'South Africans have an amazing capacity to generate creative solutions'

BUSINESS INTELLECTUALS: I interview Adrian Gore about overcoming declinism, the power of goal-setting, and how science and collaboration bring innovation to South Africa's toughest challenges.

This is the tenth and final interview of 2024 on Our Long Walk, my blog about the past, present, and future of South Africa. I talk to South African business leaders to gain their perspectives on the lessons from history. Previous interviews were with André de Ruyter, Herman Mashaba, Jannie Durand, Paul Clüver, Magda Wierzycka, Anton Rupert’s biographer Ebbe Dommisse, Phuthi Mahanyele-Dabengwa, Michael Jordaan and Stephan Malherbe. Please consider a paid subscription to access the full interview and all of my twice-weekly content, including columns, guest essays, and summaries of the latest relevant research.

Adrian Gore is the founder and group chief executive of Discovery Limited.

1. You’ve argued that South Africa suffers from severe declinist thinking – the sense that things are on an inevitable downhill trajectory. We are confidently wrong about the state of our country. There is a clear cognitive bias here, but to what extent do you think a better sense of history can help fight our chronic declinism?

That’s an interesting question. Some of the research underpinning our arguments on declinism relates to evolutionary biology, which shows that humans adapted to their harsh environments (physical attacks, starvation) by becoming more primed for negative signals than positive ones. Understanding this genetic bias helps us realise that our propensity towards pessimism and declinism is not the sophisticated response we think it is, but an outdated instinct from a vastly different time in our history. Ironically, in an environment of systemic and interconnected threats (racism, pandemics, war, climate change etc.) what is needed is a positive mindset that builds trust and collaboration. To get a system to work requires motivating strangers, who are dispersed across time and space, to cooperate. For this, positive frameworks and feedback loops are needed, not negative ones. We are miscoded.

A way to counter chronic declinism is by looking back to see how far we’ve come. Look at our history in South Africa – it’s littered with problems that seemed intractable and insoluble, but over time have either been minimised or solved. Over the course of thirty years, we faced the transition from apartheid to democracy, the AIDS epidemic, extreme levels of violent crime, the Zuma years, and loadshedding. The fact that these problems change means they aren’t inevitable or insurmountable. If anything, South Africans have an amazing capacity to generate creative solutions, unique to a country having to simultaneously address high levels of inequality while nurturing pockets of sophistication. Take, for example, the Covid-19 pandemic: while SA saw a significant number of infections, its well-established scientific capability was a key contributor to some of the most important Covid-19 vaccine trials and its genomic sequencing capabilities have enabled its identification of new variants. There are other examples of this resulting from government and business working in partnership to tackle major hurdles to economic growth.

I am not trying to minimise the country’s problems – they need to be solved. My argument is that problems of the day are sought out and obsessed over as evidence of doom, yet they are not. However, when progress is made, the nation’s sentiments and psyche are not revised to take progress into account.

When we look back at our country’s history, we also neglect to appreciate the gains we’ve made and the relative scale and sophistication of our economy. For example, in the 30 years since Nelson Mandela became President, South Africa has had only two years of negative GDP growth, one being the Covid-affected year of 2020, the other under Jacob Zuma in 2009. Since 1994, formal housing has increased by 130% and mean years of schooling has increased from 7.9 years to 11.4 years. Some 85% of Africa’s stock market capitalisation is concentrated in the JSE, and SA’s GDP is comparable to that of countries like Egypt, Denmark and Malaysia.

That’s why recognising our country’s potential and reframing the narrative is central: if we lose sight of South Africa’s sophistication, scale and beauty, we lose sight of the fact that there is something precious worth fighting for. This creates a negative feedback cycle: if we see our country as a lost cause, why dream, build or invest? On the other hand, if we see what we stand to lose, we evoke the agency needed to drive progress to overcome decline.

2. South Africa in the 1990s was a time of tremendous change, optimism, and uncertainty. Discovery emerged at this pivotal moment, leveraging early digital innovations to address the pressing healthcare and financial challenges unique to that era. Looking back, how much of Discovery’s success would you attribute to timing, and how did the socio-political shifts of the 1990s shape the company’s early vision and strategy?

The timing was crucial. Discovery was started in 1992, during the transition from apartheid to democracy and it was a time of considerable political and economic uncertainty. The South African healthcare landscape was facing challenges and medical schemes were under pressure. The country had a shortage of doctors and a high quadruple disease burden, and private health insurers had to adopt a system of community rating (which prohibited them from varying premiums based on age, gender, health status or other factors) without mandatory enrolment – creating potential for adverse selection and medical inflation. We believed we could create a sustainable approach that integrated traditional medical aids and health insurance. We also felt we had a compelling business case – a specialist health insurer that focused on demand-side management – making people healthier. Our initial hunch around prevention was later validated by our own and external data – that we could incentivise people to do healthy things and improve their health and longevity over time.

We learned from this experience that difficult times are the best times to build because others are distracted and opportunities are undervalued. I actually think it’s easier to build in difficult times and interestingly, this has been a theme for Discovery – we are proficient in complexity and resilient in the face of change. I believe that successful entrepreneurs know that cycles come and go and that the best time to invest and build is when times are tough – then when good times emerge, you are in full stride. The Warren Buffet statement, “Be fearful when others are greedy and greedy when others are fearful” refers to wise investing, but it applies even more so to building businesses.

