SA’s top management is set for at least another decade of slow transformation, with very few new faces representing diversity in terms of race and gender expected until at least 2015.

 

“While top companies are increasingly ensuring that their general workforce reflects the country’s demographics – in line with both ethical and legal requirements - the faces at the very top will continue to look the same for many years and, more likely, even the next decade,” says Debbie Goodman-Bhyat, MD of Jack Hammer Executive Headhunters.

 

South African CEOs and MDs can no longer get away with not being digitally savvy: a new survey shows more than 90% of companies expect their head honchos to be up to date with the latest advances in the digital and social media space, as the online environment becomes more critical to sustaining a successful business.

 

According to Jack Hammer Executive Headhunters, which polled firms in the traditionally conservative financial services, engineering, FMCG and manufacturing sectors, nearly all assume that the Head of the organisation will at least have an understanding of the importance of digital technology for the company, even if they personally do not engage in online or social media.

 

“Your CEO might not tweet or even have a Facebook account,” says Debbie Goodman-Bhyat of Jack Hammer, “but he or she must be far-sighted enough to see the potential benefit of these channels for the business. Obviously some industries are more likely to engage with such media but the days of ignoring the online space as ‘irrelevant to our core business and customers’ or ‘for the youngsters’ are over. As more and more South Africans get connected to the Internet and share information, so there are more and more chances for a company’s reputation and market share to be made – or broken.”

 

She strongly cautions against handing over your company’s digital presence to “a junior who seems to know they’re doing because they spend all day on their iPhone.

 

“You wouldn’t make someone straight out of school with Matric maths your CFO, so don’t fall into the same trap when it comes to your social media. There are numerous brands which had to put expensive PR campaigns in place to win back customers because an inexperienced person was at the helm of their social media accounts. There are seasoned professionals who are intimately familiar with the opportunities and challenges of the online environment - and they should be recruited into your strategic communications mix.

 

“Before hiring someone to drive your social media strategy (either internally or as an outsourced agency partner), make sure you’ve cut through the digital jargon, and have fully understood the individual’s background, their track record with similar initiatives in the past, and the impact, scope and cost of the project or strategy they are recommending – the same fundamentals you would use for any other strategic hire”, cautions Goodman-Bhyat.

 

“It’s quite easy to get swept up with the hype of new media and to feel compelled to participate in costly digital campaigns purely because ‘everyone else is doing it’. Just as a traditional Marketing Executive is expected to demonstrate a business case and tracking measures for marketing expenditure, so too the Online Strategist should have the skills and experience to do the same.”

 

Goodman-Bhyat says executives need to see digital media as “word of mouth… on steroids. News of great customer service or a poor product can spread within seconds and reach some of your most desirable clients and consumers. Many local companies have been burnt because they underestimated the power of social media. What you and your team took years to build up could be harmed within minutes if you don’t have a comprehensive digital media strategy and competent manager in place.”

 

And while reducing their business insights into 140 characters may be intimidating to some MBA graduates who run million-dollar multinationals, she points out that more and more CEOs and MDs are taking the plunge – and building up loyal followings at the same time.

 

“Visionaries like Bill Gates (Microsoft), Richard Branson (Virgin), Jack Welch (General Electric) and Martha Stewart (Martha Stewart Living) all maintain lively Twitter profiles. Even Zwelinzima Vavi, the secretary-general of Cosatu, has taken to the twittersphere.

 

“Modern consumers expect to have two-way conversations with brands via Facebook, blogs, forums, Twitter and even YouTube. As the head of the brand, you need to ensure that your team is empowered to harness these channels. With CEOs and MDs getting younger – the Jack Hammer Executive Report for 2012/13 shows that the youngest South African Top40 company CEO is only 41 - the time when PAs printed out emails and took down dictated responses to them is truly past!”

 

International surveys show that consumers who engage with brands digitally spend more than those who don’t. Research by The Economist Intelligence Unit shows that at least two-thirds of the organisations achieving the highest returns reported that their C-suites are “active advocates” of social media.

 

“Think of it as another way of getting more people to be loyal to your brand – the more loyalty, the better your bottom line,” says Goodman-Bhyat.

Pondering occupation of the firm’s highest office one day? Then it’s time to get commerce-savvy, if all you currently have in your arsenal is people expertise, a survey of SA’s top corporate employers has revealed.

