Barnes set to put modern stamp on the Post Office
NEWS on Thursday that maverick businessman Mark Barnes would become CEO of the South African Post Office from January surprised most people, but he may just be the right person for the job.
The former investment banker and now executive chairman and founder of the JSE-listed Purple Group is a novice when it comes to managing public sector institutions and he will have to learn fast to befriend militant trade unions whose members launched a crippling strike at the post office last year.
Barnes, a former deputy MD at Standard Corporate and Merchant Bank and former CEO of Brait, said: “The business case is so compelling for the Post Office not to be just an old deliverer of mail but rather to be engaged in new-age business, that’s involved in e-commerce, financial services, distribution of product and logistics.”
The strategic turnaround plan approved by the cabinet this year will be the foundation of his post office rescue plan. “Beyond that I’m looking at a growth strategy that intersects with commerce,” he said.
Earlier this year, Barnes, convinced he had the solution to the Post Office’s woes, submitted an unsolicited turnaround proposal to Deputy President Cyril Ramaphosa.
Barnes, who is also the coowner of Exclusive Books, said his priorities were fixing the core mail business so that post and parcels arrived on time and intact, building better relations with staff and trade unions, and clawing back market share lost to competitors such as courier companies.
“In five years’ time we can start harvesting fruits.”
Asked to elaborate on the plan, he said: “I don’t want to be prescriptive about exactly what’s going to happen. This is not a rationalisation-based strategy, this is a growth strategy.”
The Post Office has a footprint of 1 500 outlets that extends into rural areas, and through its Postbank is the only access to financial services for some communities.
But its financial situation is dire and it is struggling to pay creditors and staff. Earlier this year it reported a net loss of R1.2-billion for the 2014-15 year.
Barnes said: “I haven’t been given any no-go areas . . . There has been an openness of engagement, which has been exciting for me. I think as a country we are all just about ready to sit and listen to each other.”
Minister of Telecommunications and Postal Services Siyabonga Cwele welcomed Barnes’s appointment. Cwele said he was continuing discussions with the National Treasury to find ways of investing in the Post Office and to fund its turnaround plan, which includes new services such as banking and electronic services. “The board and management have done everything possible on the cost-cutting and cost-containment side.”
Barnes graduated in actuarial science from the University of Cape Town and has attended a management programme at Harvard Business School.
The response to his appointment was mixed on Twitter. Former FNB CEO Michael Jordaan said: “Selfless of @Mark_barnes56 to run the Post Office, an institution that is losing more of its relevance everyday.”
Barnes takes over after CEO Chris Hlekane resigned in September following a year on suspension for allegedly making decisions without board approval. Acting CEO Mlu Mathonsi departed last month. Trevor Ndlazi, group executive
This is not a rationalisationbased strategy, this is a growth strategy
for strategy and sustainability, is acting CEO.
Appointments of leading business figures to help turn around ailing state entities have not always been successful. In 1999, Meyer Kahn, who was executive chairman of SAB Holdings, became the South African Police Service CEO, but walked away when his twoyear contract expired after an unsuccessful tenure. He went on to become SABMiller chairman and helped to take the company global.
Former Eskom chairman and businessman Bobby Godsell lasted only a year at the stateowned utility and departed in 2009 following differences with the government.
Likewise, Russell Loubser, former CEO of the JSE, resigned from the SAA board along with other members in a spat with the government.