services whereas the programme management and research and policy directorates recognise

innovation and knowledge management.

It was previously asserted that innovation has not been embraced as an organisational culture,

but rather a notion acknowledged and placed in a specific directorate as reflected in the

institutional arrangement. The importance of innovation as a culture across the departments

and hierarchies is not sufficiently appreciated. The relationship exists between finance,

human resource services as support departments and the implementing department in relation

to systems, and the operational strategies and policies that they embrace.

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Chapter 6: Recommendations

The following are recommendations to Human Settlements in addressing constraints and

challenges in implementing housing projects:

The national housing code policy would be more likely to meet expectations if it only

provided housing subsidies for economically active young adults beyond university age (say

25 years and older), subject to research findings on a suitable age for housing subsidy. The

subsidy quantum is rigid, the qualification criteria of beneficiary earnings are a maximum of

R3500 since 1996, and has never increased as the value of money depreciates. An increase in

this income level is recommended.

There is a need to inculcate the culture of learning and intuition in the department and

across the hierarchy of the organisational structure. The organisation seems to be biased

toward algorithmic thinking. However, because of national recognition of innovative

technology the leaders in the various institutions have full support, but it is limited to the

service directorate instead of all directorates.

The organisation must establish a reward system to recognise innovation and must expand

this to the broader community of employees, and the selection process must be clearly

understood and be transparent.

The NHBRC operates at exploitation mode in terms of design thinking theory. Although

The CSIR and Agrėment SA support research on innovative technology, implementation

must be accelerated by embarking on marketing these technologies for community buy-in.

The researcher is of the view that integrative thinking theory can be used to solve this

wicked problem in order to bring about a better business model that will place professional

services under a single department.

The department must stimulate a culture of innovation and operational efficiency in

supporting directorates such as corporate services; Finance & Supply chain management and

legal, to reduce bottlenecks permeating service directorates. The performance management

system in place is the enabling environment that encourages performance. Rewarding

innovation will create a culture of thinking and continuous improvements. Culture of

innovation should be institutionalised rather than implementing it in a specific directorate

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such as research and innovation. Rewarding performance must be documented and publicized

in organizational newspaper.

The department ought to influence a review the national supply chain management policy

to accommodate innovative ideas in project implementation. The policy should create a

competitive environment for innovative solutions to problems rather standardizing everything

for uniformity in the tender process. Certain projects should allow design innovation in low

cost housing and this approach will curb monotony in relation to aesthetic view of

infrastructure and house plans in low cost housing development. The policy should be open

to application of the theory of knowledge funnel view.

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Chapter 7: Conclusion

The national housing code policy appears to be restrictive and inflexible to varying

extenuating circumstances. The policy is reviewed on a five-year term which is in line with

national government’s term of office for political office bearers. The policy would be best if

it only provides housing subsidies for economically active young adults beyond university

age (say 25 years and older), subject to research findings on a suitable age for housing

subsidies.

Another dimension in rejecting alternative technology by society is the effect it will have

on semi-skilled people in terms of job creation. The research has established that Human

Settlements commissioned its parastatal – the NHBRC – for quality monitoring and this has

become an obstacle to alternative design. The guidelines do not accommodate deviations

from the designs unless prior submission has been made by professionally registered

engineers and architects. These rational designs made fit-for-purpose are acceptable subject

to the approval of Agrément SA, and after such deviations have been tried and tested in the

research laboratory at the CSIR. The NHBRC operates in exploitation mode in terms of

design thinking theory.

It is observed that the cost of construction of an ABT house could reduce the cost by 50%

for some of the proven and durable technologies, and these savings can be used to improve

either the size of the house or build other amenities. The results in this research suggest a

very slow implementation of innovative technology in government projects and government

bias toward the use of established algorithms. The government has delayed the application of

innovative built technology for the past 20 years of democracy, characterised by conventional

construction methods of bricks and mortar. Housing development has not gathered

momentum due to rectification programme which is earmarked to rebuild defective houses,

an indication of a failed conventional method in the construction of houses.

The current legislation is fragmented and an effort to consolidate land use management

legislation will improve the township establishment process. The planning authority is

currently seated in the Department of Local Government and Traditional Affairs. The

challenges in coordinating approval of planning by this department suggest undue placement

of this responsibility. Planning approval would be best located in Human Settlement as most

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planning requests pertain to the development of houses. The placement of professional

services from different departments, as is the case currently, reflects a fragmented approach

which contributes to delays in the value chain. Despite the fact that the Environmental Affairs

Department is the custodian of EIAs, it can improve the turnaround time if the department

could second dedicated professionals to approve EIAs to the Department of Human

Settlement.

