Telkom’s Mabuza to the rescue — again
• New chairman will have to juggle roles to turn around Eskom
Serial chairman Jabu Mabuza is seemingly the best candidate to lead a turnaround at power utility Eskom despite leaving unfinished business at Telkom, which he has helped rescue from the brink of disaster over the past five years.
Risking a long-cultivated reputation as a business maverick in the leisure and entertainment industry, he joined a floundering Telkom — and is on a rescue mission again. Today Telkom has pared historical losses and has become an impressively lean operation under his leadership.
Miriam Altman, former head of strategy at Telkom who joined the firm in 2013, says: “There was a lot of telecommunications strategy that went into what we did, but actually the turnaround was more predicated on a set of principles that could be applied to any [state-owned enterprise] or company.”
One of the strengths Mabuza brought to Telkom was the recognition of a need to manage politics. “You can fall asleep in a Telkom AGM [annual general meeting] now, they are so boring. They used to be heavy political affairs,” Altman says.
A source in the public sector, who asked not to be named, describes Mabuza as a “nice person, but you undermine him at your own risk”.
Mabuza’s interpersonal skills and “warm style” changed the passive-aggressive atmosphere that once lurked at Telkom and he reset the language used to communicate internally.
“There were huge decisions we had to make — very risky ones to change the shape of the company. That ability to shift people between short and long term, depending on what was needed, was incredibly helpful to getting to decisions by the board,” Altman says.
Telkom CEO Sipho Maseko says Mabuza taught him how to stabilise an organisation and the importance of being surrounded by smart people.
“I have come to know him as someone who is exceptionally focused and driven, especially in helping a team to decide and drive implementation of an agreed-upon strategy.”
Mabuza’s term at Telkom will end in August 2019.
Legae Securities head of research Waseem Thokan says: “The current management at Telkom has done particularly well to reorientate the business away from the fairly stagnant and regressive business they were three or four years ago.”
Thokan says Telkom’s leadership embarked on a fairly robust series of interventions, notably in the workforce, that turned around the company.
But, Thokan also says that “it would be fair to characterise some elements of the changes as picking relatively low-hanging fruit”.
Thokan says some of the challenges facing Telkom are the levels of robustness in customer service and the consumer franchise, particularly in mobile.
Historically, Telkom lagged its peers in transformation. The company has not necessarily been in a position to do many black economic empowerment deals, a shortcoming that may affect its ability to gain access to additional spectrum, which the state will parcel out in future.
“Spectrum is a primary driver in their ability to scale up their mobile business,” he says.
TELKOM TEAMWORK
Thokan says it is fair to attribute change at a strategic level at Telkom to Maseko and Mabuza working as a team.
“But the extent to which they may be able to continue that going forward, and the extent to which the company’s systems and processes are robust enough to manage what is emerging on the relative cutting edge of business to business and business to consumer as a value offering is still somewhat subject to question
“How much of this new culture is filtered through across the entire organisation versus religiously embedded at the top end of the organisation and the historical legacy of Telkom as a state-owned company still remains there.” These problems are not necessarily answered by the reporting and communication of the company.
But Thokan says Mabuza’s role in turning around the sizeable Telkom ship will serve him well at Eskom, where there is room for relatively high-level interventions to drastically improve the utility at operational and financial level.
“I see no reason why Mr Mabuza wouldn’t be a good person to execute that [but] it’s going to be interesting to see how he manages that workload,” he says.
Telkom is at the cutting edge of several emerging, technological businesses and operates in an environment with large and well-resourced competitors.
“Generally, from a governance perspective, we tend not to prefer that board members hold multiple chairmanships, particularly at these two companies,” he says.
“Those are particularly demanding chairmanships.”
Mabuza, who turns 60 in 2018, is executive chairman of Sphere Holdings. He is also chairman of Business Leadership SA, Business Unity SA and the CEO Initiative. In addition, he is the chairman of the Africa portion of Anheuser-Busch InBev and SABMiller.
Communication Workers Union president Clyde Mervin says he has never met Mabuza.
“He always ran away, but when they talked retrenchments, he is the one who forced it down our throats. So for us, we don’t see any good in Mabuza at all.
“We have lost a lot of members under his leadership.
“The executive management positions have exploded, while the number of workers has shrunk,” he says.