 

In the latest Jack Hammer Corporate Survey, by leading executive search firm Jack Hammer Executive Headhunters, entities polled represented the financial services, FMCG, retail and engineering industries. Asked whether their company would “ever consider appointing a candidate to an MD or CEO role, from an HR-focused background and with limited commercial experience”, the answer was a resounding “no” from 9 of the 10 respondents.

 

Only one organisation said that someone with Human Resources expertise and focus would be considered – but then only if they’d had responsibility for a P&L, and had displayed commercial talent.

 

Yet interestingly, when asked about the importance of skills, leadership and management (which implicitly require very strong people orientation) people expertise are always ranked at the top of the list.

 

“It is clear then that while a people focus is highly regarded, and a key requirement for someone who is going to be the head of an organization, without a demonstrable track record of having been accountable for commercial issues such as revenue generation, profitability, cost controls, etc, it is unlikely that even the most extraordinary human capital executive will make it to the corner office,” says Debbie Goodman-Bhyat, MD of Jack Hammer.

 

“It is evident that the HR discipline is still regarded as a ‘soft skill’, even though organisations with great human capital strategies are clearly highly competitive in all respects. Nevertheless, without the above-mentioned experience, and some kind of commercial qualification or MBA, the HR exec’s route to the top job is most likely going to reach a cul-de-sac,” notes Goodman-Bhyat.

 

She says that internationally, it would not be unheard of for a philosophy major to land a major position, as employers were more accepting of diverse backgrounds, and able to absorb unusual thinkers bringing new dimensions to the workplace. However locally, a classic commercial education continues to be the non-negotiable.

 

“SA’s top corporates continue to seek the stellar numerical and analytical abilities essential to interpreting facts and figures, even if it may sometimes come at the cost of being better rounded in the workplace, with highly developed communication, creative problem-solving and critical thinking skills.

 

“That’s not to say that commercial savvy and financial acumen are not essential tools in a business leader’s kit – they certainly are. But South African corporates (and their boards who are answerable to shareholders) are extremely risk averse when making CEO appointments, and are unwilling to back strong leaders who don’t fit a ‘typical’ profile”.

There is no doubt that leadership in both the public and private sector this year has been fraught with upsets, tension and change. Questions have been asked as to the leadership of the country, and whether there is something larger at play under which our country and private sector’s leadership is buckling. Reasons for the changes in leadership both in the public and private sector may be varied and complex, pre-determined or arranged, political or economic.

 

In the mining sector, a faction of changes in leadership has been brought on, with various platinum mining executives announcing their departure from the sector, as well as senior executives announcing the axing of staff and management in order to save costs. Aquarius Platinum CEO, Stuart Murray, for example, was the third chief executive to buckle under the economic pressure caused by the uproar in the sector, especially in the face of the continual pressure of issues to deal with such as labour, the Government, safety stoppages and rising costs.

 

We recently also saw Pinky Moholi, Telkom’s group CEO, resigning, along with board director Neo Phakama Dongwana, after heading up the parastatal for the last 18 months. Moholi’s resignation follows that of Lazarus Zim, who announced he would step down as chairman last month.  Currently it seems there are eight vacancies at senior management level at Telkom. Interestingly, no other Telkom CEO, other than Sizwe Nxasana, stayed for the duration of the contract.

 

In South Africa the changing of the guard occurs many times due to the natural ‘retirement’ age being reached as well as appointment contracts coming to an end.  This is what happened, for example, when Pieter Uys stepped down in March 2012 after two decades at Vodacom and was replaced by Shameel Joosub as Group CEO.

 

Others leave because of promotions to different positions or sectors.  In Government, for example, the recent appointment of Minister Naledi Pandor to the home affairs portfolio resulted in the deputy minister Derek Hanekom being promoted to full minister at the Department of Science and Technology (DST).  Minister Pandor’s move, however, was in turn as a result of Minister Nkosazana Dlamini-Zuma taking up the post of Chairwoman of the AU Commission.

 

Similarly, in April, in the private sector, Gert Schoonbee was appointed as managing director of T-Systems because the former MD, Mardia van der Walt-Korsten, was asked to move into the higher ranks in Africa because of her exceptional leadership.