The importance of innovation as a culture across the departments and hierarchies is not

sufficiently appreciated. The relationship exists between finance, human resource services as

support departments and implementing department in relation to systems, and the operational

strategies and policies that they embrace.

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References

Bousbaci, R. (2008). “Models of Man” in Design Thinking: The “Bounded Rationality”

Episode. Design Issues, 24(4), 38.

Business Dictionary. Retrieved from http://www.businessdictionary.com/

Commission, N. P. (2012). National Infrastructure Plan. Pretoria: RSA Department of

Environmental Affairs, S. A. (2013, November 27).

Department of Tourism and Environmental Affairs. (2013). Retrieved from https://www.

environment.gov.za/strategicissues/sustainablecommunities/

Leavy, B. (2010). Design thinking - a new mental model of value innovation. Bingley, UK:

Emerald Group Publishing.

March, J. (1991). Exploration and exploitation in organizational learning. Organization

Science, (2), 71-87.

Martin, R. (2007). Opposable mind: How Successful Leaders Win Through Integrative

Thinking. Boston: Harvard Business School Press.

Martin, R. (2009). Design of Business: Why Design Thinking is the Next Competitive

Advantage. Boston: Harvard Business School Press.

Martin, R. (2010). Design thinking: Achieving insights via the “knowledge funnel.” Strategy

& Leadership, (2), 37-41.

National Housing Code. (2009). Department of Human Settlements. Pretoria.

NHBRC. (2013, November 26). Retrieved from http://www.nationalbuildingregulations/

nationalhomebuildersregistrationcouncil:nhbrc.org/index.php/search

Rogers, M. (1998). Innovation in Australian Enterprises: Evidence from the GAPS and IBIS

Databases. Melbourne Institute: Australian Government Publishing Service.

Terre Blanche, M.D.K. (2006). Research in Practice. Cape Town: University of Cape Town

Press.

http://www.nationalbuildingregulations/

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Tshivhasa. (2013). Search for Incredible Technologies. Human Settlements Review, (163).

Verganti, R. (2009). Design-driven Innovation. Boston: Harvard Business School Press.

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Index

1. Research Time Schedule

Activity Planned completion

date

Remarks

Submit Research

Topic

30 July 2013 Submitted and approved

Sign memorandum of

understanding with

Supervisor

15 July 2013 MOU signed by Student and

submitted to Supervisor. I did not

received a signed MOU.

Submit Research

Ethical clearance

30 August 2013 Submitted and approved

Submit Draft

research Proposal

30 August 2013 Draft Research proposal approved

with corrections

Submit draft research

Report

09 December 2013 Draft research proposed comments

received and report edited

Submit Final

Research Report

11 December 2013 Final research Proposal Submitted

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2. Interview Questions

Interview Questions: Provincial Department of Human Settlement

The meeting took place between the Chief Director of Human Settlement, Mrs. Mqokoyi in

Bisho, Province of the Eastern Cape and the interviews were hand recorded by the researcher

as follows:

Bheki: How often do they review national housing legislation and what informs the review?

Mrs. Mqokoyi: The National Housing Policy is reviewed on a five-year basis and is in line

with national and provincial government tenure prescribed by the constitution of the Republic

of South Africa. The policy review is informed by the developmental imperatives of

government which are influenced by the politicians. It is also informed by experiences on the

ground through senior government officials who serve as advisers to Human Settlement and

key stakeholders such as National Housing Development Agencies; NHBRC; Provincial

Department of Human Settlements; Municipalities etc.

Bheki: I would like to know whether the Human Settlement Department haa a unit or section

specialising in innovation, or research and development?

Mrs. Mqokoyi: The department has a directorate for policy and research; which specialises

in research of the experiences of people in housing development, and also look into the policy

framework. The directorate of late appreciates the testing of innovative technology and has

people responsible for such. The directorate has a chief director who reports to the head of

the department together with the other seven chief directors reporting to HOD.

Bheki: How do they promote innovation amongst staff members?

Mrs. Mqokoyi: There are two dedicated research specialists in the directorate. They have a

minimum qualification, to a master’s level and one of them has a PhD. Over and above, the

department, in an endeavor to promote significant contribution, it issues awards for best

performing employee of the year. One of these two employees got an award for his

contribution on innovation and research. He is very passionate about the innovation and

research. We also have performance bonuses which are rewarded according to an employee’s

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performance. Despite these noble rewarding programmes, the policy is not clear on the

criteria. This is our area that needs to be improved.

