Opinionista Johann Redelinghuys 25 August 2014

Giving transformation a bad name

Speaking at a South African Chamber of Commerce and Industry dinner on Thursday the secretary general of the ANC, Gwede Mantashe, said that transformation in the private sector was too slow. “Where the state is in charge, there is progress; where the private sector is in charge, transformation is too slow,” he said. As if to prove his point, it was announced on the same day that Eskom had appointed Tshediso Matona as its new CEO.

As with the appointment of any CEO of a major business, it would have been assumed that the board committee charged with making the appointment would have conducted a rigorous process to evaluate the track records of the shortlisted candidates and would have chosen someone who would stand a good chance of being successful. It is, after all, a big company by any standard, and a massively complex one in addition. Its difficulties in the past few years would add enormous challenge to the job which would effectively have to be a ‘turnaround’.

Everyone who has ever been involved in such an appointment knows that these processes are not without their difficulties, and no matter how careful they may have been, there is never any guarantee that the appointed candidate will achieve the expected success. The various stages of a well-run and independent selection process would however attempt to minimise the risks. It would work hard to ensure that someone who at least stood a reasonable chance of being successful would be appointed.

Not wishing to be unduly critical before the man gets out of the starting gate, but reviewing Mr Matoma’s background and experience, there seems to be little reason for encouragement. He has never been a CEO. He has never managed a business of any kind, never mind one as complicated as Eskom, and he has only ever been a civil servant. He has never had to look for international funding or has had to deal with belligerent stakeholders demanding acceptable performance and for the lights to be kept on. Previous colleagues, understandably wishing to remain anonymous, say that when Matoma had to work with previous minister Gigaba he did not show the qualities of a fighter and was in fact “weak”. That sounds dangerously like a “yes-man” and an unlikely candidate to do what well-informed advisors have for a long time suggested. Eskom in its present shape is too unwieldy, they say, and should be broken into its constituent generation and distribution parts which could be listed separately and, in so doing, privatised. This would give the fiscus some welcome capital, instead of continually having to bail the wounded business out.

Matoma’s first pronouncements after his appointment was announced add further to the one’s sense of concern. He immediately blamed the previous management for their lack of sufficient disclosure. Was he forgetting that Eskom was responsible to him as director general of Department of Public Enterprises and that it must surely have been his responsibility for its oversight?

The appointment of Mr Matoma is only the most recent one in a long list of very doubtful appointments made in the ambitious spirit of a punch-drunk transformation-driven ANC government. There are too many failures in the last twenty years to list them, and still the message seems to be lost.

Not that taking someone directly from government and putting them in charge of a business is necessarily a bad thing. Maria Ramos was deployed straight out of the Treasury into the job of CEO at Transnet, and by all accounts she did not do too bad a job there. And if the CEO of a state-owned enterprise is going to be bullied by some minister and his director general, then knowing all the nooks and crannies of government and understanding how to play their game might actually be helpful.

The disconcerting message of Mr Matoma’s appointment, however, is that it represents the ultimate government interference in Eskom. Appointing someone directly out of government to ensure “tighter control” as he has vouched, can only be bad news. Government is no longer in a hands-off governance role, as it ought to be, but right there pulling the levers in the engine room.

Looking back at the early Madiba years, there was a wonderful reservoir of goodwill toward South Africa and its government, both here and in the international community. Everyone wanted the new South Africa to work and there was much enthusiasm for transformation, even among the white population, who were relieved to be out of the dire Apartheid years. That goodwill has been wasted. It is squandered by those who demand transformation at any cost and in so doing often debilitating the very enterprises that must provide the jobs and the tax-base for the future.

Mr Zuma, replying to debate following the his State of the Nation address in Parliament earlier this year said that South Africa has achieved social transformation over the past twenty years, but “the emphasis must now be on economic transformation so that black people will also own the economy”.

I agree with Mr Zuma and Mr Mantashe in their cry for accelerated transformation. It is the only way South Africa is going to sustain some kind of leadership on the African continent. But if we are at all serious about transformation there is a route that has to be followed. If we want to create the jobs needed to address our growing unemployment and if we want to rebuild our distressed currency and if we want to re-establish our reputation with the rating agencies we must have a vigorous, strong economy. That will give us real transformation. A transformed but limping economy would have achieved nothing. If we are serious about growth and future prosperity we would have to ensure that companies are led by the best possible leaders; people who have all the required experience and skill, not just the right colour.

If we keep on fake-transforming by plugging in some hapless comrade and setting him up for inevitable failure, we will only be hastening the downward spiral.

Surely the people in Luthuli House realise that the object of transformation is for the whole economy to be transformed spreading the benefit throughout the country and not just ensuring it for the privileged leadership elite? Surely it would be better for them to stay in control by making the best available people to work for them and not just continuing to employ their cronies? DM

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