 

While these may be part of natural processes, other leadership changes occur when the leaders are alleged to be involved in activities untoward to the organisation he or she belongs to. Julius Malema, for example, was replaced as president of the ANC Youth League due to his controversial utterances against Jacob Zuma, and bringing the ANC into disrepute.  In 2008, the somewhat controversial recalling of Thabo Mbeki by the ANC resulted in Jacob Zuma being elected as president of the ANC, and the country, because of the electoral processes of a political party.

 

In sport, whether in rugby, soccer or cricket, we have seen changes in leadership at different levels in South Africa, from a coaching level to CEOs.  Again, with questions raised, responses went from a lack of competence to unethical behaviour to end of contracts.

 

There are also a number of categories one can create for leadership changes – some more regular and prevalent than others.  There are the ‘job-hoppers’ moving from one position to another position, mostly exchanging one CEO or executive position for another.  I am sometimes of the opinion that the reason for such rapid changes is to ‘leave before they discover my incompetence.’  Much of the blame for people getting away with this is that too many companies are desperate for the ‘next affirmative action’ person and therefore do not do such a thorough screening.  I wonder if this could perhaps be a sign of Mamphela Ramphele’s ‘lack of maturity’ observation.

 

I have also wondered how many leadership positions changed hands because of persons wanting to get back to South Africa, a specific province or city.  Friends, family and colleagues often assist with the creation of leadership possibilities in companies and government. 

 

Almost all the areas of our lives are impacted upon by people in leadership positions. Interestingly, we do not always recognise effective leadership, but we always know when it is absent. There is no doubt that leadership in South Africa is changing, and so it is worthwhile remembering Heifetz and Linsky’s quote from Leadership on the Line, “In times of rapid change, leaders pretend they know what the answers are, leading people into a systemic dynamic where no one is asking the right questions and playing by outdated rules.”

There was a time a few years ago, when talk was all about the ‘democratisation’ of information –wider access that new technology was sure to deliver. Well, that time is here. Social media has democratised information.

What does this mean? It means that in the past some people (usually figures of authority) had information and others didn’t. Those who had information – or access to information – had more power than those who didn’t.

In the corporate world, this meant that the CEO (and the executive team) used to have access to a bigger volume of credible information, more quickly that anyone else. They also had absolute control over what was disseminated and when it was done.

But social media has made the information pyramid much flatter – we can easily access information about companies, competitors or the broader industry from a variety of sources. We hear everything from rumours to analysis on social media. Twitter-savvy staff can communicate with journalists or even the CEO’s of rival companies to solicit opinion. All of this means that employees are far more independent thinkers and are less likely to be accepting of what the executive team says. It also means that the CEO has to be more responsive, act more quickly and be more authentic in communicating a message – or risk completely losing influence over key stakeholders including employees.

The biggest issue is, of course, that there is now no place to hide. The CEO has to build trust and be brave enough to be transparent because he is up against a medium that has a natural credibility that CEO’s don’t always enjoy.

So, most employees understand that the CEO has an agenda. He is incentivised to persuade you of his beliefs and goals whilst social media can be agenda-less or can aggregate views, beliefs and agendas of lots of people - creating a more balanced view.

Likewise, employees often feel that they can’t identify with the CEO. The conversation in their heads goes: “He is (usually) not like me – in education, generation, social position, etc. I can’t identify with him. I can identify with and trust sources/people who are like me. They get me. And these are the people who I speak to on social media.”

And whilst the CEO has a sense of authority that has worked in the past – these days it’s the opposite. Employees feel that executive management ‘speaks down’ to them whereas mediums like Facebook are on the same level, speak a common language and give employees a chance to express their views.

Therefore, while the CEO may with every good intention, make a formal announcement to staff – the chances of him being believed as a credible source and the chances of him being able to change behaviour is much slimmer than in the past.

This means that the CEO, if he wants to be effective, has to broaden his communication style – embracing new ideas that boost credibility and authenticity. This might mean using mediums such as ‘Twitter’ which is timely and appears more ‘genuine’ – less structured. It also gives the CEO the opportunity to respond to the comments of employees, etc and to invite their participation.

But these principles are not limited to social media. More informal, personal conversations with employees – whether in the corridors or in chatrooms – inspires confidence and trust. The rule of thumb is less mediated, structured, published communication and more spontaneous, short, sharp interactions.

In summary, today’s CEO should strive to engage employees in conversation rather than speak at them. And the only way to build trust and engage employees – is to opt for more unmediated communication than in the past. The alternative is to battle against all the other sources of communication out there for the employee ‘vote.’