Bheki. In most cases, innovative ideas are expected from transactional staff like engineers,

how open is the department to intuitive ideas from ordinary staff?

Mrs. Mqokoyi: The Department of Human Settlement is biased towards research on social

sciences rather innovation. But the department acknowledges the importance of technical

innovation. This part is moving to be under programme and project management directorate.

Innovation is acknowledged by the leadership, however, it’s not institutionalised across all

departments. Its application is ad hoc at the moment.

Bheki: Whether the department promotes and rewards innovation as part of its culture?

Mrs. Mqokoyi: The promotion of innovation is limited to a certain extend. Rewards are

based on the overall performance. Innovation is not embraced as a corporate culture in our

institution.

Bheki: How much budget is allocated to research and development/innovation?

Mrs. Mqokoyi: Budget is limited although I cannot be specific but we do not spend money

in research. We spend money in resourcing the research unit but with limitations by

provincial treasury. Budget process is informed by a number of pressing issues across the

province and is constrained. The process does not involve intensive consultation for inputs

and contributions.

Bheki: How has housing development changed in terms of technology over the past 10

years?

Mrs. Mqokoyi: Not much. Housing development has improved in term of quality of houses

and the number of houses built in order to address the backlog. Innovation technology has

been applied in pilot projects for show casing and adoption by communities. However, the

challenge is that it has not received overwhelming community by-in yet. A lot still need to be

done to convince beneficiaries on the benefits of innovative built technology. The

conventional construction has been dominant in the province, only recently, that the

department is promoting and moving toward alternative built technology (IBT).

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Bheki: I would like to know whether people are able to influence systemic changes on a

regular basis?

Mrs. Mqokoyi: People are able to influence systemic changes only if they deal directly with

the system. An example is finance who deals with supply chain issues; they have a direct

influence to the changes. Those who deal with policies have a direct influence to policy

changes. The systemic changes are difficult to influence.

Bheki: How much change has occurred in your systems and policies over the last five years?

Mrs. Mqokoyi: Not much has changed in the organization except housing development

instruments which change roughly on bi-annual basis. The subsidy quantum also changes

annual as it is informed by the inflation changes.

Bheki: Explore ways in which Municipal finance management can accommodate innovation

in service designs; Desktop study on constraints posed by MFMA and supply chain

management policy?

This part was done through conducting an in-in-depth study of the Municipal Finance

Management Act and the municipal supply chain management policy.

Bheki: What is the effect of regulatory framework in the turnaround time in the design and

implementation of housing development?

Mrs. Mqokoyi: The turnaround time ranges between three to 10 years depending on the

location of township and the laws regulating the township establishment. For the old Transkei

and Ciskei Town, township establishment were based on old Township ordinance 33 of 1933

legislation which is difficult to implement in the new South Africa, as a result approval of

general plans take longer than normal.

Bheki: I would like to know whether such regulatory framework can be changed to short-

circuit the process.

Mrs. Mqokoyi: Yes the regulatory framework can be changed, but it gets changes when a

new tenure of government is effected, which is after a five year period.

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13. If research and development or innovation is embraced in human settlements department,

which approach is dominant between the two schools of thought referred herein below?

Mrs. Mqokoyi: Human Settlements is biased towards social science but we also promote the

use of innovative technology and its associated research.

Bheki: I will be interested to know whether human settlements’ approach in research is done

internally, or outsourced to a research institution like CSRI (Centre for Scientific Research

Institute) or any organisation?

Mrs. Mqokoyi: Human Settlements has a research unit which culminates from a provincial

research and knowledge management unit in the premier’s office. All departments are

encouraged to establish their own research units and knowledge management. For innovative

built technology, Public Works has commissioned a state-owned enterprise called Agrément

SA housed at the CSIR which specialises in testing innovative built technology in buildings.

We accept IBT if it’s approved by Agrément SA.

Bheki: Any challenges with regards to embracing both schools of thought in innovation (the

analytical thinking and intuitive thinking)?

Mr Mqokoyi: Human Settlements does not have the capacity to deal with research on

innovative technology. We rely on consultants and contractors or businesses to bring about

innovative technology. So we are biased towards the social science which is more into

intuitive thinking.

Interview Questions: Human Settlement Department: Regional Office

The interview took place in Port Elizabeth between the researcher and the regional director of

Human Settlements in Cacadu region. The following qualitative questions will guide the

research in housing development at local municipality level of government:

Bheki: What is the effect of supply chain management requirements in housing projects?