3. Disruptive moments like the Spanish Flu or World War II often led to transformative changes – such as the rise of life insurance or creation of the NHS. What lasting innovations do you see coming out of the COVID-era?

Tragic as the pandemic was, some of the innovations coming out of that time will be of value to health systems going forward. There are many, but some of the top ones include:

1. Telemedicine and Virtual Care: Rapid adoption of telemedicine allowed patients to access care remotely, reducing exposure risks. This model will continue, with hybrid care combining in-person and virtual visits, improving accessibility, especially for underserved areas. For example, on the Discovery Health app, one can complete a symptom checker to determine if you need emergency or urgent care and/or connect with an ER doctor for a virtual consultation and diagnosis.

2. Health Data Integration: The need for real-time data sharing among healthcare providers and public health agencies accelerated interoperability. Enhanced data integration supports coordinated care, predictive analytics, and effective public health responses. For example, our Connected Care offering is an online digital platform connecting members to healthcare professionals and online coaches through online consultations. It also integrates with healthcare devices for remote diagnostics and monitoring. With member consent, their health record is made available to healthcare professionals to enable better quality of care wherever they are.

3. Digital Public Health Tools and Rapid Diagnostic Testing: Contact tracing apps and digital symptom checkers supported pandemic control. These tools are now valuable for monitoring other infectious diseases and public health initiatives. The demand for COVID-19 testing also led to the development of rapid tests and at-home kits, paving the way for similar diagnostics for other conditions.

4. mRNA Vaccine Technology: The success of mRNA vaccines for COVID-19 demonstrated the technology’s potential for rapid development. mRNA platforms are now being explored for vaccines against other diseases and personalised cancer treatments.

5. Mental Health Services and Digital Therapeutics: Increased demand for mental health support led to a surge in digital solutions, making therapy and counselling more accessible. Digital mental health tools will remain crucial, expanding access and reducing stigma.

4. In 1954, Roger Bannister famously broke the four-minute mile running record, symbolising the achievement of seemingly impossible goals. In 2022, you set out to run a five-minute mile. Last year, you became involved in a new government partnership, aiming to set challenging targets for South Africa’s economic growth. Does the preparation for running a five-minute mile translate to setting and achieving economic growth targets?

I was inspired to set the 5-minute mile goal because Vitality data shows just how powerful physical activity is for our health and wellbeing. But more importantly, I did it to illustrate the power of setting goals, particularly during complex times. Many people asked me why I set a tough personal goal when things were so difficult and unpredictable in the macro environment – the world was still reeling from the pandemic, the Russia-Ukraine war had just broken out, and locally loadshedding was decimating the economy and sentiment was abysmal. But this is precisely when we should set them because goals can be a powerful tonic in an environment of chaos and uncertainty.

Furthermore, we are learning from behavioural economics that goals have more power than we may rationally understand. When we set goals, we trigger potent levels of focus and motivation; and consequently, create unimaginable stretch in our potential that otherwise lies dormant and undiscovered.

This is known as loss aversion, a phenomenon whereby individuals are doubly as motivated by loss as by a gain of equal magnitude. Nobel Prize winners Kahneman and Tversky explored this concept by looking at the value people derive from things, both positive and negative. They found that the relationship is not linear as assumed but S-shaped, declining gradually and flattening out. They also found that the curve is much steeper on the negative side. In other words, loss is felt more keenly than gain and is hence more motivating. This is profound when contemplating how to improve our own lives, our communities and our country.

That’s why, when we formed the government-business partnership, we focused on three clear workstreams – energy, transport and logistics, and crime and corruption – and set clear goals for each with regular feedback sessions and accountability. The drive and urgency that collective goals create are what move the needle on complex problems. Since initiating the partnership, there has been a 76% reduction in loadshedding with 6GW of new energy generation added to the grid; private sector helped deploy over 500 security personnel along a key freight rail corridor with more than R700m invested; and in terms of Crime and Corruption, the above investments led to a 50% reduction in security incidents on the coal line. A financial Forensic Analysis Centre has also been set up with an investment of R57 million, and the Joint Initiative on Crime and Corruption is in place and operational.

5. Our vaccine rollout during Covid, you’ve argued, shows our ability to overcome the seemingly insurmountable crises we constantly face. Why do you think we struggle to apply the same level of success to other issues, like ensuring an adequate water supply?

Issues around water supply are incredibly challenging, from the funding and willingness to get things done, to system complexity and the huge demand-supply gap. There is huge infrastructural and operational complexity. One of the success factors in the government-business partnership has been the ability to focus on key areas where we could drive progress, instead of trying to address everything at once. Once we have made sufficient traction in our key workstreams, we can look further.

6. Science appears to be central to your business and view of the world: you frequently cite Nobel winners like Daniel Kahneman and Angus Deaton, for instance. How do you decide which scientific insights to incorporate into Discovery’s strategies, and are there any you think the broader business community could benefit from embracing?