ON October 2, Pick n Pay, one of the biggest retail groups in South Africa (valued at about R17 billion on the JSE), announced that its CEO, Pieter Boone, had stepped down with immediate effect.
The board had taken the decision to let him go because of poor performance. In the plan to get the group back on track, the board had decided to bring back Sean Summers, who was CEO between 1999 and 2007.
In the statement released, the board expressed delight at the return of Summers as he is considered to be an inspirational leader with unrivalled knowledge and experience that is needed by the group at this time. The board said he was absolutely the right person to win the trust of old and new customers.
Glancing at the board of Pick n Pay, one can’t help but notice that its make-up is majority white (76%), with only one black woman. Contrast this board composition with the customer base, which is majority black, segmented along income lines, in a country that is 80% black.
The Pick n Pay growth strategy called Ekuseni, a Zulu word meaning “dawn”, emphasises that it aims to serve a diverse customer base by differentiating better to serve their needs.
The irony of being a white board aiming to serve a diverse customer base in a country that is majority black, using a black language to label the strategy that is meant to propel your business growth, is staggering. It makes one understand why the very board would find it appropriate to bring back from retirement a 70-year-old white male to drive this growth strategy and business turnaround.
In a country that has the bulk population sitting at between 25 and 44 years in age, Pick n Pay found a 70-year old white male to be the absolute best person for the job, who will not only win the trust of both old and new customers at this time, but will represent the future of the business.
One can’t help but conclude that Pick n Pay is out of touch with the reality and environment in which it operates.
To completely ignore the country’s transformation imperatives and socio-economic inclusion while hoping to achieve business growth can only be described as delusional. It is reckless of a board of a business of the size of Pick n Pay, a JSE-listed company.
Contrast this approach to another JSE-listed company, FirstRand, which announced a series of leadership changes on October 4 that saw the group chief operations officer (COO), Mary Vilakazi, becoming the first black female CEO to lead the group. She becomes the second black CEO of the group after Sizwe Nxasana and the second woman CEO of the top five financial services since Maria Ramos, who was Absa CEO for a decade.
As COO she would have been in a position to implement the group strategy and in the belly of the business. This means she understands the business and would have been in a position to watch her predecessor closely to know how to lead the group better. This is what would be seen as intentional succession planning to not only ensure that the business is prepared but also the individual is prepared for the responsibility.
By preparing a black woman for the job, FirstRand has demonstrated that it understands the South African environment in which it operates. The fact is that inclusive leadership in a country such as ours is not simply a luxury but a business imperative, crucial for business success.
Again, looking at the board composition of FirstRand, one can see a diverse group of board members. Although still a majority white board, it is chaired by a black chairperson and includes women from diverse racial groups as members. It is an inclusive board representing the diversity of the country and making relevant business decisions.
In the end, one’s leadership calibre and support in the role determines their success in the role. It’s not simply a demographic determination, as is seen in the case at Pick n Pay where Pieter Boone, a white male, was asked to step down due to poor performance.
Vilakazi’s success is yet to be determined and analysed. However, it goes a long way to be considerate of the demographics of the population when assigning responsibility, especially when the goal is to drive inclusive business growth and economic growth.
Dr Sibongile Vilakazi is the president of the Black Management Forum.
BUSINESS REPORT