William Perks: Supply chain management is centralised in the province. The turnaround

time for the SCM process is long and we are unable to respond to urgent matters such as

emergency housing. All procurement must go to public tender, innovative technology is

difficult to implement as a result.

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Bheki: What is the effect of town planning requirements in the turnaround time for project

implementation?

William Perks: Town planning process takes long but for our region it does not take long.

Bheki: What the effect of norms and standards in applying the theory of knowledge funnel in

housing projects?

William Perks: we use provincial norms and standards. Innovative technology must be

approved by the province and Agrément SA.

Bheki: How is the input of engineers and landscape architects in applying innovations and

constraints posed by regulatory environment in housing developments?

William Perks: NHBRC regulates the use of innovative technology. NHBRC inspectors

stick to the guiding manuals.

Bheki: How is knowledge funnel view understood and applied by practitioners in housing

projects?

William Perks: It is understood by practitioners but innovation is promoted. A buy-in from

local community is a problem.

Bheki: Municipalities are biased towards reliability and analytical thinking and associated

algorithms in their housing projects, how can government accommodate validity in the quest

for creativity and innovation?

William Perks: Adoption of innovation technology at national level.

Interview Questions: Provincial Department of Treasury

Bheki: Municipal Finance Management is highly regulated and exceed public finance

management legislation, how can the department relax certain clauses to allow space for

innovation?

Nceba Sithole: Because of increase corruption in local government and experiences learnt in

audit outcomes, supply chain management policy regulation had to be regulated to minimise

the possibility of corruption.

Bheki: Project management principles embraced in the cycle of procurement and

implementation in MFMA leaves no space for innovation and this is done in pursuit of cost

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effectiveness and efficient use of limited resource. Recognising the importance of creativity

and innovation, how can legislation promote innovation and exempt municipalities in such

cases from being declared as fruitless expenditure in cases where the outcome was not

achieved?

Nceba Sithole: For now legislation does not allow expenditure without measurable

outcomes. The expenditure on research and development is well catered in research

institutions and accounted for accordingly. Service delivery departments are not expected to

spend money on testing and research.

Bheki: The department is stringent on the allocation of budget for municipalities and

provinces, with spelled out outcomes or deliverables. How can government improve and

make budgetary provisions for innovation in government sector without overly relying to

consultants?

Nceba Sithole: Government does not have provision for research and development in local

government. However, this provision is made in all provincial departments. Local

government is seen as service oriented organisation and a face of government. Research can

be done through their development agencies. Proposal can be made to National Treasury

regarding the possibility of allowing these provisions.

Interview Questions: Development Consultants: Planners, Engineers and Project

Managers

The interview was conducted with PN Molefe Consulting Engineers, a company appointed

by the Human Settlements Department for monitoring the implementation of housing projects

in the Port Elizabeth region. An introduction of the research purpose and the research

objectives was done to the interviewee. The questions were as follows:

Bheki: How much cognisance is the field of practitioners about knowledge funnel theory and

the school of thought it seeks to influence business organisations?

Yolanda Ngcawuzele: I do not know about the theory but I understand it as you explain it in

your background. We are a consulting engineer firm that provides project management

service and inspections to Human Settlement Department and as such we not into developing

or designing anything.

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Bheki: How much effort is involved in creativity and intuitive thinking when seeking

solutions to human settlement changes such as social housing and associated infrastructure?

Yolanda Ngcawuzele: We are following guiding manuals for inspections in monitoring

construction on housing projects. Contractors are expected to stick to the specification with

no alternative design allowed. In infrastructure development, designs are flexible following

the guidelines for design of engineering service and South African National Standards Code

1200 as guiding parameters.

Bheki: How long does it take for practitioners in evolving from well-known algorithms:

systems; processes and design methods?

Yolanda Ngcawuzele: It is difficult to evolve because we want to maximise profits but we

do accept innovative technology that has been tested and tried for its workability.

Bheki: How much influence do consultants have in technological innovation in housing

development and what constraints do they face in government?

Yolanda Ngcawuzele: We do not have much influence, we use set standards in supervising

the works. Government is strict in terms of its adopted norms and standards.

Bheki: How much time and effort do consultants spend in search of innovation?

Yolanda Ngcawuzele: We do not have a research and development unit. We use existing

standards and design guidelines. We are service oriented firm and have limited capacity to

implement projects on speed and at costs.

Bheki: Which areas of legislation impede improvement on service delivery?

Procurement of services delays the implementation of projects. This is a legislative

requirement. It would be better if emergency projects are exempted from procurement

process.

knowledge funnel view and introspection on local...

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