Funders take R3bn hit as Smile Telecoms winds down

Smile Telecommunications — the group founded by SA black empowerment entrepreneur Irene Charnley — is being wound down, which will see debt owed to several SA government funders, including the PIC, extinguished in the transaction.

Smile was founded in 2007 jointly by Charnley and Mohammad Wajih Sharbatly of the Saudi-based Al Nahla Group. It has mobile telecoms operations in Nigeria, Tanzania, Uganda and the Democratic Republic of the Congo, where it has access to high-value spectrum. It is incorporated in Mauritius with a head office in London.

During the course of Smile’s existence, the Government Employees’ Pension Fund through the Public Investment Corporation committed $100 million in a 50/50 equity and loan split; the Industrial Development Corporation of South Africa $60 million, made up of a $20 million loan and $40 million share subscription agreement; and the Development Bank of Southern Africa —

Indeed, the chickens were always going to come back to roost, I mean what with all the polarisation being accepted and embraced as the norm and companies putting up structures to manage the polarisation. Worker representatives were put in place to defend the rights of employees versus management representatives who were there to defend the employer’s money. Productivity was important but it was about two forces pulling in different directions, generally and this was always a recipe for disaster. What we need to pay attention to is the fact that this was under what one could call “normal” circumstances. The economy was not as bad as it is now and companies were doing business and making profits in Zim dollars, millions of Zim dollars. It was important and prudent for a manager to check what the turnover of an organisation he or she wanted to work for was. So, in terms of business, we were not in bad state.

It is investing in real training and development that we neglected. If the training was not for actual and needed skills to perform, the budget for training and development was to a large extent for ticking boxes. The training and development department had to be seen to be doing something you know and so you had large sums of money going into flimsy training courses, easy ones like “communication skills”, “interpersonal relations”, “team building” and so on and so on, and the training department didn’t really need to justify this in any thorough manner. Evaluation to determine efficiency and effectiveness was a luxury. It had to be done that’s all. What we did not take seriously was thorough training needs analyses that sought to address the needs of an organization both at that current moment and for the future and so when the future arrived with a broken economy, to say we were caught napping would be an understatement, we were caught in a comatose and now most organisations have no clue what to do to come back to life.

Organisations did not invest in training their workforce in attitude, mental fitness, the ability not just to survive under difficult circumstances but to thrive because when we go to the gym we are preparing to be fit when the going gets tough. Companies did not invest in building good working relationships for sound industrial climates, but instead, tough, and experienced human resources practitioners were hired to defend the company against militant and abrasive worker representatives and in the process, yes money was made but the future destroyed through conflict.

I recall working as a human resource manager with this CEO who was notorious for the statement: “I don’t want to see this guy…I don’t care what you do to get rid of him, but I just can’t work with the guy….” We would then enter into a mutual termination and sight such reasons as “the relationship has deteriorated irretrievably…” It would get difficult at times with the employee, sometimes a managerial employee, refusing to terminate and preferring to go the legal route. The CEO would be willing to bite the bullet and face the possibility of the employee getting reinstated. That’s how bad we were in terms of conflict management, condemning people to joblessness over issues that could have been solved amicably because there was little training when it came to these issues. At some point I earned myself a written warning for refusing to rubber stamp the dismissal of a marketing manager I believed had not committed any act of misconduct.

That was us, on a survival mode at a time when we should have been investing in mental and attitude fitness to carry us during difficult times. When it started raining, we were not ready, and this got bad.

This kind of organisation was already on survival mode well before things fell apart and if that were the case, you can imagine where it is right now, in dire straits. On hindsight, what we did not prepare for were the rainy days and when it started raining cats and dogs as it is doing now, we had no clue what to do with the poor animals, cats, and dogs, and when the economy plummeted, we fell with it with a sickening thud!

We are at a point now where we can see, if we care to do so, that we needed to invest in understanding and cultivating the psychological contract (George, 2009) as compared to the legal and rights contract. Why? Because the legal contract is always a win/lose contract and there is no draw match in it. Someone has to lick their wounds as they go home while another has to smile all the way to the bank. Win/win principles got viewed as just philosophies for a few learned idealists who were just too bookish and pedantic. We don’t need school here, you would get told, we are here to make money and get things done.

At that time when we had the money, we could have focused on developing our mental muscle (Shirzad, 2012), but we spend huge sums of money training in ‘ communication skills’ and other courses. Don’t get me wrong, communication skills are critical, but they need to be aligned with business and people growth objectives. A training practitioner cannot just appear in a budget meeting with a placard written, ‘ communication skills.’ What is the connection with the business super-objective? That’s some seriously disjointed planning there that does not help the organisation in the long run. There is no dovetailing of objectives and plans there. The muscles that need to be developed for the organisation to stand the storms were never an issue and when things did fall apart as they always do, we also fell apart.

My argument today is that things got bad well before the fiasco we see today. We were bad in people and industrial relationships building and management and we got to a point where the scourge ceased to be just polarisation and became this pandemic called disenfranchisement that saw workers and even managers feeling that they did not belong to the agenda and that they didn’t own anything regarding the companies they worked for. How would you expect an employee in that state to want to see their organisation thriving?

If organisations fell dismally under ‘normal’ circumstances, what do you expect now? We had big organisations such as Zeco, G & D, Cold Storage Commission performing badly and falling apart when the economy was still breathing without needing any life support systems. Now the situation is bad, is it not? So, now what do you expect? Am I being a prophet of doom or a bearer of bad news? By no means, on the contrary I am here to say we didn’t understand what we needed to do, but now, to use Chinua Achebe’s words we have a good chance to look back and see where the rains started beating us…and from there we can rebuild. There is a clarion call for revolutionary people and performance managers to build the work ethic we need to turn things around. This column is that space for us to re-imagine things, talk about people and performance management methods that work.

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